Nordic TaNkers

Annual Report 2009

Nordic Tankers A/S

Annual Report 2009

CVR no. 76 35 17 16

Company data
Company Nordic Tankers A/S Snderlandsgade 44 DK-7500 Holstebro CVR no.: 76 35 17 16 Registered office: Holstebro Website: www.nordictankers.com Subsidiaries Nordic Copenhagen Shipping Co. Pte. Ltd., Singapore, wholly owned Nordic Oslo Shipping Co. Pte. Ltd., Singapore, wholly owned Jointly controlled entities Nordic Seaarland Tankers B.V., the Netherlands, 50-100% holding, joint venture Board of Directors Flemming Krusell Srensen, Chairman Attorney-at-law Sven Rosenmeyer Paulsen, Deputy Chairman Jens Fehrn-Christensen CEO, LLM Mogens Buschard CEO Jesper Tullin Executive Board CEO Tommy Thomsen CFO Christian Hassel Auditors Deloitte Statsautoriseret Revisionsaktieselskab

Contents
Company data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Managements review . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Consolidated financial highlights . . . . . . . . . . . . . . . . . . . . 6 Financial performance and outlook . . . . . . . . . . . . . . . . . . 8 Product tankers operations and markets 2009. . . . . . . . 10 Chemical tankers operations and markets 2009 . . . . . . 11 Financial review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Fleet description and pools. . . . . . . . . . . . . . . . . . . . . . . . 16 Risk management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Statutory corporate governance statement. . . . . . . . . . . . 20 Shareholder information . . . . . . . . . . . . . . . . . . . . . . . . . 22 Group chart Nordic Tankers A/S . . . . . . . . . . . . . . . . . . . . 24 Board of Directors and Executive Board . . . . . . . . . . . . . . 25 Management statement. . . . . . . . . . . . . . . . . . . . . . . . . . 26 Independent auditors report . . . . . . . . . . . . . . . . . . . . . . 27 Financial statements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Consolidated and parent company statement of comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . 29 Consolidated and parent company balance sheet. . . . . . . 30 Consolidated and parent company statement of changes in equity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Consolidated and parent company cash flow statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 Fleet list . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76

Managements review
To the investors of Nordic Tankers A/S
2009 was in many ways a year of change for Nordic Tankers. Following a long, turbulent period in 2008 and the beginning of 2009, an extraordinary general meeting elected a new Board of Directors on 2 February 2009 with strong competencies in shipping and finance. Klaus Kjrulff was elected Chairman. The new Board of Directors made a targeted effort to rebuild Nordic Tankers reputation as a serious and dedicated shipping company and to restore shareholder and stakeholder confidence in the Company. At the general meeting on 23 April 2009, the Board of Directors presented the Rebound 2012 strategy featuring two tracks one to maintain and develop the existing business model as a tonnage provider and one to explore the possibilities of turning the Company into a full-service shipping line through partnerships, alliances or mergers. Moreover, the Board of Directors would seek to build a shareholder structure that would ensure a stable and productive future development and prevent new, destructive attacks on the Company. On 1 May 2009, the Company hired Jens Pontoppidan as new CEO. Nordic Tankers took delivery of three new vessels in 2009; the LR1 product tanker Nordic Anne, which is wholly owned by Nordic Tankers, was delivered in April, while the two handy-size product tankers Nordic Agnetha and Amy, which are co-owned with Italy-based Zacchello Group, were delivered in May and July. Including these newbuildings, the Nordic Tankers fleet totals ten vessels with an average age of 2.6 years, which is a very young age compared with other shipping companies. Operations were affected by the international financial crisis, the abrupt slowdown in the world economy and the resulting adverse consequences for the shipping industry. Freight rates for the Companys product and chemical tankers continued to fall and remained historically low for the major part of the year. This impacted earnings as well as the value of the Companys vessels, and the Board of Directors wrote down the value of the Companys fleet on two occasions by a total of USD 84.8 million. The Board of Directors and the Executive Board worked hard to implement the strategy, which resulted in the announcement on 26 November of the agreement with Clipper on a combination of the product and chemical tanker operations of the two shipping companies. The agreement was conditional upon the support of the Nordic Tankers shareholders, and as many as 98.6% of the votes cast at an extraordinary general meeting held on 17 December 2009 were in favour of the agreement. Moreover, the proposed resolution for a rights issue was passed with 98.5% of the votes cast. In keeping with the strategy adopted in April, the agreement turned Nordic Tankers into a full-service shipping line through the transfer of the Clipper chemical tanker organisation and, moreover, it created a more stable shareholder structure with Clipper as a major shareholder that completely supports Nordic Tankers future strategy and focus on shipping operations. Following the completion of the transaction on 7 January 2010, Nordic Tankers owns and operates some 70 product and chemical tankers and has become a key global operator in this segment. In future, the management will pursue a strategy of profitable growth and focus on long-term value creation. As a result of the transaction, a new Executive Board comprising CEO Tommy Thomsen and CFO Christian Hassel was appointed. The Company reported a loss after tax of USD 94.5 million for 2009. Financial results were negatively affected by the extraordinary write-downs on the companys tankers of USD 84.8 and the historically weak market conditions resulting from the global financial crisis. As a consequence of the poor market conditions, the Companys capital base is weak in spite of a significant capital injection by Clipper in connection with the transaction and a strengthening of the capital base has top priority in the work agenda of the Board of Directors and the Executive Board. This implies a strong focus on costs and internal improvements and an ongoing dialogue with the Companys creditors about necessary facilities and respite arrangements as well as preparation of a share issue with pre-emption rights for existing shareholders, which is expected to be carried out in the second quarter of 2010. The Board of Directors considers the financial results to be unsatisfactory. In connection with the extraordinary general meeting on 17 December 2009, Chairman Klaus Kjrulff unfortunately had to resign from the Board of Directors because of a noncompetition clause he had signed with his former employer. Our thanks are due to Klaus Kjrulff for having led Nordic Tankers through very difficult times and eventually completing the transaction with Clipper. We would like to thank the many loyal shareholders who supported the Company in connection with the combination with Clippers tanker operations. We look forward to developing the Company into a significant player in our two business segments. The markets are still historically weak, but it is in times like these that opportunities arise to introduce changes that will ensure long-term profitable growth. We hope for the shareholders continued support in our effort to rebuild the capital base of the Company and develop the business further.

Flemming K. Srensen Chairman of the Board of Directors

Tommy Thomsen CEO

Managements review

Consolidated financial highlights

Key figures Revenue Gross profit EBITDA Operating profit/loss (EBIT) Earnings from continuing operations Earnings from discontinued operations Net financials Profit/loss for the year Profit/loss for the year, parent companys share Comprehensive income Invested capital Net working capital (NWC) Equity Balance sheet total Investments in property, plant and equipment Net interest-bearing debt Cash earnings Average number of full-time employees Number of shares, current Ratios Gross margin (%)* Operating margin (%)* Operating margin before sale of vessels and write-downs (%)* Equity ratio (%)** Return on invested capital (%)* Return on equity (%) Assets/equity Financial gearing Operating asset gearing Revenue/invested capital* Net working capital/revenue* Key figures - shares Earnings per share, USD Net asset value per share, USD Market price per share, DKK -13.21 2.9 26 0.64 16.1 40 3.29 15.7 103 36.8% -295.5% -12.4% 9.3% -41.0% -139.2% 10.74 9.11 10.11 0.14 -3.9% 58.8% 44.6% 22.5% 46.9% 8.6% 4.0% 2.13 0.92 1.94 0.19 -1.0% 65.5% 70.3% 34.2% 43.3% 12.5% 25.8% 2.31 1.15 2.18 0.18 6.1% 63.2% 40.7% 40.7% 30.3% 10.4% 17.0% 3.30 2.12 3.13 0.25 10.1% 68.7% 83.5% 51.6% 57.0% 60.9% 49.8% 1.75 -0.09 1.02 0.73 4.2% 2009 USD 1000 29,960 11,013 7,359 -88,544 -94,552 0 -5,980 -94,552 -94,552 -94,368 207,786 232 20,557 220,705 76,887 187,350 -19,825 2 2008 2007 USD 1000 USD 1000 45,303 26,635 39,208 20,227 4,607 0 -12,017 4,607 4,607 2,714 223,982 -2,588 115,254 245,526 51,991 105,461 14,290 2 37,084 24,287 34,220 26,079 16,347 5,275 -7,355 21,622 20,501 29,854 244,825 1,702 112,538 259,793 63,598 128,891 24,007 2 2006 USD 1000 28,105 17,755 17,093 11,440 7,751 943 -4,093 8,694 8,505 8,546 173,324 2,825 55,322 182,820 129,628 117,065 11,382 2 1,300 47,659 1,141 46,854 82,176 16,349 -4,195 20,731 1 1,300 2005 USD 1000 27,318 18,773 26,479 22,807 22,807 0 -1,759 18,648 18,296

7,180,000 7,180,000 7,180,000

Unless otherwise stated, key figures and ratios have been calculated in accordance with the standards laid down by the Danish Society of Financial Analysts in Recommendations & Financial Ratios 2005. See definitions on page 75. * The key figures and ratios have been calculated exclusively for the continuing activities. ** The financial ratios are not defined in the Danish Society of Financial Analysts guidelines Recommendations & Financial Ratios 2005.

Managements review

Managements review

Financial performance and outlook

Financial results In addition to the parent company, the consolidated financial statements of Nordic Tankers include the subsidiaries Nordic Copenhagen Shipping Co. Pte. Ltd. and Nordic Oslo Shipping Co. Pte. Ltd. and the jointly controlled entity Nordic Seaarland Tankers B.V. The group reported a loss after tax of USD 94.6 million for 2009, down from a profit after tax of USD 4.6 million for 2008. The loss meets the latest expectations for a loss after tax of USD 92-94 million as announced on 26 November 2009. The results include write downs of the Companys vessels of USD 84.8 million, which is consistent with expectations. Revenue amounted to USD 30.0 million, down from USD 45.3 in 2008. At 31 December 2009, the Companys equity totalled USD 20.6 million as against USD 115.3 million at the end of 2008. The operation of the Companys vessels before write-downs and tax resulted in a loss of USD 9.7 million for 2009, which is consistent with expectations. The annual results were negatively affected by writedowns of USD 84.8 million on the Companys vessels. As a consequence of these write-downs, the parent companys financial statements included a write-down of investments in subsidiaries and jointly controlled entities of USD 4.2 million and USD 49.2 million, respectively. Despite more ship-days in 2009 compared with 2008, operating expenses were on a par with 2008 and amounted to USD 18.9 million in 2009. Staff costs and external costs fell from USD 6.0 million in 2008 to USD 3.7 million. The fall is primarily attributable to staff costs because an adjustment of liabilities for wages and salaries of USD 0.8 million was made in 2009. In 2008, this adjustment amounted to USD -0.8 million. The net result was a small expense for wages and salaries of USD 0.6 million. For further information on earnings and costs relating to the Companys vessels, please see the section on operations and markets. Strategy Before the completion of the transaction with Clipper on 7 January 2010, Nordic Tankers was a so-called tonnage provider, which means that the Company owns vessels, but that their commercial operation is outsourced. The Company had also outsourced the technical operation of the vessels as well as the greater part of the administrative functions. In future, Nordic Tankers will be a full-service shipping company with own commercial and technical management and own administrative functions. As a result of the transaction, the Company has formulated a new strategy with focus on the operation of chemical tankers. The chemical tanker segment is rather fragmented, and the management expects to play an active

part in the consolidation process in the coming years. The product tanker segment will be of secondary focus, but may be developed further over time if attractive opportunities present themselves. The Companys six product tankers are in market leading pools administered by recognised shipping lines, and the Company has no plans at this stage to change this arrangement. The new vision announced at the Companys general meeting on 17 December 2009 is as follows: To become a leading global operator of chemical and product tankers, known for the best employees and the highest efficiency. Moreover, the Company has stated an ambition to have more than 150 vessels in its fleet by the end of 2013 (own and chartered vessels as well as vessels in commercial management), an operating margin of at least 20% and an equity ratio of at least 30%. The enlargement of the fleet may be achieved by attracting more vessels to the Companys commercial and technical management, by chartering vessels at attractive terms and conditions and by acquiring new vessels in the market. Due to the Companys rather thin capital base, focus will be on enlargement of the fleet through the two first mentioned suggestions. Any growth in own or chartered tonnage as well as tonnage in management will, however, only be accepted to the extent that the growth is expected to be commercially viable and thus expected to create value for the Companys shareholders. The Companys operating margin and equity ratio are a long way away from the above-mentioned ambition, and an operating margin of 20% is only obtainable in a normalised market situation where the rates are higher than at present. The equity ratio is expected to be realised through improved earnings combined with economies of scale through profitable, selective fleet growth and further share issues to the extent deemed appropriate and possible. Outlook for 2010 Because of the financial crisis and the negative development of the global economy, it is very difficult to predict the market situation in 2010. Against this background, 2010 looks like a difficult year, and the Company expects revenue to be in the region of USD 60-65 million and EBITDA to be between USD 4 million and 8 million. Moreover, we expect to report a loss before tax of between USD 20 million and 25 million before any write-downs on vessels or other items and a loss of between USD 28 million and 33 million before any write-downs on vessels but after a write-down on acquired goodwill of approx. USD 8 million. Earnings expectations before write-downs reflect the historically low freight rates and the great uncertainty that plague the shipping industry.

Managements review

The reason for the expected write-down of acquired goodwill of about USD 8 million is that the Company, according to IFRS, must calculate the value of the shares of Nordic Tankers issued to Clipper as payment for the contribution of ownership interests in vessels at the quoted market price of the Nordic Tankers shares at the time of the transfer of control of the companies on 7 January 2010. The quoted market price was DKK 27.70 per share, whereas the transaction price, which reflected the relative fair value of the contribution, amounted to DKK 16.86 per share. The difference between the quoted price and the transaction price agreed between the parties is about USD 8 million, and the Company expects that this difference will first have to be recognised as goodwill and then written down in the financial statements for 2010. As the difference in value increases equity correspondingly in connection with the contribution, equity will not be affected by the expected write-down. For further information on acquisition of enterprises in 2010, please see note 25. Capital resources and liquidity The Companys capital base has weakened as a result of the deteriorating market conditions. A strengthening of the capital base has top priority in the work agenda of the Board of Directors and the Executive Board. Based on the most recent expectations for 2010, the Company considers its liquidity and capital resources to be adequate, even if the rights issue is not completed, to support continuing operations as well as current and anticipated investments at least until the end of 2010. Based on the earnings expectations for 2010 and ongoing and planned investments as well as the extension granted of the time for payment of instalments on certain bank loans until the beginning of 2012, the Companys total cash flow for 2010 is projected to be between USD -17 and -20 million. The management assesses that this negative cash flow may be financed partly through the Companys liquidity of approx. USD 12 million at the beginning of the year, partly by undrawn borrowing facilities of USD 10 million, including a new credit facility of USD 7.5 million made available by Clipper. As a result of continued uncertainty about the development of the freight market, there is greater uncertainty than normal about the Companys earnings expectations, and the Company has limited financial resources to absorb any negative deviations from the managements expectations for earnings performance, investments and liquidity. Therefore, the management is preparing a share issue in the second quarter of 2010 with pre-emption rights for existing shareholders in order to strengthen the Companys capital base and liquidity.

Company history Nordic Tankers is a shipping company emerging from the general partnership K/S Difko XLVII (47). This company was founded in 1984 as part of an order for three product tankers at the now closed B&W Shipyard in Copenhagen. The vessels were delivered in 1986 and 1987 and were chartered on 15-year bareboat contracts with purchase options for the charterers. In 1991, the charterers exercised their options on one of the vessels. In February 2000, the charterers of the two remaining tankers could no longer meet their contractual obligations because of poor market conditions. Consequently, K/S Difko XLVII (47) took over their company, Nordic Shipping I/S (now Nordic Tankers A/S). In this connection, a contract was made with A/S Dampskibsselskabet TORM for commercial operation of the vessels which were then operated in TORMs LR1 pool. From 2000 and onwards, freight rates generally developed positively and Nordic Tankers built up its financial resources, which made it possible to invest in further tonnage. Among other things, this resulted in the acquisition of chemical tankers that were operated in cooperation with Eitzen Chemicals A/S. Tonnage tax was introduced in Denmark in 2001, and K/S Difko XLVII (47) decided to enter Nordic Tankers for the scheme from and including the financial year 2001/02. In April 2006, Nordic Tankers set up a joint company Nordic Seaarland Tankers B.V. with Netherlands-based Seaarland Shipping Management B.V., which is owned by the Italian shipping group Zacchello Group. The company joined the tonnage tax scheme in the Netherlands. Nordic Seaarland Tankers B.V. invests in handy-size product tankers. These vessels are operated by Maersk Tankers in the Handytanker pool. In preparation for the companys admission to OMX Copenhagen Stock Exchange, K/S Difko XLVII (47) on 23 May 2007 allotted shares in Nordic Tankers to its approximately 5,700 investors. At the beginning of 2008, K/S Difko XLVII (47) was wound up. Forward-looking statements This report contains forward looking statements reflecting the managements current beliefs concerning future events and financial results. Statements relating to 2010 are inherently subject to uncertainty and Nordic Tankers actual results may thus differ from expectations. Factors which could cause actual results to deviate from the expectations include, but are not limited to, changes in macroeconomic and political conditions especially on the Companys main markets, changes in Nordic Tankers freight rate assumptions and operating expenses, volatility of rates and vessel prices, regulatory changes, possible disruptions of traffic and operations resulting from outside events, etc. This annual report does not constitute an invitation to buy or sell shares in Nordic Tankers A/S.

Managements review

Product tankers operations and markets 2009

Market outlook for 2010 The product tanker market was negatively affected by a declining demand for oil. After a year which saw demands fall, we expect the global demand for oil to pick up again in 2010. The development in USA and Europe, which are the largest consumers of oil, is of particular importance to Nordic Tankers. Like in 2009, a large number of new product tankers will be delivered in 2010. We will also see a phasing out of old single hull tankers, which according to the IMO rules must be phased out in 2010. Nordic Tankers expects a net growth in the product tanker fleet in 2010, which is expected to have a negative impact on freight rates. However, disappointing earnings and limited access to funding may cause an acceleration in the phasing out of old, loss-making tonnage. All in all, Nordic Tankers estimates that daily earnings in 2010 will be on the same level as 2009. A positive development in the global economy and the demand for oil and an increase in the phasing out of old tonnage would have a positive impact on earnings. Because of the weak market, the pools that Nordic Tankers participates in have a lower contribution ratio compared with previous years. Consequently, there is increased uncertainty about the earnings expectations for 2010.

The year was characterised by the negative development in the global economy, and freight rates remained at a historically low level throughout most of the period. After a brief improvement in February, the product tanker market was hit hard by the slow-down in global activity. Bunker prices were also weak at the beginning of the year and fell to about USD 240 per ton. However, this was not enough to compensate for the fall in freight rates, and unlike freight rates, bunker prices increased in the second quarter, which put further pressure on earnings. This tendency continued throughout most of the second half of the year, and the handy-size segment in particular was negatively affected by the disappointing demand for oil in Europe and the USA. The LR1 tankers were used to store gas oil and jet fuel. This use was intensified in September and continued for the rest of the year, which helped improve rates in this segment. Continued use of vessel capacity as storage space and a cold winter resulted in a general improvement of the product tanker market at the end of the year, though freight rates at end-2009 were still below the levels of preceding years.

Development in earnings, product tankers 2009 Index 100 = December 2008

120 100 80 60 40 20 0 d/08 j/09 f/09 m/09 a/09 m/09 j/09 j/09 a/09 s/09 o/09 n/09 d/09

37,000 mts petrol Europe-USA

55,000 mts naphtha Saudi Arabia - Japan

Source: Nordic Tankers

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Managements review

Chemical tankers operations and markets 2009

The development in the chemical tanker segment was similar to the development in the product tanker segment. The freight rates in the chemical tanker segment opened the year at a low level. Throughout the entire year, rates were also under pressure from a general fall in both spot and contract cargoes. The Companys City class vessels participated in the Eitzen City Class Pool throughout 2009. A great portion of the employment was generated from shipment of refined oil cargoes. Thus, the earnings of these vessels did, to a high degree, follow the smaller product tankers, whose earnings were very unsatisfactory. Market outlook for 2010 Following the transaction with Clipper on 7 January 2010, Nordic Tankers has increased its exposure in and focus on chemical tankers. An important change has been the takeover of five 6,000 dwt chemical tankers with tanks of stainless steel. These vessels can carry more types of chemicals compared with the Companys other vessels.

Moreover, Nordic Tankers manages about 55 chemical tankers for Clipper and other shipping companies. These vessels have coated tanks or tanks of stainless steel. Thus, Nordic Tankers will, to a higher degree than previously, be sensitive towards the development in the chemical tanker market. The growth in the volume of chemical cargoes follows the development in the global economy. Following a fall in 2009, we expect 2010 to be characterised by global growth. However, the entry of new chemical tankers is expected to depress rates in 2010. Nordic Tankers has specific focus on contract coverage in chemical tankers, and we expect a coverage of about 50% in 2010. However, this will depend on the actual cargo volumes under the Companys shipping contracts. All in all, 2010 will be a challenging year for the chemical tankers; however, the phasing out of old tonnage and strong growth in the global economy might have a positive impact on earnings.

Managements review

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Managements review

Financial review
ThE gROuP Financial results for the year and equity figures in ( ) = 2008 The Company reported a loss after tax of USD 94.6 million for the year (USD +4.6 million). Loss before tax amounted to USD 94.5 million (USD +8.2 million). The loss meets the latest expectations for a loss after tax of USD 92-94 million as announced on 26 November 2009. Revenue amounted to USD 30.0 million, down from USD 45.3 in 2008. No vessels were sold in 2009. In 2008, profit on sale of vessels (NORDIC LISBETH) totalled USD 18.5 million before tax. The financial results were negatively affected by writedowns on the Companys vessels. In 2009, deteriorating market conditions resulting from the global financial crisis resulted in write-downs of USD 84.8 million on the Companys vessels. The write-downs are distributed among the segments as follows: the LR1 segment USD 8.3 million, the chemical tanker segment USD 21.6 million and the handysize segment USD 54.9 million. In 2008, the value of the Companys chemical tankers was written down by USD 8.5 million. For further information on write-downs, please see note 12. As a consequence of these write-downs, the parent companys financial statements included a write-down of investments in subsidiaries and jointly controlled entities of USD 4.2 million and USD 49.2 million, respectively. Equity amounted to USD 20.6 million (USD 115.3 million), corresponding to a fall of 82.2%. Key elements of the fall in equity are as follows: Equity development in million USD Equity at 1 January 2009 Loss for the year Fair value adjustment of derivative financial instruments held to hedge future cash flows Transferred to the income statement for a cash flow hedge Costs related to the capital increase completed on 7 January 2010 Equity at 31 December 2009 115.3 -94.6 -2.6 2.8 -0.3 20.6

The assumptions applied in the calculation of the recoverable amount are set out in note 12. Other valuations for accounting purposes and estimates are described in note 1 Accounting policies. Revenue Revenue, in the form of freight receipts, fell by USD 15.3 million to USD 30.0 million, a fall of 34%, which is primarily due to significantly lower freight rates in 2009 compared with 2008. In the LR1 segment, rates have diminished by more than one half, in the handy-size tanker segment the fall amounted to 40% and in the chemical tanker segment the fall amounted to 24%. LR1 product tankers LR1 product tanker operations in 2009, in the form of ship-days, were down 26% on 2008. Freight receipts fell by USD 6.9 million, which, among other things, is due to the sale of NORDIC LISBETH in December 2008. Prior to the delivery of NORDIC ANNE on 20 April 2009, the Company had no LR1 product tankers. Fewer ship-days and significantly lower freight rates thus explain the fall in freight receipts. handy-size tankers Handy-size tanker operations in 2009, in the form of shipdays, increased by 26% on 2008, which was attributable to the delivery of the 50% owned product tankers NORDIC AGNETHA on 9 May 2009 and AMY on 7 July 2009. Freight receipts amounted to USD 13.8 million (USD 18.2 million), corresponding to a fall of 24%. The increase in ship-days was thus not enough to make up for the significantly lower freight rates. Chemical tankers Chemical tanker operations, in the form of ship-days, remained almost unchanged compared with last year. This segment was also affected by the lower freight rates. Thus, freight receipts amounted to USD 13.0 million, down from USD 17.0 million in 2008, corresponding to a fall of 23%. The Companys total operating expenses for all segments came to USD 18.9 million, which is on a par with last year and by and large as expected. For further information, please see the segment data in note 3. Financial income and expenses, net Net financial expenses amounted to USD 6.0 million (USD 12.0 million). The fall was attributable to increasing interest income, falling interest expenses relating to mortgage debt

The groups vessels are recognised in the balance sheet at cost less accumulated depreciation and write-downs. The carrying amount of the vessels is currently compared with their earnings potential and indications of value. If there are indications of impairment exceeding the annual depreciation, a write-down to the lower recoverable amount will be made.

Managements review

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and a significantly lower write-down on the investment in Tower Group shares in 2009 compared with 2008. For further information, please see notes 8 and 9. Tax The Companys tax payment is calculated according to the rules and regulations of the Danish Tonnage Tax Act, including a USD 3.5 million tax in 2008 on profit from the sale of vessels. For further information, please see note 10. Assets At 31 December 2009, the Companys balance sheet amounted to USD 220.6 million, a fall of USD 24.8 million, or 10.1%. Non-current assets fell by USD 19.0 million to USD 89.5 million. The fall was attributable to depreciation and writedowns as well as the acquisition of the product tankers NORDIC ANNE, NORDIC AGNETHA and AMY. Equity and liabilities The groups equity fell, primarily due to the write-down of the value of the vessels, by USD 94.7 million to USD 20.6 million, corresponding to 82.2%. No dividend was declared in 2009. Group liabilities increased by USD 69.9 million to USD 200.1 million. Non-current liabilities increased by USD 79.2 million in 2009 to USD 188.8 million as a result of the raising of loans to finance new tonnage. Cash flows Operations contributed USD 4.3 million (USD 23.1 million). Financial income and expenses and taxes negatively affected cash flows from operating activities by USD 9.7 million in 2009 (USD -12.9 million). Total cash flows from operating activities amounted to a negative USD 5.4 million in 2009 (USD +10.2 million). In 2009, a total of USD 76.9 million (USD 52.0 million) was invested in new vessels. No vessels were sold in 2009. In 2008, the sale of vessels affected the cash flow from investing activities by USD 68.1 million. Total cash flows from investing activities amounted to a negative USD 76.9 million (USD +13.0 million). Cash flows from financing activities amounted to USD 72.7 million in 2009 (USD -21.3 million). In 2009, loans raised to finance new vessels amounted to USD 82.0 million and repayment of debt finance amounted to USD 9.2 million. In 2008, loans raised to provide financing amounted to USD 61.5 million and repayment of debt finance amounted to USD 82.8 million. In 2009, the groups cash and cash equivalents fell by USD 9.5 million to USD 2.6 million. Cash and cash equivalents at year-end consisted exclusively of bank deposits in USD and DKK.

PARENT COMPANy Financial results for the year and equity figures in ( ) = 2008 The parent company reported a loss after tax of USD 78.5 million for the year (USD +3.4 million). Loss before tax amounted to USD 78.5 million (USD +7.0 million). No vessels were sold in 2009. In 2008, profit on sale of vessels (NORDIC LISBETH) totalled USD 18.5 million before tax. The financial results were negatively affected by writedowns on the Companys vessels. In 2009, deteriorating market conditions resulting from the global financial crisis resulted in write-downs of USD 17.6 million on the parent companys vessels. The write-downs are distributed among the segments as follows: the LR1 segment USD 8.3 million and the chemical tanker segment USD 9.3 million. In 2008, the value of the Companys chemical tankers was written down by USD 6.2 million. For further information on write-downs, please see note 12. A consequence of the write-downs on vessels in subsidiaries and jointly controlled entities was that write-downs of investments in subsidiaries and jointly controlled entities of USD 4.2 million and USD 49.2 million, respectively, were recognised in the parent companys financial statements. For further information on the write-downs, please see notes 13 and 14. The parent companys equity amounted to USD 20.6 million (USD 99.4 million), corresponding to a fall of 79.3%. Key elements of the fall in equity are as follows: Development in parent companys equity in million USD Equity at 1 January 2009 Loss for the year Fair value adjustment of derivative financial instruments held to hedge future cash flows Transferred to the income statement for a cash flow hedge Costs related to the capital increase completed on 7 January 2010 Equity at 31 December 2009 99.4 -78.5 -2.8 2.8 -0.3 20.6

The parent companys vessels are recognised in the balance sheet at cost less accumulated depreciation and writedowns. The carrying amount of the vessels is currently compared with their earnings potential and value indicators. If there are indications of impairment exceeding the annual depreciation, a write-down to the lower recoverable amount will be made.

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The assumptions applied in the calculation of the recoverable amount are set out in note 12. Other valuations for accounting purposes and estimates are described in note 1 Accounting policies. Revenue Revenue, in the form of freight receipts, fell by USD 9.0 million to USD 9.6 million, a fall of 48%, which is primarily due to significantly lower freight rates in 2009 compared with 2008. The LR1 product tankers had 89 fewer ship-days because of the sale of NORDIC LISBETH, and freight rates fell by more than 50%. The chemical tankers saw freight rates fall by 24%. The parent companys total operating expenses came to USD 7.1 million, which is on a par with last year and by and large as expected. Financial income and expenses, net Net financial expenses amounted to USD 3.0 million (USD 7.0 million). The fall is attributable to increasing interest income, falling interest expenses relating to mortgage debt and a significantly lower write-down on the investment in Tower Group shares in 2009 compared with 2008. For further information, please see notes 8 and 9. Tax The parent companys tax payment is calculated according to the rules and regulations of the Danish Tonnage Tax Act, including a USD 3.5 million tax in 2008 on profit from the sale of vessels. For further information, please see note 10. Assets At 31 December 2009, the parent companys balance sheet amounted to USD 98.9 million, a fall of USD 31.2 million, or 24%. The parent companys non-current assets fell by USD 23.0 million to USD 89.5 million. The fall was attributable to depreciation and write-downs as well as the acquisition of the product tanker NORDIC ANNE. Equity and liabilities The parent companys equity fell, primarily due to the writedown of the value of vessels and investments, by USD 78.8 million to USD 20.6 million, corresponding to 79.3%. No dividend was declared in 2009. The parent companys liabilities increased by USD 47.6 million to USD 78.4 million. The parent companys non-current liabilities increased by USD 50.7 million in 2009 to USD 70.8 million as a result of the raising of loans to finance new tonnage.

Parent companys cash flows Operations contributed a negative USD 2.3 million (USD +8.9 million). Financial income and expenses and taxes negatively affected cash flows from operating activities by USD 6.2 million in 2009 (USD -7.7 million). Total cash flows from operating activities amounted to a negative USD 8.5 million in 2009 (USD +1.2 million). In 2009, a total of USD 42.3 million (USD 0.0 million) was invested in new vessels. No vessels were sold in 2009. In 2008, the sale of vessels affected the cash flow from investing activities by USD 68.1 million. Total cash flows from investing activities amounted to a negative USD 49.4 million (USD +54.2 million). Cash flows from financing activities amounted to USD 50.5 million in 2009 (USD -49.6 million). In 2009, loans raised to finance new vessels amounted to USD 51.0 million and repayment of debt finance amounted to USD 0.6 million. In 2008, loans raised to provide financing amounted to USD 26.8 million and repayment of debt finance amounted to USD 76.5 million. In 2009, the parent companys cash and cash equivalents fell by USD 7.4 million to USD 0.1 million. Cash and cash equivalents at year-end consisted exclusively of bank deposits in USD and DKK.

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Fleet description and pools

Product tankers
LR1 product tankers LR1 product tankers are 60-79,000 dwt vessels (Panamax size) with 70-100,000 cubic meter epoxy-painted cargo space. These vessels primarily sail with large quantities of refined oil products from the place of production to other parts of the world. Examples include naphtha from the Middle East to the Far East, diesel from the Far East to Europe, jet fuel from the Middle East to Europe or petrol from the Baltic countries to North America. Even products such as crude oil, which could previously only be shipped in vessels designed for this purpose, may now be shipped in LR1 tankers because today the hold of this vessel type can be cleaned so thoroughly that it can carry a great number of different products. Together with the major Aframax/LR2 product tankers, the LR1 tankers are often the first vessels to be directly affected by seasonal fluctuations derived from the demand for heating oil during winter in the northern hemisphere, increased activity (petrol and jet fuel) during the main holiday periods, maintenance of major industrial plants, refineries, etc. Following the sale of NORDIC LISBETH, Nordic Tankers did not operate any LR tankers at the end of 2008, however, a newbuilding, which was ordered in 2006, was on order. The newbuilding NORDIC ANNE was delivered from New Times Shipbuilding in China on 20 April 2009. Nordic Anne Holding Year of construction Shipyard Deadweight Number of cargo spaces/cubic Length Main engine Horsepower Speed, loaded 100% 2009 New Times, China 73,500 12 / 83,000 m3 228.6 m MAN B&W 14,000 15.0 knots

Nordic Tankers partner in the handy-size segment is Italy-based Zacchello Group. In 2006, a jointly controlled shipping company was established in the Netherlands, Nordic Seaarland Tankers B.V., which has signed a commercial management agreement with Seaarland Shipping Management and a technical management agreement with Motia for all the vessels in the joint shipping company. Both of these companies are part of the Zacchello group. At end-December 2009, the company operated five handy-size tankers. NORDIC AGNETHA was delivered on 9 May 2009, and AMY was delivered on 7 July 2009.

Chemical tankers
The 13,000 dwt chemical tankers of this segment meet the IMO2 requirements for tankers carrying lighter chemicals. However, since the pool is primarily employed in transport of refined oil cargoes, the cargoes have often been identical with the cargoes carried by the Companys handy-size tankers. Nordic Tankers partner in the chemical tanker segment is Norway-based Eitzen Chemical A/S. At end-December 2009, the Company operated a total of four chemical tankers.

Pools
The establishment of pools is a cooperation between several shipping companies on employment of their vessels in a specific segment. The vessels employed in a pool are often of comparable size, capacity and quality. Pools are widespread in the international shipping industry. They improve service for customers and exploit the benefits of scale. The pool managers of the individual pools market all the vessels employed in their pool as a single coherent fleet. By employing a large number of almost identical vessels in one pool, customers are offered the right vessel at the right place at the requested time. All vessels of the Nordic Tankers fleet are employed in pools that are all characterised as being leading within their segments.

handy-size product tankers The handy-size product tankers include 25-40,000 dwt vessels. Their main practice field is shipment of refined oil products and IMO2 and IMO3 classified chemical cargoes, including vegetable oils. The areas served include the Mediterranean, the Black Sea, North-West Europe, South East Asia and the Caribbean. Vegetable oils are typically carried from South East Asia to Europe.

LR1
At end-2009, Nordic Tankers operated the product tanker NORDIC ANNE in this segment. Nordic Tankers is a member of TORMs LR1 pool. TORM introduced the pool concept for LR1 tankers in 1990. Today, this pool includes five shipping companies with 38 tankers, and six newbuildings are scheduled for delivery in 2009-10. The members of the pool are TORM,

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handysize product tankers Nordic Ruth Holding Year of construction Shipyard Deadweight Number of cargo spaces/ IMO class and cubic Length Main engine Horsepower Speed, loaded 75% 2000 Daedong, South Korea 35,820 12 / IMO3 42,316 m3 183.0 m Sulzer 11,100 14.4 knots Nordic Pia 75% 2006 GSI, China 38,471 12 / IMO3 43,625 m3 183.0 m MAN B&W 10,710 15.2 knots Nordic hanne 100% 2007 GSI, China 38,396 12 / IMO3 43,444 m3 182.86 m MAN B&W 10,710 15.2 knots Nordic Agnetha 50% 2009 Hyundai-Mipo, South Korea 37,400 12 / IMO2 42,500 m3 184.0m MAN B&W 9,600 15 knots Amy 50% 2009 Hyundai-Mipo, South Korea 37,400 12 / IMO2 42,500 m3 184.0m MAN B&W 9,600 15 knots

Chemical tankers Nordic Copenhagen Holding Year of construction Shipyard Deadweight Number of cargo spaces/ IMO class and cubic Length Main engine Horsepower Speed, loaded 100% 2005 Hyundai-Samho, South Korea 12,959 12/ IMO2 13,341 m3 127.2 m MAN B&W 5,500 13.4 knots Nordic Oslo 100% 2005 Hyundai-Samho, South Korea 12,975 12 / IMO2 13,344 m3 127.2 m MAN B&W 5,500 13.4 knots Nordic Stockholm 100% 2007 Hyundai-Samho, South Korea 12,885 12 / IMO2 13,347 m3 127.2 m MAN B&W 5,500 13.4 knots Nordic helsinki 100% 2007 INP Sekwang, South Korea 13,035 12 / IMO2 13,652 m3 128.6 m MAN B&W 6,060 13. 5 knots

Reederei Nord Klaus E. Oldendorff Ltd., Gotland Shipping (Bahamas) Ltd., Difko A/S, Nordic Tankers A/S and Skagerack Invest Limited.

City Class
Nordic Tankers was also a member of Eitzen Chemicals City Class Pool in 2009. It was established in 2005 by Eitzen, Nordic Tankers and Brvig. Today, the pool includes four shipping companies with 26 vessels in the 10-15,000 dwt segment, and ten vessels are scheduled for delivery in 200910. The members of the City Class Pool are Eitzen Chemical, Nordic Tankers, Lloyds Fond and Rigel Schiffahrs GMBH. The agreement with the City Class Pool was terminated in 2010 as a result of the transaction with Clipper.

handytankers
Nordic Tankers vessels are, via its cooperation with Seaarland Shipping Management, employed in Maersk Tankers Handytankers Pool, which includes five shipping companies with 117 tankers in the 27-51,000 dwt segment, and nine newbuildings are scheduled for delivery in 2009-10. The members of the pool are Maersk Tankers, Seaarland Shipping Management, Motia, Chemikalien Seetransport and dAmico Tankers.

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Risk management

The Executive Board currently identifies risks considered to have the most significant effect on the groups financial position and business performance and plans any measures deemed relevant to limit the groups sensitivity to such risks. Risks and measures are reviewed at least annually with the Board of Directors. Financing of Company operations At 31 December 2009, Nordic Tankers finance loans totalled USD 190 million. The loan agreements stipulate minimum requirements (financial covenants) for liquidity, equity ratio and debt ratio, based on the market value of the vessels, among other things. At certain times during the year 2009, some of the financial covenants were not met. In April, the jointly controlled entity failed to meet the debt ratio requirements. The situation was solved through the payment of extraordinary instalments following payment by the parties, including Nordic Tankers A/S. In the autumn of 2009, the group no longer met the debt ratio requirements and minimum liquidity requirements, which led to a renegotiation of the loan agreements. The result was an addendum to the loan agreements in November 2009 which provided for deferment of instalments on the loans and reduced debt ratio requirements and minimum liquidity requirements and increased the lenders margin. At 31 December 2009, the parent company and its subsidies failed to meet the minimum liquidity requirement. The situation was remedied through the conclusion of another addendum to the loan agreement in January 2010 in connection with the groups acquisition of a number of Clipper operations. Despite the groups low capital resources, the financial covenants are expected to be met, based on the groups expectations for future earnings, cash flow and the development in the value of vessels, etc. hR and outsourcing Until the end of 2009, the Company had two employees, who made up the Executive Board, while the day-to-day management of the Company was outsourced to business partners who undertook commercial management, technical management and administrative tasks. Fluctuations in bunker oil prices Oil prices, and hence the price of the bunker oil used by vessels as fuel, fluctuate widely. Total variable expenses for operating the companys vessels depend very much on the price of bunker oil. If oil prices were to rise, it is uncertain whether such an increase could be wholly or partially set off against increased freight rates.

The manager of the individual pools, in which the companys vessels are included, decides, in cooperation with the individual companies, whether to hedge bunker requirements. Commercial management and pool contracts The Company has contracted with third parties for the commercial management of the Companys vessels and pool arrangements. Nordic Tankers endeavours to make contracts with leading pool managers. Shared ownership of vessels The Company owns vessels jointly with one other shipping company, Zacchello Group. With respect to these vessels, the Company is highly dependent on agreement with the co-owner when it comes to important decisions on the vessels, including their sale and changes in employment and management. Moreover, the Company is to a certain extent dependent on the co-owner meeting its financial obligations. Foreign exchange risks The Companys foreign exchange exposure is quite low as the majority of the Companys income and expenses are in the same currency (USD = functional currency); however, it will be financially hedged if and when deemed necessary by the management. The Companys financial reporting and earnings are in USD, whereas the share price on NASDAQ OMX Copenhagen is in DKK; consequently, an investment in the Companys shares will mean significant exposure to changes in the USD/DKK exchange rate. Following the transaction with Clipper, the Company has become sensitive to fluctuations in the EURO as part of the freight receipts are in EURO and related loans are in EURO. DKK exposure has increased as a result of significantly higher staff and administrative costs, which are denominated in DKK. Interest rate risk At 31 December 2009, Nordic Tankers net interest-bearing debt amounted to USD 187 million. The Company has hedged about 50% of the interest rate risk associated with this debt for a period of between one and two years. Consequently, the Company continues to be sensitive to fluctuations, especially in interest on USD. Based on the net interest-bearing debt at 31 December 2009, an interest rate increase of one percentage point would result in an increase in the Companys annual interest expenses of about USD 1.0 million before tax. The Companys loans are denominated in USD and are floating-rate loans.The management continually monitors the interest market and assesses the need for hedging.

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Statutory corporate governance statement

Composition of the Board of Directors The Company has not at the present time found it necessary to fix a retirement age for directors as the Company emphasises the importance of a Board of Directors composed of members with considerable relevant professional experience. The Company has not yet prepared independent descriptions of the tasks, duties and responsibilities of the Chairman and Deputy Chairman of the Board of Directors. The duties are described in part in the rules of procedure adopted by the Board of Directors. Audit committee In the spring of 2009, the Board of Directors set up an audit committee comprising three members. In 2009, the committee held six meetings. The Companys management and the Companys auditor also participated in the meetings. The main objective of the committee is to assist the Board of Directors in: Overseeing the financial reporting process. Monitoring the efficiency of the Companys internal control systems and risk management systems. Overseeing the statutory audit of the financial statements. Overseeing and controlling the independence of the auditors, including in particular the provision of non-audit services to the Company. In 2009, the work of the audit committee included: Review of interim reports. Analysis of financial risks. Review of impairment tests of the Companys vessels. Auditor agreement and auditors fees. Quality assurance and independence of auditors. The audit committee submits a report on its work to the Board of Directors not later than on the Board meeting immediately following an audit committee meeting. After the closing of the financial year, the audit committee was discontinued as the duties of the audit committee will be taken over by the Board of Directors. Because of the limited number of employees in the Company so far, there was no reason for having employee representatives on the Board. Remuneration of the Board of Directors and the Executive Board The Board of Directors has not formulated an actual remuneration policy, but it currently reviews remuneration for the members of the Board of Directors and the Executive Board to make sure that it reflects their duties and responsibilities. The Board of Directors has decided not to disclose the remu-

This statutory corporate governance statement covers the financial period 1 January to 31 December 2009. Financial reporting process The Board of Directors and the Executive Board are responsible for the groups internal control and risk management in connection with the financial reporting process, including observance of relevant statutory rules and regulations in connection with financial reporting. Control environment The Executive Board receives monthly reports from the commercial and technical managers, which are compared against the budgets, and the Executive Board prepares a report which is considered and assessed at the next Board of Directors meeting. The preparation of interim and annual reports has been outsourced to Difko Administration A/S and is as such covered by Difkos control systems. The most important contributors to the financial reporting process are thus Difko and reports from subsidiaries and jointly controlled entities, which are subject to independent audit pursuant to the legislation applicable in the country of their registered office. Difko receives, on behalf of Nordic Tankers, quarterly financial reporting briefs from subsidiaries at vessel level. The reporting is conducted in accordance with reporting guidelines ensuring observance of the groups accounting policies. Prior to publication of quarterly and annual reports, a committee meeting and a Board meeting are held. Audit committee members, the Executive Board, the Companys auditor and representatives of Difko, who are responsible for the presentation of the financial statements, participate in the audit committee meeting. At the meeting, the reports are reviewed and an overall assessment is made of the risks associated with the financial reporting process. At the Board meeting, the audit committee members report to the Board of Directors. The financial statements are reviewed and explained relative to the budget and expectations. Moreover, any estimates and assessments used in the financial reporting are discussed and decided on. Corporate governance Nordic Tankers is committed to maintaining a high standard of corporate governance, and the Board of Directors currently reviews the framework and principles for the overall governance of the Company. The aim is to achieve longterm growth in shareholder value. The Company is in compliance with the majority of the recommendations given in Recommendations for corporate governance made public by NASDAQ OMX Copenhagen. The main deviations are in the following areas:

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neration or retirement benefit plan applicable to individual members of the management. No incentive schemes have been offered to the Board of Directors and the Executive Board; consequently, no overall guidelines have been drawn up for such schemes. At the annual general meeting to be held on 22 April 2010, a resolution will be proposed for the adoption of: General guidelines for incentive pay to members of the Board of Directors, the Executive Board and other employees. Moreover, a resolution may be proposed for the authorisation of the Board of Directors to issue warrants to members of the Executive Board and other employees. Corporate Social Responsibility (CSR) Nordic Tankers has a responsibility for contributing to a global, sustainable development economically, socially and environmentally. One of Nordic Tankers three basic values

is integrity, which emphasises the Companys will and desire to be mindful of its social responsibility. The Company has launched a number of initiatives in this field, but has not yet formulated any strategy or policy for the area. In January 2010, the Company supplemented its ownership of vessels with its own operating organisation and is planning on accelerating efforts to systematise already existing initiatives in the area and identifying any further initiatives that may be launched. Later, these projects are expected to form the basis of the formulation of a strategy and policy in the area.

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Shareholder information
Share data Listed on: NASDAQ OMX Copenhagen Share capital: DKK 71,800,000 after the transaction with Clipper DKK 125,882,860 Nominal value: DKK 10 Shares issued: 7,180,000 after the transaction with Clipper 12,588,286 shares Share classes: One Votes per share: One Bearer share: Yes Restriction on voting rights: No Restricted negotiability: No Security ID code: DK0060083996 Temporary ID code: DK0060209179 Movements in the Companys share price The closing price at year-end 2009 was DKK 26. A fall of 35% compared with end-2008. The fall and movements in the Companys share price are on a par with blue chip shipping shares see the below graphs. Investor relations The aim of Nordic Tankers investor relations policy is to ensure a high level of information to the Companys shareholders through: Transparency Reliability Accessibility The tools for ensuring that the Company lives up to this objective are: The website www.nordictankers.com contains news in brief and background information about Company operations and management. Nordic Nyt a newsletter for shareholders featuring in-depth articles. Shareholder structure At 25 March 2010, Nordic Tankers had 6,096 shareholders, of which 96.9% were registered shareholders. On 25 March 2010, the following shareholders held more than 5% of the share capital and voting rights: Clipper A/S: 3,894,932 shares (31% exclusive of treasury shares) reported on 7 January 2010

Index value of 100 as at 1 January 2009

Relative price 160,00 140,00 120,00 100,00 80,00 60,00 40,00 20,00 0,00 Date 01-01- 01-02- 01-03- 01-04- 01-05- 01-06- 01-07- 01-08- 01-09- 01-10- 01-11- 01-122009 2009 2009 2009 2009 2009 2009 2009 2009 2009 2009 2009 Nordic Tankers A/S A. P Mller - Maersk B Eitzen Chemical D/S Torm

The Companys shares are covered by the following analyst: Finn Bjarke Petersen, Nordea - transportation, tel.: +45 33335723.

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Treasury shares The Board of Directors of Nordic Tankers has been authorised by the general meeting in the period until the next annual general meeting to acquire a maximum of nom. DKK 7,180,000 treasury shares, corresponding to 718,000 shares or 10% of the share capital. At year-end 2009, Nordic Tankers held nom. DKK 240,000 treasury shares, corresponding to 24,000 shares. The acquisition hereof was part of the preparations for the IPO, and the Company has not acquired treasury shares since its listing in 2007. Dividend policy No dividend will be distributed for the financial year 2009, and Nordic Tankers does not expect to distribute any dividend for the financial year 2010 either. In the years to come, the Company will seek to improve its equity ratio and pursue an active investment policy, including focus on the expansion of the fleet. The Company will strive to increase earnings and generate sufficient capital to distribute dividend. Material agreements The group has arranged a credit line of up to USD 190 million. The agreement includes a Change of Control clause relating to situations in which control of the Company changes. The effect of the clause is that the loans must be repaid not later than 60 days after a Change of Control situation has occurred, unless approved by the lending bank. Change of control of the Company has no impact on other material agreements. Procedures for election of members to the Board of Directors The members of the Board of Directors are elected at the general meeting, except for those elected pursuant to the provisions of the Danish Public Limited Companies Act on employee representation. The number of directors elected by the general meeting totals 5-8. Directors are elected for one year at a time. Retired directors can be re-elected. Procedures for making amendments to the articles of association Resolutions to amend the Companys articles of association are passed at the general meeting pursuant to sections 65a(2), 65b(1) or (5) or section 79(1) or (2) of the Danish Public Limited Companies Act. Any proposal for amending the articles of association that a shareholder wishes to present at the annual general meeting must be submitted in writing to the Board of Directors not later than 15 February in the year in which the annual general meeting is held.

Financial calendar 2010

25 March 22 April 26 May 26 August 25 November Annual report Annual general meeting Interim report for Q1 2010 Interim report for H1 2010 Interim report for Q3 2010

Releases made public via NASDAQ OMX Copenhagen in 2009

02.02. 02.02. 03.02. 11.02. 11.02. 18.02. 25.02. 11.03. 26.03. 07.04. 21.04. 22.04. 23.04. 30.04. 06.05. 11.05. 28.05. 27.08. 23.10. 25.11. 26.11. 26.11. 26.11. 01.12. 17.12. 17.12. 18.12. Management changes, liquidity and sale of tonnage in Nordic Tankers A/S New Board of Directors of Nordic Tankers A/S Management situation and financial position Steen Bryde, Brian Sholt Petersen and Jesper Bo Nielsen reported to the Danish Fraud Squad Minutes of extraordinary general meeting held on 2 February 2009 Decisions by the former Board of Directors on the sale of tonnage Decisions by the former Board of Directors on the sale of tonnage Nordic Tankers announces downward adjustment of expectations for 2008 Annual Report of Nordic Tankers for 2008 Notice to convene annual general meeting to be held on 23 April 2009 Nordic Tankers first vessel to sail under the Danish flag Updated strategy Minutes of annual general meeting New CEO Minutes of annual general meeting held on 23 April 2009 Nordic Tankers receives new handy-size tanker Interim report for Q1 2009 Interim report for H1 2009 Company announcement regarding article in Dagbladet Brsen Re. Berlingske Business comment on Nordic Tankers Interim report for Q3 2009 Nordic Tankers and Clipper join forces to establish major Danish tanker operator Financial calendar 2010 Notice to convene extraordinary general meeting to be held on 17 December 2009 Re. the chairmanship of Nordic Tankers Outcome of extraordinary general meeting held on 17 December 2009 Articles of association after the extraordinary general meeting held on 17 December 2009

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group chart Nordic Tankers A/S 31 December 2009

Nordic Tankers A/S

Nordic Anne, Nordic Stockholm, Nordic Helsinki All wholly owned

Subsidiaries

Jointly controlled entities

Nordic Copenhagen Shipping Co. Pte. Ltd., wholly owned

Nordic Seaarland Tankers B.V. Netherlands

Nordic Copenhagen wholly owned

Nordic Hanne, wholly owned Nordic Ruth and Pia, 75% holding Nordic Agnetha and Amy, 50% holding

Nordic Oslo Shipping Co. Pte. Ltd., wholly owned

Nordic Oslo wholly owned

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Board of Directors and Executive Board

Board of Directors
Flemming Krusell Srensen Born 1948. Chairman of the Board of Directors. Elected to the Board of Directors on 2 February 2009. Educated in banking. Has worked at Kjbenhavns Handelsbank as Arbitrage Manager in Luxembourg and in Varde Bank as Liquidity and International Director. From 1995 in Difko Administration, responsible for shipping companies. Member of the Executive Board from 2000-2006. Managing Director of Nordic Tankers from 2006-2008. Sven Rosenmeyer Paulsen Born 1947. Deputy Chairman of the Board of Directors. Elected to the Board of Directors on 2 February 2009. Attorney with additional maritime law education abroad. Entitled to appear before the Supreme Court and specialises in maritime law, ship financing, shipbuilding contracts, purchase and sale of ships, and insurance and contracts of the shipping industry. Partner in law firm Kromann Reumert 1981-2007. Member of the Board of Sydbank A/S, among others. MogensBuschard Born 1944. Elected to the Board of Directors the first time in 2005. LLM. Has been employed in government services for a number of years. Subsequently, self-employment in investment. Managing Director of Danstig ApS and other investment firms. Member of the boards of several foundations and corporations. Among the initiators of the formation of Nordic Tankers A/S and its first Chairman of the Board of Directors. Jens Fehrn-Christensen Born 1952. Elected to the Board of Directors on 2 February 2009. MSc (Economics and Business Administration). Has more than 25 years of experience as a manager in the shipping industry. From 1992 Economic and Finance Director in Dampskibsselskabet Norden A/ S. 2000-2007 CFO and member of the management of Dampskibsselskabet Norden A/S. Chairman of the board of NCS Holding A/S, Meyer & Bukdahl A/S and member of the boards of Sun-Air of Scandinavia A/S, Maritime Museum Fund and Hansi & Janus Larsens Familielegat. Jesper Tullin Born 1966. Elected to the Board of Directors on 2 February 2009. Mercantile education, Copenhagen Business School. Founder of Finansgruppen A/S - majority shareholder and CEO of the company. Chairman of the boards of the following companies: Pilbk Administration A/S, Finansgruppen Erhverv A/S, Ejendomsselskabet af 25. marts 2003 A/S and Scorpion Investment A/S. Member of the boards and CEO of the following companies: Bkgrden Invest A/S, Finansgruppen A/S, Finansgruppen Projekt A/S, Finansgruppen International A/S, and Finansgruppen Administration A/S. Member of the board of Finansgruppen Nordic A/S.

Executive Board
Tommy Thomsen Born 1957. CEO. Shipping education from A.P. MllerMrsk. International Senior Management Program, Harvard Business School. From 1978-2007 employed by A.P. MllerMrsk and held various positions, i.a. Vice President of Mrsk Tankers from 1991 to 1995 and CEO of Mrsk Inc., USA from 1995 to 2001 and shipowner/partner from 2001 to 2007. CEO of Clipper Tankers 2008-2009. Partner of Clipper. Christian hassel Born 1963. CFO. LLM from the University of Copenhagen 1988, MBA from INSEAD in 1992. Employed by the law firm of Kromann Reumert from 1988 to 1991. Adviser, McKinsey & Company, from 1993 to 1996. Partner and CEO of Carnegie Investment Banking from 1997 to 2008. Executive Adviser, Clipper, 2009. Member of the boards of Nordic Ferry Services A/S and Sydfynske A/S.

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Management statement

We have today considered and approved the annual report of Nordic Tankers A/S for the financial year 1 January - 31 December 2009. The annual report has been prepared in accordance with International Financial Reporting Standards as adopted by the EU and additional Danish disclosure requirements for listed companies. In our opinion, the consolidated financial statements and parent financial statements give a true and fair view of the Groups and the Parents financial position at 31 December 2009 and of their fiancial performance and their cash flows for the financial year 1 January - 31 December 2009. Further, in our opinion the management commentary gives a true and fair review of the development in the Groups and the Parents operations and financial matters, the results of the Group and the Parent for the year and the financial position as a whole, and describes the significant risks and uncertainties facing the Group and the Parent. We recommend that the annual report be adopted at the annual general meeting. Copenhagen, 25 March 2010.

Executive Board

Tommy Thomsen CEO

Christian Hassel CFO

Board of Directors

Flemming K. Srensen formand

Sven Rosenmeyer Paulsen nstformand

Jens Fehrn-Christensen

Mogens Stig Buschard

Jesper Tullin

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Independent auditors report

To the shareholders of Nordic Tankers A/S
Report on the consolidated financial statements and parent financial statements We have audited the consolidated financial statements and parent financial statements of Nordic Tankers A/S for the financial year 1 January - 31 December 2009, which comprise the comprehensive income statement, balance sheet, statement of changes in equity, cash flow statement and notes, including the accounting policies, for the Group as well as the Parent. The consolidated financial statements and parent financial statements have been prepared in accordance with International Financial Reporting Standards as adopted by the EU and additional Danish disclosure requirements for listed companies. Managements responsibility for the consolidated financial statements and parent financial statements Management is responsible for the preparation and fair presentation of consolidated financial statements and parent financial statements in accordance with International Financial Reporting Standards as adopted by the EU and additional Danish disclosure requirements for listed companies. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of consolidated financial statements and parent financial statements that are free from material misstatement, whether due to fraud or error, selecting and applying appropriate accounting policies, and making accounting estimates that are reasonable in the circumstances. Auditors responsibility and basis of opinion Our responsibility is to express an opinion on these consolidated financial statements and parent financial statements based on our audit. We conducted our audit in accordance with Danish and International Standards on Auditing. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the consolidated financial statements and parent financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements and parent financial statements. The procedures selected depend on the auditors judgement, including the assessment of the risks of material misstatement of the consolidated financial statements and parent financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entitys preparation and fair

presentation of consolidated financial statements and parent financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entitys internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by Management, as well as evaluating the overall presentation of the consolidated financial statements and parent financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Our audit has not resulted in any qualification. Opinion In our opinion, the consolidated financial statements and parent financial statements give a true and fair view of the Groups and the Parents financial position at 31 December 2009, and of their financial performance and their cash flows for the financial year 1 January - 31 December 2009 in accordance with International Financial Reporting Standards as adopted by the EU and additional Danish disclosure requirements for listed companies. Statement on the management commentary Management is responsible for preparing a management commentary that contains a fair review in accordance with the Danish Financial Statements Act. Our audit did not include the management commentary, but we have read it pursuant to the Danish Financial Statements Act. We did not perform any procedures other than those performed during the audit of the consolidated financial statements and parent financial statements. Based on this, we believe that the disclosures in the management commentary are consistent with the consolidated financial statements and parent financial statements.

Aarhus, 25 March 2010 Deloitte Statsautoriseret Revisionsaktieselskab

Per Buhl Nielsen State Authorised Public Accountant

Jesper Meto State Authorised Public Accountant

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27

Financial statements

Consolidated and parent company statement of comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Consolidated and parent company balance sheet. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Consolidated and parent company statement of changes in equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Consolidated and parent company cash flow statement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

Notes 1. Accounting policies . . . . . . . . . . . . . . . . . . . . . . . . . . 36 2. Significant accounting estimates, assumptions and uncertaintiess . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 3. Consolidated segment information . . . . . . . . . . . . . . 45 4. Staff costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 5. Profit on sale of vessels . . . . . . . . . . . . . . . . . . . . . . . 49 6. Depreciation and write-downs. . . . . . . . . . . . . . . . . . 49 7. Write-down of investments . . . . . . . . . . . . . . . . . . . . 49 8. Financial income . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 9. Financial expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 10. Tax on profit/loss for the year. . . . . . . . . . . . . . . . . . . 51 11. Earnings per share . . . . . . . . . . . . . . . . . . . . . . . . . . . 51 12. Property, plant and equipment. . . . . . . . . . . . . . . . . . 52 13. Investments in subsidiaries. . . . . . . . . . . . . . . . . . . . . 54 14. Investments in jointly controlled entities. . . . . . . . . . . 55 15. Receivables from sales etc.. . . . . . . . . . . . . . . . . . . . . 56 16. Available-for-sale financial assets . . . . . . . . . . . . . . . . 56 17. Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 18. Share capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 19. Treasury shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 20. Finance loans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 21. Trade payables. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 22. Other payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 23. Remuneration for auditors appointed by the general meeting . . . . . . . . . . . . . . . . . . . . . . . 61 24. Changes in working capital . . . . . . . . . . . . . . . . . . . . 61 25. Acquisition of enterprises in 2010 . . . . . . . . . . . . . . . 62 26. Contingent liabilities, collateral and contractual obligations . . . . . . . . . . . . . . . . . . . . . . . 66 27. Foreign exchange, interest rate and credit risks and application of financial instruments. . . . . . . . . . . 67 28. Related parties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73 29. Shareholder relations. . . . . . . . . . . . . . . . . . . . . . . . . 74 30. Events occurring after the balance sheet date . . . . . . 74

28

Financial statements

Consolidated and parent company statement of comprehensive income

Parent company 2008 2009 USD 1000 USD 1000 18,653 -7,751 10,902 -2,511 -3,213 18,545 -9,683 14,040 0 0 1,072 -8,112 7,000 -3,561 3,439 555 -2,179 -1,624 1,815 9,615 -7,189 2,426 -227 -3,176 0 -21,064 -22,041 -4,243 -49,236 1,621 -4,584 -78,483 -36 -78,519 2,781 -2,754 27 -78,492 Revenue Operating expenses gross profit Staff costs Other external costs Profit from sale of vessels Depreciation and write-downs Operating profit/loss (EBIT) Write-down of investments in subsidiaries Write-down of investments in jointly controlled entities Financial income Financial expenses Profit/loss before tax Tax on profit/loss for the year Profit/loss for the year Transferred to the income statement in relation to hedging of cash flows Fair value adjustment of derivative financial instruments held to hedge future cash flows Other comprehensive income Comprehensive income Distribution of profit/loss for the year 3,439 0 3,439 -78,519 0 -78,519 Distribution of comprehensive income for the year 1,815 0 1,815 -78,492 0 -78,492 Earnings per share excl. minority interests (EPS) 11 Parent companys shareholders Minority interests -94,368 0 -94,368 -13.2 2,714 0 2,714 0.6 Parent companys shareholders Minority interests -94,552 0 -94,552 4,607 0 4,607 10 7 7 8 9 5 6 4 Note group 2009 2008 USD 1000 USD 1000 29,960 -18,947 11,013 -278 -3,376 0 -95,903 -88,544 0 0 1,389 -7,369 -94,524 -28 -94,552 2,781 -2,597 184 -94,368 45,303 -18,668 26,635 -2,526 -3,446 18,545 -18,981 20,227 0 0 791 -12,808 8,210 -3,603 4,607 565 -2,458 -1,893 2,714

Financial statements

29

Consolidated and parent company balance sheet

Assets
Parent company 2008 2009 USD 1000 USD 1000 49,968 10,380 60,348 12,082 40,055 52,137 112,485 249 642 6,747 2,314 0 9,703 242 7,472 17,666 130,151 81,616 0 81,616 7,839 0 7,839 89,455 275 2,253 5,954 779 0 8,986 135 71 9,467 98,922 Vessels Prepayments on vessels Property, plant and equipment Investments in subsidiaries Investments in jointly controlled entities Financial assets Total non-current assets Lubricant stocks Receivables from sales, etc. Loans to subsidiaries Other receivables Receivables from business partner Receivables Available-for-sale financial assets Cash Current assets Assets 16 17 15 12 13 14 Note group 2009 2008 USD 1000 USD 1000 207,554 0 207,554 0 0 0 207,554 1,135 6,222 0 798 2,236 9,256 135 2,625 13,151 220,705 207,423 19,147 226,570 0 0 0 226,570 890 3,386 0 2,320 0 5,706 242 12,118 18,956 245,526

30

Financial statements

Liabilities and equity

Parent company 2008 2009 USD 1000 USD 1000 12,826 25,959 63,568 -2,445 -527 0 99,381 0 99,381 20,147 20,147 0 1,769 3,509 0 5,345 10,623 30,770 130,151 12,826 25,630 -14,951 -2,418 -527 0 20,560 0 20,560 70,820 70,820 0 3,025 14 1,324 3,179 7,542 78,362 98,922 Share capital Share premium Retained earnings Reserve for hedging transactions Reserve for foreign currency translation adjustments Reserve for fair value adjustments Equity, parent companys shareholders Equity, minority interests Total equity Finance loans Non-current liabilities Finance loans Trade payables Corporation tax Provisions Other payables Current liabilities Total liabilities Liabilities and equity 7 22 20 21 20 Note 18 group 2009 2008 USD 1000 USD 1000 12,826 25,630 -24,861 -2,615 -60 9,632 20,552 5 20,557 188,804 188,804 1,171 4,658 14 0 5,501 11,344 200,148 220,705 12,826 25,959 69,691 -2,799 -60 9,632 115,249 5 115,254 109,653 109,653 7,926 3,083 3,509 0 6,101 20,619 130,272 245,526

Financial statements

31

Consolidated and parent company statement of changes in equity

Consolidated statement of changes in equity 2009 Reserves Reserves for fair value Equity for foreign adjustments attribucurrency in connection table to translation with step Retained minority Total adjustments acquisitions earnings interests equity USD 1000 USD 1000 USD 1000 USD 1000 USD 1000 -60 9,632 69,691 5 115,254

Reserves Share Share for hedging capital premium transactions USD 1000 USD 1000 USD 1000 Equity at 1 January 2009 Costs related to the capital increase on 7 January 2010 Comprehensive income for the financial year Equity at 31 December 2009 12,826 25,630 12,826 25,959 -2,799

-329 184 -2,615 -60 9,632 -94,552 -24,861 5

-329 -94,368 20,557

Consolidated statement of changes in equity 2008 Reserves Reserves for fair value Equity for foreign adjustments attribucurrency in connection table to translation with step Retained minority Total adjustments acquisitions earnings interests equity USD 1000 USD 1000 USD 1000 USD 1000 USD 1000 -60 9,632 65,084 3 2 -1,893 25,959 -2,799 -60 9,632 4,607 69,691 5 112,538 2 2,714 115,254

Reserves Share Share for hedging capital premium transactions USD 1000 USD 1000 USD 1000 Equity at 1 January 2008 Minority interests Comprehensive income for the financial year Equity at 31 December 2008 12,826 12,826 25,959 -906

32

Financial statements

Parent company statement of changes in equity 2009 Reserves for foreign currency translation adjustments USD 1000 -527

Sharecapital USD 1000 Equity at 1 January 2009 Costs related to the capital increase on 7 January 2010 Comprehensive income for the financial year Equity at 31 December 2009 12,826 12,826

Share premium USD 1000 25,959

Reserves for hedging transactions USD 1000 -2,445

Retained earnings USD 1000 63,568

Total equity USD 1000 99,381

-329 27 25,630 -2,418 -527 -78,519 -14,951

-329 -78,492 20,560

Parent company statement of changes in equity 2008 Reserves for foreign currency translation adjustments USD 1000 -527

Sharecapital USD 1000 Equity at 1 January 2008 Comprehensive income for the financial year Equity at 31 December 2008 12,826 12,826

Share premium USD 1000 25,959

Reserves for hedging transactions USD 1000 -821 -1,624

Retained earnings USD 1000 60,129 3,439

Total equity USD 1000 97,566 1,815 99,381

25,959

-2,445

-527

63,568

Definitions of reserves, etc. Share premium account comprises the premium on issued shares in 2007 less related issue costs. hedging reserves represent the cumulative net change in the fair value of hedging transactions qualifying for hedging of future cash flows and where the hedged transaction has yet to be realised.

Reserves for foreign currency translation adjustments include the cumulative foreign currency translation adjustments relating to the change in 2006 in presentation currency from DKK to USD and subsequent foreign currency translation adjustments resulting from translation of net items relating to enterprises and investments in currencies other than USD. Fair value adjustment reserves in connection with step acquisitions record cumulative fair value adjustments in connection with step acquisition of enterprises.

Financial statements

33

Consolidated and parent company cash flow statement

Parent company 2008 2009 USD 1000 USD 1000 14,040 9,683 -18,545 3,712 8,890 535 -5,201 -3,019 1,205 -15,350 0 68,108 -3,154 4,626 0 0 54,230 26,835 -76,473 -49,638 5,797 1,675 7,472 -22,041 21,064 0 -1,358 -2,335 1,621 -4,258 -3,518 -8,490 -1,550 -42,332 0 0 0 -6,307 793 -49,396 51,045 -560 50,485 -7,401 7,472 71 Operating profit/loss (EBIT) Depreciation and write-downs Profit/loss from sale of vessels Changes in working capital Cash flows from primary operations Financial income received Financial expenses paid Corporation tax paid Cash flows from operating activities Acquisition, etc, of financial assets Acquisition, etc of property, plant and equipment Sale of property, plant and equipment Acquisition of available-for-sale financial assets Collection of receivables from jointly controlled entities Loans to jointly controlled entities Loans to subsidiaries Cash flows from investing activities Financing raised Repayments on loan facilities Cash flows from financing activities Cash flows for the year Cash and cash equivalents at 1 January Cash and cash equivalents at 31 December 17 24 Note

group 2009 2008 USD 1000 USD 1000 -88,544 95,903 0 -3,010 4,349 1,389 -7,526 -3,565 -5,353 0 -76,887 0 0 0 0 0 -76,887 81,995 -9,248 72,747 -9,493 12,118 2,625 20,227 18,981 -18,545 2,448 23,111 254 -9,897 -3,311 10,157 0 -51,991 68,108 -3,154 0 0 0 12,963 61,485 -82,762 -21,277 1,843 10,275 12,118

34

Financial statements

Financial statements

35

Notes
1 Accounting policies
The annual report of Nordic Tankers A/S, which includes the consolidated financial statements and the financial statements of the parent company, has been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU and additional Danish disclosure requirements for annual reports of listed companies (reporting class D); cf. IFRS order issued pursuant to the Danish Financial Statements Act. In addition, the annual report complies with International Financial Reporting Standards (IFRS issued by the International Accounting Standards Board (IASB). The financial statements have been prepared in accordance with the historical cost convention except where fair value accounting is specifically required by IFRS. The functional currency of the parent company and all significant subsidiaries and jointly controlled entities is USD, and the presentation currency of the group is USD. The accounting policies have been consistently applied and are described below. Implementation of new and revised standards and interpretations The annual report for 2009 has been prepared in accordance with the new and revised standards (IFRS/IAS) and new interpretations (IFRIC), which apply to financial years starting on or after 1 January 2009: Standards affecting presentation and disclosure Revised IAS 1, Presentation of Financial Statements (September 2007) IAS 1 (2007) introduces new terminology in statements of accounts and changes to the format and contents of the statements of accounts. The revised version requires the presentation of a statement of comprehensive income, but has otherwise not affected the consolidated financial statements or the parent company financial statements. The revised IFRS 7 requires additional information about fair value measurements and liquidity risk. The group has decided not to publish comparative figures in the consolidated financial statements and parent company financial statements pursuant to the transitional provisions of the revised standard. Standards and interpretations that may affect the financial results or the financial position The application of new and revised standards and interpretations have not affected the consolidated financial statements or the parent company financial statements. Standards and interpretations not yet effective At the time of publication of this annual report, a series of new and revised standards and interpretations have not yet taken effect or been adopted by the EU and have, consequently, not been incorporated into the annual report: Implementation of the revised IFRS 3, Business Combinations, will, among other things, mean that with effect from the financial year 2010, the group must recognise acquisition costs and changes in contingent consideration associated with business combination transactions directly in the income statement. Moreover, the revised standard allows recognition of 100% of the goodwill, even though the acquired part of a company amounts to less than 100%. Implementation of IFRS 9 Financial Instruments: Classification and Measurement will mean that financial assets, except for unlisted shares, which under the current accounting policies are classified as available-for-sale financial assets with recognition of fair value adjustments in other comprehensive income with effect from the financial year 2013 must be classified as financial assets at fair value through profit or loss. With effect from the financial year 2013, unlisted shares must be classified as financial assets at fair value through other comprehensive income. Moreover, the groups investments in unlisted shares whose fair value cannot be measured reliably, which are therefore measured at cost today, must be measured at fair value upon implementation of IFRS 9. The management does not expect the implementation of the new and revised standards and interpretations to have any significant effect on the annual report for the coming financial years. Consolidated financial statements The consolidated financial statements include Nordic Tankers A/S (parent company) and the enterprises (subsidiaries) which are controlled by the parent company. Control is presumed to exist when the parent company, directly or indirectly, owns more than 50% of the voting rights or in any other way can or does exercise a controlling influence. Entities which are by agreement managed jointly with one or more other enterprises are considered to be jointly controlled entities which are accounted for by proportionate consolidation. Basis of consolidation The consolidated financial statements have been prepared

Revised IFRS 7, Financial Instruments: Disclosures (March 2009)

36

Financial statements

on the basis of the accounts of Nordic Tankers A/S and its subsidiaries and jointly controlled entities. The consolidated financial statements have been prepared by adding together items of a uniform nature. The accounts used for consolidation purposes have been prepared in accordance with the groups accounting policies. Intercompany income and expenses, intercompany balances and dividends as well as profit and loss from intercompany transactions have been eliminated on consolidation. Subsidiaries items are recognised in full in the consolidated financial statements. Minority interests proportionate share of results is included as part of consolidated results for the year and as a separate part of group equity. Investments in jointly controlled entities are recognised and measured in the consolidated financial statements pro rata with the groups ownership interest and presented on a line-by-line basis in the consolidated financial statements. The proportionate share of the results of the entities after tax and elimination of unrealised proportionate intercompany profits and losses and less impairment loss relating to goodwill is recognised in the income statement. The proportionate share of all transactions and events recognised directly in the equity of the jointly controlled entity is recognised in group equity. Participation in pools Nordic Tankers A/S generates practically all its revenue through pool arrangements. Total pool revenue is generated from each vessel participating in the pool. The pool measures revenue based on the contractual rates and the duration of each voyage, and revenue is recognised in the income statement upon delivery of service in accordance with the terms and conditions of the charter parties. The pools are regarded as jointly controlled operations, and the groups share of items in the income statement and balance sheet in the respective pools is accounted for by recognising a proportional share, based on participation in the pool, combining items of a uniform nature. The groups share of pool revenue is primarily dependent on the number of days the groups vessels have been available for the pools in relation to the total available pool earning days during the period. Business combinations Newly acquired or newly established enterprises are recognised in the consolidated financial statements as of the date of acquisition or establishment. The date of acquisition is the date on which control of the enterprise is effectively transferred. Enterprises that have been sold or wound up are recognised in the consolidated financial statements until the date of the sale or the winding-up. The date of sale is

the date on which control of the enterprise is effectively transferred to a third party. On the acquisition of new enterprises, the purchase method is applied according to which the identifiable assets, liabilities and contingent liabilities of the newly acquired enterprises are measured at their fair values at the date of acquisition. However, non-current assets acquired as part of a business combination that meet the criteria to be classified as held for sale are measured at fair value less estimated costs to sell. When a business combination is achieved in stages, the enterprise is recognised for the period until control is acquired separately for each transaction, including as an associate or jointly controlled entity. Upon acquisition of control of the enterprise, the identifiable assets, liabilities and contingent liabilities of the enterprise are measured at their fair values at the date of acquisition for both new acquisitions and any existing interests in the enterprise. On initial recognition, fair value adjustments relating to the groups existing interests are treated as a revaluation, and increases in carrying amounts are recognised directly in equity under revaluation reserves, while reductions are recognised in the income statement. The acquired assets, liabilities and contingent liabilities are not revalued after initial recognition. Newly acquired jointly controlled entities are recognised in the consolidated financial statements from the date the joint control commences. Entities that have been sold or wound up are recognised in the consolidated income statement until the date of the sale or the winding-up. The date of sale is the date on which joint control of the entity ceases. Restructuring costs are only recognised in the pre-acquisition balance sheet to the extent that they constitute a liability for the acquired entity. Account is taken of the tax effect of the revaluations made. The cost of an enterprise consists of the fair value of the consideration paid plus costs directly attributable to the acquisition of the enterprise. If the final determination of the consideration is conditional on one or more future events, adjustments are recognised in cost to the extent that the events are probable and the consideration can be measured reliably. The excess (goodwill) of the cost of the business combination over the fair value of the acquired assets, liabilities and contingent liabilities is recognised as an asset under intangibles and is tested for impairment at least once every year. If the carrying amount of the asset exceeds its recoverable amount, it is written down to the lower recoverable amount. If negative goodwill arises, the calculated fair values and the calculated cost of the enterprise are reassessed. If, after reassessment, the fair value of the acquired assets, liabilities and contingent liabilities continues to exceed the cost, the balance is credited to the income statement.

Financial statements

37

Profit or loss from the sale or winding up of subsidiaries Profits or losses from the sale or winding up of subsidiaries are stated as the difference between the sum received from the sale or winding up and the carrying amount of the net assets at the time of selling or winding up, including goodwill, accumulated foreign currency translation adjustments recognised directly in equity and expected costs of sale or winding up. The selling price is measured at fair value of the consideration received. Foreign currency translation On initial recognition, transactions in currencies other than the functional currency of each enterprise are translated using the exchange rate ruling at the date of the transaction. Receivables, payables and other monetary items in foreign currencies, which have not been settled at the balance sheet date, are translated using the rate of exchange ruling at the balance sheet date. Any exchange differences arising between the rate of exchange ruling at the date of the transaction and the rate of exchange ruling at the date of payment and the balance sheet date, respectively, are recognised in the income statement as financial income and expenses, net. Property, plant and equipment, intangibles, inventories and other non-monetary assets purchased in foreign currencies and measured using historical costs are translated using the rate of exchange ruling at the date of the transaction. Non-monetary items that are revalued at fair value are translated using the rate of exchange ruling at the date of the revaluation. Upon recognition in the consolidated financial statements of enterprises with functional currencies other than USD, the income statements are translated at the average exchange rates for the respective months, unless these deviate materially from the actual exchange rates ruling at the dates of the transactions. If so, the actual exchange rates are used. Balance sheet items are translated using the exchange rates ruling at the balance sheet date. Exchange differences arising from translation of balance sheet items at the beginning of the year at the rates of exchange ruling at the balance sheet date and from translation of income statements from average rates of exchange to the rates of exchange ruling at the balance sheet date for enterprises presenting financial statements in another currency than USD are recognised directly in equity. Correspondingly, exchange differences arising from changes made directly in the equity of these enterprises are also recognised directly in equity. Translation adjustments of receivables from or payables to subsidiaries which are considered to be part of the parent companys total investment in the said subsidiary are also recognised directly in equity in the consolidated financial

statements if the receivables or payables are denominated in another currency than USD. Exchange differences arising from translation of the groups share of equity at the beginning of the year at the rate of exchange ruling at the balance sheet date and from translation of the share of the results for the year from average rate of exchange to the rate of exchange ruling at the balance sheet date are recognised directly in equity. Derivative financial instruments Derivative financial instruments, primarily interest rate swaps, are used for hedging purposes. Derivative financial instruments are initially measured at fair value on the contract date. Directly attributable costs associated with the purchase or issue of the financial instrument are added to derivative financial instruments where subsequent fair value adjustments are recognised in equity. Derivative financial instruments are subsequently measured at fair value at the balance sheet date. Changes in the fair value of derivative financial instruments designated as and qualifying for recognition as effective hedges of future transactions are recognised directly in equity. When the hedged transactions are realised, accumulated changes are recognised as part of the cost of the transactions. Changes in the fair value of derivative financial instruments used to hedge net investments in foreign enterprises are recognised directly in equity to the extent that the hedge is effective. On disposal of the foreign enterprise in question, the accumulated value changes are transferred to the income statement. Derivative financial instruments that do not qualify for hedge accounting are classified as held for trading and measured at fair value, and changes in fair value are recognised in the income statement as financial income or expenses as they occur. Segment information Nordic Tankers A/S operates three segments: LR1 product tankers, handy-size tankers and chemical tankers. There used to be four segments, but the multipurpose segment was discontinued during the 2007 financial year. This segmentation is based on Nordic Tanker A/S internal management and reporting structure. The segment information follows the groups risks, accounting policies and management control. The group only has one geographical segment as the group regards the global market as a single market, and individual fleet units are not restricted to specific regions or parts of the world. Segment income and expenses and segment assets and liabilities include items directly attributable to each segment

38

Financial statements

and those items which can be reliably allocated to individual segments. Non-allocated items primarily relate to assets and liabilities as well as income and expenses associated with the groups administrative functions, investing activities, income taxes etc. Non-current assets in the segments include the assets used directly in the operation of the segment, including intangibles and property, plant and equipment. Current assets in the segments include the assets directly associated with the operation of the segment, including inventories, trade receivables, other receivables, prepayments and cash. Segment liabilities include all operating liabilities, including trade payables, provisions and other payables. Tax Corporate income tax payable by the parent company has been provided for at a rate of 25% of taxable income calculated pursuant to the Danish Tonnage Tax Act. The company has opted for the tonnage tax scheme for a binding period of 10 years, which expires at the end of 2011. Under the tonnage tax scheme, the calculation of taxable income is not based on income and expenses as for normal corporation tax. Taxable income is instead calculated on the basis of the tonnage used with the addition of net interest income and gains on disposal of vessels acquired pre-2007. Corporate income tax payable by the jointly controlled entities has been provided for in accordance with Dutch tonnage tax rules, whereas no tax, apart from withholding tax on interest to the parent company, is payable by the subsidiaries in Singapore pursuant to local rules. On disposal of vessels acquired pre-2007, deferred tax is provided for at a rate of 25% of the taxable gains realisable on their carrying amount. Taxable gains are calculated as the difference between the carrying amount of vessels and their taxable acquisition price. Adjustments of deferred tax as a result of a change in the carrying amount of vessels when applying depreciation are recognised in the income statement. Discontinued operations and non-current assets held for sale Discontinued operations are significant business areas that have been sold or are classified as held for sale pursuant to a plan. Subsidiaries held exclusively for resale are considered to be discontinued operations. The results of discontinued operations are presented in the income statement as a separate item consisting of the operating profit or loss after tax from the operation and any profits or losses resulting from fair value adjustments or the sale of the operations and associated liabilities. Non-current assets and groups of assets held for sale are

presented separately in the balance sheet as current assets. Liabilities directly associated with such assets are presented as current liabilities in the balance sheet. Non-current assets held for sale are not depreciated but are written down to the lower of carrying amount and fair value less estimated costs of sale.

Income statement
Revenue Income, including revenue, is recognised in the income statement when: the income creating activities have been carried out on the basis of a binding agreement the income can be measured reliably it is probable that the economic benefits associated with the transaction will flow to the group costs relating to the transaction can be measured reliably Revenue comprises freight and demurrage receipts from the vessels and gains and losses from forward freight agreements designated as hedges. Revenue is recognised when it meets the general criteria mentioned above and the stage of completion can be measured reliably. Accordingly, freight and demurrage receipts are recognised at selling price upon delivery of service in accordance with the charter parties concluded. Operating expenses Operating expenses include costs relating to the operation and maintenance of vessels, including costs relating to crew not employed by consolidated enterprises. Operating expenses are recognised as incurred. Staff costs Staff costs comprise wages and salaries, social security and pension costs, etc. and are recognised as incurred. Other external costs Other external costs comprise administrative expenses, which include the cost of offices, administrative service partners, etc. Financial income and expenses, net Financial income and expenses include interest income and interest expenses, realised and unrealised exchange gains and losses on payables and transactions in foreign currencies, mortgage amortisation premium/allowance as well as additions and allowances under the on-account tax scheme.

Financial statements

39

Interest income and expenses are accrued on the basis of the principal and the effective interest rate. The effective interest rate is the discount rate that is used to discount expected future payments related to the financial asset or the financial liability in order for the present value of such asset or liability to match its carrying amount. Dividends from investments are recognised when the right to receive payment has been established, which is typically when the dividend has been approved by the general meeting.

A portion of the cost of acquiring a new vessel is allocated to the components expected to be replaced or refurbished at the next dry-docking. For newbuildings, the initial drydocking asset is estimated on the basis of the expected costs related to the first-coming docking, which is based on experience with similar vessels. For second-hand vessels, a dry-docking asset is also segregated and capitalised separately, however, taking into account the normal docking intervals of the vessel. At subsequent dry-dockings, the asset comprises the actual docking costs incurred. Impairment of property, plant and equipment The carrying amounts of property, plant and equipment with finite useful lives are evaluated at the balance sheet date to determine whether there are indications of impairment. If an indication of impairment is identified, the recoverable amount of the asset is estimated in order to determine the need for recognising an impairment loss and the extent hereof. If an asset does not generate cash flows that are independent from other assets, the recoverable amount is determined for the smallest cash-generating unit to which the asset belongs. The recoverable amount is defined as the higher of the fair value of the asset or the cash-generating unit less costs to sell and the value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a discount rate that reflects current market assessments of the time value of money, the risks specific to the asset or the cash-generating unit for which the estimates of future cash flows have not been adjusted. If the recoverable amount of the asset or cash-generating unit is estimated to be less than its carrying amount, the carrying amount is reduced to the recoverable amount. An impairment loss for cash-generating units is allocated to the assets of the unit, but no asset will be reduced to a lower value than its fair value less expected costs to sell. Impairment losses are recognised in the income statement. Where an impairment loss subsequently reverses as a result of changes in assumptions used to determine the recoverable amount, the carrying amount of the asset or cash-generating unit is increased to the revised recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset or cash-generating unit. Impairment of goodwill is not reversed. Inventories Inventories consist of oils and lubricants, etc. and are measured at cost using the FIFO method or the net realisable value, whichever is lower.

Balance sheet
Property, plant and equipment Vessels Vessels are measured at cost less accumulated depreciation and write-downs. The cost comprises the cost of acquisition and any expenses directly related to the acquisition until the time when the asset is ready for use, including interest expenses incurred during the period of construction. All major components of vessels except for dry-docking assets are depreciated on a straight-line basis to the estimated residual value over their estimated useful lives, which Nordic Tankers A/S estimates to be 25 years. The management considers that a 25-year depreciable life is consistent with that used by other shipping companies with comparable tonnage. Depreciation is based on cost less the estimated residual value. Residual value is estimated as the lightweight tonnage of each vessel multiplied by scrap value per ton. The useful life and residual value of the vessels are reviewed at least at each financial year-end based on market conditions, regulatory requirements and the groups business plans. Moreover, the group evaluates the carrying amount of the vessels to determine whether events have occurred that indicate impairment and would require an adjustment of the carrying amounts. Prepayments on vessels under construction are recognised as instalments paid and prepayments. Docking The fleet of own vessels is required to undergo planned drydockings for major repairs and maintenance, which cannot be carried out while the vessels are operating. Dry-dockings are generally required every 30-60 months depending on the nature of the work. Costs relating to dry-dockings are capitalised and depreciated on a straight-line basis over the estimated period until the next docking. The residual value is estimated at nil.

40

Financial statements

Receivables Receivables comprise trade receivables, loans and other receivables. Receivables are classified as loans and receivables that are financial assets, with fixed or determinable payments, that are not quoted in an active market and which are not derivative financial instruments. Receivables are initially measured at fair value and subsequently at amortised cost, which usually equals the nominal value less provisions for bad debts. Write down is done individually using a provisions account. Prepayments Prepayments recognised under assets comprise paid-up expenses relating to the subsequent financial year. Prepayments are measured at cost. Other securities and equity investments Other securities and investments recognised under current assets comprise listed bonds and equity investments in enterprises that are not subsidiaries, jointly controlled entities or associates. Other securities and investments are classified as available-for-sale financial assets. Available-for-sale financial assets are financial assets that are not derivative financial instruments and which are either classified as available for sale or which cannot be classified as loans or receivables, financial assets measured at fair value through the income statement or held-to-maturity financial assets. On initial recognition, other securities and investments are measured at fair value on the trade date plus costs directly attributable to the acquisition. The securities are subsequently measured at fair value at the balance sheet date, and changes in fair value are recognised directly in equity. On the sale or disposal of the securities, accumulated fair value adjustments are recognised in the income statement. If there are clear indications of impairment and when there is objective evidence of impairment of a permanent nature, a write-down to fair value will be made through the income statement. Significant or prolonged impairment of the fair value is deemed to constitute objective evidence. Fair value is determined as the market price for listed securities and estimated fair value determined on the basis of market information and generally accepted valuation methods for other securities. Own investments that are not traded in an active market and whose fair value cannot be reliably measured, are measured at cost. Dividend Dividend is recognised as a liability at the time of approval by the general meeting. Treasury shares Acquisition costs and consideration for treasury shares

and dividend on treasury shares are recognised directly as retained earnings in equity. Provisions Provisions are recognised when the group has a legal or constructive obligation as a result of past events, for which it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation. Provisions are measured as the best estimate of the expenditure required to settle the obligation at the balance sheet date. Provisions with an expected maturity of more than one year from the balance sheet date are measured at present value. Non-current financial liabilities (finance loans) Finance loans are initially measured at fair value less any transaction costs. Finance loans are subsequently measured at amortised cost. This means that the difference between the amount on initial recognition and the redemption value is recognised in the income statement as a financial expense over the term of the loan using the effective interest method. Lease commitments Lease payments relating to operating leases are recognised using the straight-line method in the income statement over the term of the leases. Other financial liabilities Other financial liabilities comprise bank loans, trade payables and other payables to public authorities, etc. Other financial liabilities are initially measured at fair value less any transaction costs. Liabilities are subsequently measured at amortised cost using the effective interest method. Accordingly, the difference between the proceeds and the nominal value is recognised in the income statement as a financial expense over the term of the loan. Deferred income Deferred income recognised under liabilities comprises received income for recognition in subsequent financial years. Deferred income is measured at cost. Cash flow statement The consolidated and parent company cash flow statements are presented using the indirect method and show cash flows from operating, investing and financing activities as well as cash and cash equivalents at the beginning and end of the year. Cash flows from acquisition and divestment of enterprises are shown separately under cash flows from investing activities. Cash flows from acquired enterprises are recognised in

Financial statements

41

the cash flow statement from the time of their acquisition, and cash flows from divested enterprises are recognised up to the time of sale. Cash flows from operating activities are stated as the operating profit or loss, adjusted for non-cash operating items and changes in working capital, less corporation tax paid attributable to operating activities. Cash flows from investing activities include payments in connection with the acquisition and divestment of enterprises and financial assets and the acquisition, development, improvement and sale, etc. of intangibles and property, plant and equipment. Cash flows from financing activities comprise changes in the parent companys share capital and related costs as well as raising and repayment of loans, instalments on interestbearing debt, acquisition of treasury shares and payment of dividend. Cash flows in other currencies than the functional currency are recognised in the cash flow statement using average exchange rates for the respective months, unless these deviate materially from the actual exchange rates ruling at the dates of the transactions. If so, the actual exchange rates are used. Cash and cash equivalents comprise cash less any bank overdrafts which form an integral part of the groups cash management.

Supplementary accounting policies for the parent company Investments in subsidiaries and jointly controlled entities in the financial statements of the parent company Investments in subsidiaries and jointly controlled entities are measured at cost. If the cost price exceeds the recoverable amount of the investment, it is written down to this lower amount. The recoverable amount is defined as the higher of the fair value of the subsidiary or jointly controlled entity less costs of sale and the value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a discount rate that reflects current market assessments of the time value of money, the risks specific to the enterprise in question for which the estimates of future cash flows have not been adjusted.

42

Financial statements

Financial statements

43

2 Significant accounting estimates, assumptions and uncertainties

Many items cannot be measured reliably, but must be estimated. Such estimates consist of assessments based on the most recent information available at the time of preparing the financial statements. It may be necessary to change previous estimates as a result of changes in the assumptions on which the estimates were based or due to new information, further experience or subsequent events. Significant accounting estimates In connection with the practical application of the accounting policies described, the management has made the following significant accounting estimates that have had a significant impact on the financial statements: Carrying amount of vessels The group evaluates the carrying amount of the vessels to determine whether events have occurred that would require an adjustment of the amounts. The valuation of vessels is reviewed based on events and changes in circumstances indicating that the carrying amount of the assets might not be recovered. In assessing the recoverable amount, the group reviews significant indicators of potential impairment such as purchase and selling prices and general market conditions. Moreover, market valuations from leading and independent international ship brokers are obtained on an annual basis to support the valuation of vessels. When an indication of impairment is identified, the discounted future cash flows are compared to the carrying amount of the vessels. If they are lower than the carrying amount, an impairment loss is recognised as the difference between the fair value and the carrying amount. If an indication of impairment is identified, the need for recognising an impairment loss according to IFRS is assessed by comparing the carrying amount of the vessels to the higher of the net realisable value of the vessels and the discounted future cash flows. The review of impairment indicators and projection of future discounted cash flows is complex and requires the group to make various estimates, including of future freight rates, earnings from vessels and discount rates. All of these factors have been historically volatile. The carrying amount of the groups vessels may not necessarily represent their actual market value at any point in time as market prices of second-hand vessels to a certain degree fluctuate with changes in charter rates and the cost of newbuildings. If the estimated future cash flows or related assumptions change permanently, it may be necessary to reduce the carrying amount of the vessels. Write-downs of USD 8.5 million on the groups four vessels in the chemical tanker segment were recognised in the

financial year 2008 and write-downs of USD 84.8 million on all the groups vessels were recognised in 2009, cf. note 12. Special liabilities In 2008, contracts and agreements were entered into by the former management which the Company considers to be unlawful and non-binding on the Company and, therefore, contests. Thus, there is uncertainty about the degree to which the Company must meet the obligations under these contracts and agreements. The management made a careful assessment of the risks and scope and made provisions for liabilities in the order of USD 2 million in the annual report for 2008, including estimated costs relating to investigation and clarification of the extent of the liabilities. About USD 1.2 million for staff costs and about USD 0.8 million for other external costs. In the 2009 financial year, some of the liabilities were clarified and paid, and at end-2009, the management made provisions for the rest of the liabilities in the order of USD 0.6 million. Total estimated liabilities are provided for under current liabilities. The impact on the financial results was as follows: for 2009, USD +0.8 million and for 2008, USD -2.0 million. Capital resources and liquidity Based on the most recently announced expectations for 2010, the Company considers its liquidity and capital resources adequate, even if the rights issue is not completed, to support continuing operations as well as ongoing and planned investments at least until the end of 2010. Based on the earnings expectations for 2010 and ongoing and planned investments as well as the extension granted for the payment of instalments on the Companys bank loan until the beginning of 2012, the Companys total cash flow for 2010 is projected to be between USD -17 and -20 million. The management assesses that this negative cash flow may be financed partly through the Companys liquidity of approx. USD 12 million at the beginning of the year, partly by undrawn borrowing facilities of USD 10 million, including the new credit facility of USD 7.5 million made available by Clipper. As a result of continued uncertainty about the development of the freight market, there is greater uncertainty than normal about the Companys earnings expectations, and the Company has limited financial resources to absorb any negative deviations from the managements expectations for earnings performance, investments and liquidity. Therefore, the management is preparing a share issue in the second quarter of 2010 with pre-emption rights for existing shareholders in order to strengthen the Companys capital base and liquidity.

44

Financial statements

3 Consolidated segment information

The group adopted IFRS 8, Operating Segments, for the first time for the financial year 2009. The adoption of IFRS 8 has not resulted in any changes in the identification of the groups segments. Types of freight services generating earnings for the segments The groups internal reporting to the Board of Directors of the parent company, which guides Board decisions on distribution of resources and assessment of segment results, is focused on the categories of vessel types/sizes operating on different markets, however, there may be some overlapping between markets. The operating segments under IFRS 8 are as follows: Vessel type LR1 product tankers Handy-size tankers Chemical tankers Description Tankers of about 70,000 dwt Tankers of 35,000 - 40,000 dwt Tankers of about 13,000 dwt Market Freight of refined oil products Freight of refined oil products and IMO3 products Freight of refined oil products and IMO2 products

Revenue represents sales to extra-group customers alone. In 2008 and 2009, the group did not provide freight services to one single customer for more than 10% of total group revenue. The accounting policies governing presentation of segment information are consistent with the accounting policies applied by the group, cf. note 1. Operating profit/ loss for the segments reflects the earnings generated by each segment. Total operating profit/loss for the segments is equal to the EBIT less non-allocated joint operating and administrative expenses, including remuneration for the group management team. Financial income and financial expenses for the segments reflect results of interest-bearing assets and interest-bearing debt directly attributable to the segments. Thus, segment results reflect the results reported

to the Board of Directors of the parent company, which guide Board decisions and assessments on segment results. In order to be able to assess segment results and distribute resources between the segments, the Board of Directors also monitor long-term property, plant and equipment and financial assets as well as non-current liabilities in the form of ship loans relating to the individual segment. All assets and liabilities in the group are allocated to the respective segments, expect for jointly owned cash, loans to jointly controlled entities, available-for-sale financial assets and bank loans. The Board of Directors also monitors the groups capital expenditure. Information on the groups segments is listed in note 3.

Financial statements

45

3 Consolidated segment information

Income statement LR1 Product tankers 2009 USD 1000 Revenue Operating expenses gross profit Staff costs Other external costs Depreciation Write-downs Operating profit/loss Financial income Financial expenses Profit/loss before tax Tax on profit/loss for the year Profit/loss for the year Other segment information: Segment assets Capital expenditure Segment liabilities Ship-days (number) Gross profit per ship-day (USD 1000) 44,939 42,333 38,597 251 4 95,911 34,554 97,474 1,108 6 77,256 0 56,572 1,451 2 2,599 0 7,505 220,705 76,887 200,148 3,166 -2,181 985 -84 -331 -1,339 -8,306 -9,075 1 -1,027 -10,101 -22 -10,123 handy-size tankers 2009 USD 1000 13,761 -7,157 6,604 -365 -1,268 -5,183 -54,953 -55,165 0 -3,851 -59,016 9 -59,007 Chemical tankers 2009 USD 1000 13,033 -9,615 3,418 -375 -1,352 -4,546 -21,576 -24,431 0 -2,053 -26,484 0 -26,484 Not allocated 2009 USD 1000 0 6 6 546 -425 0 0 127 1,388 -438 1,077 -15 1,062 Continuing operations 2009 USD 1000 29,960 -18,947 11,013 -278 -3,376 -11,068 -84,835 -88,544 1,389 -7,369 -94,524 -28 -94,552

For further information, please see note 12 on impairment tests of vessels.

46

Financial statements

Consolidated segment information

Income statement LR1 Product tankers 2008 USD 1000 Revenue Operating expenses gross profit/loss Staff costs Other external costs Depreciation Write-downs Profit from sale of vessels Operating profit/loss Financial income Financial expenses Profit/loss before tax Tax on profit/loss for the year Profit/loss for the year Other segment information: Segment assets Capital expenditure Segment liabilities Ship-days (number) Gross profit per ship-day (USD 1000) 4,334 340 21 12,553 121,209 51,034 74,944 875 14 97,387 957 25,568 1,435 5 25,426 14,377 245,526 51,991 130,272 10,099 -2,911 7,188 -216 -280 -1,129 0 18,545 24,108 12 -1,735 22,385 -3,500 18,885 handy-size tankers 2008 USD 1000 18,192 -6,353 11,839 -388 -823 -4,701 0 0 5,927 79 -4,201 1,805 -20 1,785 Chemical tankers 2008 USD 1000 17,012 -9,368 7,644 -378 -967 -4,651 -8,500 0 -6,852 119 -3,652 -10,385 -31 -10,416 Not allocated 2008 USD 1000 0 -36 -36 -1,544 -1,376 0 0 0 -2,956 581 -3,220 -5,595 -52 -5,647 Continuing operations 2008 USD 1000 45,303 -18,668 26,635 -2,526 -3,446 -10,481 -8,500 18,545 20,227 791 -12,808 8,210 -3,603 4,607

For further information, please see note 12 on impairment tests of vessels.

Financial statements

47

4 Staff costs
Parent company 2008 2009 USD 1000 USD 1000 -326 -1,307 -810 -67 -1 -2,511 2 -323 -688 833 -48 -1 -227 2 Average number of employees Remuneration for the Board of Directors Wages and salaries Adjustment of liabilities relating to wages and salaries Defined contribution plans Other social security costs group 2009 2008 USD 1000 USD 1000 -374 -688 833 -48 -1 -278 2 -341 -1,307 -810 -67 -1 -2,526 2

Crew aboard vessels is not included in the average number of employees as they are not employeed by the group. Wages and salaries are included under operating expenses. A member of the Executive Board has a company car. The related costs incurred are included under other external costs.

Remuneration for senior executives Members of the Board of Directors and the Executive Board of the parent company and other executives receive the following remuneration: group Board of Directors 2009 USD 1000 Remuneration for the Board of Directors Wages and salaries Defined contribution plans Adjustment of liabilities relating to wages and salaries -338 0 0 -338 0 -338 2008 USD 1000 -341 0 0 -341 0 -341 Parent company Board of Directors 2009 USD 1000 Remuneration for the Board of Directors Wages and salaries Defined contribution plans Adjustment of liabilities relating to wages and salaries -323 0 0 -323 0 -323 2008 USD 1000 -326 0 0 -326 0 -326 Executive Board 2009 USD 1000 0 -688 -48 -736 833 97 2008 USD 1000 0 -1,307 -67 -1,374 -810 -2,184 Executive Board 2009 USD 1000 -36 -688 -48 -772 833 61 2008 USD 1000 0 -1,307 -67 -1,374 -810 -2,184

48

Financial statements

5 Profit on sale of vessels

Parent company 2008 2009 USD 1000 USD 1000 70,160 -2,052 -49,563 18,545 0 0 0 0 Selling price Costs of sale Carrying amount group 2009 2008 USD 1000 USD 1000 0 0 0 0 70,160 -2,052 -49,563 18,545

The profit recorded in 2008 by the parent company and the group relates to the sale of the LR1 tanker NORDIC LISBETH.

6 Depreciation and write-downs

Parent company 2008 2009 USD 1000 USD 1000 -3,483 -6,200 -9,683 -3,505 -17,559 -21,064 Depreciation, vessels Write-downs, vessels group 2009 2008 USD 1000 USD 1000 -11,068 -84,835 -95,903 -10,481 -8,500 -18,981

7 Write-down of investments
Parent company 2008 2009 USD 1000 USD 1000 0 0 0 0 0 0 0 -4,243 -4,243 -41,605 -6,307 -1,324 -49,236 -53,479 Write-down of investments in subsidiaries Write-downs in subsidiaries Write-down of investments in jointly controlled entities Write-down of loans to jointly controlled entities Provisions for recourse guarantee commitment relating to jointly controlled entities Write-downs in jointly controlled entities group 2009 2008 USD 1000 USD 1000 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Financial statements

49

8 Financial income
Parent company 2008 2009 USD 1000 USD 1000 36 499 535 537 1,072 1,319 232 1,551 70 1,621 Interest on bank deposits, etc, Interest on receivables Interest income from financial assets not measured at fair value Foreign exchange gains Total financial income group 2009 2008 USD 1000 USD 1000 1,319 0 1,319 70 1,389 140 8 148 643 791

9 Financial expenses
Parent company 2008 2009 USD 1000 USD 1000 -4,036 0 -261 -4,297 -1 -145 0 -203 -2,911 -555 -8,112 -7,040 -976 0 -386 -1,362 -3 0 0 -331 -107 -2,781 -4,584 -2,963 Interest on mortgage debt Interest on bank loans Interest on current liabilities Interest expenses Bank fees Borrowing costs Garantee commission Foreign exchange loss Impairment of available-for-sale financial assets Fair value adjustments transferred from equity relating to hedging of future cash flows Total financial expenses Net financials group 2009 2008 USD 1000 USD 1000 -3,601 0 -454 -4,055 -21 0 0 -405 -107 -2,781 -7,369 -5,980 -8,643 0 -294 -8,937 -24 -145 0 -226 -2,911 -565 -12,808 -12,017

50

Financial statements

10 Tax on profit/loss for the year

Parent company 2008 2009 USD 1000 USD 1000 -3,509 0 -3,509 -52 -3,561 -22 0 -22 -14 -36 Tax on profit for the year may be specified as follows: 7,000 -7,000 0 3,485 24 0 52 3,561 -78,483 78,483 0 0 22 0 14 36 Profit/loss before tax Of which under the tonnage tax or other schemes Calculated tax, 25% Tax on profit from sale of vessels Tonnage tax Adjustment of tax for previous years Tax on interests -94,524 94,524 0 0 22 -8 14 28 8,210 -8,210 0 3,485 48 18 52 3,603 Tax for the year Changes in deferred tax Tax on profit/loss for the year Other taxes group 2009 2008 USD 1000 USD 1000 -14 0 -14 -14 -28 -3,533 0 -3,533 -70 -3,603

The company opted for the tonnage tax scheme with effect from the 2002 accounting period and with binding effect until end-2011. The company did not own any vessels on entry into the tonnage tax scheme; consequently, the company has no deferred taxes from the transitional period.

11 Earnings per share

group 2009 USD 1000 Profit/loss for the year Number of shares used in calculation of earnings per share Average number of outstanding shares Average number of treasury shares Number of shares used in calculation 7,180,000 -24,000 7,156,000 USD Earnings per share for continuing and discontinued operations Calculation of diluted earnings per share is not relevant. -13,21 7,180,000 -24,000 7,156,000 USD 0,64 -94,552 2008 USD 1000 4,607

Financial statements

51

12 Property, plant and equipment group

Prepayment on vessels under construction 2009 USD 1000 19,147 0 -19,147 0 0 0 0 0 0 0 0 0 0 Prepayment on vessels under construction 2008 USD 1000 18,952 195 0 19,147 0 0 0 0 0 0 0 0 19,147

Vessels and docking 2009 USD 1000 Property, plant and equipment Cost at 1 January Additions Disposals Cost at 31 December Revaluations at 1 January Additions Cost at 31 December Depreciation and write-downs at 1 January Depreciation for the year Write-downs for the year Reversal on disposal Depreciation and write-downs at 31 December Carrying amount at 31 December 222,973 96,034 0 319,007 9,632 0 9,632 -25,182 -11,068 -84,835 0 -121,085 207,554

Vessels and docking 2008 USD 1000 225,226 51,796 -54,049 222,973 9,632 0 9,632 -10,687 -10,481 -8,500 4,486 -25,182 207,423

52

Financial statements

Property, plant and equipment parent company

Prepayment on vessels under construction 2009 USD 1000 10,380 0 -10,380 0 0 0 0 0 0 0 Prepayment on vessels under construction 2008 USD 1000 10,380 0 0 10,380 0 0 0 0 0 10,380

Vessels and docking 2009 USD 1000 Property, plant and equipment Cost at 1 January Additions Disposals Cost at 31 December Depreciation and write-downs at 1 January Depreciation for the year Write-downs for the year Reversal on disposal Depreciation and write-downs at 31 December Carrying amount at 31 December 59,203 52,712 0 111,915 -9,235 -3,505 -17,559 0 -30,299 81,616

Vessels and docking 2008 USD 1000 113,252 0 -54,049 59,203 -4,038 -3,483 -6,200 4,486 -9,235 49,968

Impairment tests of vessels

As a result of a fall in the fair value of the Companys vessels, cf. ship brokers assessments and the general uncertainty about market developments, the Company has identified indicators of impairment of the Companys vessels. Therefore, the Company assessed the recoverable amounts of its vessels as at 31 December 2008 and 31 December 2009 in connection with the preparation of the financial statements. The recoverable amount is calculated for each of the Companys vessels, which is defined as the smallest cashgenerating unit, for which it is possible to calculate the value in use and the fair value. The value in use calculations were carried out using cash flow projections over the vessels expected useful lives, based on approved budgets and estimates for the first three years, the estimated subsequent development and a weighted discount rate of 8.3% p.a. after tax for 2008 and of 9.2% p.a. after tax for 2009. The fair values less costs of sale were calculated on the basis of the average of the market assessments made by two independent ship brokers.

The recoverable amounts of the vessels were in 2008 determined on the basis of value in use calculations as the value in use in 2008 was higher than the fair value less costs of sale in every case. In connection with the preparation of the financial statements for 2009, the recoverable amounts of the vessels were determined on the basis of the fair value less costs of sale, which at end-2009 were higher than the value in use. Write-downs of USD 8.5 million on the groups four vessels in the chemical tanker segment were recognised in the financial year 2008 and write-downs of USD 84.8 million on all the groups vessels were recognised in 2009. The key assumptions used in the value in use calculations are the following: Cash flows are based on normal earnings over the remaining useful lives of the vessels, based on the vessels expected useful lives of 25 years, cf. the accounting policies. Freight rates for the first three years have been estimated based on experience, knowledge of the market and input from the companys business partners. As of the fourth year, freight rates in the relevant segments are estimated to see an annual increase of 3%.

Financial statements

53

 Operating and administrative expenses for the first three years are estimated based on experience with the vessels concerned, good knowledge of the market and expected cost development. As of the fourth year, expenses are estimated to see an annual increase of 3%. Docking costs are estimated based on experience and future docking plans. Docking costs are estimated to see an annual increase of 3%. The recoverable amount of the vessels is to a great extent dependent on the development of the freight market. Todays market makes it very difficult to predict the future

market situation for tankers, and there is a risk that the current financial crisis will continue or deteriorate at the same time as the supply of tanker capacity will remain high or increase further, which would keep freight rates at the current level or reduce them to a lower level. If fluctuations in the freight rates differ from the managements estimate, this may have a strong positive or negative impact on the recoverable amounts. The management has made its best estimate of the development of the freight market, both in the next 1-3 years and in the longer term, however, its estimate is associated with great uncertainty.

13 Investments in subsidiaries
Parent company 2008 2009 USD 1000 USD 1000 12,082 0 0 12,082 0 0 0 12,082 12,082 0 0 12,082 0 -4,243 -4,243 7,839 Cost at 1 January Additions relating to acquisition of enterprises Disposals relating to the divestment of enterprises Cost at 31 December Value adjustments at 1 January Write-downs for the year Value adjustments at 31 December Carrying amount at 31 December

The parent companys subsidiaries are: Nordic Copenhagen Shipping Co. Pte. Ltd. Singapore. Wholly owned. Nordic Oslo Shipping Co. Pte. Ltd. Singapore. Wholly owned. As a result of a fall in the fair value of the Companys vessels, cf. assessments by ship brokers and the general uncertainty about the market development, the parent company has identified indicators of impairment of Nordic Tankers A/S investments in subsidiaries compared with the carrying amount. Therefore, the Company assessed the recoverable amounts of its investments as at 31 December 2009. The recoverable amount was determined as the fair value of the investments, corresponding to the net value of the investments calculated at the fair value of vessels and other assets and liabilities. The assessment was based on the assessments of the Companys vessels referred to in note 12. The recoverable amount was lower than the carrying amount; consequently, the investments were written down by USD 4.2 million to the calculated recoverable amount of USD 7.8 million.

54

Financial statements

14 Investments in jointly controlled entities

Parent company 2008 2009 USD 1000 USD 1000 24,705 15,350 0 40,055 0 0 0 40,055 40,055 1,550 0 41,605 0 -41,605 -41,605 0 Cost at 1 January Additions relating to acquisition of equity investments Disposals relating to disposal of equity investments Cost at 31 December Value adjustments at 1 January Write-downs for the year Value adjustments at 31 December Carrying amount at 31 December

The jointly controlled entities are: Nordic Seaarland Tankers B.V., the Netherlands, joint venture, operation of a wholly-owned handy-size tanker, and two 50% and two 75.01% holdings in handy-size tankers. The table below shows the jointly controlled entities share of results included in the consolidated income statement and principal items included in the consolidated balance sheet at 31 December 2008 and 2009 in compliance with IFRS: group 2009 2008 USD 1000 USD 1000 Revenue Operating expenses Other expenses Net financials 13,761 -7,157 -6,807 -3,851 -4,054 Non-current assets Current assets Non-current liabilities Current liabilities 91,416 4,495 96,175 7,367 18,192 -6,353 -5,912 -4,122 1,805 116,997 4,212 68,241 46,563

As a result of a fall in the fair value of the Companys vessels, cf. assessments by ship brokers and the general uncertainty about the market development, the parent company has identified indicators of impairment of Nordic Tankers A/S investments in jointly controlled entities compared with the carrying amount. Therefore, the Company assessed the recoverable amounts of its investments as at 31 December 2009. The recoverable amount was determined as the fair value of the investments, corresponding to the net value of the investments calculated at the fair value of vessels and other assets and liabilities. The assessment was based on the assessments of the Companys vessels referred to in note 12. As the recoverable amount was negative, write-downs of USD 41.6 million were recognised, corresponding to the carrying amount before write-downs.

Financial statements

55

15 Receivables from sales etc.

Parent company 2008 2009 USD 1000 USD 1000 642 2,253 Receivables from pool arrangements group 2009 2008 USD 1000 USD 1000 6,222 3,386

Group revenue derives from pool arrangements. Receivables from pool arrangements reflect the difference between recognised revenue and freight settlements received. The receivables are not past due, and following an individual assessment, no write-downs were made.

16 Available-for-sale financial assets

Available-for-sale financial assets comprise listed Danish shares acquired for USD 3,153 thousand in 2008. The shares were measured at a fair value of USD 135 thousand calculated at the market price at 31 December 2009, which resulted in a further write-down in 2009 of USD 107 thousand compared with a write-down of USD 2,911 thousand in 2008. The holdings significant and prolonged impairment is deemed by the company to constitute objective evidence of impairment of a permanent nature; consequently, the write-down was recognised in the income statement.

17 Cash
Parent company 2008 2009 USD 1000 USD 1000 7,472 71 Cash and bank deposits group 2009 2008 USD 1000 USD 1000 2,625 12,118

The groups cash consists primarily of deposits in reputable banks, and no special credit risk is deemed to be associated with the cash. The groups and parent companys cash has been pledged as security for finance loans. Bank deposits carry floating interest rates.

56

Financial statements

18 Share capital
Parent company 2008 2009 USD 1000 USD 1000 12,826 0 12,826 12,826 0 12,826 Share capital at 1 January Capital increase Share capital at 31 December group 2009 2008 USD 1000 USD 1000 12,826 0 12,826 12,826 0 12,826

The share capital consists of 7,180,000 shares of DKK 10. The shares have not been divided into classes, and there are no special rights attached to the shares.

2008 shares 7,180,000 0 0 7,180,000

2009 shares 7,180,000 0 0 7,180,000 Number of shares at 1 January Capital increase through bonus shares Capital increase through IPO Number of shares at 31 December

19 Treasury shares
Parent company and group Nominal value 2008 shares Treasury shares at 1 January Acquisition Disposal Treasury shares at 31 December 24,000 0 0 24,000 2009 shares 24,000 0 0 24,000 0 240,000 2008 DKK 240,000 2009 DKK 240,000 0 0 240,000 % of share capital 2008 % 0.33% 0% 0% 0.33% 2009 % 0.33% 0% 0% 0.33%

In 2007, before the flotation on the stock exchange, the company acquired nominally DKK 240 thousand treasury shares for USD 448 thousand as part of its preparations for stock exchange listing. Following the listing, the company has not exercised the option to acquire treasury shares.

Financial statements

57

20 Finance loans group

2009 2008 USD 1000 USD 1000 Payables to credit institutions are recognised in the balance sheet as follows: Non-current liabilities Current liabilities 188,804 1,171 189,975 Nominal value At 31 December, the group had the following loans and credits: 2009 Carrying amount USD 1000 0 20,363 17,212 71,340 10,800 11,000 29,622 15,619 15,134 -1,247 132 189,975 Of which falling due within one year 1,171 188,804 Falling due within one year Falling due between one and two years Falling due between two and three years Falling due between three and four years Falling due between four and five years Falling due after 5 years 1,171 1,874 39,569 12,366 12,366 122,629 189,975 2008 Carrying amount USD 1000 20,855 20,827 20,827 0 11,200 11,600 33,103 0 0 -1,021 188 117,579 7,926 109,653 7,926 6,959 6,959 6,959 6,959 81,817 117,579 191,091 109,653 7,926 117,579 118,412

Currency USD USD USD USD USD USD USD USD USD Borrowing costs Calculated interest not yet due on finance loans

Maturity 2015 2021 2021 2022 2022 2023 2025 2024 2024

Fixed/ Floating Floating Floating Floating Floating Floating Floating Floating Floating Floating

58

Financial statements

Finance loans parent company

2009 2008 USD 1000 USD 1000 Payables to credit institutions are recognised in the balance sheet as follows: Non-current liabilities Current liabilities 70,820 0 70,820 Nominal value At 31 December, the parent company had the following loans and credits: 2009 Carrying amount USD 1000 71,340 0 -643 123 70,820 Of which falling due within one year 0 70,820 Falling due within one year Falling due between one and two years Falling due between two and three years Falling due between three and four years Falling due between four and five years Falling due after 5 years 0 0 17,173 4,907 4,907 43,833 70,820 The fair value of the groups and parent companys liabilities other than provisions corresponds to the carrying amount because of the floating rates. Amounts of future maturities do not include interest payments. The loan agreements stipulate minimum requirements (financial covenants) for liquidity, equity ratio and debt ratio, based on the market value of the vessels, among other things. At certain times during the year 2009, some of the financial covenants were not met. In May, the jointly controlled entities failed to meet the debt ratio requirements. The situation was solved through the payment of extraordinary instalments following payment by the shareholders, including Nordic Tankers A/S. In the autumn of 2009, the group no longer met the debt ratio requirements or minimum requirements for liquidity, 2008 Carrying amount USD 1000 0 20,855 -711 3 20,147 0 20,147 0 0 0 0 0 20,147 20,147 71,340 20,147 0 20,147 20,855

Currency USD USD Borrowing costs Calculated interest not yet due on finance loans

Maturity 2022 2015

Fixed/ Floating Floating Floating

which led to a renegotiation of the loan agreements. The result was an addendum to the loan agreements in November 2009 which provided for deferment of instalments on the loans and reduced debt ratio requirements and minimum liquidity requirements and increased the lenders margin. At 31 December 2009, the parent company and its subsidies failed to meet the minimum liquidity requirement. The situation was remedied through the conclusion of another addendum to the loan agreement in January 2010 in connection with the groups acquisition of a number of Clipper operations. Despite the groups low capital resources, the financial covenants are expected to be met, based on the groups expectations for future earnings, cash flow and the development in the value of vessels, etc.

Financial statements

59

21 Trade payables
Parent company 2008 2009 USD 1000 USD 1000 1,693 76 1,769 2,945 80 3,025 Suppliers of goods and services Other suppliers group 2009 2008 USD 1000 USD 1000 4,578 80 4,658 2,519 564 3,083

The carrying amount corresponds to the fair value of the liabilities.

22 Other payables
Parent company 2008 2009 USD 1000 USD 1000 65 2,401 2,879 0 5,345 112 2,418 649 0 3,179 Wages, salaries. A tax, social security contributions, holiday pay, etc. payable Derivative financial instruments Other expenses payable Payables to business partners group 2009 2008 USD 1000 USD 1000 112 2,615 1,381 1,393 5,501 65 2,754 3,282 0 6,101

The carrying amount of payables relating to A tax, social security contributions, holiday pay, etc., financial instruments and expenses payable correspond to the fair value of the liabilities. The holiday pay obligations represent the groups obligation to pay wages during the holidays that employees have accrued at the balance sheet date for payment during the subsequent financial year. Payables to business partners represent the groups share of the shareholder loans to the jointly controlled entities provided by the business partner.

60

Financial statements

23 Remuneration for auditors appointed by the general meeting

Remuneration for the parent companys auditor appointed by the general meeting for the financial year.

Parent company 2008 2009 USD 1000 USD 1000 70 0 0 75 145 76 51 21 188 336 Statutory audit Other assurance reports Tax consultancy Non-audit services

group 2009 2008 USD 1000 USD 1000 118 51 38 188 395 70 4 7 64 145

24 Changes in working capital

Parent company 2008 2009 USD 1000 USD 1000 403 -174 3,483 3,712 -26 -76 -1,256 -1,358 Changes in amounts tied up in inventories on vessels Changes in receivables Changes in trade payables, etc. group 2009 2008 USD 1000 USD 1000 -245 -3,550 785 -3,010 293 -494 2,649 2,448

Financial statements

61

25 Acquisition of enterprises in 2010

After the closing of the financial year, Nordic Tankers A/S has from Clipper acquired a controlling interest and the majority of voting rights in a number of companies with effect from 7 January 2010. The aim of the acquisitions was to expand the Groups operations within the chemical tanker segment, partly through ownership of vessels, partly through offering of management services. The acquisitions in brief: Acquisition of a controlling interest and the majority of voting rights in four limited partnership companies owning one chemical tanker each and the entire ownership interest and all the voting rights in a company owning one chemical tanker as well as all ownership interests and voting rights in four limited partnership companies. Acquisition of the entire ownership interest and all voting rights in two companies specialising in commercial and technical management, respectively.

As the acquisitions of the shipowning companies and the management companies were carried out at the same time and between the same parties, the acquisitions are considered to be one acquisition. In connection with the issue of new shares in Nordic Tankers A/S as part of the consideration, Clipper has become a major shareholder in Nordic Tankers A/S with a holding of about 31%. Since the original shareholders of Nordic Tankers A/S still hold the majority of the voting rights, Nordic Tankers is considered to be the acquirer, regardless of the fact that Clipper is the largest shareholder. The acquired companies and the preliminary calculation of the consideration and the allocation hereof may be specified as follows:

Name 2010 A/S Nordic Inge, Copenhagen K/S Nordic Nadja, Copenhagen K/S Nordic Nelly, Copenhagen K/S Nordic Nora, Copenhagen Limited partnership companies: Nordic Marianne ApS Nordic Nadja APS Nordic Nelly ApS Nordic Nora ApS Shipowning companies, total Nordic Tankers Management A/S, Copenhagen Clipper Marine Services A/S (expected to change name to Nordic Tankers Marine A/S) Management companies, total Total consideration

Primary operations Ownership and operation of vessel Ownership and operation of vessel Ownership and operation of vessel Ownership and operation of vessel General partners of each one of the four acquired limited partnership companies

Ownership interest Acquisition acquired date % 07.01.2010 07.01.2010 07.01.2010 07.01.2010 07.01.2010 07.01.2010 100 95 90 95 95 100

Voting share Considacquired eration % uSD1000 100 95 90 95 95 100

K/S Nordic Marianne, Copenhagen Ownership and operation of vessel

31,796 Commercial management of vessels 07.01.2010 Technical management of vessels 07.01.2010 100 100 100 100

14,281 46,077

62

Financial statements

Total uSD1000 Non-current assets Vessels Tools and equipment Total non-current assets Current assets Inventories Trade receivables Other receivables Cash Total current assets Total assets Non-current liabilities Ship loans Current liabilities Repayments on ship loans Trade payables Other payables Total current liabilities Net assets acquired Goodwill Minority interests Total consideration Cash acquired, cf. above Deferred contingent consideration Consideration in shares at market price Consideration in shares at transaction price Consideration in instruments of debt Cash consideration 6,178 2,347 13,514 22,039 30,384 16,660 (967) 46,077 (9,221) (6,061) (20,740) (4,905) (14,371) (9,221) 46,082 579 2,779 15,131 9,221 27,710 98,505 70,750 45 70,795

Financial statements

63

Acquisition of the Shipowning companies Consideration for the Shipowning companies was in the form of a non-cash contribution through the issue of 5,408,296 new shares in Nordic Tankers A/S and issuance of instruments of debt of USD 6,151 thousand. According to the agreement, the share issue was completed at a price of DKK 16.86 per share, corresponding to USD 17,528 thousand at the date of acquisition, and the total consideration amounted to USD 23,679 thousand. The instruments of debt of USD 6,151 thousand carry interest at 10% p.a. and are repayable during the period 31 December 2012 31 December 2014. Interest is added to the debt and will be paid concurrently with the repayment of the debt instruments. The instruments of debt will be subordinate to Nordic Tankers A/S lending banks. In order to give a true and fair view of the value, the management has decided to base the value of the consideration for acquired ownership interests in the Shipowning companies on the basis of fair value measurements of the proportionate share of the fair value of the acquired operations as well as the fair value of Nordic Tankers used to determine the terms of trade. Since none of the companies involved in the transaction with the Shipowning companies held significant values apart from the chemical tankers, the fair values of Nordic Tankers and the Shipowning companies were calculated on the basis of a valuation of the vessels based on an average of two international, independent ship brokers assessment of the market value of the individual vessels. The market value assessments of Nordic Tankers vessels, adjusted for debt and other monetary net assets, were compared to the value of the ownership interests in the contributed Shipowning companies, which was calculated using the same procedure. Consequently, the new shares in Nordic Tankers were issued at a transaction price of DKK 16.86 per share. In the opinion of the group, the stated transaction price reflects the fair value per share of the group immediately before the transaction. However, according to the provisions of IFRS on acquisitions, the value of the shares of Nordic Tankers A/S issued to Clipper as payment for the contributed ownership interests in the Shipowning companies must be determined using the quoted market price of the Nordic Tankers shares at the time of the transfer of control of the companies, which was on 7 January 2010, irrespective of the fact that the parties to the transaction, including the shareholders of Nordic Tankers A/S with a qualified majority, have approved the use of a price of DKK 16.86 per share and irrespective of the fact that the above valuations result in a price of DKK 16.86 per share. However, the consideration for Other Investors contribution of ownership interests in the Shipowning companies is determined using the agreed price of DKK

16.86 per share as the acquisition of the minority interests in the Shipowning companies from Other Investors is considered independent transactions and not part of the overall negotiations regarding the acquisition. Other Investors were just offered the possibility of contributing their ownership interests in the Shipowning companies at the same terms and conditions as Clipper. Exclusively for the purpose of the accounting treatment of the acquisition of the Shipowning companies, the consideration for the contributed ownership interests in the Shipowning companies has been calculated as follows: uSD 1000 Issue of 3,894,932 shares to Clipper of DKK 10 at a price of DKK 27.70 (at an exchange rate of USD 520.21) Issue of 1,513,364 shares to Other Investors of DKK 10 at a price of DKK 16.86 (at an exchange rate of USD 520.21) Issue of instruments of debt 20,740

4,905

6,151 31,796

The use of the quoted market price of Nordic Tankers A/S shares as at 7 January 2010 is expected to result in a subsequent write-down of goodwill of USD 8,117 thousand calculated as the difference between the carrying amount of the consideration of USD 31,796 thousand and the abovementioned valuation of the Shipowning companies of USD 23,679 thousand. Acquisition of the Management companies The acquisition of the Management companies is paid for with a contingent deferred consideration and issuance of a debt instrument of USD 8,220 thousand. Nordic Tankers A/S must pay a contingent deferred consideration for the acquisition of Nordic Tankers Management A/S and Clipper Marine Services A/S (expected to change its name to Nordic Tankers Marine A/S on 16 April 2010) of between USD 7,500 thousand and USD 15,000 thousand, depending on the financial performance before tax of the two companies during the four-year period 20102013, based on an annual statement. Not later than in May of each of the financial years 2011-2013, the contingent deferred payment must be paid by way of a payment on account of 50% of the preceding financial years positive earnings, and a final adjustment of the payment will be made in May 2014. If the accumulated financial results before tax for the four-year period do not exceed USD 4,000 thousand, a minimum payment of USD 7,500 thousand will be triggered, whereas accumulated financial results before tax

64

Financial statements

for the four-year period in excess of USD 8,000 thousand will trigger a maximum payment of USD 15,000 thousand. Moreover, it has been agreed that the seller of the Management companies must compensate Nordic Tankers A/S for any financial losses before tax for the financial years 20102012 with a maximum payment of USD 11,000 thousand. The total contingent deferred consideration for the Management companies will thus amount to between USD 3,500 thousand and USD 15,000 thousand. Nordic Tankers A/S finds it probable that the total consideration will amount to USD 15,000 thousand, however, the loss guarantee is expected to result in a payment to Nordic Tankers A/S in the amount of USD 4,630 thousand. The fair value of the additional probable consideration of net USD 10,370 thousand amounted to USD 6,061 at the date of acquisition. The debt instrument of USD 8,220 thousand carries interest at 10% p.a. and is repayable during the period 31 December 2012 31 December 2014. Interest is added to the debt and will be paid concurrently with the repayment of the debt instrument. The instrument of debt will be subordinate to Nordic Tankers A/S lending banks. Nordic Tankers A/S acquisition costs initially amounted to USD 851 thousand, of which USD 796 thousand has been included as administrative expenses in the statement of comprehensive income for the financial year 1 January 2009 31 December 2009, while the remaining portion of USD 55 thousand will be included as administrative expenses in the statement of comprehensive income for the financial year 1 January 2010 31 December 2010.

Net assets acquired include trade receivables at a fair value of USD 2,779 thousand, which corresponds to the nominal value as none of the receivables are considered to be uncollectible. As regards the acquisition of the Shipowning companies, Nordic Tankers A/S considers the fair value of the contributed assets to be at least equal to the total consideration of USD 23,679 thousand plus the value of the minority interests in the acquired company based on the transaction price agreed between the seller and the group for the issued shares. As regards the acquisition of the Management companies, a consideration is paid which exceeds the fair value of the identifiable assets, liabilities and contingent liabilities acquired. This positive difference (goodwill) is primarily attributable to knowhow acquired of technical and commercial management. Such intangible assets do not qualify for separate recognition. Goodwill is not expected to be deductible for tax purposes. The minority interests in the Shipowning companies have been recognised at the value at the date of acquisition, corresponding to USD 967 thousand. The minority interests have been measured at fair value based on the same criteria used for the assessment of the contributed assets, including that vessels have been evaluated at market price in accordance with brokers assessments.

Financial statements

65

26 Contingent liabilities, collateral and contractual obligations

The parent company has provided a guarantee under which it assumes primary liability to lenders in Nordic Oslo Shipping and Nordic Copenhagen Co. Pte. Ltd., Singapore for finance loans which at 31 December 2009 amounted to USD 21.8 million. Moreover, the parent company has provided a guarantee to the lender for the groups share of the involvement in Nordic Seaarland Tankers B.V., which amounted to USD 98.3 million at 31 December 2009. The following has been provided as security vis--vis the parent companys lenders: The groups vessels have been pledged as security. The carrying amount totals USD 207.6 million. Cash, USD 2.6 million for the group and USD 0.1 million for the parent company, has been pledged as security. The parent companys investment in subsidiaries, USD 7.8 million, has been pledged as security. The groups freight receipts and insurances taken out in respect of the vessels have been pledged as security.

Contractual obligations Nordic Tankers A/S has entered into an administration agreement with Difko Administration A/S. The agreement was terminated on 31 December 2009 and will expire on 31 March 2010. In 2009, the annual fee, including extra work, amounted to DKK 3.9 million, which is index-linked. Further obligations after the close of the financial year After the close of the financial year, Nordic Tankers A/S has completed transactions with Clipper, and in this connection the Company has guaranteed a loan in the amount of EUR 8.9 million and entered as a limited partner with a remaining liability of EUR 25.4 million.

66

Financial statements

27 Foreign exchange, interest rate and credit risks and application of financial instruments

Parent company 2008 2009 USD 1000 USD 1000 242 242 642 6,747 2,314 7,472 17,175 135 135 2,253 5,954 779 71 9,057 Available-for-sale financial assets Available-for-sale financial assets Receivables from sales Loans to subsidiaries Other receivables Cash Loans and receivables Derivative financial instruments used to hedge future cash flows (interest rate swaps and collar) Financial liabilities used as hedging instruments Finance loans Trade payables Other payables Financial liabilities measured at amortised cost

group 2009 2008 USD 1000 USD 1000 135 135 6,222 0 798 2,625 9,645 242 242 3,386 0 2,320 12,118 17,824

2,445 2,445 20,147 1,769 2,944 24,860

2,418 2,418 70,820 3,025 761 74,606

2,615 2,615 189,975 4,658 1,493 196,126

2,799 2,799 117,579 3,083 3,347 124,009

Financial statements

67

Fair value hierarchy for financial instruments measured at fair value in the balance sheet Financial instruments measured at fair value are classified below in accordance with the fair value hierarchy: Quoted prices in an active market for identical instruments (level 1). Quoted prices in an active market for similar assets or liabilities or other valuation methods where all significant inputs are based on observable market data (level 2). Valuation methods where any significant inputs are not based on observable market data (level 3).

Methods and assumptions in determining fair value Listed shares The holding of listed shares is measured at listed prices and price quotes. Derivative financial instruments Forward exchange transactions and interest rate swaps are measured according to generally accepted valuation methods based on relevant observable swap curves and exchange rates.

2009 Listed shares Available-for-sale financial assets Derivative financial instruments held to hedge future cash flows (interest rate swaps and interest rate collar) Financial liabilities used as hedging instruments

Level 1 DKK 1000 135 135 -

Level 2 DKK 1000 2,615 2,615

Level 3 DKK 1000 -

Total DKK 1000 135 135 2,615 2,615

In accordance with the transitional provisions of the revised IFRS 7 regarding the fair value hierarchy, no comparative figures have been stated for this information. There were no transfers between level 1 and level 2 during the financial year.

68

Financial statements

The groups risk management policy Due to its operations, investments and financing, the group is exposed to fluctuations in foreign exchange rates and the level of interest. The parent company monitors and manages the groups financial risks centrally and coordinates the groups liquidity management, including funding and investment of excess liquidity. The group pursues a finance policy which operates with a low risk profile, ensuring the foreign exchange, interest and credit risks arise only on the basis of commercial factors. Thus, it is group policy to exclusively use financial instruments to hedge risks. For further information on accounting policies and methods, including recognition criteria and bases of measurement, please see the section on accounting policies. Foreign exchange risks The groups foreign enterprises are only mildly sensitive to exchange rate fluctuations as earnings and costs are denominated in USD. The parent company is only mildly sensitive to exchange rate fluctuations as earnings and costs are primarily denominated in USD, except for staff costs and administrative expenses, which are denominated in DKK. Transactions in DKK and other currencies are not hedged. It is group policy not to hedge limited foreign exchange risks. As a result of the fact that the groups and parent companys earnings and costs as well as assets and liabilities are denominated and measured in USD the foreign exchange risk is very limited, and no hedging instruments have been used to hedge cash flows or assets and liabilities. Because of the insignificant foreign exchange risk, no sensitivity analysis of fluctuations between USD and DKK has been prepared. Interest rate risk It is group policy to hedge interest rate risks on the groups borrowings when the management assesses that interest payments may be hedged at a satisfactory level compared with the associated costs. Hedging is generally accomplished using interest rate swaps, under which floating-rate loans are converted to fixed-rate loans, or using interest rate collars, under which maximum and minimum rates of interest are fixed for the portion covered. group The fair value of the groups outstanding interest rate swaps contracted to hedge interest rate risks on floating-rate loans amounts to a liability, USD -2,066 thousand (31 December 2008: a value of USD 1,614 thousand). The outstanding interest rate swaps have a nominal value of USD 89,500 thousand and run until 30 September 2010 (USD 27,500

thousand) and 29 June 2012 (USD 62,000 thousand) (31 December 2008: 27,500 and 31 December 2007: USD 27,500 and run until 2010). Moreover, the group has an interest rate swap with a nominal value of USD 30,000 thousand which runs from 24 May 2010 to 29 June 2012. The fair value of the groups outstanding interest rate collar contracted to hedge interest rate risks (maximum/minimum rate of interest) on floating-rate loans amounts to a liability, USD -548 thousand (31 December 2008: a value of USD -1,148 thousand). The outstanding interest rate collar has a nominal value of USD 30,000 thousand and runs until 24 May 2010 (31 December 2008: USD 30,000 thousand). The groups bank deposits are held in call accounts and carry a floating rate of interest. Interest rate fluctuations affect the groups finance loans. A one percentage point increase in interest rates compared with the realised interest level would have had an adverse impact of USD 1.0 million (2008: USD 1.2 million) on results for the year and equity. A corresponding fall in interest rates would have had a corresponding positive impact on results for the year and equity. Parent company The fair value of the parent companys outstanding interest rate swaps contracted to hedge interest rate risks on floating-rate loans amounts to a liability, USD -1,870 thousand (31 December 2008: a value of USD -1,254 thousand). The outstanding interest rate swaps have a nominal value of USD 82,500 thousand and run until 30 September 2010 (USD 20,500 thousand) and 29 June 2012 (USD 62,000 thousand) (31 December 2008: 27,500 and 31 December 2007: USD 27,500 and run until 2010). Moreover, the parent company has an interest rate swap with a nominal value of USD 30,000 thousand which runs from 24 May 2010 to 29 June 2012. The fair value of the parent companys outstanding interest rate collar contracted to hedge interest rate risks (maximum/minimum rate of interest) on floating-rate loans amounts to a liability, USD -548 thousand (31 December 2008: a value of USD 1,148 thousand). The outstanding interest rate collar has a nominal value of USD 30,000 thousand and runs until 24 May 2010 (31 December 2008: USD 30,000 thousand). The parent companys bank deposits are held in call accounts and carry a floating rate of interest. Interest rate fluctuations affect the parent companys finance loans. A one percentage point increase in interest rates compared with the realised interest level would have had an adverse impact of USD 0.6 million (2008: USD 0.8 million) on results for the year and equity. A corresponding fall in interest rates would have had a corresponding positive impact on results for the year and equity.

Financial statements

69

Date of revaluation/maturity group

Within 1 year USD 1000 31.12.2009 Receivables from sales Cash and cash equivalents Finance loans Collar Interest rate swaps 31.12.2008 Receivables from sales Cash and cash equivalents Finance loans FX Forward Collar Interest rate swaps 3,386 12,118 -7,926 196 -1,745 -1,685 4,344 0 0 -27,836 0 -749 -1,062 -29,647 0 0 -81,817 0 0 0 -81,817 3,386 12,118 -117,579 196 -2,494 -2,747 -107,120 0 0 0 196 0 0 196 6,222 2,625 -1,171 -492 -3,544 3,640 0 0 -66,175 -810 -2,915 -69,900 0 0 -122,629 0 0 -122,629 6,222 2,625 -189,975 -1,302 -6,459 -188,889 0 0 0 0 0 0 Between 2-5 years USD 1000 After 5 years USD 1000 Total USD 1000 Of which fixed-rate USD 1000

Date of revaluation/maturity parent company

Within 1 year USD 1000 31.12.2009 Receivables from sales Cash and cash equivalents Finance loans Collar Interest rate swaps 31.12.2008 Receivables from sales Cash and cash equivalents Finance loans FX Forward Collar Interest rate swaps 642 7,472 0 196 -1,745 -1,480 5,085 0 0 0 0 -749 -1,062 -1,811 0 0 -20,147 0 0 0 -20,147 642 7,472 -20,147 196 -2,494 -2,542 -16,873 0 0 0 196 0 0 196 2,253 71 0 -492 -3,334 -1,502 0 0 -26,987 -810 -2,915 -30,712 0 0 -43,833 0 0 -43,833 2,253 71 -70,820 -1,302 -6,249 -76,047 0 0 0 0 0 0 Between 2-5 years USD 1000 After 5 years USD 1000 Total USD 1000 Of which fixed-rate USD 1000

70

Financial statements

The groups and parent companys interest-bearing financial assets and liabilities expose them to interest rate risks. In respect of the groups and parent companys financial assets and liabilities, the following contractual dates of reassessment and maturity, whichever is earlier, are listed below. Liquidity risks It is group policy in connection with borrowing, etc to ensure the greatest possible flexibility through a diversifica-

tion strategy whereby borrowings are spread across dates of maturity and renegotiation, including spread across fixed loans and overdraftstyle facilities. The group aims at having sufficient cash resources to enable it always to make appropriate arrangements in the event of unforeseen fluctuations in cash outflows. Cash resources are monitored on a current basis. Group and parent company cash resources consist of cash and undrawn borrowing facilities.

Parent company 2008 2009 USD 1000 USD 1000 Cash resources consist of the following: 7,472 7,345 14,817 71 0 71 Cash Undrawn borrowing facilities

group 2009 2008 USD 1000 USD 1000 2,625 0 2,625 12,118 7,345 19,463

Maturities of financial liabilities are specified in the notes. Group and parent company cash resources consist of cash and undrawn borrowing facilities. Maturities of financial liabilities are specified below, divided into the time intervals used in the groups liquidity management. The specified amounts represent the amounts falling due, including future interest, calculated at the interest rate ruling at the balance sheet date. Credit risks It is group policy to cooperate with recognised pool partners and business partners on management of the groups earning conditions and the operation of vessels so as to minimise credit risks. The groups credit risk relates to receivables from pool arrangements contracted with recognised business partners. Consequently, this credit risk is deemed to be absolutely minimal and so receivables are not hedged. The groups maximum credit risk associated with receivables corresponds to their carrying amounts.

Optimisation of capital structure The Companys management currently assesses whether the capital structure of the group complies with company and shareholder interests. The overall goal is to ensure a capital structure which supports long-term growth and at the same time maximises yield by optimising the balance between equity and debt, taking into due consideration any obligations to lenders. The groups capital structure is composed of finance loans and equity. Consolidated equity accounted for 9.3% (31 December 2008: 46.9%) of the balance sheet total. The actual return on consolidated equity amounted to -139.2% in 2009 (2008: 4.0%). The prospectus for the IPO in 2007 stated that Nordic Tankers did not expect to distribute dividend for the first 2-3 years. The company would instead pursue an active investment policy. This strategy has been retained. Breach of loan agreement terms The group has not neglected or breached any loan agreement terms in the financial year or the comparative year.

Financial statements

71

Witin 6 months USD 1000 2009 Non-derivative financial liabilities Finance loans Trade payables Other payables Derivative financial instruments Derivative financial instruments used to hedge future cash flows -2,663 -12,575 2008 Non-derivative financial liabilities Finance loans Trade payables Other payables Derivative financial instruments Derivative financial instruments used to hedge future cash flows -1,515 -13,319 -5,374 -3,083 -3,347 -11,804 -3,748 -4,658 -1,506 -9,912

Between 6 and 12 months USD 1000

Between 1 and 5 years USD 1000

After 5 years USD 1000

Total USD 1000

-3,749 0 0 -3,749 -1,373 -5,122

-87,640 0 0 -87,640 -3,725 -91,365

-138,736 0 -1,393 -140,129 0 -140,129

-233,873 -4,658 -2,899 -241,430 -7,761 -249,191

-5,374 0 -3,509 -8,883 -1,915 -10,798

-38,367 0 0 -38,367 -1,811 -40,178

-88,265 0 0 -88,265 0 -88,265

-137,380 -3,083 -6,856 -147,319 -5,241 -152,560

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Financial statements

28 Related parties

Related parties with a controlling interest There are no related parties with a controlling interest in Nordic Tankers A/S. Board of Directors and Executive Board Nordic Tankers A/S groups related parties with a controlling interest include the members of the Board of Directors and the Executive Board of the company as well as their related family members. Moreover, companies in which the above-mentioned persons hold significant interests are also considered related parties. For further information, please see note 4 concerning remuneration for the Board of Directors and the Executive Board. The company has engaged in transactions with members of the Board of Directors and companies controlled by members of the Board of Directors in the form of consulting services, which may be shown separately as follows: Financial year 2008 In 2008, former member of the Board of Directors of Nordic Tankers A/S Kurt Bjrndal provided communications consultancy services to Nordic Tankers through the company B&G Kommunikation A/S (B&G Kommunikation). Kurt Bjrndal resigned from the Board of Directors on 23 April 2008. B&Gs fees amounted to DKK 214 thousand in 2008. The law firm Bang & Regnarsen represented by former member of the Board of Directors Mads Roikjer received legal fees in the amount of DKK 1,572 thousand in 2008. In 2008, former member of the Board of Directors Jesper Bo Nielsen received fees in the amount of USD 1,200 thousand via his company Nitasco ApS. In connection with the payment of the fee, Nitasco Aps claimed compensation for an exchange loss of DKK 831 thousand. The existing management of the company contests the claim. In 2008, the former management signed on behalf of Nordic Tankers A/S a transfer agreement with Bryde Grup-

pen ApS represented by the former member of the Board of Directors Steen Bryde on occupation of the premises at Lautrupsgade 7, 6th floor (including deposit and rent due) together with IT equipment and furniture for a total of DKK 2,870 thousand. The claim has not been paid as the existing management contests the claim and considers the agreement void. Financial year 2009 In January 2009, the former management, which resigned on 2 February 2009, signed on behalf of Nordic Tankers A/S the following agreements and contracts which the existing management considers void and therefore contests: Executive service agreement with former CEO and member of the Board of Directors Steen Bryde, who has advanced a claim for DKK 6,340 thousand. Employment contract for the position of CFO with the former member of the Board of Directors Brian Petersen, who has advanced a claim for DKK 2,014 thousand. Consignment agreement on the sale of vessels with Nitasco ApS and Nitasco Maritime ApS represented by former member of the Board of Directors Jesper Bo Nielsen involving an up-front fee of USD 1,000 thousand and a monthly fee for 30 months of DKK 200 thousand. In January 2009, Nitasco ApS represented by former member of the Board of Directors Jesper Bo Nielsen also advanced a claim for an additional consulting fee of DKK 2,300 thousand in connection with the sale of Nordic Lisbeth in 2008. Moreover, the following related party transactions occurred in 2009: Member of the Board of Directors Sven Rosenmeyer Paulsen received a fee of DKK 80 thousand for legal services.

holdings of shares by members who were serving on the Board of Directors and the Executive Board at 31 December 2009: Name Mogens Buschard Sven Rosenmeyer Paulsen Jens Fehrn-Christensen Jesper Tullin Flemming Krusell Srensen Claus Breitenbauch Jens Pontoppidan Nominal holding 4,142,000 0 0 750,000 47,980 127,000 0 holding (%) 5.77% 0.00% 0.00% 1.04% 0.07% 0.18% 0.00% holding (shares) 414,200 0 0 75,000 4,798 12,700 0

Financial statements

73

Other related parties Other related parties with whom Nordic Tankers A/S has had transactions: Subsidiaries, cf. list in note 13. Jointly controlled entities, cf. list in note 14. Transactions with subsidiaries: No dividends in 2008 and 2009. Loans to subsidiaries of USD 6,747 thousand at 31 December 2008 and USD 5,954 thousand at 31 December 2009. Transactions with jointly controlled entities: Loans to jointly controlled entities of USD 6,307 thousand in 2009, which were written down to zero on 31 December 2009. Guarantees to lenders loaning money to jointly controlled entities, cf. note 26.

29 Shareholder relations
Nordic Tankers A/S has registered the following shareholders with more than 5% of the voting rights or nominal value of the share capital: Clipper: 3,894,932 shares (31% exclusive of treasury shares) reported on 7 January 2010. Following the transaction with Clipper, Mogens Buschard is no longer a major shareholder holding more than 5% of the voting rights.

30 Events occurring after the balance sheet date

After the close of the financial year, Nordic Tankers A/S has completed transactions with Clipper, cf. note 25, Acquisition of enterprises in 2010. No other significant events have occurred after the balance sheet date.

74

Financial statements

Definitions and calculation formulas Unless otherwise stated, key figures and ratios have been calculated in accordance with the standards laid down by the Danish Society of Financial Analysts in Recommendations & Financial Ratios 2005.

Gross margin (%)

Gross profit * 100 Revenue Operating profit * 100 Revenue Equity * 100 Balance sheet total EBIT * 100 Average invested capital Profit * 100 Average equity of parent company Total asssets Total equity Net interest-bearing debt Total equity Invested capital Total equity Revenue Average invested capital Average net working capital (NWC) Revenue

Operating margin (%)

Equity ratio (%)

Return on invested capital (%)

Return on equity (%)

Assets/equity

Financial gearing

Operating asset gearing

Revenue/ invested capital

Net working capital/revenue

Cash earnings are defined as results for the year distributed to the shareholders of the parent company plus the share of amortisation, depreciation and impairment losses attributable to the parent companys ownership interest. Net interest-bearing debt is defined as the sum of finance loans less cash and cash equivalents. Invested capital is defined as net working capital (NWC) plus property, plant and equipment and intangibles and less other provisions and other non-current operating liabilities.

The equity ratio is defined as equity divided by total assets. This financial ratio is not defined in the Danish Society of Financial Analysts guidelines Recommendations & Financial Ratios 2005. Net working capital (NWC) is defined as inventories, receivables and other current operating assets less trade payables and other liabilities other than provisions as well as other current operating liabilities.

Financial statements

75

Fleet list
year of construction 2009 Vessel size dwt. 73,000 Sale / acquisition Ordered 2006

Vessel Product tanker LR1 Nordic Anne

holding 100%

Company Nordic Tankers A/S

Product tanker handy-size Nordic Ruth Nordic Pia Nordic Hanne Nordic Agnetha Amy Chemical tanker Nordic Copenhagen Nordic Oslo Nordic Stockholm Nordic Helsinki 2005 2005 2007 2007 12,959 12,075 12,800 13,000 100% 100% 100% 100% Nordic Copenhagen Shipping Nordic Oslo Shipping Nordic Tankers A/S Nordic Tankers A/S Acq. 50% 29/6-07 Acq. 50% 2/7-07 Acquired 15/8-07 Acquired 15/8-07 2000 2006 2007 2009 2009 35,820 38,500 38,500 37,400 37,400 75,01% 75,01% 100% 50,01% 50,01% Nordic Seaarland Nordic Seaarland Nordic Seaarland Nordic Seaarland Nordic Seaarland Acquired 2006 Acquired 2006 Acquired 2008 Ordered 2006 Ordered 2006

Vessel Product tanker LR1 Nordic Anne Product tanker handy-size Nordic Ruth Nordic Pia Nordic Hanne Nordic Agnetha Amy Chemical tanker Nordic Copenhagen Nordic Oslo Nordic Stockholm Nordic Helsinki

Partner

Pool Torm Pool

Pool manager Torm LR1

Technical manager EMS Ship Management

Zacchello Group Zacchello Group Zacchello Group Zacchello Group Zacchello Group

Handytankers Handytankers Handytankers Exp. Maersk Pool Exp. Maersk Pool

Maersk Tankers Maersk Tankers Maersk Tankers Maersk Tankers Maersk Tankers

Seaarland Shipping Management Seaarland Shipping Management Seaarland Shipping Management

Eitzen Chemical Eitzen Chemical

Eitzen City Class Pool Eitzen City Class Pool Eitzen City Class Pool Eitzen City Class Pool

Eitzen Chemical Eitzen Chemical Eitzen Chemical Eitzen Chemical

EMS Ship Management EMS Ship Management EMS Ship Management EMS Ship Management

76

Financial statements

Photographer: Eberhard Petzold. Photographer board: Erik Brahl. Graphic production: Rounborgs grafiske hus, Holstebro

Nordic TaNkers
Nordic Tankers A/S Harbour House Sundkrogsgade 21 DK-2100 Copenhagen Denmark Phone +45 3910 9000 Fax +45 3910 9001 www.nordictankers.com