Management Committee's Financial Report 2006

The International Association of Independent Tanker Owners (INTERTANKO) is a non-profit organisation whose aims are to further the interests of independent tanker owners; to promote a free and competitive tanker market; to work for safety at sea and the protection of the marine environment.

INTERTANKO has four offices located in Oslo, London, Singapore and Arlington (USA).

In accordance with the Norwegian Accounting Act para. 3-3 we confirm that the financial statements have been prepared on the assumption of going concern.

INTERTANKO is not subject to any specific factors influencing its business beyond what is normal for an association. Income is influenced by general economic conditions, by the number of members (and the size of their fleets) and by the number of associate members. INTERTANKO currently has 260 members (2650 tankers, 220M DWT) and over 300 associate members. Expense levels are particularly influenced by manning levels and exposure to currency fluctuations between the main income currency (USD) and expense currencies.

INTERTANKO’s total operating income rose by approximately 8% in 2006. Membership and associate membership fee income both show encouraging growth in 2006, even when adjusted for fee rate increases, and bear witness to a positive increase in the number of members and associate members and registered fleet. Although lower than in 2005, the surplus for year is considered reasonable and offers the opportunity to make a measured improvement to INTERTANKO’s Capital Fund.

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.

INTERTANKO has incorporated the aim of avoiding gender discrimination in its policies. The company has 25 employees, of which 8 are women. The Executive Committee consists of 15 men and 0 women.

Illness related absence totalled 108 days, which constitutes approximately 2 % of total hours worked during the year. Absence during the year is comparable to last year.

Operations do not result in pollution or spillage harmful to the external environment.

It is the Management Committee’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 Committee recommends that the surplus of USD 438 469 for 2006 be transferred to the Capital Fund, which at the end of the year stands at USD 1 898 994.

Mr. S. Van Dyck, (Chairman), Maritrans Inc

Mr. P. Decavele, (Vice-Chairman), Broström Tankers SAS

Mr. N. G. Fistes, Euronav NV

Peter Swift Managing Director INTERTANKO

Oslo, 21 March, 2007

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INTERTANKO Profit and Loss Account for the Year Ending 31 December, 2006

Expressed in USD

	2006		2005	Note
				1
I N C O M E
Membership Fees	4 849 500		3 984 516
Associate Membership Fees	856 758		735 318
Surcharge	0		448 045
Membership FDIP	137 600		143 999
Service Charge	300 560		285 353	2
Publications	376 874		472 016
Advertising	102 151		118 881
INTERTANKO Courses	2 662		1 898
Tanker Events- Income	487 000		388 372
Total Operating Income	7 113 105		6 578 398
E X P E N S E S
Salaries & Benefits	2 862 549		2 620 704	2, 3
Social Security / Pensions	864 551		829 663	3
Meetings	198 469		179 153
Tanker Events- Expenses	370 974		298 389
Travel	679 930		446 828
Regional Representation	102 846		87 433
Consultancy	491 837		516 772	4
Litigation	83 568		16 901	4
Representation U.S. Legislation	0		15 667
Public Relations	30 635		12 070
Projects / Research	96 123		56 641
Subscriptions	41 521		44 231
Printing	68 095		81 562
Post / Telephone	155 274		165 086
Office Expense / Rent	723 052		702 567
Depreciation	41 893		41 893
Total Operating Expenses	-6 811 317		-6 115 560
Operating Surpuls	301 788		462 838
Interest Income	104 100		41 821
Exchange Gains	65 338		112 717
Sum Non-Operating Income	169 438		154 538
Interest Expenses / Bank Charges	32 757		34 335
Sum Non-Operating Income	-32 757		-34 335
Surplus for the Year	438 469		583 041

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INTERTANKO Balance Sheet as of 31 December, 2006

Expressed in USD

	2006		2005	Note
A S S E T S
Fixed Assets
Office Furniture & Data Equipment	138 218		180 111	5
Total Fixed Assets	138 218		180 111
Long-term Investments
Long-term Mortgage Loans to Employees	2 323		2 506	6
Total Long-term Investments	2 323		2 506
Current Assets
Other Short-term Receivables	482 799		313 511
Accounts Receivable	192 736		194 791
Cash and Bank	1 807 506		1 587 967	7
Total Current Assets	2 483 041		2 096 269
TOTAL ASSETS	2 623 582		2 278 886
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.--	1 460 525		887 484
Surplus/Deficit for the Year	438 469		583 041
Capital Fund 31.12.--	1 898 994		1 460 525
Current Liabilities
Accounts Payable	99 223		22 295
Withheld Taxes, Social Security & Holiday Pay	238 827		185 143
Accrued Expenses & Deferred Income	386 538		610 923
Total Current Liabilities	724 588		818 361
TOTAL LIABILITIES AND CAPITAL	2 623 582		2 278 886

Mr. S. Van Dyck, (Chairman), Maritrans Inc

Mr. P. Decavele, (Vice-Chairman), Broström Tankers SAS

Mr. N. G. Fistes, Euronav NV

Peter Swift Managing Director INTERTANKO

Oslo, 21 March, 2007

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Notes to the Financial Statements for the year ended December 31, 2006

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, 2006 have been translated at the year-end exchange rate: for 2006 USD 1=NOK 6.24319 (2005 USD 1=NOK 6.78471).
Fixed assets, expressed in USD, are valued at cost and depreciated over their economic life. Membership fees, Associate Membership fees, Surcharge and Membership FDIP income are invoiced for the calendar year and recognised upon receipt of payment. All other income classes are recognised upon delivery of services.

2. Service Charge
Accounting practice relating to the treatment of Service Charge has been changed in 2006. Elements of Service Charge which relate to direct reimbursement of expenses incurred by INTERTANKO on behalf of INTERCARGO are no longer treated as service charge income. For the purposes of comparison, the 2005 profit & loss account has been adjusted to reflect this change.

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

Salaries:	USD	2 689 309
Other benefits:	USD	173 240
Pension premiums:	USD	354 251
Social security:	USD	510 300

4. Litigation
Accounting practice relating to the treatment of Litigation has been changed in 2006. Expenses relating to litigation in law cases now appear as a distinct expense item and are no longer classified as consultancy expenses. For the purposes of comparison, the 2005 profit & loss account has been adjusted to reflect this change.

5. Fixed Assets
Changes in the balance of fixed assets for 2006 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	238 455
Depreciation for the year:	USD	41 893
Depreciation on sold / scrapped assets:	USD
Accumulated depreciation at 31 Dec:	USD	280 348
Closing balance at book value:	USD	138 218

6. Long-term Mortgage Loans to Employees
This represents a loan to one employee, which is secured by a mortgage on the property.

7. Cash and Bank
Included in cash and bank balances at 31 December, 2006 is a restricted bank account for withheld taxes amounting to USD 73 680.

8. 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, 2006 the pension scheme covered 13 employees with an average of 18 years remaining until retirement. The pension insurance scheme meets the requirements of the Norwegian obligatory service pension (obligatorisk tjenestepensjon, OTP). The following transactions on the pension premium fund were noted during 2006 (in Norwegian kroner):

Opening balance 01 Jan:	NOK	1 869 102
Premiums for the year:	NOK	-1 534 060
Payments to the premium fund:	NOK	1 111 011
Interest & dividends:	NOK	454 269
Closing balance 31 Dec:	NOK	1 900 322

9. Number of Employees and Remuneration / Allowances to Managing Director and Executive Committee.
Average number of employees during 2006 was 25, representing 25 man-years. Remuneration / Allowances to Managing Director:

Salary:	USD	212 613
Pension:	USD	199 576
Bonus:	USD	51 945
Sum:	USD	464 134

The Managing Director has no financial agreement relating to termination of employment contract. INTERTANKO’s Executive Committee members receive no remuneration for their work for INTERTANKO. Travel expenses relating to INTERTANKO activity are reimbursed in accordance with agreed policy for reimbursement of such travel expenses.

10. Auditor’s Remuneration
The auditor’s remuneration for 2006 was USD 13 794 (NOK 86 118) excl VAT (MVA). No additional assistance was provided by the audit company during 2006.

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INTERTANKO Cash Flow Statement

Expressed in USD

	2006		2005
Surplus for the Year	438 469		583 041
Depreciation for the Year	41 893		41 893
Change in Current Receivables	-167 233		-99 227
Change in Current Liabilities	-93 773		125 008
Net Cash From Operating Activities	219 356		650 715
Change in Long-term Inv./Fixed Assets	183		855
Net Cash From Investing Activities	183		855
Net Change in Liquid Assets	219 539		651 570
Cash & Bank at 01.01.--	1 587 967		936 397
Cash & bank at 31.12.--	1 807 506		1 587 967

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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 2006 was significantly higher than for 2005 (up USD 534 707) although USD 113 605 under budget. However, the latter is primarily the result of the change in accounting practice relating to Service Charge (see Note 2 of the notes to the financial statements). The most significant changes in income were as follows:

• Membership and associate membership fees. Fee income increased by 22% and 17% respectively. Fee rate increases from 2005 to 2006 were 10%.

• Publication sales fell 20%, but this was in line with expectations. 2005 publication sales were exceptionally high.

Tanker event income in 2006 was considerably higher than in 2005 (up USD 98 628, 25%), with tanker event expenses following a similar pattern and rising 24% (up USD 72 585). The resulting USD 116 026 surplus on tanker event activities was greater than 2005’s surplus of USD 89 983 and better than the budgeted surplus for 2006 of USD 18 000.

Total operating expenses for 2006 were USD 695 757 higher than those of the previous year although USD 371 863 under budget. The most significant changes in expenses compared with 2005 were the following:

• Salaries & Benefits. Up 9%. Much of the increase compared to 2005 relates to a salary increase for the MD agreed in 2004 but voluntarily deferred without retroactivity until 2006 and bonuses to all staff. The general level of salary increases for 2006 was 2%.

• Travel. Up USD 233 102 (52%). A reflection of high activity during 2006, but also the result of an expanded Executive Committee meeting more frequently as well as a wish to have a minimum of two secretariat staff members at Panel and Committee meetings.

• Projects / Research. Up USD 39 482 (70%). In great part due to a software platform upgrade for INTERTANKO’s website.

Non-operating items for 2006 were generally in line with 2005 levels, with the exception of interest income (up USD 62 279) principally due to increasing US interest rates and exchange gains (down USD 47 379).

For 2006 INTERTANKO’s operating surplus was USD 301 788 and the overall surplus for the year USD 438 469.

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INTERTANKO Actual & Budget for 2006

Expressed in USD

	2006	2006	Discre-
	Actual	Budget	pancy
I N C O M E
Membership Fees	4 849 500	4 928 000	-78 500
Associate Membership Fees	856 758	872 670	-15 912
Surcharge	0	0	0
Membership FDIP	137 600	145 600	-8 000
Service Charge	300 560	494 440	-193 880
Publications	376 874	180 000	196 874
Advertising	102 151	110 000	-7 849
INTERTANKO Courses	2 662	3 000	-338
Tanker Events- Income	487 000	493 000	-6 000
Total Operating Income	7 113 105	7 226 710	-113 605
E X P E N S E S
Salaries & Benefits	2 862 549	3 326 046	463 497
Social Security / Pensions	864 551	827 942	-36 609
Meetings	198 469	153 275	-45 194
Tanker Events- Expenses	370 974	475 000	104 026
Travel	679 930	545 500	-134 430
Regional Representation	102 846	124 000	21 154
Consultancy	491 837	470 737	-21 100
Litigation	83 568	40 000	-43 568
Representation U.S. Legislation	0	10 000	10 000
Public Relations	30 635	5 000	-25 635
Projects / Research	96 123	163 650	67 527
Subscriptions	41 521	33 600	-7 921
Printing	68 095	55 000	-13 095
Post / Telephone	155 274	171 000	15 726
Office Expense / Rent	723 052	732 430	9 378
Total Operating Expenses	-6 811 317	-7 183 180	371 863
Operating Surplus	301 788	43 530	258 258
Interest Income	104 100	30 000	74 100
Exchange Gains	65 338	0	65 338
Sum Non-Operating Income	169 438	30 000	139 438
Interest Expenses / Bank Charges	32 757	30 000	-2 757
Sum Non-Operating Expenses	-32 757	-30 000	-2 757
Surplus for the Year	438 469	43 530	394 939