J. Lauritzen Holding A/S Sankt Annae Plads 28 DK …reports.huginonline.com/779631.pdfREPORT AND ACCOUNTS J. Lauritzen Holding A/S Sankt Annae Plads 28 DK-1291 Copenhagen K Denmark

REPORT AND ACCOUNTS

J. Lauritzen Holding A/S

Sankt Annae Plads 28

DK-1291 Copenhagen K

Denmark

Tel.: +45 3396 8000

Fax: + 45 3396 8435

[email protected]

www.lauritzen-holding.com

CVR NO.: 2204 2017

J. LAU

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99

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1 The J. Lauritzen Holding Group

4 Key figures

5 Annual Report

8 Risks

SHIPPING AND TRANSPORT

10 J. Lauritzen A/S

12 DFDS A/S

INDUSTRY

14 Danyard A/S

15 Danyard Aalborg A/S

16 Aalborg Industries A/S

18 Financial Review

20 Auditors’ Report

21 Accounting Policies

24 Board of Directors and Management- honorary posts

25 Annual accounts

29 Notes

38 Group companies

39 Fleet

41 Addresses of main offices

The Annual Report and Accountshas been translated fromthe Danish version.In case of discrepanciesthe Danish version shall prevail.

CONTENTS THE J. LAURITZEN HOLDING GROUP

Shipping and Transport

J. Lauritzen A/SSankt Annae Plads 28P.O. Box 2147DK-1291 Copenhagen KDenmark

Phone: +45 3396 8000Telefax: +45 3396 8001Telex: 15 522 jlau [email protected]

DFDS A/SSankt Annae Plads 30DK-1295 Copenhagen KDenmark

Phone: +45 3342 3342Telefax: +45 3342 3341Telex: 19 435 dfdsc [email protected]

Industrial companies

Frederikshavn MaritimeErhvervspark A/SKragholmen 4Postbox 719DK-9900 FrederikshavnDenmark

Phone: +45 7010 0515Telefax: +45 7010 [email protected]

Aalborg Industries A/SGasværksvej 24P.O. Box 661,DK-9100 AalborgDenmark

Phone: +45 9930 4000Telefax: +45 9816 3022Telex: 69705 albor [email protected]

PARENT COMPANY

J. Lauritzen Holding A/SSankt Annae Plads 28P.O. Box 2147DK-1291 Copenhagen KDenmark


Addresses of main offices of

the J. Lauritzen Holding Group.

For additional addresses please contact

the companies.

1

THE J. LAURITZEN HOLDING GROUP

Annual General MeetingThe Annual General Meeting is heldon Monday, 22 May 2000 at 10amat Langelinie Pavillonen,2100 Copenhagen Ø.

The shareholders in question are asfollows:

• The JL-FoundationSankt Annæ Plads 28,1291 Copenhagen K.

• ATPKongens Vænge 8,3400 Hillerød

J. Lauritzen Holding A/S is the parentcompany for the Group’s companies,which include shipping, transport andindustrial companies.

As mentioned at the Annual GeneralMeeting of 1999, the J. LauritzenHolding Group will now focus on co-re business such as shipping andtransport activities and associatedservice activities.

The Group companies are separateentities, each with its own corporateidentity. The board of directors andmanagement of each company thushave the primary responsibility forensuring that agreed strategies,objectives and policies are fulfilled.

Where natural with a view to promo-ting the Group’s long-term objectives,cooperation is established and de-veloped between the members of theGroup.

J. Lauritzen Holding exercises its ow-nership powers by electing membersto the boards of the individual com-panies and through periodical discus-sions between the management of J.Lauritzen Holding and the subsidiar-ies on strategy, policies and objectives(earning requirements, dividends,investments and similar).

The JL-Foundation is the principal sha-reholder in J. Lauritzen Holding A/S.

ShareholdersThe B shares of J. Lauritzen HoldingA/S are listed on the CopenhagenStock Exchange. According to section28A of the Danish Companies Act,the names of shareholders with morethan 5% of the shares or votingrights must be given in the annualreport.

2


J. Lauritzen A/S

J. Lauritzen comprises the shippingcompanies Lauritzen Reefers A/S,Lauritzen Kosan A/S and LauritzenBulkers A/S, and a number of land-based logistics companies mainlysituated in South America.

The shipping companies, which ope-rate worldwide, are controlled fromthe head office in Denmark, but havesupport from offices/representationsin USA, Brazil, Chile, Australia, NewZealand, Japan and China. In addi-tion J. Lauritzen has a worldwidenetwork of agents.

Lauritzen Reefers - one of theworld’s leading operators within high-quality transportation of perishablefoods and transport concepts that arebeing continuously developed.Lauritzen Reefers controls a fleet ofown and chartered reefer vessels.

Lauritzen South America - compri-ses port terminals, cold stores and in-land transport companies, all suppor-ting the integrated transport activi-ties.

Lauritzen Kosan - by virtue of itsextensive experience and proficiency,the company is one of the leadingoperators within regional sea distribu-tion of gas, but has also extensiveactivities overseas.

Lauritzen Bulkers - is an interna-tionally recognised operator withintransportation of dry bulk cargoes.Lauritzen Bulkers operates a fleet ofHandysize and Handymax bulkcarriers with crane and grab facilitiesfor self-loading and self-dischargingoperations.

DFDS A/S

DFDS comprises two core businessareas: Transport/logistics and Passen-ger Shipping. The areas are organisedin three divisions: DFDS Dan Trans-port, DFDS Tor Line and DFDS Sea-ways.

DFDS Dan Transport is one ofNorthern Europe’s leading companieswithin international transport andforwarding, logistics and haulage/na-tional distribution.

DFDS Tor Line is one of NorthernEurope’s leading ro/ro companies andoperates liner services based on fre-quent departures between ports inNorthern Europe. It also has port ter-minal and agency activities.

DFDS Seaways operates passengerservices on routes that include onenight on board. The route network isbased on the “city-to-city” concept inNorthern Europe. It also operatescanal tours in Copenhagen and abusiness travel agency.

Unique position in the transportmarket in Northern EuropeThe combination of a freighter com-pany, freight-carrying passenger shipsand a land-based transport company,built up around Northern Europe’sspecial geographical features with aconsiderable need for marine trans-port, gives DFDS extensive controlover the entire transport chain.

SHIP

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Organisation


Management:

Bent Østergaard

J. Lauritzen A/S - 100 %

Management:

Torben Janholt

Birgit Aagaard-Svendsen

DFDS A/S - 52,8 %

Management:

Thorleif Blok

Chr. Merrild

Ole Frie

Oddbjörn Fastesson

Bo-Lennert Thorbjörnsson

Danyard A/S - 100 %

Management:

Torben Erikstrup

Danyard Aalborg A/S - 100 %

Management:

Torben Erikstrup

Aalborg Industries A/S - 100%

Management:

Freddy Frandsen

Svend Ole Aagren

Indicates that the

company is listed on

the Copenhagen

Stock Exchange

3

Danyard A/S

Danyard used to be one of Scandina-via’s largest shipyards, but was closeddown at the end of 1999. The build-ings and yard facilities have beentransferred to an affiliated company,Frederikshavn Maritime ErhvervsparkA/S (FME).

FME is a leasing company with43,000 square metres of floor space,dry-docks and other yard facilities ona 100,000 m2 site owned by the Portof Frederikshavn.

The object is to lease out FME’s facili-ties - particularly to companies withinthe marine sector - and thus keep asmany jobs as possible in the area ona financially viable basis.

Danyard Aalborg A/S

Danyard Aalborg develops, produces,sells and maintains ships and marineproducts made of composite fibre-glass for military and naval purposes.Recently, the company has trainedemployees and built up expertisewithin carbon-fibre technology. It isalso participating in several projectson further development of lighterand stronger construction materials.

The company’s main customers areDanish and foreign navies, but stepshave been taken to expand thecustomer portfolio to commercialmarine customers. For example, theyard has begun building large motor-yachts.

Aalborg Industries A/S

Aalborg Industries develops, manu-factures and sells energy, steam- andheat-generating equipment, mainly inthe form of small and medium-sizedboilers, and associated combustion,heat transmission and process tech-nologies.

The product range includes heat-recovery boilers, oil- and gas-firedboilers for industrial applications,marine boilers, heat exchangers andinert gas systems.

Aalborg Industries holds a leadingposition in the global marine boilermarket, and one of its strategicobjectives is to gain a similar positionwithin other business areas.

The activities are divided into two co-re areas:

Marine - boilers, including burners,heat exchangers and inert gassystems.

Land-based - heat recovery boilers,oil-/gas-fired boilers and heatexchangers.

The areas are supported by after salesactivities.

The company’s products are made atits own factories in Denmark, China,Indonesia and Brazil.

4

DKK million 1999 1998 1997 1996 1995

INCOME 21,086 15,755 15,147 14,358 16,096Costs (19,630) (14,463) (13,971) (13,767) (15,265)Depreciation and writedowns (918) (961) (719) (710) (882)

OPERATING PROFIT(LOSS) 538 331 457 (119) (51)Profit on sale of ships 28 15 146 10 1Share of profit in associated undertakings 4 56 43 25 8Financial items etc., net (373) (280) (306) (293) (257)

PROFIT(LOSS) ON ORDINARY ACTIVITIES BEFORE TAX 197 122 339 (377) (299)Tax on ordinary activities (121) (154) (161) 45 0

PROFIT(LOSS) ON ORDINARY ACTIVITIES 76 (33) 178 (332) (299)Extraordinary items, net 1,077 (100) 281 163 (486)

PROFIT(LOSS) FOR THE YEAR 1,153 (133) 459 (169) (785)Minority shareholders’ share of the profit (94) (150) (209) (96) (46)

NET PROFIT(LOSS) 1,059 (283) 250 (265) (831)

Fixed assets 10,984 7,759 7,147 6,736 7,263Assets 16,817 11,623 11,651 11,451 12,762Capital and reserves 4,451 2,886 3,276 2,843 3,028J. Lauritzen Holding A/S’ share of capital and reserves 2.824 1,777 2,133 1,872 2,111Cash flow from operations 1,242 1,238 562 315 428Investments in tangible fixed assets 1,005 1,483 1,220 594 805Cash increase/decrease during the year 443 (141) (296) 271 (479)

Number of employees 15,500 11,600 11,600 12,600 15,000

Earnings per DKK 20 share (11) (68) 17 (159) (130)Market price per DKK 20 share 711 427 580 694 622Book value per DKK 20 share, DKK 1,050 661 793 696 785

Profit margin, percent % 2.6 2.1 3.0 (0.8) (0.3)Return on assets, percent % 4.6 4.3 6.4 0.6 1.8Return on equity, percent % (1.3) (9.4) 2.3 (21.5) (13.8)Equity ratio, percent % 26.5 24.8 28.1 24.8 23.7

Earnings per. DKK 20 share: Profit(loss) on ordinary activities excluding minorities interests/Average number of share

Return on assets:Operating profit(loss) + financial income/Average total assets

Book value per DKK 20 share: Capital and reserves excluding minority interests/Number of shares at year-end

Return on equity: Profit on ordinary activities excluding minority interests/Average capital and reserves excluding minority interests

Profit margin: Operating profit(loss)/Income

Equity ratio: Capital and reserves including minority interests/Assets

THE J. LAURITZEN HOLDING GROUP - KEY FIGURES

The financial ratios

have been calculated

in accordance with

the recommendations

of the Danish Society

of Financial Analysts.

However, the equity ratio

includes minority interests.

5

THE J. LAURITZEN HOLDING GROUP - ANNUAL REPORT FOR 1999

In 1999, J. Lauritzen Holding Grouprecorded income totalling DKK 21,086million against DKK 15,755 million inthe previous year. The result of ordi-nary activities was a profit of DKK 76million compared with a loss of DKK33 million in 1998.

With extraordinary items totallingDKK 1,077 million, the net result afterminority interests’ share was a profitof DKK 1,059 million against a loss ofDKK 283 million in 1998. The result isin line with previously expressedexpectations.

On 27 March 1999, J. Lauritzen Hol-ding A/S and EQT Scandinavia Ltd.agreed on a 100% sale of the sharesin Sabroe Refrigeration to York Inter-national Corporation for a cash consi-deration of DKK 2.9 billion. The dealreceived final approval by the compe-tition authorities in June 1999.

The sale ensured Sabroe the best pos-sible conditions for continuation ofthe necessary product developmentand continued expansion, and gaveJ. Lauritzen Holding A/S a book profitof DKK 1,077 million. The disposalalso ensured the necessary liquidityfor settlement of bank debts and forexpansion of other companies in theGroup. In this connection, the sharesdeposited as security for the bankdebt were released.

The biggest expansion within theGroup took place in DFDS with thepurchase of the shares in DanTrans-port for DKK 2,000 million. To partial-ly finance this purchase, DFDS carriedout a rights issue in the autumn of1999. J. Lauritzen Holding exercisedits subscription right in full, buyingshares to the value of DKK 440million.

At the Annual General Meeting inMay 1999, the Board of Directorswas authorised to purchase up to10% of its own shares. To date, thecompany has purchased 3.4% of the

shares at a total price of DKK 71.6million.

The result in J. Lauritzen was a lossof DKK 88 million. This is unsatisfac-tory, although better than expectedat the beginning of the year.

In 1999, J. Lauritzen undertook a ra-dical restructuring and adjustment ofthe long-term financing of the com-pany. This included changing theshipping company’s legal structure. J.Lauritzen now comprises the shippingcompanies Lauritzen Reefers, Laurit-zen Kosan and Lauritzen Bulkers, be-sides a number of land-based logi-stics companies, mainly situated inSouth America. The land-based acti-vities, which were established to sup-port Lauritzen Reefers’ activities inthe South American market, are to-day an independent business area.

J. Lauritzen made a continuous effortduring the year to consolidate thegas and reefer transport market. Thenew corporate structure has improv-ed the company’s possibility of devel-oping its four business areas and ofparticipating in relevant structuralchanges in the market.

In 1999, J. Lauritzen operated a totalaverage fleet of 114 vessels, of whichthe company owned 37 itself at theend of the year.

DFDS showed a profit for the year ofDKK 193 million.

The result cannot be described as sa-tisfactory, but must be seen in thelight of large amortisation of good-will and financing costs relating tothe acquisition of DanTransport. Theexpected synergies from the mergerof DFDS Transport and DanTransportwill not be visible until 2000. On topof this come unsatisfactory resultsfrom the acquired Norwegian ro/roactivities (North Sea Line) and fromthe forwarding activities in the UK.

In connection with the delivery of

INCOME

DKK billion

PROFIT(LOSS) ON ORDINARY ACTIVITIES

DKK million

CAPITAL AND RESERVES

DKK billion

Minority interests share

J. Lauritzen Holding A/S’ share

100

-100

-200

-300

5

4

3

2

1

20

15

10

5

‘95 ‘96 ‘97 ‘98 ‘99

‘95 ‘96 ‘97 ‘98 ‘99

‘95 ‘96 ‘97 ‘98 ‘99

6

ANNUAL REPORT FOR 1999

three new ro/ro ships to DFDS, theItalian shipyard, Fincantieri, did notmeet the agreed delivery dates andtherefore paid delivery fines.The Swisstransport company Danzas grantedDFDS compensation for breach ofcontract. The compensation was par-tially booked to income in 1999. Boththe delivery fines and the compensa-tion are included as ordinary incomeas compensation for loss of incomeand extra costs.

The result for Passenger Shipping, onthe other hand, was satisfactory, seenin the light of the abolition of tax-free sales.

DFDS achieved three important stra-tegic objectives in 1999.

DFDS established the second largesttransport company in the Nordic re-gion through the acquisition of Dan-Transport.

The acquisition of North Sea Line sig-nificantly strengthened DFDS TorLines’ market position on the NorthSea.

DFDS implemented a transparent, lo-gical and flexible organisational struc-ture. In the first half of 2000, thethree divisions - DFDS Dan Transport,

DFDS Tor Line and DFDS Seaways -will become legal entities. Each willthus be able to enter into industrialcooperation with external partners,with some element of ownership orcross-ownership. In addition, all ro/roand port terminal activities were as-sembled in DFDS Tor Line.

Danyard and Frederikshavn MaritimeErhvervspark (FME) recorded a totalloss of DKK 52 million in 1999.

During the year, Danyard deliveredthe last two of a series of nine che-mical tankers to Stolt Parcel TankersInc. without serious delays - to theimmense credit of the employees andthe management, since these tankerswere also the last vessels built anddelivered by Danyard. The closing-down of the shipyard took place asscheduled and in accordance withthe financial plans, and by the end ofthe financial year, all employees hadleft or been made redundant.

As at 1 June 1999, FME was establish-ed, and all Danyard’s tangible assetswere transferred to this company,which at the same time entered intoDanyard’s lease with the Port of Fre-derikshavn. FME is a leasing companywith 43,000 square metres of floorspace besides port areas and dry-docks. By the end of the year, abouthalf the space and dry-docks andport areas were leased, and 450 to500 people are thus still employed inthe area.

Danyard Aalborg achieved a fairprofit of DKK 7 million in 1999.

In 1999, Danyard Aalborg was mainlyengaged in maintenance work forthe Danish Navy.

Aalborg Industries achieved a satis-factory result - a profit of DKK 63million.

On 30 June 1999, Aalborg Industriesacquired Wiesloch Marine & Indu-stries B.V. /Wiesloch Beheer B.V. in

7

the Netherlands. Wiesloch is a lead-ing supplier of thermal fluid heatersfor the marine market. Aalborg Indu-stries has thereby gained a market-leading position within this segmentand further consolidated its positionas global market leader withinmarine boilers.

In 1999, Aalborg Industries carried outa number of measures and projectsaimed at ensuring continued growthin turnover and earnings. These acti-vities were focused on product devel-opment, product standardisation andmarket development. The costs incur-red were charged to income.

In 1999, the management structurewas strengthened still further to un-derpin the global strategy. This hasreinforced the global perception ofAalborg Industries as a single compa-ny that is very close to its customersand the markets and has led to in-creased opportunities for maximisingsynergies.

Work on the establishment of a glo-bal supply unit responsible for logi-stics, purchasing, outsourcing, trans-port and production was intensifiedstill further during the year, and theunit is expected to contribute signifi-cantly to improved competitiveness inthe years ahead.

The enlargement of the productionfacilities in China is proceeding accor-ding to the plan and will be complet-ed in May 2000. With this, AalborgIndustries has further strengthened itscompetitiveness and closeness to themain markets, Korea, Japan and Chi-na in the marine boiler area.

Year 2000The widely dreaded turn of the mil-lennium passed without any IT pro-blems in the J. Lauritzen HoldingGroup.

Post balance sheet eventsAs at 27 March 2000 J. LauritzenHolding entered into an agreementregarding sale of Danyard Aalborg asa MBO. The price is equivalent tobook value at year-end. The sale willhave no effect for the result in 2000for J. Lauritzen Holding.

Outlook for 2000The year 2000 is expected to show aprofit on ordinary activities before taxof approximately DKK 250 millionand a net profit, which - apart fromextraordinary items - is expected tobe marginal positive.

A more detailed description of theoutlook for the individual companiesfor 2000 is given below. Readers arealso referred to a separate section onrisk factors on pages 8-9.

In the coming year, J. Lauritzen willcontinue its efforts to consolidate itsmarket positions in order to ensurelong-term stability.

The price of oil is a significant costelement for the shipping company. In1999, the price more than doubledcompared with the level at the begin-ning of the year. The price is expect-ed to remain at a high level in 2000.

The company’s result will be particu-larly sensitive to fluctuations in theprice of oil.

The result for the first few months ofthe current year was disappointing,especially in the case of reefers. Dueto the current high oil prices and apersistently weak freight market,again especially for reefers, J. Laurit-zen now expects the result on ordina-ry activities to be slightly lower thanin 1999.

The level of activity in DFDS’ mainmarkets is expected to develop favour-ably, although there is every sign ofcontinued instability in the Russianmarket. No significant changes in ex-change rates are expected in 2000.

At division level, DFDS Seaways ex-pects to achieve a somewhat betterresult in 2000 than in 1999. The re-sult for DFDS Tor Line is expected toremain at the 1999 level despite in-creased depreciation and high oilprices. The result for the Norwegianro/ro activities is expected to remainunsatisfactory.

DFDS Dan Transport expects to im-prove slightly on its 1999 result, evenallowing for unsatisfactory earningsin the UK forwarding activities.

With reservation for the uncertaintyconcerning oil prices, the total resultbefore financing costs etc., for theDFDS Group is expected to be about15% higher than in 1999. The resultbefore tax and extraordinary items isalso expected to be about 15%ahead.

Aalborg Industries’ strategy for theperiod 1998-2002 is based on adevelopment of the Group towards aglobalised structure and both acqui-sitive and organic growth in turnoverand earnings.

With the implementation of the manyaction plans in recent years and theinitiation of new activities to improvecompetitiveness, the targets set for2000 in the strategy plan will also beachieved, although a slightly lowerprofit is expected than in 1999.

Aalborg Industries will therefore con-tinue intensive product and marketdevelopment and, in this connection,make one or more acquisitions withinits core business areas.

DividendThe Board of Directors recommendsthat a dividend of DKK 10 per sharebe paid for 1999.

8

THE J. LAURITZEN HOLDING GROUP - RISK FACTORS

J. LAURITZENOperational risk factorsJ. Lauritzen’s business areas are in allessentials related to internationalshipping activities. Long-term stablegrowth of the global economy, with aconsequently growing need for trans-port, benefits the company.

The general economic developmentand the global market fluctuationsthus greatly affect the company’s ear-ning capacity in both a positive and anegative direction.

Reefer transport, which is one of J.Lauritzen’s main activities, is also verysensitive to the climatic conditions inthe fruit-producing countries.

The company also operates regionalgas carriers, primarily in Europe. Here,the climatic conditions are also of so-me importance, since mild winters inEurope affects the demand for gasfor heating purposes. However, thedevelopment of oil prices and thelarge oil companies’ earning potentialalso affect the level of rates in thismarket.

Lastly, J. Lauritzen operates a largefleet of bulk carriers. The market isextremely competitive, and the mainrisks relate to supply and demand fortonnage.

Currency and interest-rateexposure and oil risksJ. Lauritzen’s currency exposure on itsoperations relates primarily to USD.Earnings from shipping are mainly inUSD, while the costs for operation ofvessels, purchase of bunkers and ad-ministration are mainly in USD, DKKand EUR.

The positive net exposure in USD iscovered partly by borrowing in USDto finance the fleet and partly byhedging (selling) USD on forward andoption contracts when this is deemednecessary.

The interest-rate exposure on thecompany’s debt portfolio is activelymanaged by means of financialinstruments, such as swaps. The debtis currently almost equally dividedbetween fixed and variable rate.

Bunkers (oil) for the fleet constitute aseparate risk. The risk is continuouslyassessed and can be covered byfinancial swap contracts etc.

DFDSOperational risk factorsDFDS’ business areas are sensitive toeconomic fluctuations, which, if lar-ge enough, can affect the activities inboth a negative and a positivedirection. Owing to the geographicaldiversification of its activities, DFDS isless dependent on the developmentin individual markets.

DFDS’ growth is achieved mainlythrough organic growth, companyand activity acquisitions and generalindustrial alliances. The latter two, inparticular, can be very costly for theorganisation in terms of resources,and if the results do not come up toexpectations, it can have seriousconsequences for DFDS’ develop-ment.

Environmental and safety require-ments are based on DFDS’ environ-mental and safety policy, but also onrequirements from public authoritiesand DFDS’ customers. More stringentrequirements must be expected in thefuture, which could mean extra costsfor DFDS. Where possible, environ-mental risks are insured. DFDS is par-ticipating in the preparatory legislati-ve work through industry organisa-tions.

DFDS’ activities can be affected bypolitical decisions, which might havenegative consequences for DFDS. Atpresent, the biggest risk in thatrespect is thought to be abolition oftax-free sales on routes to Norway.

9

Boilers for land-based systems for elec-tricity and heat production, and pro-cess steam, are affected not only bygeneral economic growth, but also bya number of politically related deci-sions. The liberalisation of the electri-city and energy market in Europe andthe USA will have an immense impacton suppliers in this market and willlead, for example, to a more efficientand price-sensitive supply of energy.These factors will in turn bring newrequirements concerning technologi-cal development and increase thefocus on environmental factors.

Currency and interest rateexposureAalborg Industries’ earnings are, to alarge extent, in foreign currencies,particularly USD. The currency expo-sure is covered as orders come in byselling currency on the forwardexchange market.

Third-party financing is mainly in DKKand, in relation to the balance sheettotal, is very modest. Surplus liquidityis placed on the money market and istherefore not sensitive to exchangerates.

In its activities, DFDS uses passengerships and cargo carriers, lorries andterminals, together with other opera-ting equipment. The use of such ope-rating equipment involves the usualoperating risks associated with this.The risks are minimised throughcompliance with safety requirementsand procedures.

Currency and interest rateexposure and oil risksDFDS’ net currency exposure from itsoperations relates mainly to net costsin USD and net income in SEK, NOKand GBP. The income in SEK, NOKand GBP concerns mainly passenger-shipping and freight-market earnings,which are settled in foreign curren-cies, and the subsidiaries’ operatingresults.

The costs in USD consist of chartercosts for ro/ro tonnage and bunker-ing. In connection with the purchaseof bunkers, oil-price fluctuations arealso a risk.

In accordance with DFDS’ policies,currency exposure is covered centrallyin DFDS, where net positions arehedged by means of forward exchan-ge transactions, currency loans, op-tions and swaps. The currency mar-kets are closely monitored and hedg-ing is carried out where it is deemedthat the currency positions could ha-ve a major adverse impact on DFDS’result.

Around half of DFDS’ present debtportfolio is at fixed rates for the com-ing four years. The average interestrate on the fixed-interest debt port-folio is about 5.7%.

The interest rate exposure on thevariable-rate debt is partially balanc-ed by DFDS’ liquid assets.

Integration of DFDS Transport andDanTransportDanTransport is DFDS’ largest acquisi-tion to date. The integration of theoperational units is progressing satis-

factorily, and so far the problemsoccurred can be described as normalin connection with an integration ofthis size. The new logistics and trans-port organisation has been favourab-ly received by the market.

Although the integration has proceed-ed satisfactorily so far, the possibilityof unforeseen problems arising befo-re it is completed cannot be entirelyruled out.

AALBORG INDUSTRIESOperational risk factorsAalborg Industries’ core businessareas are within production and in-stallation of marine boilers for shipsand boilers for land-based systemsfor electricity and heat production,together with process steam. Bothareas are very dependent on the de-velopment in the global economy.

The demand for marine boilers relat-es almost exclusively to newbuildingactivity within the shipping industry.That means that the development offreight rates, the need for marinetransport, scrapping of tonnage, etc.are all critical factors, not only forship-owners all over the world, butalso for Aalborg Industries.

Structural changes within shipbuild-ing could in time constitute somerisk. Geographically, shipbuilding ca-pacity is being reduced in Europe andthe USA, but increased in the FarEast, and the yards are getting stilllarger. That may imply different andnew requirements for subsuppliers tothese yards, including a growingneed for a broader range of productsand greater geographical closeness tothe yards.

However, Aalborg Industries, which isone of very few global manufacturersof marine boilers, is well equippedfor this development.

10

J. LAURITZEN A/S

Board of DirectorsOtto Christensen, ChairmanBent Østergaard, Deputy Chairman

ManagementTorben Janholt, President and CEOBirgit Aagaard-Svendsen, ExecutiveVice President and CFO

Key figures, DKK million 1999 1998

Income 3,440 3,397

Costs (3,251) (3,254)

Depreciation and write-downs (205) (418)

Operating profit(loss) (16) (275)

Profit on sales of ships 28 15

Financial items etc., net (96) (84)

Profit (loss) on ordinary

activities before tax (84) (344)

Tax on profit (loss) on (3) (5)

ordinary activities

Profit(loss) on ordinary activities (87) (349)

Profit (loss) for the year (87) (349)

Minority interests (1) (4)

Net profit (loss) (88) (353)

Fixed assets 2,309 2,343

Aktiver 2,899 2,730

Capital and reserves 670 752

Employees 1,012 1,043

Operating margin, % (0.5) (8.1)

Return on net assets, % 1.4 (7.3)

Return on equity, % (12.9) (39.0)

Equity ratio,% 23.1 27.5

1999 in briefThe net result for the year was a lossof DKK 88 million, against a loss ofDKK 353 million in 1998. The result isunsatisfactory although better thanexpected at the beginning of theyear. The improvement is due in partto restructuring of the company’soperational and commercial activitiesand the stronger USD. Oil prices, onthe other hand, almost doubled in1999 and had an adverse effect onthe result for the year.

The markets in which J. Lauritzen isrepresented showed stable develop-ment during the year, although theyremained at a low level. All the busi-ness areas were strengthened anddeveloped their market positions in1999.

During the year, J. Lauritzen carriedout a radical restructuring of thecompany, which included changingits legal structure. J. Lauritzen nowcomprises the shipping companiesLauritzen Reefers, Lauritzen Kosanand Lauritzen Bulkers, together witha number of land-based logisticscompanies, mainly situated in SouthAmerica. The land-based activities,which were established to supportLauritzen Reefers’ activities in theSouth American market, are now aseparate business area.

During the year, J. Lauritzen soughtconsolidation in the gas andrefrigerated transport market. Thenew corporate structure increases thepossibilities of developing the fourbusiness areas and of participating inrelevant structural changes in themarket.

J. Lauritzen operated a total averagefleet of 114 vessels in 1999, of whichthe company owned 37 itself at year-end. The company added net onevessel to its fleet during the year. Thetwo reefers, Nippon Reefer and NewZealand Reefer, were sold. LauritzenKosan added a newbuilding, TessaKosan, to its fleet, together with two

Korean gas tankers, Kinna Kosan,built in 1989, and Kaisa Kosan, builtin 1992.

J. Lauritzen wants to be at the cut-ting edge of IT technology. In 1999,the Intranet became a central plankin the company’s operation and inter-nal, global communication. The Inter-net also has high priority, as a com-munication tool and marketplace inrelation to the company’s customersand suppliers.

LAURITZEN REEFERSThe decline in the market, which be-gan in 1998, continued in 1999.Climatic problems in Central andSouth America had an adverse effecton the fruit harvest in many fruit-exporting countries. This, combinedwith considerable new tonnage andgrowing competition from the con-tainer lines, kept freight rates low.

However, Lauritzen Reefers succeed-ed in maintaining its market shares inall main markets and in ensuringitself shipments from Chile, Argentinaand Brazil, which, measured in volu-me, were extraordinarily large in1999.

The rate level for contracts enteredinto for 2000 is marginally lower thanthe 1999 level. The rate level for spe-cialised reefers is expected to beginrising in 2000/2001, due in part toonly a modest net addition of tonna-ge. The development of the rates forcontainer transport will also have apositive knock-on effect.

LAURITZEN KOSANThe market for gas tankers was ge-nerally unsatisfactory in 1999 becau-se of low demand in relation to theavailable transport capacity. However,the market for small carriers develop-ed in the right direction, and the Spa-nish market, in particular, developedsatisfactorily, with increased volume.

11

Lauritzen Kosan had satisfactory con-tract cover that was better than inprevious years. Fluctuations on thespot market therefore had little effecton Lauritzen Kosan, and was conse-quently not forced to lay up vesselsduring the low season.

As a consequence of the positive de-velopment in the Far East, LauritzenKosan decided to establish a presen-ce in this market. At the end of theyear, it invested in two second-handcarriers to be employed in the Asianmarket.

The gas transport market in Europe,including North Africa, will continueto be characterised by moderategrowth and intense competition. Op-portunities for expansion have beenidentified in South America and theCaribbean, and Lauritzen Kosan iskeeping a close watch on opportuni-ties for growth in regional distribu-tion of gas by sea in the Far East, par-ticularly in China.

LAURITZEN BULKERSThe decline in the market, which be-gan in 1998 as a consequence of therecession in Asian, continued into thefirst half of 1999. Freight rates fell toa level not seen by the industry sincethe mid-1980s. Signs of an improve-ment first appeared in July, and sincethen, the market has graduallyrecovered.

The expansion commenced by Lau-ritzen Bulkers a couple of years ago iscontinuing. In 1999, the number ofship-days on which the fleet was oc-cupied rose by around 21% compar-ed with the previous year. LauritzenBulkers has specialised in transport ofdry bulk cargo to and from portswhere vessels have to be equippedwith crane and grab facilities for self-loading and self-discharge.

The favourable market trend is ex-pected to continue, but the dry bulkcargo market is very volatile, so un-foreseen events can have a signifi-cant effect on freight rates. In 2000,

Lauritzen Bulkers plans to strengthenits operation in the Pacific region.

Post-balance sheet eventsAt the end of January 2000, J.Lauritzen entered into agreementwith the limited partnershipsmanaged by SBK-Finans, from whichthe three reefers Ivar, Ditlev andKnud Lauritzen are on long-termcharter. With this agreement, thebareboat period has been extendedby five years to 2010 and 2011,respectively. The agreement will havea favourable effect on both cash flowand earnings in 2000 and onwards.

Outlook for 2000The positive trend in the global eco-nomy is expected to continue,although it is uncertain whether theNorth American boom will continueat the present rate. The economicrecovery in South America is expect-ed to remain slow, and the possibilityof a reversal cannot be excluded.

In the coming year, J. Lauritzen willcontinue its efforts to consolidate itsmarket positions with a view to en-suring long-term stability.

The price of oil is still a significantcost element for the company. Theprice almost doubled in 1999 and isexpected to remain at a high level in2000.

The result will be sensitive especiallyto fluctuations in oil prices.

The result for the first few months ofthe current year was disappointing,especially in the case of reefers. Dueto the current high oil prices and apersistently weak freight market,again especially for reefers, J. Laurit-zen now expects the result on ordi-nary activities to be slightly lowerthan in 1999.

12

DFDS A/S

1999 in briefTurnover rose by 55% to DKK 14,985million and the profit before depre-ciation went up by 19% to DKK1,204 million. The profit before finan-cing costs amounted to DKK 540million, which is on a par with 1998.The pre-tax profit on ordinary activi-ties was DKK 306 million and the netprofit DKK 193 million.

The result cannot be described as sa-tisfactory, but must be seen in thelight of large amortisation of good-will and financing costs relating tothe acquisition of DanTransport. Theexpected synergies from the mergerof DFDS Transport and DanTransportwill not be visible until 2000. On topof this come unsatisfactory resultsfrom the acquired Norwegian ro/roactivities (North Sea Line) and fromthe forwarding activities in the UK.Lastly, the result was depressed byhigher bunker costs than expected.

In connection with the delivery ofthree new ro/ro ships to DFDS, theItalian shipyard Fincantieri did notmeet the agreed delivery dates andtherefore paid delivery fines. TheSwiss transport company Danzas,granted DFDS compensation forbreach of contract. The compensa-tion was partially booked to incomein 1999. Both the delivery fines andthe compensation are included asordinary income as compensation forloss of income and extra costs.

The result for the Transport/logisticswas affected by the above-mentionedfactors and is thus not satisfactory,whereas Passenger Shipping produceda satisfactory result.

Strategic developmentDFDS achieved three importantstrategic objectives in 1999.

DFDS established the second largesttransport company in the Nordic re-gion through the acquisition of Dan-Transport.

The acquisition of North Sea Lineconsiderably strengthened DFDS TorLine’s market position on the NorthSea.

DFDS implemented a transparent, lo-gical and flexible organisationalstructure. The three divisions - DFDSDan Transport, DFDS Tor Line andDFDS Seaways - will become legalentities in the first half of 2000.Each will thus be able to enter intoindustrial cooperation with externalpartners with an element of owner-ship or cross-ownership. In addition,all ro/ro and port terminal activitieswere assembled in DFDS Tor Line.

Acquisition of DanTransportOn 18 May 1999, DFDS A/S signedan agreement to acquire all the sha-res in Dan Transport Holding A/Sfrom FLS Industries A/S for DKK 2.0billion. The acquisition was a naturalconsequence of DFDS’ strategy tobecome the leading supplier oftransport and logistic services in theNordic area. It also positioned DFDSas a leading player in the Europeantransport industry.

The European and US competitionauthorities approved the aquisitionagreement on 15 July 1999, and thetask of integrating DFDS Transportand DanTransport then began. Theintegration process is proceeding sa-tisfactorily and, as stated in the inte-rim report, the merger is still expect-ed to produce annual synergisticeffects from and including 2000 ofDKK 75 million, rising to DKK 100million over the coming years.

DFDS DAN TRANSPORTThe second half of the year wasseriously affected by the acquisitionof DanTransport in May 1999. Asexpected, the level of activity wasadversely affected by the change ofpartner on the Continent and theoperational integration in the DFDSDan Transport, which commenced inthe second half of the year.

Board of DirectorsJan Erlund, ChairmanBent Østergaard, Deputy Chairman

ManagementThorleif Blok, President and CEOChr. Merrild, Executive Vice President,FinanceOle Frie, Transport DirectorOddbjörn Fastesson, Vice PresidentBo-Lennart Thorbjörnsson, VicePresident


Income 14,985 9,639

Costs (13,781) (8,631)

Depreciation (664) (470)

Operating profit(loss) 540 538



activities before tax 306 408

Tax on profit(loss) on

ordinary activities (85) (117)

Profit(loss) on ordinary

activities 221 291

Extraordinary items, net (27) 0

Profit(loss) for the year 194 291

Minority interests (1) 0

Net profit(loss) 193 291

Fixed assets 8,202 4,807

Assets 12,117 6,862

Capital and reserves 3,319 2,252


Operating margin, % 3.6 5.6

Return on net assets, % 6.8 9.2

Return on equity, % 7.9 12.7

Equity ratio, % 27.4 32.8

13

Following the integration, DFDS DanTransport is one of the ten largest(comparable) European transportcompanies, measured by turnover. Inthe Nordic countries, its position asthe second largest supplier is of greatstrategic importance.

DFDS TOR LINE1999 was an eventful year with manyactivities and changes. All DFDS’ ro/ro and port terminal activities wereassembled in DFDS Tor Line.

The biggest task in 1999 was the ta-keover of the Norwegian shippingcompany Fred. Olsen’s North Sea Li-ne. Work went on throughout theyear on rationalising the activities andintroducing DFDS Tor Line’s own busi-ness concept - the Bridge concept.Service improvements in the form ofmore departures and more capacitywere implemented.

DFDS SEAWAYSThe focus in 1999 was on planningand implementation of initiatives tocounteract the consequences of theabolition of tax-free sales within theEU. DanTransport Travel Bureau andCanal Tours were taken over in con-nection with the acquisition ofDanTransport.

Within Passenger Shipping, thepassenger figure rose by 1% to 1.67million. The number of departureswas increased by 16% in connectionwith replanning of routes in view ofthe abolition of tax-free sales.

Post balance sheet eventsDFDS has signed an agreement to selltwo old ro/ro cargo carriers, TorHollandia and Tor Gothia. The carriershave been chartered for two yearswith the option of extending thecharter period. The profit from thesale amounts to DKK 20 million,which has been taken into account inthe evaluation of DFDS’ result for2000.

Outlook for 2000The main strategic goals for 2000are:• to complete the integration pro-

cess in DFDS Dan Transport and atleast realise the projected syner-gies,

• to complete the integration pro-cess in DFDS Tor Line and realiseoperational synergies,

• to translate vision and values intoaction,

• to define and anchor financialtargets throughout the organisa-tion,

• to exploit new market opportuni-ties arising from the Group’simproved strategic market position.

The main financial goals for 2000are:• to generate a substantial, positive,

free cash flow from operation afterinvestments,

• to achieve a distinct improvementin the result of the UK forwardingactivities,

• to achieve a distinct improvementin the result of the Norwegian ro/ro activities,

• to implement a reduction in theinvested capital.

The level of activity in DFDS’ mainmarkets is expected to developfavourably, except in the case of theRussian market, which seems likely toremain unstable. No significant chan-ges in exchange rates are anticipatedin 2000.

At division level, DFDS Dan Transportexpects to achieve a somewhat betteroperating result than in 1999.

The operating result for DFDS Tor Li-ne is expected to be in line with1999, despite the expansion of thedepreciation basis and high oil prices.

DFDS Seaways expects to achieve asomewhat better operating result in2000 than in 1999.

With reservation for the uncertaintyconcerning oil prices, the total profitbefore financing costs etc., for theDFDS Group is expected to be about15% higher than in 1999. The profitbefore tax and extraordinary items isalso expected to be about 15%ahead.

14

DANYARD A/S

1999 in briefThe result for the year was a loss ofDKK 53 million, against a loss of DKK125 million in 1998. The loss for1999 includes DKK 100 million fromthe reversal of a provision made in1998.

The provision was made to cover ex-traordinary costs in 1999 in connec-tion with the closing-down of theyard’s newbuilding activities, includ-ing redundancy pay and general bo-nus schemes.

The year’s activitiesDuring the year, Danyard deliveredthe last two of nine chemical tankersto Stolt Parcel Tankers Inc. withoutserious delays thanks to the loyal ef-forts of all employees. The yard thus

managed to meet the agreed timeschedules and the financial plans forclosing down the yard.

Danyard had no activities at the endof the financial year, and the employ-ees have left or been made redun-dant.

On 1 June 1999, Frederikshavn Mari-time Erhvervspark A/S (FME) enteredinto Danyard’s lease with the Port ofFrederikshavn and, in that connec-tion, purchased all Danyard’s tangibleassets. FME is a leasing company with43,000 square metres of floor spacebesides dry-docks and other yardfacilities on a 100,000 m2 site. SinceDanyard closed down, FME has ma-naged to lease out more than half ofthe 43,000 square metres of floorspace besides port areas and dry-docks to 16 different lessees. Withthat, the expectation of a profitableleasing bu-siness has been fulfilledvery early on.

At an Extraordinary General Meetingin October, a decision was made towrite down the share capital to DKK0 to partially cover losses from earlieryears. At the same time, J. LauritzenHolding paid in DKK 200 million innew share capital. Danyard’s liquidfunds, together with other currentassets, are regarded as adequate tocover all its obligations apart fromthe inter-company account withJ. Lauritzen Holding, which stood atDKK 1,069.8 million as at 31 Decem-ber 1999.

OwnershipOn 22 December 1999, J. LauritzenHolding transferred all shares in Dan-yard to its wholly-owned subsidiaryHelsingør Værft.

Outlook for 2000A break-even result is expected forthe coming year.

Board of DirectorsFreddy Frandsen, ChairmanBent Østergaard, Deputy Chairman

ManagementTorben Erikstrup, President and CEO


Income 539 1,054

Costs (651) (1,140)

Depreciation 0 (28)

Reversal of provision 0 100

Operating profit(loss) (112) (14)

Financial items etc., net 2 (11)


activities before tax (110) (25)

Tax on profit (loss) on

ordinary activities 0 0

Profit on ordinary activities (110) (25)

Extraordinary items, net 57 (100)

Profit for the year (53) (125)

Net profit(loss) (53) (125)

Fixed assets 0 126

Assets 89 720

Capital and reserves (1,070) (1,217)

Employees 604 1,277

Operating margin, % (20.8) (1.4)

Return on net assets, % (25.5) 0.0

Equity ratio, % n/a (169.0)

15

DANYARD AALBORG A/S

1999 in briefThe result for the year was a profit ofDKK 7 million, against a profit of DKK11 million in 1998. The result is verysatisfactory.

The year’s activitiesDanyard Aalborg carried out severalassignments for the Danish Navy in1999: such as a lifetime prolongationof the corvette Olfert Fischer, fitting-out and delivery of two 25 metrefibreglass boats and extensive mainte-nance work on Standard Flex andother vessels.

Danyard Aalborg signed a new 5-yearmaintenance contract with the Navyfor the 14 Standard Flex vessels thatDanyard Aalborg delivered in theperiod 1989 - 1995 and for 10 smallfibreglass boats.

In 1999, the company focused on sel-ling 110 - 150 ft super-yachts in fibre-glass sandwich material as a supple-ment to its work for the Danish Navyand other assignments. In November1999, a contract was signed for thefirst of these yachts.

The yard’s order portfolio at the endof 1999 amounted to around DKK 65million.

Outlook for 2000As at 27 March 2000 J. LauritzenHolding entered into an agreementregarding sale of Danyard Aalborg asa MBO. The price is equivalent tobook value at year-end. The sale willhave no effect for the result in 2000for J. Lauritzen Holding.

Board of DirectorsFreddy Frandsen, ChairmanBent Østergaard, Deputy Chairman

ManagementTorben Erikstrup, President and CEO


Income 115 148

Costs (101) (135)


Operating profit(loss) 12 11

Financial items etc., net (1) 0



Tax on profit(loss) on

ordinary activities (4) 0

Profit(loss) on ordinary activities 7 11

Net profit(loss) 7 11

Fixed assets 28 24

Assets 73 82


Employees 168 245





16

Board of DirectorsOtto Christensen, ChairmanBent Østergaard, Deputy Chairman

ManagementFreddy Frandsen, President and CEOSvend Ole Aagren, Senior VicePresident and CFO

Key figures DKK million 1999 1998

Income 2,023 1,675

Costs (1,890) (1,567)


Operating profit (loss) 102 79




Tax on profit (loss) on

ordinary activities (33) (27)

Profit(loss) on ordinary

activities 64 46

Profit(loss) for the year 64 46

Minority interests (1) (2)

Net profit (loss) 63 44

Fixed assets 289 189

Assets 1,263 1,005







AALBORG INDUSTRIES A/S

1999 in briefThe result for the year was a pre-taxprofit on ordinary activities of DKK 97million, up 33% on the previousyear’s pre-tax profit of DKK 73 mil-lion, and a net profit of DKK 63 mil-lion, compared with DKK 44 millionin 1998.

The result was better than expectedthroughout 1999, and the profit forthe year must be described as satis-factory.

As at 31 December 1999, the Group’sorder portfolio stood at DKK 2,160million, against DKK 1,224 million atyear-end 1998 and is regarded assatisfactory.

Development ofAalborg IndustriesBesides direct business- and customer-related activities, various measuresand projects were carried out in 1999with the aim of ensuring continuedgrowth in turnover and profits for theAalborg Industries Group.

These activities were focused on pro-duct development, product standardi-sation and market development - allwith the object of strengthening theGroup’s trend-setting, leading posi-tion in the global markets. Spendingon these activities during the year hasbeen charged to the profit and lossaccount.

In 1999, the management structurewas strengthened still further to sup-port the global strategy. This hasreinforced the global perception ofAalborg Industries as a single compa-ny that is very close to its customersand the markets and has led to in-creased opportunities for maximisingsynergies.

Work on the establishment of a glo-bal supply unit responsible for logi-stics, purchasing, outsourcing, trans-port and production was intensifiedstill further during the year, and theunit is expected to contribute

significantly to improved competitive-ness in the years ahead.

The enlargement of the productionfacilities in China is proceeding accor-ding to the plan and will be complet-ed in May 2000. With this, AalborgIndustries has further strengthened itscompetitiveness and closeness to themain markets, Korea, Japan and Chi-na in the marine boiler area.

The Japanese market for both marineand land-based boilers remains stra-tegically important, and a satisfactoryresult was achieved in 1999, creatinga good basis for strengtheningAalborg Industries’ position in thismarket.

Marine based activitiesMarine activities, which take place atthe units in Denmark, Sweden, theNetherlands, Finland, Dubai, Singapo-re, China and Japan, all produced asatisfactory result in 1999.

Despite lower sales in 1999 than in1998, Aalborg Industries consolidatedand, in some areas, strengthened itsposition as global market leader with-in the Group’s three marine productareas: marine boilers, heat exchang-ers and inert gas systems includingAfter Sales service. The new part ofthe production programme(MISSIONTM) is accounting for a grow-ing proportion of sales.

On 30 June 1999, Aalborg Industriesacquired Wiesloch Marine &Industries B.V./Wiesloch Beheer B.V.in the Netherlands. Wiesloch is aleading supplier of thermal fluid hea-ters for the marine market. With thisacquisition, Aalborg Industries hasgained a market-leading positionwithin this segment and thus reinfor-ced its position as global market lea-der within marine boilers.

In 1999, the Korean market for mari-ne boilers remained important

17

for Aalborg Industries’ market posi-tion. With a view to improving stillfurther its market-leading position inthis market, Aalborg Industries estab-lished its own sales and service unitin Pusan on 1 January 2000 in orderto be as close as possible to the ship-yards.

The global structure and network be-tween the units have been furtherdeveloped, enabling customers to beserved local on the basis of theGroup’s global know-how.

Global After Sales service was reinfor-ced in 1999 by the appointment of aGroup Vice President for the areawith a view to ensure maximum utili-sation of this important market seg-ment.

The action taken in the last few yearsto build up Aalborg Industries’ owncompetencies within burner and con-trol technology has significantlystrengthened the Group’s position inthe marine boiler market, leading toincreased sales and earnings.

Land-based activitiesAalborg Industries’ land-based activi-ties take place at the units in Den-mark, Sweden, Finland, the USA, Ja-pan, China, Brazil and Indonesia. Amajor global marketing campaign in1999 strengthened further knowled-ge and awareness of the Group’sland-based products in selected mar-kets.

The product areas are PIONEER/HRSGboilers (heat-recovery steam genera-tors), oil/gas-fired boilers and AfterSales service.

The unit in the USA achieved verysatisfactory growth in both sales andearnings in 1999 and has therebybecome the expected asset for theGroup’s land-based activities, withthe main focus on the American ho-me market. The relatively rapidgrowth in this unit has been madepossible by the unit’s general flexibili-ty and, especially, its readiness to out-source production and engineering.

In 1999, the land-based unit in Aal-borg felt the after-effects of the fi-nancial crisis in Asia, which resultedin a slight fall-off in orders from bothAsia and Europe at the beginning of1999. However, the situation improv-ed considerably at the end of theyear, and a positive profit is expectedagain in 2000.

The activities in Brazil have been ad-justed to the market situation result-ing from the major currency devalua-tion at the beginning of 1999.

The unit in Indonesia has been affect-ed in its home market by both econo-mic and political developments in thecountry. However, during the year,the company was able to provideother members of the Group with en-gineering and production and thusmanaged to maintain a solid basisthat will enable it to take full advan-tage of the positive developmentexpected in the future.

Outlook for 2000Aalborg Industries’ strategy for theperiod 1998-2002 is based on devel-opment of the Group towards a glo-balised structure and both acquisitiveand organic growth in turnover andearnings.

With the implementation of the ma-ny action plans and the initiation ofnew activities to improve competiti-veness, the Group expects the aimsof the strategy plan to be achieved in2000 as well, although the profit in2000 is likely to be slightly below the1999 figure.

Aalborg Industries will therefore con-tinue intensive product and marketdevelopment and, in that connection,make one or more acquisitions withinits core business areas.

18

FINANCIAL REVIEW

The accounting policies applied areconsistent with those of previousyears.

Readers are referred to Accountingpolicies, which include details on newevents.

IncomeIn 1999 the Group achieved incometotalling DKK 21,086 million againstDKK 15,755 million in 1998. As thefigure shows below, DFDS accountsfor the greatest increase, due to thepurchase of DanTransport.

Operating profit(loss)The total operating profit of the Groupwas DKK 208 million higher than in1998. J. Lauritzen recorded the stron-gest growth, DKK 259 million, eventhough the company continues toshow an operating loss. In 1998J. Lauritzen wrote down the value ofthe ships by DKK 200 million.

The improved operating performanceof J. Lauritzen is due to the reorgani-sation of the company’s operationaland commercial activities and thestrengthened USD in addition to thefactors mentioned above. Oil pricesmore than doubled in 1999, affectingresults adversely.

DFDS’s operating profit was affectedadversely by increased amortisationof goodwill as a result of the purcha-se of DanTransport. The expected sy-nergistic benefits will not be realiseduntil from 2000 onwards.

The operating profit of Aalborg Indu-stries showed an improvement ofDKK 23 million, from DKK 79 millionin 1998 to DKK 102 million in 1999,or an improvement of 29%.

In 1999 Danyard delivered the lasttwo chemical tankers to the Stolt-Nielsen group, and the shipyard hasnow been closed down. The windingup of the yard is almost completeand its tangible fixed assets havebeen sold to Frederikshavn MaritimeErhvervspark.

Associated undertakingsThe share of the profits before tax ofassociated companies was DKK 4 mil-lion (1998 DKK 56 million), includingthe profit of Sabroe Refrigeration A/Sof DKK 3 million (1998 DKK 54million).

Financial itemsThe Group’s net financial expensesincreased by DKK 93 million compar-ed with 1998. Most of the increase isdue to DFDS’s financing of the pur-chase of DanTransport.

Extraordinary itemsOf extraordinary income the profitfrom the sale of Sabroe RefrigerationA/S accounted for DKK 1,057 million.As disclosed in the 1998 annual ac-counts, a claim for approx. DKK 50million was made in respect of gua-rantees in connection with sales ofbusinesses. In 1999 a settlement wasmade involving payment of DKK 20

million. This amount is included in thecomputation of the profit from thesale of Sabroe. As security for anyclaims that the purchaser of Sabroemight make under the purchase andsales agreement, a total amount ofDKK 400 million has been deposited,half of it by J. Lauritzen Holding. OfJ. Lauritzen Holding’s share DKK 150million will be released on 1 July2000 provided no claims are madebefore that date. The remainingamount will be released over a four-year period. As at today no claimshave been made, and as there arenot expected to be any claims, either,no provision has been made.

Extraordinary income also includesreversal of a provision for winding upcosts at Danyard A/S.

Extraordinary expenses relate to thecost of securing pension commit-ments at DFDS.

OPERATING PROFIT(LOSS)

DKK million

J. L

AU

RITZ

EN

DFD

S

DA

NYA

RD

AA

LBO

RG IN

DU

STRI

ES

OTH

ER

600

400

300

200

INCOME

DKK billion

J. L

AU

RITZ

EN

DFD

S

DA

NYA

RD

AA

LBO

RG IN

DU

STRI

ES

OTH

ER

16

12

8

4

1999 1998 1999 1998

19

Capital and reservesMovements in capital and reservesexcluding minorities were affected bya carry-forward of the profit for theyear of DKK 1,059 million, a share ofother movements in capital and reser-ves of DKK -11, value adjustment offoreign capital holdings etc. of DKK80 million, acquisition of own sharesof DKK -55 million and dividend setaside of DKK -26 million.

LiquidityThe Group’s investments in affiliatedundertakings totalled DKK 2,518 mil-lion against DKK 358 million in 1998,most of them relating to DFDS’s pur-chase of DanTransport. Investmentsin tangible fixed assets amounted toDKK 1,005 million in 1999 againstDKK 1,483 million in 1998. Of invest-ments made in 1999, DFDS account-ed for DKK 791 million and J. Laurit-zen for DKK 162 million, mainly rela-ting to ships.

Ordinary repayments of DKK 1,370million reduced long-term creditors.New loans totalling DKK 3,169 mil-lion were raised, including DKK 1,850million in connection with the finan-cing of DFDS’s purchase of DanTrans-port.

In the autumn of 1999 DFDS made arights issue with net proceeds of DKK820 million, including DKK 440 mil-lion from J. Lauritzen Holding A/S.

Distributable liquid funds of Groupcompanies totalled DKK 1,373 millionat year-end 1999 against DKK 891million at year-end 1998.

Foreign currenciesAll the Group companies have exten-sive business relations with othercountries and are therefore affectedby movements in exchange rates. TheGroup’s overall strategy is that the re-sponsibility for hedging foreign cur-rency risks lies directly with the ope-rating companies.

Related partiesRelated parties include the JL-Founda-tion and the Board ofDirectors and the Board of Manage-ment of J. Lau-ritzen Holding A/S.

Except for the usual cost refunds inrespect of shared office facilities, norelated party transactions have beenmade.

J. LAURITZEN HOLDING A/SThe Board of Directors recommendspayment of a dividend of DKK 10 pershare for 1999 and distribution of theprofit for the year as follows:

LIKVIDITY

DKK million

1,000

750

500

250

J. L

AU

RITZ

EN

DFD

S

DA

NYA

RD

AA

LBO

RG IN

DU

STRI

ES

OTH

ER

J. L

AU

RITZ

EN

DFD

S

D

AN

YARD

AA

LBO

RG IN

DU

STRI

ES

OTH

ER

2,000

1,500

1,000

500


excl. minority interests, DKK million

1999 1998 1999 1998

DKK

Profit for the year 1,059.2DKK 10 dividendper nom. share ofDKK 20 each (26.9)Including dividendrelating to own shares 0.7 (26.2)

Transferred to other reserves 1,033.0

20

SIGNATURES

Copenhagen, 27 March 2000

Management: Board of Directors:

Bent Østergaard Michael Christiansen, Chairman Gerhard Albrechtsen, Deputy ChairmanPresident

Teddy Jacobsen Benny Falk •

Jill Lauritzen Melby Ejgil Kromann •

Steen Riisgaard Birger Nielsen •

Ivar Samrén • Elected by the employees.

Auditors’ report:We have audited the consolidated accounts and the annual accounts of J. Lauritzen Holding A/S for 1999 as prepared bythe management.

Basis of the auditWe have planned and conducted our audit in accordance with generally accepted auditing standards as applied in Denmarkto obtain reasonable assurance as to whether the accounts are free from material misstatements or omissions. Based on anevaluation of materiality and risk we have tested, during our audit, the basis and documentation for the amounts and otherdisclosures in the accounts. Our audit has included an assessment of the accounting policies applied and the financialestimates made. In addition, we have evaluated the overall adequacy of the presentation of information in the accounts.The audit has not given rise to any qualifications

OpinionIn our opinion the consolidated accounts and the annual accounts have been presented in accordance with the accountingprovisions of Danish legislation and give a true and fair view of the Group’s and the parent company’s assets and liabilities,financial position and results.

Copenhagen, 27 March 2000

KPMG C. Jespersen Revisionsfirmaet Chr. Mortensen

Kurt Gimsing Lars Andersen F. Rothstein State Authorised Public Accountants State Authorised Public Accountant

21

ACCOUNTING POLICIES

The accounts of the J. Lauritzen Hol-ding Group for 1999 have been pre-pared in accordance with the provisi-ons of the Danish Company AccountsAct, current Danish accounting stand-ards and the guidelines laid down bythe Copenhagen Stock Exchange forthe preparation of accounts of listedcompanies.

The accounting policies applied areconsistent with those of last year.

J. Lauritzen A/S’s hedging strategy waschanged during the year so that long-term USD-denominated debt is nowincluded in the hedging of future netUSD income. The section on financialitems has therefore been elaborated.

Further, own shares were acquiredduring the year. These are dealt within the section “Own shares”.

Consolidated accountsThe consolidated accounts include theaccounts of the parent company andthe companies in which J. LauritzenHolding A/S has a direct or indirect in-terest exceeding 50% of the votingrights and/or exercises controlling in-fluence. The consolidated accountsare prepared on the basis of the ac-counts and the consolidated accountsrespectively of the individual subsidia-ries by combining accounting items ofa uniform nature and subsequently eli-minating the Group’s share of inter-company profits on fixed assets andstocks, etc., intercompany commis-sions, interest, dividends, accounts,guarantees, pledges and mortgages aswell as intercompany sales.

The accounts used in the consolida-tion are prepared in accordance withthe Group’s accounting policies.

The parent company’s book value of in-vestments in subsidiaries is credited tothese companies’ capital and reserves.

The results of acquired or sold subsi-diaries are included in the profit andloss account for the period in which

they are owned by the Group. Acquir-ed subsidiaries are included at the ti-me of purchase at book value afteradjustment of assets and liabilities inaccordance with the Group’s account-ing policies. In addition, provision ismade for expenses which, at the timeof acquisition, it was decided to incurin connection with the purchase. Anyexcess value is capitalised as goodwilland written off through the profit andloss account following an individualevaluation of the useful economic lifeof the asset.

Foreign undertakingsAutonomous foreign entities are trans-lated according to the average ratesof exchange ruling during the yearwhile the balance sheet is translatedaccording to the rates of exchangeruling at year-end. Exchange differen-ces arising on translation are taken tocapital and reserves. For integral for-eign entities the monetary items of thebalance sheet are translated at the ex-change rates ruling at the end of thefinancial year, non-monetary items aretranslated at the historic rates of ex-change ruling at the end of the finan-cial year, and the monetary items ofthe profit and loss account are trans-lated at the exchange rates ruling onthe date of the transaction. Exchangedifferences arising on translation areincluded in the profit and loss accountunder financial items.

Associated undertakingsUndertakings in which the Groupowns between 20% and 50% of thevoting rights or in some other wayexercises a significant influence overthe operating and financial manage-ment of these undertakings are treat-ed as associated undertakings.

Participating interests in associated un-dertakings are valued according to theequity method at the proportionallyowned share of the undertaking’s ca-pital and reserves plus goodwill andless amortisation of goodwill. Inter-company profits and losses are elimi-nated on a proportional basis.

PROFIT AND LOSS ACCOUNT

Income and expensesIncome and expenses are enteredaccording to the accruals concept sothat income and expenses incurred forthe financial period are included.

Provision is made for future dockingsfor own ships on the basis of an indivi-dual evaluation of the anticipatedcosts.

Major works in progress for third par-ties are recognised pursuant to thepercentage of completion method,according to which the value of theshare of orders executed is included innet turnover at an estimated sales va-lue of the work performed. For works,which are expected to produce a loss,the expected negative contributionmargin is charged to the profit andloss account.

Interest on extraordinarily large pre-payments in respect of newbuildingcontracts at Danyard is entered asincome in step with production and isincluded in the value of the produc-tion for the year.

Research and development costsAll research and development costsare charged to the profit and lossaccount in the year in which they areincurred.

Depreciation and writedownsGoodwill is written off over its esti-mated life, normally not exceedingfive years. In special cases goodwill iswritten off over more than five years,with a maximum of 20 years.

The depreciation basis of ships is cal-culated at cost reduced by an esti-mated scrap value. The cost of shipsincludes interest until the time ofcommissioning.

The conversion of ships is treated asan addition to cost and is written offover the same residual period as theoriginal asset.

22


The value of ships and other fixed as-sets is written down if the use value ofthe asset is considerably lower thanthe book value due to circumstances,which are not temporary. The valua-tion is made for on an asset-to-assetbasis.

Tangible fixed assets are depreciatedby the straight line method over theirestimated useful lives, which are asfollows:

Shipyard buildings 10 - 25 yearsOther buildings 25 - 50 yearsTerminals 10 - 40 yearsShipyard plant 10 - 20 yearsRefer vessels andgas tankers 20 yearsCargo carriers andpassenger liners 15 - 25 yearsPlant, machinery andequipment 3 - 10 years

Assets not exceeding certain amountsare written off immediately in the yearof acquisition.

Fixed assets leased under finance lea-ses are depreciated according to thesame guidelines as apply to ownedassets of the same kind.

Realisation gains and losses ontangible fixed assetsRealisation gains and losses on shipsare shown on a separate line in theprofit and loss account.

Realisation gains and losses on othertangible fixed assets are mainly shownunder other operating income orother external expenses.

Results of subsidiaries/associatedundertakingsThe results before tax of subsidiaries/associated undertakings include pro-portional shares of the results beforetax of subsidiaries/associated under-takings after adjustment of intercom-pany profit and deduction of amorti-sation on Group goodwill.

The proportional share of tax on theresult for the year of subsidiaries/asso-ciated undertakings is included in theitem tax on the result for the year.

Financial itemsFinancial costs include estimatedinterest on the leasing commitmentsrecorded in the balance sheet.

Income and charges denominated inforeign currencies, which do not de-rive from foreign entities, are transla-ted at the rates ruling on the date ofthe transaction.

Both realised and unrealised exchangegains and losses on assets and liabiliti-es denominated in foreign currenciesare taken to the profit and lossaccount under financial items.

Accounts denominated in foreign cur-rencies are translated at the exchangerates ruling at the end of the financialyear. In those cases where hedginghas been made, this rate will be used.

Realised and unrealised capital gainsand losses on investments are includ-ed in the profit and loss account.When appropriating the result for theyear, unrealised gains are taken to therevaluation reserves under capital andreserves.

Long-term USD currency loans raisedto hedge future net USD income arestated at the rate ruling at the balan-ce sheet date. As a result, the exchan-ge rate adjustments arising from thechange from historical rate to year-endrate are shown as prepayments andaccruals under short-term debtors andcreditors respectively. The item is re-duced and included in the profit andloss account as repayments are made.

Financial instruments.Realised gains and losses arising fromforward or other financial contractsare included in the profit and lossaccount.

Unrealised gains and losses arisingfrom forward or other financial con-tracts made for hedging purposes areincluded in the profit and loss accountas the secured assets are realised. Allother forward or other financial con-tracts are stated at the market valueon the balance sheet date, and bothunrealised capital gains and losses aretaken to the profit and loss account.

TaxationProvision is made for corporation taxin the amount payable in the follow-ing years on the basis of the taxableincome.

Provision for deferred tax is made atthe current tax rate on all temporarydifferences between values as statedin the accounts and as computed fortaxation purposes.

Deferred tax assets are included at thevalue at which it is expected that theycan be realised, either through set-offagainst deferred tax liabilities orthrough settlement in tax on futureincome.

Extraordinary income and chargesExtraordinary income and charges areincome and charges, which derivefrom events outside the ordinaryactivities.

BALANCE SHEET

Intangible fixed assetsGoodwill is capitalised and written offover its expected economic life, with amaximum of twenty years. The bookvalue of goodwill is evaluated conti-nuously. To the extent it is believedthat there is a permanent fall in thevalue of goodwill, goodwill will bewritten down to this lower value.

Tangible fixed assetsTangible fixed assets are stated at costplus revaluations and less depreciationand writedowns. The value of an assetis written down if the use value of theasset is considerably lower than the

23

ACCOUNTING POLICIES

CASH FLOW STATEMENT

Cash flows from operating activitiesare determined according to the indi-rect method by adjusting Operatingprofit(loss) for non-cash operatingitems, changes in the working capital,financial and extraordinary items paidand corporation taxes paid.

Cash flows from investing activitiescomprise cash flows from the purcha-se and sale of intangible, tangible andfinancial fixed assets.

Cash flows from financing activitiescomprise long-term loans raised andrepayments on those loans, changesin other interest-bearing debt andother changes in the composition ofloan capital and capital and reserves.

Cash at bank and in hand comprisesliquid funds and easily realisable secu-rities subject to an insignificant risk ofchanges in value.

Leasing rentals relating to financeleases, which have been included inthe balance sheet are included undercash from operating activities in theamount constituting the interestelement of the rental. The instalmentelement is included in cash flow fromfinancing activities.

book value due to circumstances,which are not temporary.

Tangible fixed assets financed underlease agreements are capitalised in thebalance sheet if the agreement trans-fers all significant risks and rewards in-cident to ownership of the asset. Theleased tangible fixed asset is stated inthe balance sheet at the present valueof future rentals, and the commitmentin relation to the leasing company isshown as a creditor. The tangible fixedassets thus capitalised are written offin the same way as the group’s othertangible fixed assets. The depreciationis charged to the profit and lossaccount. Rentals are deemed to con-sist of an “interest element” and an“instalment element”. The “interestelement” is charged to the profit andloss account.

Any other rent and leasing commit-ments, including long-term charterpar-ties, are not included in the balancesheet but disclosed in a note to theaccounts.

Financial fixed assetsListed securities are stated at the pri-ces quoted at the end of the financialyear. Mortgages are stated at cost orlower.

Investments in affiliated and associat-ed undertakings are included at a prorata share of their book value accord-ing to the equity method less unreali-sed intercompany profits.

Other financial fixed assets are statedat cost or lower.

Current assetsStocks are valued at the lower of di-rect costs according to the FIFO me-thod or net realisable value.

Major works in progress for theaccount of third parties are valued atthe direct costs of materials, labour,design salaries and services from sub-suppliers, plus the share of the contri-

bution margin appropriate to the per-centage of completion of the indivi-dual order. Provision is made for anylosses on contribution margins.

Amounts invoiced on account, whichexceed the value of work in progresson the individual order, are includedunder short-term creditors.

Debtors are stated after provision forbad debts.

Listed securities are included at theprices quoted at the end of the finan-cial year. Unlisted shares are stated atcost or lower. Mortgages are stated atcost.

Own sharesOwn shares acquired with a view toan expected later delisting of the com-pany from the Copenhagen StockExchange are not shown in the balan-ce sheet, the cost of the acquisitionbeing deducted directly from distribu-table reserves under capital and reser-ves. Dividends received on these sha-res and sales prices are also taken di-rectly to capital and reserves.

ProvisionsProvisions for warranty works includeamounts set aside to cover works andsupplies relating to orders delivered.The provisions cover both costs relat-ing to cases already known andamounts set aside to cover any futurecases.

Provision is made for uncovered pen-sion commitments at year-end.

Other provisions are made to the ex-tent there are any unclarified risks atthe end of the financial year in respectof claims relating to specific matters,including provisions for loss-makingprojects. Moreover, provision is madefor restructuring activities which havebeen decided but not yet completedand which involve uncertainty asregards the final size or the expense ofthe time when it will be incurred.

24

BOARD OF DIRECTORS AND MANAGEMENT

Board of Directors Other commercial duties:

Michael Christiansen, Chairman Director of the Royal Danish TheatreBoard member of:- Sund & Bælt Holding A/S (Chairman)

Gerhard Albrechtsen, Deputy chairman Managing Director, NKT Holding A/SBoard member of:- I.C. Holding A/S (Chairman)- VTP Holding A/S (Chairman)- VTP Invest A/S (Chairman)- Højgaard Holding A/S- Højgaard & Schultz A/S- DaimlerChrysler Danmark A/S- EuroCom Industries A/S- Dansk Autoriseret Markedsplads A/S- DONG E&P A/S

Benny Falk • Engineer, Aalborg Industries A/S

Teddy Jacobsen Chief Financial Officer, Øresundskonsortiet and Sund & Bælt GruppenBoard member of:- A/S Bjørnskov & Co. (Chairman)- KPC Byg A/S

Ejgil Kromann • Department Manager, J. Lauritzen A/S

Jill Lauritzen Melby Chief Accountant, BASF Health & Nutrition A/S

Birger Nielsen • Hotel Manager, DFDS A/S

Steen Riisgaard Corporate Executive Vice President, Novo Nordisk A/SBoard member of:- Verdensnaturfonden WWF

Ivar Samrén Board member of:- House of Business Partners A/S (Chairman)- Egmont International Holding A/S (Chairman)- Gate Gourmet Northern Europe A/S (Vice chairman)- Otto Mønsted A/S

Management:Bent Østergaard President and CEO, J. Lauritzen Holding A/S

Board member of:- DFDS A/S

• Board member elected by the employees

25

PROFIT AND LOSS ACCOUNT

J. LAURITZEN HOLDING A/S Note DKK 1.000 THE J. LAURITZEN HOLDING GROUP

1998 1999 INCOME 1999 19981 Shiping and transport 18,061,608 12,818,8022 Shipyard and industrial activities 2,632,025 2,685,733

1,133 3,886 Other operating income 392,542 250,3441,133 3,886 TOTAL 21,086,175 15,754,879

COSTSRaw materials and consumables (1,712,442) (1,631,928)Costs of shipping operations (4,837,759) (4,375,889)

(10,944) (6,260) 3 Other external charges (9,227,986) (5,466,866)(5,658) (8,676) 4 Staff costs (3,852,210) (3,088,566)

(126) (75) 5 Depreciation and writedowns (917,591) (961,026)Reversal of provisions at Danyard A/S 0 100,000

(16,728) (15,011) TOTAL (20,547,988) (15,424,275)

(15,595) (11,125) OPERATING PROFIT(LOSS) 538,187 330,604

Profit on sale of ships 28,231 14,574(168,704) (116,548) 6 Share of profit before tax in affiliated undertakings

53,654 2,854 7 Share of profit before tax in associated undertakings 3,600 56,024

FINANCIAL ITEMS5,722 9,614 8 Financial income 84,077 103,376

(61,099) (41,844) 9 Financial charges (457,017) (383,406)(55,377) (32,230) TOTAL (372,940) (280,030)

(186,022) (76,047) PROFIT(LOSS) ON ORDINARY ACTIVITIES BEFORE TAX 197,078 121,172

(97,011) (73,905) 10 Tax on profit(loss) on ordinary activities (120,929) (154,261)

(283,033) 2,142 PROFIT(LOSS) ON ORDINARY ACTIVITIES 76,149 (33,089)

0 (1,057,041) 11 Extraordinary items after tax 1,077,380 (100,000)

(283,033) 1,059,183 PROFIT(LOSS) FOR THE YEAR 1,153,529 (133,089)

12 Minority shareholders’ share of the profit(loss) (94,346) (149,944)for the year

(283,033) 1,059,183 NET PROFIT(LOSS) 1,059,183 (283,033)

26

BALANCE SHEET AS AT 31 DECEMBER - ASSETS

J. LAURITZEN HOLDING A/S Note DKK 1.000 THE J. LAURITZEN HOLDING GROUP1998 1999 1999 1998

13 FIXED ASSETS

INTANGIBLE FIXED ASSETSGoodwill 2,348,783 86,669

TANGIBLE FIXED ASSETS245 0 Land buildings, terminals and shipyard installations 2,127,824 1,455,648

Ships 4,967,518 4,391,212Ships under financial leasing 310,325 362,580

130 59 Plant, machinery and equipment 922,691 792,202Financial leased plants, machinery and equipment 61,562 75,678Assets in the course of construction andpayments on account 194,914 335,258

375 59 TOTAL 8,584,834 7,412,578

FIXED ASSETS INVESTMENTS2,229,518 2,798,955 6+13 Investments in affiliated undertakings

210,236 0 7+13 Investments in associated undertakings 17,135 222,6330 0 Other investments and participating interests 1,523 1050 5,000 13 Other deptors 31,904 36,980

2,439,754 2,743,955 TOTAL 50,562 259,718

2,440,129 2,804,014 TOTAL FIXED ASSETS 10,984,179 7,758,965

CURRENT ASSETS14 Stocks

Works in progress for the account of others 1,217,810 1,484,782Invoiced on account (1,061,311) (821,621)

156,499 663,161Raw materials and consumables 164,891 136,511Payments on account 6,347 20,280

TOTAL 327,737 819,952

15 DebtorsTrade debtors 3,150,632 1,691,719

437,320 176,433 Amounts owed by affiliated undertakingsAmounts owed by associated undertakings 3,819 6,756

377 1,114 Other debtors 557,955 302,124247 1,396 16 Prepayments and accrued income 215,943 82,620

437,944 178,943 TOTAL 3,928,349 2,083,219

20,571 20,480 20 INVESTMENTS 82,243 79,021

6,410 210,489 20 CASH AT BANK AND IN HAND 1,494,718 881,727

464,925 409,912 TOTAL CURRENT ASSETS 5,833,047 3,863,919

2,905,054 3,213,926 TOTAL ASSETS 16,817,226 11,622,884

27

BALANCE SHEET AS AT 31 DECEMBER - LIABILITIES

J. LAURITZEN HOLDING A/S Note DKK 1.000 THE J. LAURITZEN HOLDING GROUP1998 1999 1999 1998


17 SHARE CAPITAL

53,778 53,778 Share capital 53,778 53,7780 0 Revaluation reserves 49,709 42,103

1,723,636 2,770,158 Other reserves 2,720,449 1,681,5331,777,414 2,823,936 J. LAURITZEN HOLDING A/S’ SHARE OF CAPITAL 2,823,936 1,777,414

12 Minority interests 1,627,523 1,108,2601,777,414 2,823,926 TOTAL CAPITAL AND RESERVES 4,451,459 2,885,674

PROVISIONS0 0 10 Deferred tax 510,082 518,0030 0 18 Other provisions 349,242 271,3880 0 TOTAL PROVISIONS 859,324 789,391

CREDITORS19 Long-term creditors

Mortgages on land and buildings 362,373 409,049Mortgages on ships 2,443,350 1,892,703Creditors, financial leasing 603,266 621,026

901,500 0 Credit institutions 663,547 1,488,333Other creditors 1,996,111 174,130

901,500 0 TOTAL 6,068,647 4,585,241

Short-term creditors0 91,500 19 Short-term portion of long-term creditors 999,827 447,648

150,000 200,000 Credit institutions 463,382 381,306Payment on accounts from customers 239,596 99,600Trade creditors 2,028,812 1,185,198

70,275 69,982 Amounts owed to affiliated undertakingsAmounts owed to associated undertakings 0 1,025Corporation tax 20,415 62,869

5,091 2,310 Other creditors 1,121,599 894,610774 0 Accruals and deferred income 537,967 290,323

0 26,198 Dividend for the financial year 26,198 0226,140 389,990 TOTAL 5,437,796 3,362,578

1,127,640 389,990 TOTAL CREDITORS 11,506,443 7,947,819

2,905,054 3,213,926 TOTAL LIABILITIES 16,817,226 11,622,88413 Book value of mortgaged fixed assets21 Other mortgages and deposits22 Contigent liabilities23 Contractual commitments24 Foreign exchange transactions

28

CASH FLOW STATEMENT

Note THE J. LAURITZEN HOLDING GROUP DKK 1.000 1999 1998

Operating profit(loss) 538,187 330,604Reversal of depreciation and writedowns 917,591 961,026

25 Adjustments 163,915 (67,748)26 Increase(decrease) in net working capital 197,762 57,469

Cash flow from operating activities before financial items 1,817,455 1,281,351

Financial income 233,590 135,978Financial charges (606,530) (416,008)Cash flow from ordinary activities 1,444,515 1,001,321

Cash flow from extraordinary items (73,200) 312,000Paid corporate tax (129,705) (75,336)Cash flow from operations 1,241,610 1,237,985

Investments in tangible assets (1,004,731) (1,483,317)Investments in fixed assets investments (12,995) 0

27 Investments in affiliated undertakings/activities (2,518,209) (358,328)Sale of fixed assets 139,785 99,293Sale of fixed assets investment 1,285,914 12,997Sale of affiliated undertakings 35,827 0Cash flow from investment activities (2,074,410) (1,729,355)

Capital injection 376,005 0Repayment of long-term creditors (1,369,633) (445,377)Loan raised 3,168,736 963,722)Paid dividend 0 (4,302)Acquisition costs of own shares (55,386) 0

28 Increase(decrease) in securities and cash held in trust (134,296) 182,866Increase(decrease) in credit lines (709,745) (346,209)Cash flow from financial activities 1,275,681 350,700

Increase(decrease) in cash flow for the year 442,881 (140,670)Available cash and cash equivalents and securities as at 1 January 891,085 1,031,755Additions in affiliated undertakings 39,037 0

29 Available cash and cash equivalents as at 31 December 1,373,003 891,085

29

Notes

Note 1 INCOME FROM SHIPPING AND TRANSPORT 1999 1998

Net turnover 18,061,608 12,818,802Ref. figure page 18

Note 2 INCOME FROM SHIPYARD AND INDUSTRIAL ACTIVITIES

Net turnover 2,898,782 3,030,938Changes in-work-in-progress for the account of others (266,972) (345,655)

2,631,810 2.685,283Own work capitalised 215 450

2,632,025 2,685,733Ref. figure page 18

Note 3 OTHER EXTERNAL CHARGES J. LAURITZEN HOLDING A/S

Fee to the auditors elected by the company at the general meeting:Audit fee 550 595Other fees 144 1,812

694 2,407

Note 4 STAFF COSTS THE J. LAURITZEN HOLDING GROUP

Salaries, wages and fees 3,389,822 2,727,111Pensions 138,060 101,257Other social security costs 324,328 260,198

3,852,210 3,088,566

Average number of employees 15,500 11,600Number of employees as at 31 December 14,800 11,300

Group payments of emoluments and salaries to:Directors of J. Lauritzen Holding A/S 1,849 2,398Management of J. Lauritzen Holding A/S 4,664 2,558

STAFF COSTS J. LAURITZEN HOLDING A/S

Salaries, wages and fees 7,911 4,986Pensions 732 647Other social security costs 33 25

8,676 5,658

Average number of employees 7 5

Emoluments to the Board of Directors 1,050 1,050Emoluments to the Management 4,664 2,558

Note 5 DEPRECIATION AND WRITEDOWNS THE J. LAURITZEN HOLDING GROUP

Goodwill 101,745 35,789Land and buildings, terminals and shipyard equipment 59,081 60,604Vessels 383,962 542,690Vessels under financial leasing 52,255 52,255Plant, machinery and equipment 306,432 255,572Plant, machinery and equipment under financial leasing 14,116 14,116

917,591 961,026DEPRECIATION AND WRITEDOWNS J. LAURITZEN HOLDING A/S

Bulidings 4 8Equipment 71 118

75 126

30

Notes

Note 6 INVESTMENTS IN AFFILIATED UNDERTAKINGS J. LAURITZEN HOLDING A/S 1999 1998

Share in % Profit(loss) Capital and Profit(loss) Capital and

reserves reserves

J. Lauritzen A/S, Copenhagen 100 (87,520) 637,510 (353,160) 720,418DFDS A/S, Copenhagen 52.8 192,546 3,293,237 290,642 2,241,915Danyard A/S, Frederikshavn (1) 100 (53,229) (1,069,732) (124,645) (1,216,503)Atlas-Danmark A/S, Copenhagen 100 733 5,820 3,550 5,087Aalborg Industries A/S, Aalborg (2) 100 62,532 379,842 44,296 315,519Helsingør Værft A/S, Helsingør 100 332 15,698 376 15,366Nica ApS, Aalborg 100 2,367 28,984 7,195 26,617Ejendomsselskabet af 31/12-1989 A/S, Copenhagen 100 2,603 7,853 2,922 5,250Frederikshavn Maritime Erhvervspark A/S, Frederikshavn 100 1,372 21,347 - -Danyard Aalborg A/S 100 7,006 4,240 - -Lauritzen Energy Inc., Houston (3) 100 - - 113 0

128,742 3,324,799 (128,711) 2,113,669Minority interests in DFDS A/S (90,829) (1,553,512) (137,104) (1,058,091)The JL-Foundation’s minority share in Aalborg Industries A/S (2) - - (7,300) 0Inter-company profits (2,602) (42,064) 3,495 (42,563)

35,311 1,729,223 (269,620) 1,013,015Tax on profit(loss) on ordinary activities 81,237 - 100,916 -Negative capital and reserves of Danyard A/S offset against debtors - 1,069,732 - 1,216,503

116,548 2,798,955 (168,704) 2,229,518(1) Owned by Helsingør Værft A/S(2) In June 1998 the JL-Foundations shares was acquired(3) Liquidated in 1998

Note 7 INVESTMENTS IN ASSOCIATED UNDERTAKINGS THE J. LAURITZEN HOLDING GROUP 1999 1998

Recorded at book value: Share in % Profit(loss) Capital Profit(loss) Capital

reserves reserves

Sabroe Refrigeration A/S, Århus 50 1,851 0 80,358 722,755Mckay Shipping Ltd, New Zealand 49 5,125 16,529 1,033 7,176Chile Containers S.A., Chile 10 0 0 0 0Pacific Shipping Ltd, Bahamas 50 - - 0 16Pacific Express Agency Inc., USA (1) 50 0 0 (105) 0Pacific Express Management Inc., USA (1) 50 0 0 28 0Segetrans Peru S.A.C., Peru 29 (232) 3,386 - -K/S Danred, Panama 29 0 7,996 - -West Coast Offsore Base A/S, Esbjerg 50 1,573 3,740 730 2,142Apparate-und Kesselbau Gmbh, Germany 42 240 3,722 - -Royal Arctic Linieagentur A/S, Nuuk 25 422 0 623 863Royal Arctic Spedition A/S, Nuuk 15 - - (38) 0DANZAS/DFDS Servicecenter Gmbh, Germany 50 (228) 152 - -Nordan Shipyard A/S, Frederikshavn 50 - - 0 599SJP Cargo Net Oy, Finland 20 0 53 - -E1 logistic B.V., The Netherlands 25 0 34 - -Deugro Carl E. Press Gmbh, Germany (2) - (3,475) 0 - -DPD Nordic AB, Sweden 36 0 206 - -Testbank Ship Repair and Boiler Co Ltd., England 25 - - 398 7,635

5,276 35,818 83,027 741,186Non group shareholders’ share (3,604) (18,683) (40,478) (367,411)Tax on profit(loss) on ordinary activities 0 - 5,760 -Inter-company profit on sale of Sabroe Refrigeration A/Sto Sabroe Holding A/S 1,928 0 7,715 (151,142)

3,600 17,135 56,024 222,633

In addition, the J. Lauritzen Holding Group has the following associatedundertaking which have been consolidated on a pro rata basis:Stena Tor Line HB, Sweden (50%)(1) The company is under liquidation(2) Included as a subsidiary as at 1 September 1999

31

Notes

Note 7 INVESTMENTS IN ASSOCIATED UNDERTAKINGS J. LAURITZEN HOLDING A/S 1999 1998

Share in % Profit(loss) Capital and Profit(loss) Capital and

reserves reserves

Sabroe Refrigeration A/S, Århus 50 1,851 0 80,358 722,755Scandinavian Equity Partners Ltd.’s share, 50 % (926) 0 (40,179) (361,377)Tax on profit(loss) on ordinary activities 0 - 5,760 -Inter-company profits 1,928 0 7,715 (151,142)

2,854 0 53,654 210,236

Note 8 FINANCIAL INCOME THE J. LAURITZEN HOLDING GROUP

Income from investments and loans classified as fixed assets 1,212 1Interest income 72,161 95,093Realised and unrealised foreign exchange gains, net 10,704 8,282

84,077 103,376FINANCIAL INCOME J. LAURITZEN HOLDING A/S

Interests on subordinated loan capital in affiliated undertakings 0 3,013Interest of subordinated capital 30 0Income from investments and loans classified as fixed assets 30 3,013Interests on cash and investments 6,499 2,075Interest of amounts receivable from affilated underakings 1,182 0Realised and unrealised foreign exchange gains, net 0 634Realised and unrealised capital gains on investments, net 1,903 0

9,614 5,722The loans to Danyard A/S and FrederikshavnMartime Erhvervspark A/S does not carry interests.

Note 9 FINANCIAL CHARGES THE J. LAURITZEN HOLDING GROUP

Interest costs 439,192 373,320Realised and unrealised losses on investments, net 17,825 10,086

457,017 383,406FINANCIAL CHARGES J. LAURITZEN HOLDING A/S

Interest costs 38,875 46,456Interest on amounts owed to affiliated undertakings 2,969 4,756Realised and unrealised capital losses on investments, net 0 9,887

41,844 61,099

Note 10 TAX THE J. LAURITZEN HOLDING GROUP

Deferred tax, liability (21,210) (82,769)Deferred tax, asset (9,857) 2,434Tax on profit(loss) on ordinary activities in associated undertakings 0 (5,760)Tax payable (89,862) (68,166)Tax on ordinary activities (120,929) (154,261)

Deferred tax as at 1 January 518,003 420,538Additions from acquisition af affiltaed undertakings (41,891) 0Exchange rate adjustments of deferred tax provided for foreign undertakingsat beginning of the year etc. 16,256 14,696Tax on profit(loss) on ordinary activities 21,210 82,769Tax on profit(loss) on extraordinary activities (3,496) -Deferred tax as at 31 December 510,082 518,003

TAX J. LAURITZEN HOLDING A/S

Tax payable 0 0Tax on profit(loss) on ordinary activities in affiliated undertakings (81,237) (100,916)Tax on profit(loss) on ordinary activities in associated undertakings 0 (5,760)Contribution received for joint taxation 7,332 9,665

(73,905) (97,011)The company is not subject to any deferred tax liabilityJ. Lauritzen Holding A/S is jointly taxed with the majority of the wholly ownedaffiliated undertakings and some of said undertakings’ affiliated undertakings

32

Notes

Note 11 EXTRAORDINARY ITEMS AFTER TAX THE J. LAURITZEN HOLDING GROUP 1999 1998

Income:Gain on sale of Sabroe Refrigeration A/S 1,057,041 0Reversal of provision for closing-down costs of Danyard A/S newbuilding activity 100,000 0Retirement fee, bonusses and other staff costs related to closing-down at Danyard A/S (39,450) 0Other closing-down costs at Danyard A/S (13,077) 47,473 0

1,104,514 0Costs:Pensions to retired employees in DFDS A/S (39,903) 0Provision for closing-down costs of Danyard A/S newbuilding activity 0 (100,000)Tax on extraordinary costs 12,769 0

(27,134) (100,000)

Extraordinary items, net 1,077,380 (100,000)

EXTRAORDINARY ITEMS AFTER TAX J. LAURITZEN HOLDING A/S

Income:Gain on sale of Sabroe Refrigeration A/S 1,057,041 0

Note 12 MINORITY INTERESTS 1999 1998 1999 1998

Profit(loss) Profit(loss) Capital and Capital

reserves reserves

Minority shareholders’ share in DFDS A/S (90,829) (137,104) 1,553,512 1,058,091The JL-Foundation’s share of Aalborg Industries A/S - (7,300) - 0Other minority interests (3,517) (5,540) 74,011 50,169

(94,346) (149,944) 1,627,523 1,108,260

Note 13 FIXED ASSETS THE J. LAURITZEN HOLDING GROUP

Goodwill Land, Ships Ships Plant, Plantbuildings, under machinery machinery and

terminals and finance and equipment

shipyard leases equipment under financeleases

Acquisition costs as at 1 January 159,144 1,949,401 7,374,137 759,744 1,965,812 160,443Exchange rate adjustment 8,252 89,190 71,733 0 89,738 0Transferred from other items 0 63,280 302,906 0 5,548 0Acquisitions of undertakings 512,300 683,086 186,672 0 442,305 0Acquisitions 1,927,327 98,878 421,537 0 297,332 0Disposals (35,706) (43,044) (202,534) 0 (307,743) 0Acquisition costs as at 31 December 2,571,317 2,840,791 8,154,451 759,744 2,492,992 160,443

Revaluations as at 1 January 0 183,723 0 0 0 0Revaluations as at 31 December 0 183,723 0 0 0 0

Depreciation and writedowns as at 1 January 72,475 677,476 2,982,925 397,164 1,173,610 84,765Exchange rate adjustment 1,893 11,014 12,114 0 51,746 0Acquisitions of undertakings 49,401 160,871 7,640 0 267,477 0Depreciation 101,745 59,081 383,962 52,255 306,432 14,116Depreciation on disposals (2,980) (11,752) (199,708) 0 (228,964) 0Depreciation and writedowns as at 31 December 222,534 896,690 3,186,933 449,419 1,570,301 98,881

Booked value as at 31 december 1999 2,348,783 2,127,824 4,967,518 310,325 922,691 61,562Booked value as at 31 december 1998 86,669 1,455,648 4,391,212 362,580 792,202 75,678

Booked value of mortgaged assets 532,707 3,777,832Booked value of public land assessment 625,356Public land assessment as at 1 January 1999 897,167Insured sum, including insurance of interestsagainst total loss 8,999,752 791,672

33

Notes

Assets in the Investments Other invest- Other

course of construction in associated ments and parci- debtors

and payments on account undertakings pating interests

Acquisition costs as at 1 January 1999 335,258 134,918 721 36,980Exchange rate adjustment 12,817 (411) 0 180Transferred from other items (371,734) 0 0 0Acquisitions of undertakings 31,590 14,794 0 0Acquisitions 186,983 5,252 1,418 6,325Disposals 0 (146,893) 0 (11,095)Acquisition costs as at 31 December 1999 194,914 7,660 2,139 32,390

Revaluations as at 1 January 1999 0 88,194 0 0Exchange rate adjustment 0 (334) 0 0Revaluations 0 5,375 0 0Reversal of revaluations 0 (2,434) 0 0Reversal of revaluations on disposals 0 (81,150) 0 0Revaluations as at 31 December 1999 0 9,651 0 0

Depreciation and writedowns as at 1 January 1999 0 479 616 0Exchange rate adjustment 0 0 0 (2,633)Writedowns 0 66 0 3,119Reversal of writedowns on disposals 0 (369) 0 0Depreciation and writedowns as at 31 December 1999 0 176 616 486

Booked value as at 31 december 1999 194,914 17,135 1,523 31,904Booked value as at 31 december 1998 335,258 222,633 105 36,980

Assets in the course of construction and prepayments includeinterest and foreign exchange losses of DKK 0.0 millionrelated to ships under construction (1998 DKK 7.4 million)Other debtors include deferred tax asset at DKK 3.4 million inAalborg Industries A/S (1998 DKK 13.0 million)

Note 13 FIXED ASSETS J. LAURITZEN HOLDING A/S Land and Equipment Investments Investments Other

buildings in affiliated in associerede debtors

undertakings undertakings

Acquisition costs as at 1 January 1999 818 821 2,119,144 132,289 0Acquisitions 0 0 693,948 0 5,000Disposals (818) 0 0 (132,289) 0Acquisition costs as at 31 December 1999 0 821 2,813,092 0 5,000

Revaluations as at 1 January 0 0 1,017,933 77,947 0Revaluations 0 0 114,356 2,854 0Reversal of revaluations 0 0 (82,908) (80,801) 0Revaluations as at 31 December 1999 0 0 1,049,381 0 0

Depreciation and writedowns as at 1 January 1999 573 691 2,124,063 0 0Depreciations 4 71 0 0 0Writedowns 0 0 79,214 0 0Reversal of writedowns 0 0 (70,026) 0 0Depreciation on disposals (577) 0 0 0 0Depreciation and writedowns as at 31 December 1999 0 762 2,133,251 0 0

Booked value as at 31 december 1999 0 59 1,729,222 0 5,000Booked value as at 31 december 1998 245 130 1,013,014 210,236 0

Balance as at 1 January 1,013,014 210,236Costs of aqcuisition of affiliated undertakings 693,948 0Share of other capital and reserves adjustments (10,920) 0Exchange rate adjustment of capital and reserves 79.843 0and profit etc. of foreign undertakingsShare of profit of affiliated and associated undertakings, cf notes 6 and 7 35,311 2,854Dividend from affiliated undertakings (81,974) 0Disposal of associated undertaking 0 (213,090)

1,729,222 0Investments in affiliated undertakings here include negative capital andreserves in Danyard A/S DKK 1,070 million (1998 DKK 1,216 million)of which DKK 1,070 million (1998 DKK 1,216 million) is set-off in debtors.Other debtors includes subordinated loan capital to Danyard Holding A/S,irredeemable until 2004

34

Notes

Note 14 STOCKS 1999 1998

Includes share of contribution margin of work in-progress for the account of others 185,449 197,386

Note 15 DEBTORS THE J. LAURITZEN HOLDING GROUP

Falling due after more than one year.Other debtors 22,000 45,295

Note 16 PREPAYMENT AND ACCRUED INCOME THE J. LAURITZEN HOLDING GROUP

Includes currency adjustment of long-term USD debt 91,981 -

Note 17 THE J. LAURITZEN HOLDING A/S’ SHARE OF CAPITAL AND RESERVES THE J. LAURITZEN HOLDING GROUP

Share Revaluation Other Totalcapital reserves reserves

Balance as at 1 January 1999 53,778 42,103 1,681,533 1,777,414Exchange rate adjustment of capital and reserves and profit of foreign undertakings 79,843 79,843Acquisition costs of own shares (55,386) (55,386)Share of costs of capital injection in DFDS A/S (10,920) (10,920)Reversal of revaluation on securities 7,606 (7,606) 0The net profit for the year 1,059,183 1,059,183Dividend provided in the parent company (26,198) (26,198)

53,778 49,709 2,720,449 2,823,936

Balance as at 1 January 1998 53,778 49,046 2,030,045 2,132,869Exchange rate adjustment of capital and reserves and profit of foreign undertakings 0 (61,950) (61,950)Share of discontinuation of warrants programe at Sabroe Refrigeration A/S (22,528) (22,528)Difference relating to acquisition of shares in Aalborg Industries A/S 12,056 12,056Reversal of revaluation on securities (6,943) 6,943 0The net profit for the year (283,033) (283,033)

53,778 42,103 1,681,533 1,777,414

Note 17 CAPITAL AND RESERVES J. LAURITZEN HOLDING A/S

The company’s share capital consists of: DKKClass A shares:22 shares at DKK 200,000 4,400,0001 share at DKK 977,760 977,760Class B shares:2,419,992 shares at DKK 20 48,399,840

53,777,600

Share Other Total

capital reserves

Balance as at 1 January 1999 53,778 1,723,636 1,777,414Exchange rate adjustment of capital and reserves and profit of foreign undertakings 79,843 79,843Acquisition costs of own shares (55,386) (55,386)Share of costs of capital injection in DFDS A/S (10,920) (10,920)The net profit for the year 1,059,183 1,059,183Dividend provided in the parent company (26,198) (26,198)

53,778 2,770,158 2,823,936

Balance as at 1 January 1998 53,778 2,079,091 2,132,869Exchange rate adjustment of capital and reserves and profit of foreign undertakings (61,950) (61,950)Share of discontinuation of warrants programme at Sabroe Refrigeration A/S (22,528) (22,528)Difference relating to acquisition of shares in Aalborg Industries A/S 12,056 12,056The net profit for the year (283,033) (283,033)

53,778 1,723,636 1,777,414The company’s holding of own shares, 69,111 each at DKK 20 as at December 1999,amount to 2.57% of the company’s share capital. Acquisition of own shares is relatedto an expected later delisting of the company from Copenhagen Stock Exchange

35

Notes

Note18 OTHER PROVISIONS 1999 1998

Provisions at Danyard A/S - 100,000Warranty provisions 63,975 63,540Contributions to pension schemes 130,289 14,081Other provisions 154,978 93,767

349,242 271,388

Note19 LONG-TERM CREDITORS J. LAURITZEN HOLDING A/S 1999 1998Falling due Current Falling due Current

after more portion after more portion

than 5 years than 5 years

Mortgages 119,313 16,846 152,647 20,214Mortgages on ships 1,045,464 737,407 436,678 215,828Creditors, financial leasing 123,163 106,788 213,197 88,454Credit institutions 367,366 117,642 430,751 22,632Other creditors 1,106,136 21,144 101 100,520

2,761,442 999,827 1,233,374 447,648Mortgages on ships include a loan for DKK 431.0 million (1998 DKK 476.5million) raised at the market value. The nominel value amounts toDKK 448.9 million (1998 DKK 498.8 million). The difference DKK 17.9 million(1998 DKK 22.3 million), is charged over the term of loan

Note 20 AVAILABLE CASH AND INVESTMENTS THE J. LAURITZEN HOLDING GROUP 1999 1998

Investments 82,243 79,021Cash at bank and in hand 1,494,718 881,726Held in trust, cf. note 21 (203,958) 1,290,760 (69,662) 812,064

1,373,003 891,085

Note21 OTHER MORTGAGES AND DEPOSISTS

Booked value of assets deposited as collateral for bank debt, other long-term creditors,prepayments from customers and warranty and contractual commitments:

Cash at bank and in hand 203,958 69,662Mortgages (nom. DKK 1,040 million), on newbuildings under construction at Danyard A/S 0 594,100Debtors 0 73,600

203,958 737,362

At the end of 1998 J. Lauritzen Holding A/S’ shareholding in DFDS A/S, as well as DKK 57million of nominally DKK 190 million of the shareholding in Sabroe Refrigeration A/S andDKK 100 million of nominally DKK 235 million of the shareholding in Aalborg Industries A/Swas pledged as a collateral for bank debt. The collaterals are released in 1999

36

Notes

Note 22 CONTIGENT LIABILTIES 1999 1998

Warranty and suretyship commitments 1,744,111 515,000Join and several liability relating to partnerships 208 577

1,744,319 515,577

Note 23 CONTRACTUAL COMMITMENTS

In DFDS A/S three newbuilding contracts have been concluded, whereof two has been deliveredin 1998 and 1999. The commitment amounts to DKK 259 million (1998 DKK 530 million).

Annual Annual

Leasing and rental commitments that have not been included in the balance sheet: repayment repayment

Land and buildings, remaining term 1 - 110 years 167,502 67,454Right to use port facilities, remaining term 12 years 36,631 32,100Plant, machinery and equipment, remaining term 1 - 7 years 212,581 122,732

416,714 222,286

In addition the following long-term charterparties on ships have been concluded: Antal AntalReefer vessels, remaining term 1 - 4 years 6 8Bulk-carriers, remaining term 1 - 5 years 15 3Cargo-carriers, remaining term 1 - 5 years 7 7Containers, trucks etc., remaining term 1 - 4 years 30 41

Aalborg Industries participates inconsortiums in which the company is jointlyand severally liable for the total commit-ments relating to supplies and projects.

DFDS is jointly and severally liable inconnection with the participation in thepartnership Stena Tor Line HB.As at 31 December 1999 the partnershipstotal assets exceed the total liabilities byDKK 7.7 million (1998 DKK 8.5 million),half of which has been included in theGroup accounts.

In september 1995 the Danish customs andexcise authorities made a claim of DKK 116million on DanTransport A/S. The formerowner of DanTransport, FLS Industries A/S,vouches for any financial consequencesthat might arise from this claim.

After a fire in DanTransports head office inthe USA in 1996, a number of customersclaimed compensation for loss of freight.A number of these claims were rejected bythe courts, while some are still pending.No loss is expected.

In the connection with sale of companies,guarantees and warranties have beenprovided, for example in connection withenvironmental matters. Related to the saleof Sabroe Refrigeration A/S is the amountmaximized to DKK 400 million. J. LauritzenHoldings share mounts to DKK 200 million,corresponding to the amount held in trust.

J. Lauritzen Holding A/S has providedguarantees covering the guaranteeperiodfor 6 chemical tankers for Stolt-Nielsen,which was completed and delivered at theend of 1998.

J. Lauritzen Holding A/S has providedguarantees for 2 chemical tankers for Stolt-Nielsen, which was completed anddelivered in 1999, maximized to DKK 10million per ship.

J. Lauritzen Holding A/S has provided aletter of awareness relating to Aalborgindustries A/S’ engagement to build oneDanish power plant.

J. Lauritzen Holding A/S is jointly liable fortax income in all of the companies includedin the consolidated tax return.

37

Notes

Note 24 FOREIGN EXCHANGE TRANSACTIONS

J. Lauritzen A/S has, in a combination of forward contracts and options,together with long-term USD debt hedged all the expected USD cash flow in 2000.

In DFDS A/S forward contracts has been concluded regarding currency exposure of investsmentsetc. for DKK 607 million (1998 DKK 886 million). To hedge the cash flow, forward contracts wereconcluded in DFDS A/S as at 31 December 1999 for 638 million (1998 DKK 112 million).

Aalborg Industries A/S has more or less hedged its order books as at 31 December 1999 in the individual foreign currencies

Note 25 ADJUSTMENTS1999 1998

Exchange rate adjustments 168,759 (59,755)Profit and loss from the sale of fixed assets 4,542 (16,765)Other (9,387) 8,772

163,915 (67,748)

Note 26 INCREASE/(DECREASE) IN NET WORKING CAPITAL

Increase/(decrease) in stocks 492,995 141,341Increase/(decrease) in debtors (307,074) 174,852Related to extraordinary items 0 (312,000)Increase/(decrease) in provisions (179,093) 11,606Increase/(decrease) in prepayments from customers 139,996 (66,517)Increase/(decrease) in creditors including short-term creditors 50,938 108,187

197,762 57,469

Note 27 INVESTMENTS IN AFFLIATED UNDERTAKINGS/ACTIVITIES

Intangible fixed assets (2,390,226) (52,011)Shares in Aalborg Industries A/S 0 (119,445)Other tangible fixed assets (922,459) (186,872)Current assets (1,275,675) 0Provisions 256,947 0Creditors falling due after more than one year 22,906 0Other creditors 1,790,298) 0

(2,518,2099) (358,328)

Note 28 INCREASE/(DECREASE) IN SECURITIES AND CASH HELD IN TRUST

Securities held in trust at the beginning of the year 0 71,904Cash held in trust at the beginning of the year 69,662 180,624Cash held in trust at the end of the year (203,958) (69,662)

(134,296) 182,866

Note 29 AVAILABLE CASH AND CASH EQUIVALENTS AS AT 31 DECEMBER

Securities 82,243 79,021Cash at bank and in hand 1,290,760 812,064

1,373,003 891,085

38

Country Share-capital Share(1,000) %

DFDS, continuedSpetra S.A. Luxembourg LUF 1,500 75DFDS Jumbo Transport SDN. BHD Malaysia MYR 500 43DFDS Norge Holding AS Norway NOK 12,000 100DFDS Seaways AS Norway NOK 3,050 100DFDS Tollpost-Globe AS Norway NOK 27,000 100DFDS Tor Line AS Norway NOK 100 100DFDS Transport AS Norway NOK 9,000 100DFDS Transport Service AS Norway NOK 10,000 100Tollpost-Globe Invest AS Norway NOK 400 100DFDS Transport Sp. z o.o Poland PLZ 2,008 100Prigge Transport OOO (Kaliningrad) Russia RUR 65 100DFDS Transport AG Schvitzerland CHF 100 100DFDS Jumbo Transport (S) Pte. Ltd. Singapore SGD 150 38DFDS Transport UK Ltd. Great Britain GBP 2,705 100DFDS Food Transport Ltd. Great Britain GBP 100 100DFDS Logistics Ltd. Great Britain GBP 160 100DFDS Plc. Great Britain GBP 22,250 100DFDS Seaways Ltd. Great Britain GBP 8,050 100DFDS Tor Line Ltd. Great Britain GBP 2,000 100DFDS Transport Ltd. Great Britain GBP 16,950 100DFDS Travel Ltd. Great Britain GBP 1,000 100Inter Systems Transport Ltd. Great Britain GBP 100 100Thoroughbred Trucks Ltd. Great Britain GBP 10 100Total Logistics Management Ltd. Great Britain GBP 10 100DFDS Dahlqvist AB Sweden SEK 6,000 100DFDS Fraktarna AB Sweden SEK 15,178 100DFDS Seaways AB Sweden SEK 2,050 100DFDS Tor line AB Sweden SEK 25,000 100DFDS Transport AB Sweden SEK 14,490 100DFDS Travel AB Sweden SEK 100 100InterForward in Stockholm AB Sweden SEK 240,000 100Nordisk Transport Sverige AB Sweden SEK 26,000 100Stena Tor Line HB Sweden SEK - 50DFDS Jumbo Transport Ltd. Thailand BHT 4,500 44InterForward AS Czech Rep. CZK 1,020 67BDN Cargo Transport Gmbh Germany DEM 50 100DanZas/DFDS Service center Gmbh Germany DEM 400 50Deugro Carl E. Press Gmbh Germany DEM 500 100DFDS (Deutschland) Gmbh Germany DEM 200 100DFDS Seaways Gmbh Germany DEM 1,900 100DFDS Transport Gmbh Germany DEM 1,700 100DanTransport Corporation U.S.A. USD 40 100DFDS Seaways (USA) Inc. U.S.A. USD 100 100Futhermore DFDS owns 72 inactive companies.

AALBORG INDUSTRIES A/S Denmark DKK 235,000 100Aalborg industries Ltda. Brasil BRL 4,644 77A/S Aalborg Industries Denmark DKK 2,000 100Aalborg Industries Oy Finland FIM 2,000 100Aalborg Industries B.V. Holland NLG 100 100BV Aalborg Industries NL (Wiesloch) Holland NLG 210 100P.T. Aalborg Industries Indonesia IDR 14,900,867 56Aalborg Industries K.K. Japan JPY 200,000 100Aalborg Industries Ltd. China CNY 24,600 75Aalborg Industries Ltd. China HKD 1 100Apparate- und Kesselbau Gmbh Germany DEM 570 42Aalborg Industries Pte. Ltd. Singapore SGD 2,000 100Aalborg Boiler Production AB Sweden SEK 1,000 100Aalborg Industries AB Sweden SEK 2,050 100Ciserv AB Sweden SEK 2,000 100Aalborg Industries Inc. U.S.A. USD 4,000 100

DANYARD A/S Denmark DKK 200,000 100Aalborg Stålkonstruktioner A/S Denmark DKK 500 100

Atlas-Danmark A/S Denmark DKK 5,000 100Danyard Aalborg A/S Denmark DKK 4,240 100Ejendomsselskabet af 31/12 1989 A/S Denmark DKK 5,000 100Frederikshavn Maritime Erhvervspark A/S Denmark DKK 10,000 100Helsingør Værft A/S Denmark DKK 5,000 100Nica ApS Denmark DKK 20,000 100

Country Share-capital Share(1,000) %

J. LAURITZEN HOLDING A/S Denmark DKK 53,778

J. LAURITZEN A/S Denmark DKK 230,000 100Euroamerica S.A. Argentina ARA 32 62Segetrans Argentina S.A. Argentina ARA 100 100J.Laritzen (Australia) Pty. Ltd. Australia AUD 20 100Labas (Bahamas) Ltd. Bahamas USD 10 100Shoreoff Invest Bahamas Ltd. Bahamas USD 1 100Odin Shipping Ltd. Bermuda USD 12 100J. Lauritzen do Brazil Ltda. Brasil USD 286 100Chile Containers S.A. Chile CLP 103,805 10J. Lauritzen Invest (Chile) S.A. Chile CLP 1,356,311 100Global Shipping Services S.A Chile CLP 236,919 70J. Lauritzen (Chile) S.A. Chile CLP 70,681 100Segetrans S.A. Chile CLP 841,074 70Segetrans Transporte S.A. Chile CLP 566,769 70A/S PSE 38 Denmark DKK 500 100K/S Danred Denmark DKK - 29Lauritzen Bulkers A/S Denmark DKK 10,000 100Lauritzen Kosan A/S Denmark DKK 50,000 100Lauritzen Reefers A/S Denmark DKK 40,000 100Lauritzen Ship Owner A/S Denmark DKK 1,000 100YPC 22 A/S Denmark DKK 500 100Aurora Shipping Agency Ltd. Japan JPY 10,000 100J. Lauritzen (Japan) K.K. Japan JPY 15,000 100McKay Shipping Limited New Zealand NZD 500 49Euroasia Ivestment S.A. Panama USD - 16Segetrans Peru S.A.C. Peru USD 489 29Gasnaval S.A Spain EUR 8,955 100J. Lauritzen (USA) Inc. U.S.A. USD 1 100Pacific Express Agency Inc. U.S.A. USD 2 50Pacific Express Management Inc. U.S.A. USD 2 50

DFDS A/S Denmark DKK 800,000 100DFDS Bahamas Ltd. Bahamas USD 1 100DFDS Tor Line - Lalement N.V. Belgium BEF 2,500 51DFDS Transport N.V. Belgium BEF 117,000 100DFDS Canal Tours A/S Denmark DKK 1,000 100Dan Jumbo Holding A/S Denmark DKK 5,000 50DFDS Dan Transport A/S Denmark DKK 13,000 100DFDS Dan Transport Group A/S Denmark DKK 186,000 100DFDS Logistikcenter A/S Denmark DKK 500 100DFDS Roland Munch A/S Denmark DKK 10,000 100DFDS Rusland A/S Denmark DKK 500 100DFDS Stevedoring A/S Denmark DKK 500 100DFDS Travel A/S Denmark DKK 2,000 100H. K. Samuelsen Transport A/S Denmark DKK 1,000 50Inter System Transport A/S Denmark DKK 500 100Spetra A/S Denmark DKK 12,500 75Westcoast Offshore Base A/S Denmark DKK 1,000 50DanTransport - BDN Eesti AS Estonia EEK 650 100DFDS Transport OÜ Estonia EEK 50 100Jumbo Philipphines Inc. Philippines PHP 4,000 50DFDS Transport Oy Finland FIM 2,502 100Kiinteistö Oy Vantaan Anstarie 4 Finland FIM 3,700 100DPD Finland Oy Finland FIM 250 100SJP Cargo net OY Finland FIM 100 20NTS Transport Int. S.A. France FRF 10,910 100DanTransport Grønland ApS Greenland DKK 200 100DFDS Seaways B.V. Holland NLG 40 100DFDS Tor Line B.V. Holland NLG 50 100DFDS Transport B.V. Holland NLG 1,000 100E1 Logistic B.V. Holland NLG 40 25Inter System Transport Nederland B.V. Holland NLG 260 100DFDS Jumbo Transport of Indonesia PT Indonesia IDR 200,000 20DFDS Transport (Ireland) Ltd. Irleand IEP 4,975 100DFDS Italia SRL Italiy ITL 150,000 100DanTransport HK Ltd. China HKD 1,000 100DFDS Transport SIA Latvia LVL 110 100DFDS Baltic Line UAB Lithuania LTL 10 100DFDS Blueflite Transport UAB Lithuania LTL 10 100DFDS Transport UAB Lithuania LTL 1,000 100

GROUP COMPANIES

39

FLEET

LAURITZEN REEFERSJ. Lauritzen owned Dwt. Cbft. Built

m.s. Ditlev Lauritzen • 16,950 758,725 1990m.s. Ivar Lauritzen • 16,950 758,725 1990m.s. Jørgen Lauritzen 16,950 758,725 1991m.s. Knud Lauritzen • 16,950 758,725 1991m.s. Chilean Reefer 11,095 424,307 1992m.s. Peruvian Reefer 11,095 424,307 1992m.s. Scandinavian Reefer 11,095 424,307 1992m.s. Italian Reefer 6,120 265,770 1992m.s. Indian Reefer 6,120 265,770 1991m.s. Iberian Reefer 6,120 265,770 1991• Financially leased

On charter & pool vessels Dwt. Cbft. Builtm.s. Argentinean Reefer 14,933 703,263 1988m.s. Anglian Reefer 14,932 703,263 1988m.s. Brazilian Reefer 14,803 690,880 1984m.s. Belgian Reefer 14,786 690,880 1983m.s. Amer Choapa 12,848 674,291 1987m.s. African Reefer 14,573 644,264 1985m.s. Australian Reefer 14,530 644,264 1984m.s. Asian Reefer 12,299 591,407 1978m.s. Balkan Reefer 12,299 591,407 1978m.s. Atlantic Reefer 12,633 600,558 1998m.s. Pacific Reefer 12,633 600,558 1998m.s. Canadian Reefer 12,570 597,005 1979m.s. Ecuadorian Reefer 12,570 597,005 1980m.s. Tundra Queen 12,700 596,157 1991m.s. Mexican Reefer 11,460 532,061 1994m.s. Logan 8,028 469,789 1993m.s. Bothnian Reefer 11,095 424,307 1992m.s. Nippon Reefer 8,709 396,039 1982m.s. New Zealand Reefer 8,657 396,039 1982m.s. Pentland Phoenix 8,045 394,158 1993m.s. Reefer Queen 5,248 237,136 1991

LAURITZEN KOSAN/GASNAVALJ. Lauritzen owned Dwt. Cbm. Built

m.t. Selma Kosan 6,680 6,619 1976/81m.t. Kasia Kosan 5,105 6,562 1992m.t. Tenna Kosan 4,999 5,900 1998m.t. Tessa Kosan 4,999 5,900 1999m.t. Gitta Kosan 4,828 4,415 1990m.t. Greta Kosan 4,811 4,415 1990m.t. Cervantes 4,628 4,301 1992m.t. Fernando Clariana 4,380 4,109 1991m.t. Berceo 4,380 4,102 1991m.t. Kinna Kosan 3,231 4,011 1989m.t. Poul Kosan 3,883 3,448 1978m.t. Gongora 3,500 3,281 1987m.t. Becquer 3,500 3,277 1987m.t. Henriette Kosan 2,528 3,201 1982m.t. Mette Kosan 2,528 3,196 1981m.t. Laurits Kosan 2,950 2,620 1983m.t. Knud Kosan 2,950 2,620 1982m.t. Fenja Kosan 2,035 2,570 1974/96m.t. Lydia Kosan 2,004 1,760 1993m.t. Lotta Kosan 2,004 1,760 1992m.t. Linda Kosan 2,004 1,760 1992m.t. Laura Kosan 2,004 1,760 1992m.t. Jakob Kosan 1,929 1,622 1985m.t. Henrik Kosan 1,941 1,622 1984

40

FLEET

DFDS

Passenger Ships GT Passenger BuiltCrown of Scandinavia 35,498 2,136 1994Queen of Scandinavia 33,730 1,624 1981Prince of Scandinavia 22,528 1,692 1975/91/97Princess of Scandinavia 22,528 1,704 1976/91/98Dana Anglia 19,321 1,372 1978Admiral of Scandinavia 19,292 1,132 1976King of Scandinavia 13,336 1,100 1974/90

Freight Ships (RO/RO) GT Lane Meters BuiltTor Selandia 24,196 2,800 1998Tor Suecia 24,196 2,800 1999Dana Maxima 17,068 2,723 1978/95Tor Scandia 33,652 2,600 1981Tor Flandria • 33,652 2,600 1981Tor Dania 21,850 2,520 1978/95Tor Belgia 21,491 2,520 1978/94Tor Anglia 17,492 2,490 1977/89Dana Futura 18,469 2,308 1996Dana Minerva 21,215 2,070 1978/99Tor Humbria 20,165 2,070 1978Tor Caledonia 14,424 2,000 1977/90Stena Gothia • 14,406 2,010 1975/90Norse Mersey • 16,009 1,950 1995Dana Cimbria 12,189 1,800 1986Eva Oden • 16,948 1,788 1979/88Tor Gothica 12,259 1,650 1971/77Tor Hollandia 12,254 1,650 1973/77Tor Norvegia 12,494 1,600 1975/80Dana Hafnia 11,125 1,571 1979Dana Corona • 12,110 1,480 1972Seatern • 11,909 1,480 1973

Freight Ships (LO/LO) GT TEU BuiltIngrid • 5,549 600 1997Tege • 1,560 77 1971

SHIPS FOR DELIVERY IN 2000 GT Lane Meters BuiltRo/ro newbuilding Fincantieri 24,196 2,800 2000

• Chartered tonnage

In addition DFDS charters a varying number of ships for shorter or longerperiods.

DFDS CANAL TOURS13 tourist boats1 newbuilding for delivery in 2000

LAURITZEN KOSAN/GASNAVAL, continued

On charter & pool vessels Dwt. Cbm. Builtm.t. Gaz Pacific 5,985 5,667 1981m.t. Capo Argento 3,384 4,000 1982m.t. Virgo Gas 1 2,989 2,455 1978m.t. Quentin 2,071 2,234 1977

LAURITZEN BULKERSJ. Lauritzen owned Dwt. Cbft. Built

m.s. Viking Bulker 27,934 1,350,410 1989m.s. Caribbean Bulker 27,881 1,350,380 1989

On charter/pool vessels Dwt. Cbft. Builtm.s. Bay Bulker 48,000 2,152,661 2000m.s. Lu Hai 46,702 2,112,836 1998m.s. Zhong Hai 46,396 2,053,438 1996m.s. Oriental Road 45,338 2,036,523 1997m.s. Ever Gloria 45,700 2,020,300 1995m.s. Han Hai 45,644 2,020,392 1996m.s. Shan Hai 47,201 2,016,719 1998m.s. Song Hai 47,201 2,016,719 1998m.s. Sea Bulker 42,712 1,901,904 1997m.s. Great Ocean 43,473 1,892,747 1991m.s. Athena 42,552 1,795,391 1987m.s. Federal Pescadores 40,864 1,780,723 1986m.s. Oriana C 38,706 1,706,796 1985m.s. Blest Future 38,858 1,628,519 1994m.s. Top Sugar 29,952 1,328,613 1998m.s. Pan Trader 28,716 1,378,556 1996m.s. Hudson Trader 28,711 1,378,577 1997m.s. Sendai Bulker 28,100 1,352,526 2000m.s. Pactrader 28,426 1,325,125 1997m.s. Diamond Bulker 28,460 1,325,051 1994m.s. Coral Bulker 28,454 1,326,005 1991m.s. Atlantic Bulker 27,860 1,350,407 1995m.s. Pacific Bulker 27,860 1,350,000 1995m.s. Yi Chang Hai 27,171 1,301,215 1997m.s. Fuat Bey 27,652 1,229,356 1985m.s. Glorious Sun 27,321 1,229,305 1995m.s. Spring Wave 27,321 1,229,305 1995m.s. Scan Bulker 27,308 1,229,315 1995m.s. Skaw Bulker 27,308 1,229,305 1995m.s. Antalina 28,082 1,227,648 1984m.s. Orhan Deval 27,562 1,224,412 1984m.s. Sea Rose 27,662 1,224,212 1984m.s. Golden Apo 26,605 1,200,499 1984m.s. You Yue 26,796 1,197,780 1992m.s. Erikousa Wave 26,858 1,142,497 1986m.s. Sevilla Wave 26,858 1,142,497 1986

Sailing/Training Ship Passenger BuiltLilla Dan 20 1951

1 The J. Lauritzen Holding Group

4 Key figures

5 Annual Report

8 Risks

SHIPPING AND TRANSPORT

10 J. Lauritzen A/S

12 DFDS A/S

INDUSTRY

14 Danyard A/S

15 Danyard Aalborg A/S

16 Aalborg Industries A/S

18 Financial Review

20 Auditors’ Report

21 Accounting Policies

24 Board of Directors and Management- honorary posts

25 Annual accounts

29 Notes

38 Group companies

39 Fleet

41 Addresses of main offices

The Annual Report and Accountshas been translated fromthe Danish version.In case of discrepanciesthe Danish version shall prevail.

CONTENTS THE J. LAURITZEN HOLDING GROUP

Shipping and Transport

J. Lauritzen A/SSankt Annae Plads 28P.O. Box 2147DK-1291 Copenhagen KDenmark


DFDS A/SSankt Annae Plads 30DK-1295 Copenhagen KDenmark

Phone: +45 3342 3342Telefax: +45 3342 3341Telex: 19 435 dfdsc [email protected]

Industrial companies

Frederikshavn MaritimeErhvervspark A/SKragholmen 4Postbox 719DK-9900 FrederikshavnDenmark

Phone: +45 7010 0515Telefax: +45 7010 [email protected]

Aalborg Industries A/SGasværksvej 24P.O. Box 661,DK-9100 AalborgDenmark

Phone: +45 9930 4000Telefax: +45 9816 3022Telex: 69705 albor [email protected]

PARENT COMPANY

J. Lauritzen Holding A/SSankt Annae Plads 28P.O. Box 2147DK-1291 Copenhagen KDenmark


Addresses of main offices of

the J. Lauritzen Holding Group.

For additional addresses please contact

the companies.

REPORT AND ACCOUNTS


Sankt Annae Plads 28

DK-1291 Copenhagen K

Denmark

Tel.: +45 3396 8000

Fax: + 45 3396 8435

[email protected]

www.lauritzen-holding.com

CVR NO.: 2204 2017

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J. Lauritzen Holding A/S Sankt Annae Plads 28 DK …reports.huginonline.com/779631.pdfREPORT AND ACCOUNTS J. Lauritzen Holding A/S Sankt Annae Plads 28 DK-1291 Copenhagen K Denmark