Managing Director's Financial Report 2005

INTERTANKO’s financial statements are presented on the basis of continuing business. The Secretariat’s personnel have not been subject to any mishaps or accidents in their working environment during the year. Health and safety policies and procedures are subject to regular review. The working environments in the respective offices are considered to be good.

It is the Management’s opinion that the financial statement, as presented, provides adequate information to assess the Association’s financial situation and the result for the year. Nothing has happened after the year-end which would materially effect the Association’s financial situation or the result for the year.

INTERTANKO’s Management has recommended that the surplus of USD 583 041 for 2005 be transferred to the Capital Fund, which at the end of the year stands at USD 1 460 525.

Peter Swift
Managing Director
27 February, 2006

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INTERTANKO Profit and Loss Account for the Year Ending 31 December 2005

Expressed in USD

	2005		2004	Note
I N C O M E
Membership Fees	3 894 516		3 694 522
Associate Membership Fees	735 318		666 591
Surcharge	448 045		0
Membership FDIP	143 999		152 000
Service Charge	476 321		330 925
Publications	472 016		408 477
Advertising	118 881		102 993
INTERTANKO Courses	1 898		2 234
Tanker Events- Income	388 372		274 348
Total Operating Income	6 769 366		5 632 090
E X P E N S E S
Salaries & Benefits	2 811 672		2 532 710	2
Social Security / Pensions	829 663		716 178
Meetings	179 153		141 520
Tanker Events- Expenses	298 389		329 453
Travels	446 828		377 355
Regional Representation	87 433		92 320
Consultancy	533 673		636 999
Representation U.S. Legislation	15 667		42 330
Public Relations	12 070		12 131
Projects / Research	56 641		38 185
Subscriptions	44 231		26 628
Printing	81 562		98 378
Post / Telephone	165 086		195 426
Office Expense / Rent	702 567		643 736
Total Operating Expenses	-6 264 635		-5 883 348
Operating Surpuls / Deficit	504 731		-251 258
Interest Income	41 821		8 279
Exchange Gains	112 717		10 754
Sum Non-Operating Income	154 538		19 033
Interest Expenses / Bank Charges	34 335		33 279
Depreciation	41 893		45 622
Sum Interest Exp. & Depreciation	-76 228		-78 901
Surplus / Deficit before Extraordinary Items	583 041		-311 126
Extraordinary Items	0		-149 196
Surplus / Deficit for the Year	583 041		-460 322

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INTERTANKO Balance Sheet as of 31 December 2005

Expressed in USD

	2005		2004	Note
A S S E T S
Fixed Assets
Office Furniture & Data Equipment	180 111		222 004	3
Total Fixed Assets	180 111		222 004
Long-term Investments
Long-term Mortgage Loans to Employees	2 506		3 362	4
Total Long-term Investments	2 506		3 362
Current Assets
Other Short-term Receivables	313 512		360 976
Accounts Receivable	194 791		48 100
Cash and Bank	1 587 966		936 395	5
Total Current Assets	2 096 269		1 345 472
TOTAL ASSETS	2 278 886		1 570 837
L I A B I L I T I E S  A N D  C A P I T A L
Capital
Capital Fund 01.01.--	887 484		1 337 806
Surplus/Deficit for the Year	583 041		-460 322
Capital Fund 31.12.--	1 460 525		877 484
Current Liabilities
Accounts Payable	22 295		67 834
Withheld Taxes, Social Security & Holiday Pay	185 143		227 152
Accrued Expenses & Deferred Income	610 923		398 367
Total Current Liabilities	818 361		693 353
TOTAL LIABILITIES AND CAPITAL	2 278 886		1 570 837
Oslo, 27 February, 2006

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Notes to the Financial Statements for the year ended December 31, 2005

1. Accounting Principles

The financial statements are prepared in accordance with the Norwegian Accounting Act and generally accepted accounting principles.

Assets and liabilities in Norwegian kroner at 31 December, 2005 have been translated at the year-end exchange rate: for 2005 USD 1=NOK 6.78471 (2004 USD 1=NOK 6.0386).

Fixed assets, expressed in USD, are valued at cost and depreciated over their economic life.

  2. Salaries & Social Security/Pensions

Salaries & Social Security/Pensions expenses are made up of the following amounts:

Salaries:	USD	2 743 170
Other benefits:	USD	68 502
Pension premiums:	USD	449 150
Social security:	USD	380 513

  3. Fixed Assets

Changes in the balance of fixed assets for 2005 were as follows:

Acquisition cost at 01 Jan:	USD	418 566
Purchases during the year:	USD	0
Sales/scrapping during the year:	USD	0
Acquisition cost at 31 Dec:	USD	418 566
Accumulated depreciation at 01 Jan:	USD	196 562
Depreciation for the year:	USD	41 893
Depreciation on sold/scrapped assets:	USD	0
Accumulated depreciation at 31 Dec:	USD	238 455
Closing balance at book value:	USD	180 111

  4. Long-term Mortgage Loans to Employees

This represents a loan to 1 employee, which is secured by a mortgage on the property.

  5. Cash and Bank

Included in cash and bank balances at 31 December, 2005 is a restricted bank account for withheld taxes amounting to USD 49 073.

6. Pension Premium Fund

INTERTANKO’s Oslo-based employees are covered by a pension insurance scheme, which gives them the right to defined pension rights in the future. The pension right is mainly dependent on the number of earned years and the salary level at the time of reaching pension age, which is 67 in Norway. The pension scheme is organised and managed by a local insurance company. At 31 December, 2005 the pension scheme covered 13 employees with an average of 18 years remaining until retirement.

The following transactions on the pension premium fund were noted during 2005 (in Norwegian kroner):

Opening balance 01 Jan:	NOK	1 879 786
Adjustments relating to earlier years:	NOK	-81 630
Premiums for the year:	NOK	-1 362 651
Payments to the premium fund:	NOK	-1 362 651
Interest & dividends:	NOK	70 946
Closing balance 31 Dec:	NOK	1 869 102

7. Number of Employees and Remuneration/Allowances to Managing Director

Average number of employees during 2005 was 25.

Remuneration/Allowances to Managing Director:

Salary:	USD	162 882
Pension:	USD	65 116
Bonus:	USD	30 000
Sum:		257 998

8. Auditor’s Remuneration

The auditor’s remuneration for 2005 was USD 7 908 (NOK 53 651). No additional assistance was provided by the audit company during 2005.

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INTERTANKO Cash Flow Statement

Expressed in USD

	2005		2004
Surplus/Deficit for the Year	583 041		-460 322
Depreciation for the Year	41 893		45 622
Change in Current Receivables	-99 227		-197 171
Change in Current Liabilities	125 008		295 662
Net Cash From Operating Activities	650 715		-316 209
Change in Long-term Inv./Fixed Assets	855		-2 528
Net Cash From Investing Activities	855		-2 528
Net Change in Liquid Assets	651 570		-318 737
Cash & Bank at 01.01.--	936 396		1 255 133
Cash & bank at 31.12.--	1 587 966		936 396

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Auditor’s Report

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Comments to INTERTANKO’s Financial Result for the Year Ending 31 December, 2005

Total operating income for 2005 was substantially higher than for 2004 (up USD 1 137 276) and USD 716 274 over budget. This was principally due to the 10% surcharge applied to 2005 membership and associate membership fees. However, operating income (compared with 2004) rose also in part due to the following:

• Membership and associate membership fees. Fee income increased by 8% and 10% respectively. Fee rate increases from 2004 to 2005 were 5%.

• Service charges paid by INTERCARGO to INTERTANKO to cover its part of expenses resulting from the operation of the joint secretariat.

• Continued high publication sales. Up USD 63 539 compared with 2004.

Tanker event income in 2005 was considerably higher than in 2004 (up 41% to USD 114 024), while tanker event expenses were somewhat lower (down USD 31 604). The resulting USD 89 983 surplus on tanker event activities was a significant improvement on 2004’s deficit of USD 55 105 and better than the budgeted surplus for 2005 of USD 20 000.

Total operating expenses for 2005 were USD 381 287 higher than those of the previous year and USD 262 904 over budget. The most significant changes in expenses, compared with 2004 were the following:

• Salaries & Benefits. Up 11% (5% over budget). Much of the increase compared to 2004 relates to INTERCARGO payroll expenses (recouped through the higher Service Charge). The remainder (overrun compared to budget) is due to performance bonuses paid to staff. The general level of salary increases for 2005 was 2%.

• Travels. Up USD 69 474 (18%). A reflection of high activity during 2005. Travel expenses were however USD 23 672 lower than budgeted.

• Consultancy. Down USD 103 326 (16%) owing to the termination of a retainer agreement.

Non-operating items for 2005 were generally in line with 2004 levels, with the exception of extraordinary items (USD 0 for 2005) and exchange gains, which were significantly higher.

For 2005 INTERTANKO’s operating surplus was USD 504 731 and the overall surplus for the year USD 583 041.

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INTERTANKO Actual & Budget for 2004

Expressed in USD

	2005	2005	Discre-
	Actual	Budget	pancy
I N C O M E
Membership Fees	3 984 516	3 967 781	16 735
Associate Membership Fees	735 318	751 933	-16 615
Surcharge	448 045	0	448 045
Membership FDIP	143 999	150 400	-6 401
Service Charge	476 321	484 578	-8 257
Publications	472 016	265 400	206 616
Advertising	118 881	100 000	18 881
INTERTANKO Courses	1 898	3 000	-1 102
Tanker Events- Income	388 372	330 000	-58 372
Total Operating Income	6 769 366	6 053 092	716 274
E X P E N S E S
Salaries & Benefits	2 811 672	2 677 618	-134 054
Social Security / Pensions	829 663	697 089	-132 574
Meetings	179 153	153 275	-25 878
Tanker Events- Expenses	298 389	310 000	11 611
Travels	446 828	470 500	23 672
Regional Representation	87 433	104 000	16 567
Consultancy	533 673	497 333	-36 340
Representation U.S. Legislation	15 667	10 000	-5 667
Public Relations	12 070	5 000	-7 070
Projects / Research	56 641	83 650	27 009
Subscriptions	44 231	30 900	-13 331
Printing	81 562	74 500	-7 062
Post / Telephone	165 086	169 500	4 414
Office Expense / Rent	702 567	718 366	15 799
Total Operating Expenses	-6 264 635	-6 001 731	-262 904
Operating Surplus	504 731	51 361	453 370
Interest Income	41 821	30 000	11 821
Exchange Gains	112 717	100 000	12 171
Sum Non-Operating Income	154 538	130 000	24 538
Interest Expenses / Bank Charges	34 335	30 000	-4 335
Depreciation	41 893	50 000	8 107
Sum Interest Exp. & Depreciation	-76 228	-80 000	3 772
Surplus before Extraordinary Items	583 041	101 361	481 680
Extraordinary Items	0	0	0
Surplus for the Year	583 041	101 361	481 680