history of thoresen · 2009. 1. 7. · thoresen thai agencies public company limited 3 the...

Established in Hong Kong in 1904 Thoresen initially provided shipping services to Norwegian companieson the coast of China and Asian businesses trading between China and Siam. Having expandedconsiderably throughout the years Thoresen is proud of its Asian heritage and its leading positionin the shipping sector in the region.

Thoresen’s first physical presence in Thailand was in 1926 and a branch office was opened in1937. This office was established to act as ship agents and correspondents for marine insurancecompanies. It is said that large oak trees grow from little acorns and as Thoresen’s transportationservices expanded in the Asia-Pacific region, so grew its Bangkok office which became everbusier, culminating in the establishing of an independent company, namely Thoresen & Co.,(Bangkok) Ltd. Since its establishment in 1974, this company has evolved into Thoresen ThaiAgencies Public Company Limited, the holding company for all Thoresen Group companies inThailand and has become a listed company on the Stock Exchange of Thailand in 1995.

The Thoresen Group is today one of the leading shipping groups in Thailand, owning and operatinga total of 43 dry cargo vessels and providing a wide range of shipping related services, includingship agencies, stevedoring, port operations, ship brokerage, ship repairs, various offshore relatedactivities, and marine communication.

HISTORY OF THORESEN

AS OF 30 SEPTEMBER 2004

Name of Company • Thoresen Thai Agencies Public Company Limited

Registration No. • Bor Mor Jor 520

Date of Establishment • 16 August 1983

Date of Conversion to

Public Company Limited • 15 December 1994

Date of Being Listed in SET • 25 September 1995

Address • 26/26-27 Orakarn Building, 8th Floor,Soi Chidlom, Ploenchit Road,Kwaeng Lumpinee, Pathumwan, Bangkok 10330Thailand

Type of Business • Shipping OperationsShipping Services

Registered Capital • Baht 770,000,000

Paid up Capital • Baht 639,567,720(as of 31 December 2004 - Baht 643,684,422)

No. of Issued Shares • 639,567,720 ordinary shares(as of 31 December 2004 - 643,684,422 shares)

Par Value/ Share • Baht 1

Securities Registrar • Thailand Securities Depository Co.,Ltd.The Stock Exchange of Thailand Building,62 Ratchadapisek Road, Kwaeng Klongtoey,Khet Klongtoey, Bangkok 10110 ThailandTelephone : +66 (0) 2229-2800, +66 (0) 2654-5599

Auditor • Mrs. Anothai LeekitwattanaCertified Public Accountant (Thailand) No. 3442PricewaterhouseCoopers ABAS Limited15th Floor, Bangkok City Tower,179/74-80 South Sathorn Road, Bangkok 10120ThailandTelephone : +66 (0) 2344-1000

Legal Advisor • Tilleke & Gibbins International Ltd.64/1 Soi Ton-Son, Ploenchit Road,Bangkok 10330 ThailandTelephone : +66 (0) 2254-2640

THE COMPANY

Thoresen Thai AgenciesPublic Company Limited

1

Financial Highlights .......................................................................................................... 2

Message from the Chairman ............................................................................................. 3

Audit Committee Report ................................................................................................... 4

Board of Directors ............................................................................................................ 5

Organisation Chart ............................................................................................................ 6

Nature of Business ........................................................................................................... 7

Market Situation .............................................................................................................. 13

Statement of the Board of Directors’ Responsibilities for the Financial Statements .... 20

Consolidated and Company Financial Statements .......................................................... 21

Income Structure ............................................................................................................. 79

Risk Factors ..................................................................................................................... 79

Management & Shareholders .......................................................................................... 80

Corporate Governance ..................................................................................................... 87

Related Party Transactions .............................................................................................. 90

Internal Control ............................................................................................................... 91

Inside Information Control ............................................................................................. 91

Management Discussion & Analysis .............................................................................. 92

Company Investments .................................................................................................... 94

On the CoverVessel ...........Thor HarmonyDWT ............ 42,978Built ............ 2002

CONTENTS


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FINANCIAL HIGHLIGHTS

ENDED 30 SEPTEMBER (Thousand Baht)

2004 2003 2002

FINANCIAL STATUS

• Total Revenues 10,619,850 5,073,332 3,715,325• Total Expenses 6,293,763 4,070,739 3,302,386• Net Profit (Loss) 4,326,087 1,002,800 410,393

! Gain(Loss) on Exchange Rate (248,795) 224,173 59,994• Total Assets 15,766,991 5,763,588 3,842,879• Total Liabilities 9,071,912 4,072,440 3,166,317• Total Shareholders’ Equity 6,695,078 1,691,149 676,562• Share Capital : Registered 770,000 770,000 770,000

Paid up 639,568 549,183 426,404

OPERATING PERFORMANCE

• Number of Vessels 43 33 25• Average DWT as of 30 September 25,767 22,954 20,516• Vessel Days 14,631 9,923 8,852• TC Rate/Day (USD) 12,581 5,650 4,329• Net Profit (Loss) 4,574,882 778,627 350,399

(Excluding gain/loss on exchange rate)

! Shipping Operations 4,498,783 732,415 265,937! Shipping Services 130,400 116,020 144,921! Holding Activities (54,301) (69,808) (60,459)

(including interest expenses and general administrative expenses)

• Net Cash Flow from Operating Activities 5,195,756 929,877 675,157(After interest payments)

• Average Accounts Payable Period (days) 51 53 59

FINANCIAL RATIO

• Par Value (Baht) 1 1 10• Book Value (Baht) 10.71 3.28 15.74• Number of Shares 639,567,720 549,183,360 42,640,457• Earnings Per Share * 7.32 1.52 8.24• Net Cash Flow Per Share 8.31 0.55 15.87

(from operating activities/after interest payment)

• Dividend Per Share (Baht) 4.50 0.50 2.50• Return on Shareholders’ Equity (%) * 109.10 84.82 73.89• Return on Total Assets (%) * 42.50 20.88 10.09• Net profit Margin (%) * 43.08 16.06 9.43

*Excluding Gain/Loss on Exchange Rate


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The operating performance of Thoresen Thai Agencies Public Company Limited showed a net consolidatedprofit of Baht 4,326.1 million, as compared to a net consolidated profit of Baht 1,002.8 million in the previous year.Excluding exchange gains and losses, resulting from the appreciation or depreciation of the Baht, the Companywould have recorded a net consolidated profit of Baht 4,574.88 million, as compared to a net consolidated profitof Baht 778.6 million in the previous year.

Although the service companies performed well, contributing a net profit of Baht 130.4 million for the period,the improved operating performance was the direct result of a significantly improved freight market, combinedwith the Company having at its disposal a significantly larger, and better equipped, fleet.

The Company’s fleet consisted of 43 vessels as of 30 September 2004, with an average DWT and age of25,767 tons and 18.6 years, as compared to 33 vessels, with an average DWT and age of 22,954 tons and20.0 years, the year before. The Company subsequently took delivery of another four vessels in the first quarterof the 2004/05 financial year, with an average DWT and age of 29,280 tons and 13.5 years.

The total dry bulk trade volume grew an estimated 4.7% in 2004, which, combined with many vessels beingtied up in ports due to port and inland transportation bottlenecks, resulted in vessels being in short supply,despite available supply having increased around 5.1% during the same period, and a sharp rise in freight rates.The growth of the Chinese economy, and its booming steel industry, was clearly the driving force behind suchsolid demand growth, generating well over half of the overall demand growth during the period, despiteconstituting only around 15% of total overall world demand for dry bulk shipping.

In a situation where dry cargo vessels are now in short supply, and with the world dry bulk carrier fleetexpected to increase only 3 to 4% per year, depending on scrapping rates, over the next three years, it would bereasonable to expect that freight rates will remain at high levels in the coming periods, unless the growth ofthe world economy, or the Chinese economy, was to slow significantly.

Although it is our opinion that the outlook for the general bulk dry market is very positive, we have locked ina considerable portion of our fleet on time charters and contracts of affreightments, all at high rates, in orderto improve our earning visibility. As of November 2004, around 55% of available capacity for the 2004/05financial year had already been locked in on time charters and contracts of affreightments. With another 30%of our available capacity having been earmarked for our liner trades, where rates tend to be more stable,when compared to the tramp market, we feel confident that we will record significant increases in thecontributions from shipping operations also in the coming year.

With a solid business foundation accumulated from the past I would like to take this opportunity, on behalf ofthe Board of Directors, to extend my sincere gratitude to shareholders and customers from both the publicand private sectors, for their continued support, and to the staff for their hard work and dedication.

MESSAGE FROM THE CHAIRMAN

(M.R. Chandram S. Chandratat)Chairman


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The Audit Committee of Thoresen Thai Agencies Public Company Limited was appointed by the Board ofDirectors to examine all matters relating to the financial status of the Company, and its internal and external audits.The Committee pursues and promotes good corporate governance by actively creating awareness and providingadvice to management on sound risk management and internal control practices.

The Audit Committee consists of three independent directors as follows:

1. M.R. Chandram S. Chandratat Chairman of the Audit Committee

2. Mr. Sompong Thanasophon Audit Committee Member

3. Vice Admiral Kittichai Senanarong Audit Committee Member

The Audit Committee has major roles and responsibilities as follows:

••••• Review the reliability of financial reports and the transparency and accuracy of the disclosure of connectedtransactions or transactions which may have conflicts of interest.

••••• Review the internal control systems and provide for more effective internal audit systems.

••••• Review the compliance with rules and regulations of the Stock Exchange of Thailand, commitments withother parties, laws and relevant regulations.

••••• Recommend an appropriate external auditor and audit fee to the Board of Directors.

••••• Perform any other duties assigned by the Board of Directors.

During the financial year ended on 30 September 2004, the Audit Committee convened eleven meetings toreview accounting systems, internal control systems and quarterly and annual financial reports before proposingthem to the Board of Directors’ meetings and for public dissemination. The review of all matters is basedon independent consideration by discussion and exchange ideas with external auditors, related managementand internal auditors.

In conclusion, the Audit Committee is of the opinion that the Company’s operations during the previous year hadreasonable and sufficient internal control systems and the financial reports were prepared in accordance withthe generally accepted accounting principles and the Company has complied with relevant laws and regulations.

For the financial year ended on 30 September 2005, the Audit Committee has recommended to the Board ofDirectors that PricewaterhouseCoopers ABAS Limited be re-appointed as the Company’s auditors due tothe fact that its reputation and audit standards are widely acceptable. The appointment of the audit firm wouldbe further proposed to the Shareholders for approval at the Annual Ordinary General Meeting of theShareholders.

AUDIT COMMITTEE REPORT

(M.R. Chandram S. Chandratat)Chairman of the Audit Committee


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BOARD OF DIRECTORS

M.R. Chandram S. ChandratatChairman / Audit Committee Chairman

Mr. Arne TeigenManaging Director

Mr. Sompong ThanasophonDirector / Audit Committee

Vice Admiral Kittichai SenanarongDirector / Audit Committee

Mr. Sathien TejapaibulDirector

Mr. Bjorn OstromDirector

Mr. Pichai ChirungsappasukDirector

Mr. Lance Karl DepewDirector

Mr. Frode TeigenExecutive Director

Mr. Ole TeigenExecutive Director

Mr. Opart PetchmuneeDirector


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Thoresen Thai Agencies Public Company Limited and its subsidiaries are involved in businesses encompassing theentire spectrum of shipping services. The Group’s activities can be separated into two main categories, namelyshipping operations and shipping services.

THORESEN GROUP

Ship Agencies

Stevedoring

Ship Brokerage

Ship Maintenance & Repairs

P & I Club Representation

Port Operations

Liner Services

Tramp Services

Vessel Chartering Services

Offshore Related Services

Marine Communication

SHIPPING SERVICESSHIPPING OPERATIONS

ORGANISATION CHART


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Thoresen Thai Agencies Public Company Limited owns and operates, through separate subsidiary companies,a fleet of 43 general cargo vessels and bulk carriers which, as of 30 September 2004, consisted of thefollowing vessels:

SHIPPING OPERATIONS

The vessels are usually traded until they reach 27 to 32 years of age, and the average age of Thoresen’s fleetcompares against a world average of 23 years for general cargo vessels (10-30,000 DWT) and 20 years forbulk carriers (20-40,000 DWT).

The Company took delivery of four additional general cargo vessels/bulk carriers in the first quarter ofthe 2003/04 financial year, with an average DWT and age of 29,280 and 13.5 years, bringing the fleet up to47 vessels as of 31 December 2004.

Thoresen Fleet as of 30 September 2004

Vessel Average Year of AverageNo Design DWT Built Age

1 SD-14 15,240 Jun-77 27.44 Santa Fe 20,860 Sept-77 27.14 Multi Purpose 17,311 Feb-83 21.77 TD-15A 16,236 Jul-86 18.25 Pasat 19,495 Jul-88 16.2

21 Tween-Deckers 18,050 Mar-84 20.5

5 Wismar (Box) 23,730 Feb-86 18.74 Con-Bulkers (Box) 25,319 Jul-83 21.23 Bulk 34,553 Sept-85 19.14 Bulk (Box) 37,927 Jun-92 12.34 Bulk 42,034 Oct-86 17.92 Bulk (Box) 42,754 Oct-98 5.9

22 Bulk Carriers 33,133 Jan-88 16.7

43 Fleet Average 25,767 Mar-86 18.6

Note : Age calculated as of 30 September 2004

NATURE OF BUSINESS


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SHIPPING OPERATIONS

NATURE OF BUSINESS

Historically, Thoresen has primarily been a liner operator. However, as a result of the rapid growth of our fleetover the last few years, the portion of the fleet utilised in liner trades has, despite having introduced additionalservices, gradually declined and the Company currently utilises around one third of total available DWT capacity(higher portion if measured in number of vessels as the liner trades make more use of the smaller vessels) in suchtrades. Current liner trades includes regular services between S.E. Asia into the Arabian Gulf, Red Sea, and theMediterranean, with a large share of return cargoes being contract based. One of the advantages of liner tradesis that they tend to deliver more stability in respect of earnings, as compared to the general tramp market.

The reliance on time charters, where rates are locked in for extended periods, has gradually increased, from around15% in the 2002/03 financial year, to around 31% in the 2003/04 financial year (expected to further increase toaround 50% next year) as the Company has increased its focus on improving earning visibility.

The Thoresen fleet consists of tween-deckers, and open hatch box shaped and conventional bulk carriers,of between 15,000 and 52,000 DWT. Although such vessels are often inter-changeable, and influenced bythe same overall market forces, each design does have its own advantages.

As the name implies, such vessels have a middle, or tween, deck in its cargo holds, makingthem very suitable for carriage of liner / unitised cargoes. A tween-decker can also be usedfor the carriage of conventional bulk cargoes.

The open hatch box shaped bulk carriers have much wider hatch openings than conventionalbulk carriers, making them more efficient in the carriage of unitised cargoes, such as steel andforest products. Such a vessel is also suitable for the carriage of conventional bulk cargoes.

The conventional bulk carrier is, as the name implies, the most suitable design for the carriageof conventional bulk cargoes.

Tween-Deckers

Open Hatch

Bulk Carrier


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Liner Service Vessels call regularly at pre-announced ports. Shippers pay a fixed freight rate per revenue ton of cargo, whilst vesselowners pay for all voyage related expenses, including loading and discharge expenses, fuel oils, port expenses, andagency fees. Number and variety of cargoes tend to be high.

Tramp - Voyage Charter Vessel is employed from port A to port B. Charterer pays a fixed amount per ton of cargo carried. Vessel owner paysfor all voyage related expenses.

Tramp - Time Charter Vessel is employed from port A to port B, or from region A to region B. Charterer pays a fixed amount per day forthe use of vessel, covers all voyage related expenses, and instructs the captain on cargo to be loaded.

Trading Patterns2003/2004 Financial Year

Cargoes Carried by Thoresen2003/2004 Financial Year

SHIPPING OPERATIONS

NATURE OF BUSINESS

During the 2003/04 financial year, Thoresen carried a total of 7.7 million tons of cargoes, an increase of60.4% over last year, of which 45.1% consisted of fertilisers, agricultural, and forest products.


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SHIPPING SERVICES

NATURE OF BUSINESS

• Ship Agencies

Thoresen is the largest ship agency group in Thailand handling allvessel types, except container vessels. The agency business inThailand is carried out by ISS Thoresen Agencies Ltd. (100%),marketed as part of the ISS global network, the world’s largestagency group and by GAC (Thailand) Ltd. which is a joint venturebetween Thoresen (51%) and GAC (49%). GAC is the world’ssecond largest agency group.

Thoresen (Indochina) SA (50%) provides agency services throughoutVietnam and Cambodia.

All three companies provide ships’ agency services: port clearance,berthing, loading and discharging, cargo booking, supplying fuel,water, stores, vessel repairs and crew changes. Additionally GAC(Thailand) Ltd provides sea and airfreight services, logistics and inlandtransportation.

• P & I Club Representation

Thai P&I Services International Ltd., which is 90% owned byThoresen, acts as the local correspondents in Thailand for P&I Clubsas well Hull and Machinery Insurance companies.

The services offered include arranging for cargo damage surveys,collision investigations, stowaway repatriation, dispute resolution andlegal representation.

• Stevedoring

Chidlom Transport and Services Co.,Ltd (100%) undertakesthe loading and discharging of cargoes, tallying, packing andtransportation of the cargo to and from the ships and suppliers /receivers.

Chidlom Marine Services and Supplies Ltd. (100%) provides cargolashings and handling equipment and consumables such as dunnageand steel wires. The company has sales agencies for a number ofChinese manufacturers.


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SHIPPING SERVICES

NATURE OF BUSINESS

• Ship Brokerage

Fearnleys (Thailand) Ltd. and its subsidiary, PT Fearnleys Indonesiaprovide competitive ship broking services between cargo interestsand ship owners. Fearnleys (Thailand) Limited is a joint venturebetween Thoresen (50%) and Fearnleys A/S of Norway (49%),one of the world’s largest ship broking houses.

• Ship Maintenance and Repairs

T.S.C. Maritime Ltd. (100%) is an ISO 9001 company certified byLloyds Register of Shipping. T.S.C. Maritime Ltd. was establishedinitially to perform maintenance and repairs afloat on Thoresen vesselscalling in Thailand. The skills and expertise developed led to theformation of the company offering these services to all owners callingin Thailand.

• Offshore Related Services

Mermaid Maritime performs a wide range of maritime services,mainly geared towards local and international clients within themerchant shipping and offshore oil & gas industries. The Companyis accredited and authorised by all the major classification societiesand international maritime organisations to provide:

♦ Offshore service & support vessels

♦ Diving and ROV services

♦ Non destructive testing

♦ Safety equipment service & supply

♦ Other specialist services

Mermaid Maritime was a pioneer in offering such services inThailand, and has firmly established itself as the local leaderwithin its field of operations. In recent years the Company hasalso expanded overseas and now executes large contracts in otherSouth East Asian and Middle Eastern countries.

Mermaid Maritime was first established in 1982 and is a joint venturebetween TTA and a group of local and foreign professionals.


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SHIPPING SERVICES

NATURE OF BUSINESS

• Marine Communication

Horizon Mobile Communication Co.,Ltd., a company in whichThoresen holds 34% of the shares, is a specialised provider ofmobile satellite communications and packaged IT solutions,including.

♦ Satellite communication hardware.

♦ Inmarsat and Iridium airtime (appointed Iridium servicepartner in March 2002).

♦ HMCmail software and HUB software for compression ofdata.

♦ HMC forms software for handling various document being sentto and from vessels.

♦ Distributor of other softwares, including electronic charting,weather routing and vessel tracking systems.

The company is represented in Thailand, Singapore, Hong Kong,Norway and Australia.

• Port Operations

Sharjah Ports Services, which is a joint venture between SharjahPorts Authority in the United Arab Emirates (51%) and Thoresen(49%), has a concession covering all stevedoring, cargo handling,cargo storage, cargo delivery, marketing and accounting for allgeneral cargo, ro-ro (roll on, roll of) and reefer (refrigerated)break-bulk cargoes for Port Khalid, Hamriyah and Sharjah Creekports, for a period of 10 years, with options for renewals.

The company came into existence in June 2002, as part of a portprivatisation programme. All existing employees of the port, about500 in total, and all existing equipment, were taken over by the newcompany.

Port Khalid is the largest of the three ports covered under thecontract and is located some 16km south of Dubai. Together, the threeports currently handle in excess of 1 million tonnes of cargo per year,with significant available capacity for increases, and generatedDirhams 34 million (Baht 401 million) in turnover in 2004.


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MARKET SITUATION

SHIPPING OPERATIONS

• Type and Number of Vessels

COMBINEDCARRIERS

174 SHIPS OF 12.03 M. DWT

CAPESIZEBULK CARRIER

>80,000 DWT662 SHIPS OF 105.21 M. DWT

PANAMAXBULK CARRIER60 - 80,000 DWT

1,139 SHIPS OF 80.46 M. DWT

HANDYMAXBULK CARRIER40 - 60,000 DWT


HANDYSIZEBULK CARRIER10 - 40,000 DWT


GENERAL CARGOVESSELS

10 - 25,000 DWT1,265 SHIPS OF 19.98 M. DWT

BIGGER CARGOPARCELS USEBIGGER BULKCARRIERSTO ACHIEVEECONOMIES OFSCALE

Ship Types Cargoes Carried

GRAINCOALSTEELCEMENTPOTASHRICESUGARSALTGYPSUMFOREST PRODSSCRAPSULPHURNFM ORESVEHICLESPRODUCT CARGOES

IRON ORECOALGRAIN

IRON ORECOALGRAINBAUXITEPHOSPHATE

"#

$%

$%

$%

TTA’s Segment

$%

&

• Cargoes Carried by Ship Types

The world fleet of bulk and general cargo carriers over 10,000 DWT consisted of 7,129 vessels as ofOctober 2004, with the smaller vessels constituting the largest segment in terms of number of vessels. Thenumber of vessels in each segment can be summarised as follows:

Ship Type Size No. of Ships Million DWT.

Capesize + 80,000 DWT 662 105.21Panamax 60 - 80,000 DWT 1,139 80.46Handymax 40 - 60,000 DWT 1,248 58.38Handysize 25 - 40,000 DWT 1,683 53.07Handysize 10 - 25,000 DWT 1,132 21.09General Cargo 10 - 25,000 DWT 1,265 19.98

Total 7,129 338.19* Source : Fairplay World Shipping Encyclopaedia as at October 2004.


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Although most of the cargoes carried by smaller vessels are not suitable to be carried in very large sizedvessels, there are still many cargoes which can be carried by vessel of different sizes, and the freight marketsfor the vessels of different segments tend to correlate with one another fairly closely.

As a general rule, due to the economy of scale, the bigger the cargo parcels, and the faster the loading anddischarge operations, the market will always seek to use larger vessels when the trade permits.

The smaller vessels do however have a trading advantage in that there are general limitations in the averageship sizes serving different routes, such as a) port restrictions: many ports, especially river ports, have draftlimitations, b) infrastructures: less advanced port, or inland, infrastructure make it impossible to quickly bringlarge cargoes to and from port areas, c) trade limitations: many traders lack the financial strength to deal inlarge volumes and there are limited demands for individual cargoes at various destinations, and d) intra-area trades:the economy of scale only applies when vessels are at sea, and the shorter the distance the less time will bespent at sea. As a result of the many trades involved, and due to the trading limitations set out above, freightrates for the smaller vessels tend to be more stable than those of the larger vessels.

Over the past two decades the average annualised growth of the overall bulk market has been just over 2%,which reflects a mature industry with slow growth. The 1980’s were characterised by a large oversupply ofthe bulk fleet, which, combined with many cargoes being containerised, resulted in a very depressed freightmarket. Although the market fundamentals gradually improved, the 1990’s were characterised by a series ofmini cycles, with volatile movements and short periods of upswings giving way to subsequent downturns.

The year 2003 proved to be a turning point. The demand growth outpaced all previous historical trends, augmentedby a booming steel industry and a high Asian coal demand.

The total dry bulk volume grew an estimated 5.1% in 2003, and around 4.7% in 2004, which, combined withmany vessels being tied up in ports due to port, and inland, bottlenecks, resulted in vessels being in short supply,despite available supply having increased by 2.2% in 2003, and 5.1% in 2004, and a sharp rise in freight rates.

The growth of the Chinese economy, and its booming steel industry, has clearly been the most importantfactor behind such surge in demand, and it is reckoned that the Chinese economy has generated over half ofthe overall demand growth over the last few years, despite constituting only around 15% of the total overalldemand for dry bulk shipping. Interestingly, from 1965 to 1972 when Japan was developing its economy, itaccounted for around 40% of the overall demand growth, so the recent surge in demand from China didfollow a well worn trail.

The rates achieved by the Thoresen fleet have recorded significant increases over the last two years, as a directresult of the improved market conditions, combined with the fact that our average vessel size has also increasedduring such period.

MARKET SITUATION

SHIPPING OPERATIONS


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MARKET SITUATION

SHIPPING OPERATIONS

Notes :

TC Income Time Charter Income: arrived at by deducting all voyage related expenses, such as for loading and discharging, port expenses,agency fees, fuel, and canal fees, from gross freight.

TC Rate Time Charter Rate: arrived at by dividing TC Income with vessel days required to earn such income. Expressed in USD per vesselper day.

D W T Dead Weight Tons: total carrying capacity of vessel, including cargo, fuel oils, fresh water, spares and stores etc.

In a situation where dry cargo vessels are now in short supply, and with the world dry bulk carrier fleet expectedto increase only 3.0 to 4.0% per year, depending on scrapping rates, over the next three years, it would bereasonable to expect that freight rates will remain at high levels in the coming periods, unless the growth ofthe world economy, or the Chinese economy, were to slow down significantly, in which case the risk would bea reduced demand, combined with effectively increasing supply due to vessels being released from congested ports.

Thoresen Freight Rates(USD/Day-TC basis)

Thoresen Vessel Size(Average DWT)

Source : Thoresen/Average per Year/Based on 365 vessel days per year Source: Thoresen/1996-2004

Commodity 2002 2003 2004 2005

Iron Ore 474 4.4% 524 10.6% 581 10.9% 610 5.0%

Coal 547 2.0% 613 12.1% 646 5.4% 676 4.6%

Grains 268 1.9% 264 -1.5% 265 0.4% 268 1.1%

80 -1.2% 83 3.8% 80 -3.6% 81 1.3%

Minor Bulks 705 -0.6% 731 3.7% 751 2.7% 766 2.0%

Other Dry 1,506 2.6% 1,549 2.9% 1,619 4.5% 1,684 4.0%

Total Bulks 3,580 2.0% 3,764 5.1% 3,942 4.7% 4,085 3.6%

Trade Volume (Million Tonnes) and % change year on year

Demand/Supply Indicators

Fleet in Million DWT and % change year on year

Notes : General Cargo fleet 2005 based on the same level of scrappings as Oct. 2004/Capesize/Panamax Fleets include ComboSource : World Shipyard Monitor, November 2004

Segment 2002 2003 2004 2005

Capesize 94.0 1.5 % 98.5 4.8% 105.9 7.5 % 113 6.7%

Panamax 74.4 2.9 % 75.6 1.6 % 81.2 7.4 % 84.4 3.9%

Handymax 53.1 7.3 % 57 7.3 % 61.1 7.2 % 64.9 6.2%

Handysize 74.3 - 1.5 % 72.3 - 2.7 % 72.7 0.6% 70 -3.7%

20.51 -13.5 % 19.99 - 2.5 % 19.06 - 4.7% 18.63 -2.3%

316.3 0.9 % 323.4 2.2 % 340.0 5.1 % 350.9 3.2%

GeneralCargo

TotalAvailable

Other MajorBulks


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MARKET SITUATION

SHIPPING OPERATIONS

Although it is our opinion that the general economic outlook is positive, and that the Chinese economy will continueto grow at a generally high rate also in coming periods, we have chosen to lock in a considerable portion ofour fleet on time charters, and contracts of affreightments, in order to improve our earning visibility. As ofNovember 2004, around 55% of our available capacity for the 2004/05 financial year had already been lockedin on time charters and contracts of affreightments. With another 30% having been earmarked for our linertrades, where rates tend to be more stable, when compared to the tramp market, we feel confident that we willrecord significant further increases in the contributions from shipping operations in the coming period.

It should also be noted that the world fleet of general cargo vessels, and that of smaller handysize bulk carriers,are now getting very old as a result of very few such vessels having been built over the last 20 years. Due tothe current age profiles, it is widely expected that the supply of such vessels will continue to decline, at relativelyhigh rates, in the years ahead.

Tweendeckers for 10-40,000 DWT Bulkers for 10-40,000 DWT

Number of Vessels by Year of Built

Bulkers for 40-60,000 DWT

Source : Fairplay World Shipping Encyclopedia, October 2004Note : Number of Vessels Built 2005 to 2006 based on current orderbook.


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The advantage with such age profiles, and fragmented ownership profiles, is, from an owner’s point of view, isthat the likelyhood of an oversupply situation taking place within the general cargo and handysize bulk segmentsover next few years are very slim, and that scrapping should intensify in the event that market conditions becomesofter, thus reducing available supply if and when required.

Fleet Distribution by Owners/ManagersGeneral Cargo & Bulk Carriers (15,000-45,000 DWT)

Source : Fairplay World Shipping Encyclopedia, October 2004

MARKET SITUATION

SHIPPING OPERATIONS

Historically, the smaller general cargo vessels and handysize bulk carriers have been scrapped at the average ageof around 27 years. However, such vessels tend to have a longer life span, as compared to the larger bulk carriers,and most such vessels can have their trading life extended to over 30 years under favourable trading conditions.As such, it would be reasonable to expect that many of the older general cargo vessels and smaller handysize bulkcarriers will continue to trade for a few years more.

Although there is a trend towards consolidation, the segments in which Thoresen operates are still very fragmented,with the largest owners controlling a relatively small share of the overall market.


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Thoresen has a long history of providing shipping services to the maritime industry. Having just celebratedits 100th year as ships’ agents, initially in Hong Kong, Thoresen has been providing shipping services in Thailandsince 1926. The shipping services have expanded over the years to include stevedoring, ship brokerage, shipmaintenance and repairs, maritime communications, port operations and various offshore related activities.

The combined net contributions of the service businesses amounted to Baht 130.40 million for the 2003/04financial year, as compared to a net contribution of Baht 116.02 million in the previous year, an increase of12.39%. The breakdown of the net contribution of the service companies for 2003/04 is as follows:

Thoresen is the leading ship agency service provider in Thailand, handling all vessel types, except containervessels. In a market that is highly fragmented and competitive, it is not realistic to expect significantly highercontributions from these operations. We do however consider that the business volume, and contributions,will increase at an annual rate of 5-10% over the next few years.

The ship brokerage activities have grown at a very high rate with improved net contributions up to Baht 18.80million in the 2003/04 financial year. This has been the result of increased business volume combined with highercommissions received as the result of the stronger freight markets. It is expected that this trend will continue inthe coming period.

Although the port operations in Sharjah, UAE, did not contribute significantly in the last year, the port hassubstantial additional capacity available and we consider there is significant potential for the future, particularlyconsidering the high rates of economic growth in the Middle East. It should also be noted that our liner tradesto the Middle East derive significant benefits from this venture although these are recorded under the headingof income from shipping operations.

MARKET SITUATION

SHIPPING SERVICES

Net Profit Contributions from Service Companies2003/04 Financial Year

Note : Excluding Gain / Loss on Exchange Rate


19

MARKET SITUATION

SHIPPING SERVICES

Our investment in marine communications, although not very significant, has developed very well, and weexpect continued growth, through expansion and diversification, with a wider, more sophisticated range ofproducts and service offerings.

Being represented in Thailand, Singapore, Hong Kong, Japan, Australia, Norway and the USA and with a growingdistributor network, the contributions from the company from such activities should increase in the coming year.

Our investment in offshore-related activities, through Mermaid Maritime Ltd., is expected to provide a verysignificant increase in the coming year. The Company completed a Baht 400 million capital increase during2004, of which Thoresen subscribed to 50% so as to maintain its percentage shareholding. The purpose ofthe capital increase was to provide funds for business expansion. At the forefront of this was a move bythe Company further into sub-sea engineering activities which saw the Company acquire additional ROV’sand a saturation diving system. In this regard, Mermaid is now recognised as one of the leading sub-seaengineering contractors in S.E.Asia. The benefits of these acquisitions will be seen in the coming year.

Moving forward, Mermaid is expected to continue to focus on developing its niche businesses, offering servicesto the offshore oil & gas companies. In order to accommodate this growth, new facilities are being builtat Pin Thong on the Eastern Seaboard. The facilities are scheduled to be completed by the end of the firstquarter 2005.

Overall, we expect a significant increase in contributions from the service related activities in the coming yearwith the offshore related activities being the largest contributor to such expected increase.


20

In accordance with the policy on good corporate governance of listed companies as stipulated by the StockExchange of Thailand, the board of directors of listed companies shall present a statement on the responsibilitiesof the company’s directors for the audited financial statements in annual reports.

The board of directors of Thoresen Thai Agencies Plc certified that the audited consolidated and companyfinancial statements were prepared in accordance with the standards of the Institute of Certified Accountantsand Auditors of Thailand as well as recognised accounting standards and that they presented the true andfair financial and operational status of the Company and its subsidiaries.

(Mr. Arne Teigen) (M.R. Chandram S. Chandratat)Managing Director Chairman

STATEMENT OF THE BOARD OF DIRECTORSRESPONSIBILITIES FOR THE FINANCIAL STATEMENTS


79

INCOME STRUCTURE

Besides the general economic situation and its effects on freight rates, the following factors represent risks to theCompany:a) Currency Exchange Risk

The Company’s loans are mainly in USD (USD 184.46 million, or 99 % of total loans ), and a depreciation ofthe Baht can result in significant exchange losses when such loans are translated into Baht at lower rates.Almost all of the Company’s earnings are USD based.

b) Oil PricesThe Company’s vessels consume significant quantities of fuel and diesel oils, and in the 2003/2004financial year, such expenses amounted to 23.85 % of the total vessel operating expenses. Although theCompany seeks to compensate for higher oil prices by raising the freight rates quoted to its customers,there is a time lag, due to forward bookings and other marketing constraints, normally of around threemonths, before such increased freight rates become effective. Vessels on time charters are not affected bychanging oil prices as the cost of fuel is paid for by the charterer.

c) AccidentsVessels are movable assets, and accidents can lead to loss of income. Although the Company has takenout insurances against damage and/or loss of the property itself, there is no insurance in effect coveringloss of time/earnings. Between 2002 and 2004, an average of. 0.3 % of vessel days available was lost due toaccidents involving groundings, collisions, machinery and structural damage, and fires.

d) Shortage of Skilled PersonnelThe Company is dependent on the availability of skilled, and certified, officers and crew. As the Companyis continuously training and promoting existing personnel, there is currently no shortage of such personnel.

e) Risk on Maintenance ExpensesThe Company has a policy of acquiring second-hand vessels, and to upgrade such vessels after delivery.Subsequent maintenance expenses, consisting of regular repair and maintenance (Baht 710.16 millionin 2003/2004), and of drydocking expenses (Baht 354.77 million in 2003/2004), can however fluctuate,depending on trading patterns and regulatory requirements.

RISK FACTORS

Income Business 2004 2003 2002Segment Income Percentage Income Percentage Income Percentage

1. Freight Shipping 10,135.69 95.44 4,524.15 89.18 3,293.42 88.64Charges Operations

2. Service Shipping 181.84 1.71 188.76 3.72 205.03 5.52Income Services

3. Commission Shipping 139.71 1.31 46.15 0.91 48.49 1.31Income Services

4. Share of Profit from Associates 37.31 0.35 47.11 0.93 42.38 1.145. Others 125.30 1.19 267.16 5.26 126.01 3.39

Total 10,619.85 100.00 5,073.33 100.00 3,715.33 100.00

(Million Baht)

* Names of 47 Shipping Companies are shown in the item of Company Investments


80

1. M.R. Chandram S. Chandratat Chairman / Audit Committee Chairman2. Mr. Arne Teigen Managing Director3. Mr. Sompong Thanasophon Director / Audit Committee4. Vice Admiral Kittichai Senanarong Director / Audit Committee5. Mr. Bjorn Ostrom Director6. Mr. Sathien Tejapaibul Director7. Mr. Lance Karl Depew Director8. Mr. Pichai Chirungsappasuk Director9. Mr. Opart Petchmunee Director

10. Mr. Frode Teigen Executive Director11. Mr. Ole Teigen Executive Director

Scope of Duties and Responsibilities of the Board of Directors

1. To carry out activities in compliance with laws, the objectives of the company, the Articles ofAssociation and the resolutions of the shareholders.

2. To determine the interim dividends to the shareholders.

3. To appoint and remove company staffs. The board of directors may appoint any director or a group ofdirectors to act on their behalf.

4. To consider and approve the rewards for employees or any persons who work for the companytemporarily or permanently.

Structure and Appointment of the Board of Directors

1. The number of directors on the Board shall be no less than five, and no less than one-half of the totaldirectors shall reside in Thailand.

2. The directors shall be elected by the shareholders in general meeting according to the following rulesand procedures:

(1) Every shareholder shall have one vote per share.

(2) Every shareholder may use all his votes set forth in (1) to elect one or more directors and may nothowever divide those votes in any proportion for any particular director.

(3) Those who receive the highest respective votes shall be elected as directors, in order of theirrespective votes, in a number equal to the number of directors to be elected at such meeting. In thecase of a tie at lower place which would result in the number of directors greater than that permittedfor the time being, the presiding chairman shall have a casting vote.

MANAGEMENT & SHAREHOLDERS

MANAGEMENT STRUCTURE

A) The Board of Directors


81

1. M.R. Chandram S. Chandratat Chairman of the Audit Committee2. Mr. Sompong Thanasophon Member of the Audit Committee3. Vice Admiral Kittichai Senanarong Member of the Audit Committee

Qualifications of the Audit Committee

1. Holding shares not more than five per cent of paid-up capital of the company, affiliated company,associated company or related company, which shall be inclusive of the shares held by related persons.

2. Being a director who does not take part in the management of the company, affiliated company,associated company, related company or majority shareholder of the company and is not an employee,staff member or advisor who receives a regular salary from the company, affiliated company, associatedcompany, related company or majority shareholder of the company.

3. Being a director who has no direct or indirect benefit or interest in finance and management of thecompany, affiliated company, associated company, or majority shareholder of the company, includingthe benefit or interest of the said nature during the period of 1 year before his appointment as amember of the audit committee except where the board of directors has carefully considered that suchprevious benefit or interest does not affect the performance of duties and the giving of independentopinions.

4. Being a director who is not a related person or close relative of any management member or majorityshareholder of the company.

5. Being a director whom is not appointed as a representative to safeguard interests of the company’sdirectors, majority shareholders or shareholders who are related to the company’s majority shareholders.

6. Being capable of performing duties, giving opinions or reporting the results of performance of workaccording to the duties delegated by the board of directors free and clear of the control of the managementor the majority shareholders of the company including related persons or close relatives of the saidpersons.

Scope of Duties and Responsibilities of the Audit Committee

1. To review the sufficiency, creditability and objectivity of the financial reporting by coordinating withthe external auditors and the management who are responsible for preparing the quarterly and yearlyfinancial reports.

2. To review the adequacy and effectiveness of internal control systems and internal audit functionsby coordinating with the external auditors and internal auditors.

3. To review compliance with the Securities and Exchange Acts, Regulations of the SET, and any otherrelevant laws.

4. To consider and advise the appointment of the external auditors including the audit fee.



B) The Audit Committee


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D) The Executives of the Company


1. Mr. Pongsak Kanchanakpan General Manager, Group Personnel and Administration2. Ms. Nuch Kalyawongsa General Manager, Group Finance and Accounting

Secretary to the Board of Directors : Ms. Mantanee Surakarnkul

SUPPLEMENTAL DISCLOSURES OF INFORMATION IN ACCORDANCE WITH THE PUBLIC LIMITED COMPANIES ACT

1. A Report of Disclosure of Information in Accordance with Section 88(1) of Public Limited Companies Act

Contracts which the directors have interest in, either directly or indirectly, made within fiscal year of 2004

-None-

Scope of Duties and Responsibilities of the Audit Committee (cont’d)

5. To consider compliance with all connected transaction disclosures or the conflict of interests disclosures.

6. To take care of any other matters assigned to it by the board of directors, such as reviewing the company’sfinancial and risk management policies.

7. To report the activities of the audit committee in the company’s annual report, which must be signed bythe chairman of the audit committee.

Structure and Appointment of the Audit Committee

The number of audit committee shall be no less than three. The qualifications of each member must bein accordance with the announcement of the Stock Exchange of Thailand. The audit committee will beselected and appointed by the board of directors.

1. M.R. Chandram S. Chandratat2. Mr. Arne Teigen3. Mr. Sompong Thanasophon4. Vice Admiral Kittichai Senanarong

Scope of Duties and Responsibilities of the Remuneration Committee

To consider and determine the remunerations for the executives and the employees.

Structure and Appointment of the Remuneration Committee

The remuneration committee shall consist of one executive director and three external directors to beappointed by the board of directors.

C) The Remuneration Committee


83

* The Amount of Shares as of 30 September 2003 and 30 September 2004 included shares in the scriptless system* As of 29 November 2004. Teigen Group held 17,397,370 shares.



2. A Report of Disclosure of Information in Accordance with Section 88(2) of Public Limited Companies Act

SHAREHOLDINGS BY THE DIRECTORS AS OF 30 SEPTEMBER 2004

(based on par value of Baht 1)

No. Name As of Changes As of30 Sept. 03 During Year 30 Sept. 04

1. M.R.Chandram S. Chandratat 537,230 80,000 617,230Spouse 350,000 (18,000) 332,000

2. *Mr. Arne Teigen 8,879,640 116,190 8,995,8303. Mr. Sompong Thanasophon - - -

Spouse - - -4. Vice Admiral Kittichai Senanarong - - -

Spouse - - -5. Mr. Bjorn Ostrom - - -6. Mr. Sathien Tejapaibul 2,597,500 - 2,597,500

Spouse 1,411,000 (65,000) 1,346,0007. Mr. Pichai Chirungsappasuk - - -

Spouse - - -8. Mr. Lance Karl Depew 1,119,900 53,900 1,173,800

Spouse - - -9. *Mr. Frode Teigen 50,681,490 (27,642,500) 23,038,990

Spouse - - -10. *Mr. Ole Teigen 40,282,910 (13,096,650) 27,186,260

Spouse - - -11. Mr. Opart Petchmunee 1,250 500 1,750

Spouse - - -

Total 105,860,920 (40,571,560) 65,289,360

SHAREHOLDINGS BY EXECUTIVES AS OF 30 SEPTEMBER 2004

No. Name As of Changes As of30 Sept. 03 During Year 30 Sept. 04

1. Mr. Pongsak Kanchanakpan 2,000 - 2,000

2. Ms. Nuch Kalyawongsa 1,750 - 1,750

Total 3,750 - 3,750


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MANAGEMENT REMUNERATIONSA) Remunerations in cash as of 30 September 2004

1. Remunerations of the Board of Directors

Remunerations of the Board of Directors Baht

1. M.R. Chandram S. Chandratat 2,970,0002. Mr. Arne Teigen -3. Mr. Sompong Thanasophon 660,0004. Vice Admiral Kittichai Senanarong 660,0005. Mr. Bjorn Ostrom 330,0006. Mr. Sathien Tejapaibul 330,0007. Mr. Lance Karl Depew 330,0008. Mr. Pichai Chirungsappasuk (being appointed in August 2004) 49,0009. Mr. Frode Teigen -

10. Mr. Ole Teigen -11. Mr.Opart Petchmunee -

Total 5,329,000

Note: a) Total remunerations of seven directors out of eleven directors were Baht 5.329 million. The other four directors did not receive the director’remunerations because they are regular employees of the Company.

b) Directors’ remunerations of M.R. Chandram S. Chandratat, Mr. Sompong Thanasophon and Vice Admiral Kittichai Senanarong include additionalremunerations for serving on the Audit Committee.

2. Remunerations of the Executives

Total remunerations (in the form of salary and bonus) of the seven executives (including executivedirectors) were Baht 57.81 million.

B) Other remunerations as of 30 September 2004

The Company has contributed Baht 5.39 million to the provident fund and social security fund for the sevenexecutives.

SHAREHOLDERS

Major shareholders as of 29 November 2004 (The latest share register book’s closing date)

No. Name No. of Shares Percentage

1. Thai NVDR Co., Ltd. 102,184,850 15.872. Somers (U.K.) Limited 58,119,400 9.033. Thai Military Bank Plc. 47,318,710 7.354. Morgan Stanley & Co International Limited 34,026,000 5.295. HSBC (Singapore) Nominees Pte Ltd. 25,472,120 3.966. Teigen Group 17,397,370 2.707. C.S. Capital Co., Ltd. 13,649,740 2.128. Chote Chalit Co., Ltd. 12,159,400 1.899. Pictet & Cie 10,529,300 1.64

10. Chase Nominee Limited 1 10,022,700 1.56

Total 330,879,590 51.41


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BOARD OF DIRECTORS

Working Experience

M.R. Chandram S. Chandratat 1994 - present Chairman, Thoresen Thai Agencies Plc2001 - present Chairman of the Audit Committee, Thoresen Thai Agencies Plc1991 - present Managing Director, C.S. Capital Ltd.2001 - 2002 Chairman, United Palm Oil Industrial Plc1992 - 2004 Director, United Palm Oil Industrial Plc1990 - 1992 Chairman of the Executive Board, Capital Nomura Securities Plc1985 - 1990 Director General, Government Savings Bank1982 - 1985 Deputy General Manager, Bank for Agriculture & Agricultural Cooperatives

Mr. Arne Teigen 1994 - present Director and Managing Director, Thoresen Thai Agencies PlcSept. 2004 - present Director, Kaset Samuth Ltd.1983 - present Director, Thoresen & Co., (Bangkok) Ltd.1978 - 1992 Chairman and Managing Director, Thoresen & Co., Ltd., Hong Kong1975 - 1985 Director, Norse Petroleum A/S, Norway1974 - 1984 Chairman and Managing Director, BK Skibs A/S, Norway1975 - 1977 Director, Norinvest A/S, Norway1964 - 1978 Managing Director, Arne Teigen Rederi A/S, Norway

Mr. Sompong Thanasophon 1999 - present Audit Committee Member, Thoresen Thai Agencies Plc1994 - present Independent Director, Thoresen Thai Agencies Plc1990 - 1996 Vice Chairman, Bangkok Metropolitan Bank Plc1985 - 1990 Chairman of the Executive Board, Bangkok Metropolitan Bank Plc1979 - 1984 Deputy Governor, Bank of Thailand

Vice Admiral Kittichai Senanarong 1999 - present Audit Committee Member, Thoresen Thai Agencies Plc1994 - present Independent Director, Thoresen Thai Agencies Plc1993 - 1994 Deputy Chief of Staff Attached General Headquarters1989 Deputy Commandant, Naval Academy1988 Chief of Staff, Naval Academy1984 - 1987 Naval Attache, Paris

Mr. Bjorn Ostrom Oct. 2000 - present Director, Thoresen Thai Agencies Plc1997 - 2000 Counsellor, the Singapore Shipping AssociationSept.1986 - 31 Aug. 2000 Executive Vice President of Christiania Bank, Singapore Branch1985 - 1986 Director of Asia Shipping Group, PK Christiania Hong Kong1979 - 1984 Director Adjoint, Banque de la Societe Financiere Europeanne Paris1975 - 1979 Senior Executive, Hambros Bank London

Mr. Pichai Chirungsappasuk Aug. 2004 - present Director, Thoresen Thai Agencies PlcAug. 2004 - present Executive Officer SME Banking Upcountry 4, Thai Military Bank Plc2003 - present Director, Nakorn Thai Strip Mill Plc1997 - present Director, Wang Tai Co.,Ltd.Oct. 2003 - Aug. 2004 Executive Vice President, The Industrial Finance Corporation of Thailand2000 - 2001 Director, J.B.Hotel (Hat Yai) Co.,Ltd.1998 - 2002 Director, Business Creation Co.,Ltd.1998 - 2002 Director, Asset Development Co.,Ltd.1995 - 1997 Director, Bara Finance & Securities Plc

Mr. Sathien Tejapaibul 1994 - present Director, Thoresen Thai Agencies Plc1996 - present Chairman, Ambrose Wine Limited1967 - present Director, Tejapaibul Co., Ltd.


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BOARD OF DIRECTORS (cont’d)

Working Experience

Mr. Lance Karl Depew Jan. 2002 - present Director, Thoresen Thai Agencies Plc2002 - present General Partner, Railay Capital Partners, L.P.2000 - present Managing Partner, Uluwatu Partners International LLC1994 - present Portfolio Manager, Quest Management Inc.1993 - 1994 Equity Research Intern, Trust Company of the West, U.S.A.1989 - 1992 Senior Consultant, KPMG Peat Marwick

Mr. Frode Teigen 1992 - present Director, Thoresen Thai Agencies PlcNov. 2003 - present Director, Thoresen (Indochaina) S.A.March 2003 - present Director, Thoresen Chartering (HK) LimitedJune 2002 - present Director, Sharjah Ports ServicesFeb. 2002 - present Director, Thoresen Shipping FZESept. 2000 - present Director, ISS Thoresen Agencies Ltd.July 2000 - 2003 Director, Horizon Mobile Communications Co.,Ltd.1997 - present Director, Thoresen Chartering (Pte) Ltd.1992 - present Director, Gulf Agency Company (Thailand) Ltd.1990 - present Director, Fearnleys (Thailand) Ltd.1991 - April 2000 Director, Chidlom Transport & Services Ltd.1989 - 1992 Director, Thoresen & Co., (Bangkok) Ltd.1987 - 1988 Deputy General Manager, Thoresen Ship Management Ltd., Hong Kong

Mr. Ole Teigen 1993 - present Director, Thoresen Thai Agencies Plc & 46 subsidiary companies of Thoresen GroupFeb. 2000 - present Director, Horizon Mobile Communications Co.,Ltd.1994 - present Director, Mermaid Maritime Ltd.1992 - present Director, Thoresen & Co., (Bangkok) Ltd.1989 - 1990 Project Manager, Thoresen Ship Management Ltd., Hong Kong

Mr. Opart Petchmunee 1990 - present Director, Thoresen Thai Agencies PlcOct. 2003 - present Director, ISS Thoresen Agencies Ltd.1994 - 2002 Director, Thoresen Auto Transport Ltd.1983 - 1990 Operation Manager, Euro Asia Chartering Pte. Ltd., Singapore

EXECUTIVES

Working Experience

Mr. Pongsak Kanchanakpan 1989 - present General Manager, Group Personnel and Administration, Thoresen Group of CompaniesOct. 2003 - present Director, ISS Thoresen Agencies Ltd.2000 - present Director, Mermaid Maritime Ltd.2000 - present Director, Thai P&I Services International Ltd.2000 - present Director, Horizon Mobile Communications Co.,Ltd.1993 - present Director, Gulf Agency Company (Thailand) Ltd.1992 - present Director, Thoresen & Co., (Bangkok) Ltd.1985 - 1988 Faculty, University of Oklahoma Libraries, University of Oklahoma, U.S.A.

Ms. Nuch Kalyawongsa 1987 - present General Manager, Group Finance and Accounting, Thoresen Group of Companies1996 - present Director, Fearnleys (Thailand) Ltd.1990 - present Director, Kaset Samuth Ltd.1979 - 1987 Assistant Chief Accountant, Vidhyakom Plc


87

Policy on Corporate Governance

The Company understands the importance of good corporate governance principles andintends to apply these principles in managing the Company. Our core managementobjectives include the creation of an efficient transport organisation and a strong foundationto sustain future business growth. By fulfilling these objectives, the Company is ableto maximise the benefits to all of its stockholders. Therefore, the board of directors,management, and employees of the Company will strive to achieve the 15 key governanceprinciples recommended by the Stock Exchange of Thailand (SET) in August 2001.

Shareholder Rights/ Shareholder Meetings

Every shareholder of the Company is accorded equal rights. Each shareholder is ableto express opinions and raise issues or questions freely and to vote his shares as appropriateduring shareholder meetings. The Company will send out invitations to meetings in advanceso that shareholders have time to consider the issues and related recommendations ofthe board of directors. The Company also sends proxy forms with these invitations so thatany shareholder who is unable to attend meetings can nominate a representative to attendand vote on his behalf.

Rights of Different Stakeholders

The Company understands and respects the interests of different stakeholders andattempts to maximise the benefits for all groups. Given the utmost importance of its clients,the Company will strive to protect their rights and interests, particularly with respect tothe delivery of goods and services. Information provided by clients will be kept confidentialand will not be disclosed without the clients’ prior consent. Employees of the Companywill receive benefits and training to improve their capabilities and skills.

Management Vision

The board of directors stresses the Company’s continued growth and creation ofshareholder value. Therefore, the Company has established clear policies and strategiesthat are deemed to be achievable and created the proper incentives to attain them.The Company’s quarterly financial reports provide benchmarks on which managementcan be assessed in achieving these policies.

Conflicts of Interest

The Company will attempt to avoid entering into any connected transactions or thosewhich create inherent conflicts of interest. If such transactions arise, the Company willreport them to SET. If such a transaction needs to be approved by the board of directors,shareholders will be notified of the details and the recommendation of independentdirectors on the matter. Any party which has a conflict of interest will not be allowed tovote on the matter.

CORPORATE GOVERNANCE

COMPLIANCE TO THE PRINCIPLES OF GOOD CORPORATE GOVERNANCE

Principle 1

Principle 2 and 4

Principle 3

Principle 6

Principle 5


88


Principle 11

Principle 8

Principle 9

Principle 10

Business Ethics

The Company has formulated a set of corporate ethics by which managementand employees will abide. Ethical procedures include appropriate ways to deal withshareholders, clients, and competitors. These ethical procedures have been clearly statedin writing by the Company.

Checks and Balances

The board of directors consists of 11 members, of which three are executive directorsand eight are non-executive directors. Among the non-executive directors are membersof the Audit Committee, independent directors, and directors who represent differentshareholder groups. During board meetings, non-executive directors can provide opinionsand suggestions and vote along side executive directors. All directors have one vote andif the votes are tied on any issue, the chairman has one extra vote to decide the issue.

Executive Positions

In order to achieve an appropriate balance between executive directors and non-executivedirectors, the positions of chairman of the board and managing director will be separate.The chairman will preside over all board meetings and be a non-executive director.The chairman’s responsibilities include establishing the agenda for board meetingsor shareholder meetings. The managing director will be an executive director and isresponsible for implementing the board’s policies. The chairman must be elected bythe board of directors.

Executive Compensation

The Company has a fair and transparent executive compensation policy. All compensationsfor directors will be proposed for consideration and approval at the annual shareholders’meeting. Furthermore, a Remuneration Committee has been established to consider allexecutive compensation issues including management pay. The Remuneration Committeewill meet and make recommendations to the board, which has the right to approve orreject them. The Company discloses all compensation policies and amounts (earned bythe board of directors and senior management) per the requirements of the Securitiesand Exchange Commission (SEC)

Board Meetings

The Company will hold regular board meetings and will invite all directors to attendin advance. The invitations will include the meeting agenda, and matters will be approvedby a simple majority vote. If any director votes against an item, his objection will be notedin the minutes of the meeting and kept within the Company. During the past year the recordof attendance of each director during board meetings is as follows:

Principle 7


89

Board Committees

The board of directors has appointed two committees, namely the Audit Committeeand the Remuneration Committee. Each committee has specific and clearly definedroles. The board committees meet regularly to discuss issues and report their findings tothe board of directors. The board of directors selects members of the two committees.During the past year the record of attendance of each audit committee member duringaudit committee meetings with external auditors is as follows :

Internal Control and Audit

The Company has an Internal Audit Department responsible for all internal audit andcontrol activities. The department’s main objective is to ensure that the Company isfollowing all applicable rules and regulations, including those of SET and SEC. In order toensure transparency, all audit reports are sent to the Audit Committee, which will thenforward them to the board of directors. During the past year the record of attendance ofeach audit committee member during audit committee meetings with the managementand internal auditors is as follows:


Principle 12

Principle 13

No. Name Attendance/Number of MeetingsFrom 1 October 2003-30 September 2004

1. M.R. Chandram S. Chandratat 4/52. Mr. Sompong Thanasophon 5/53. Vice Admiral Kittichai Senanarong 4/5

1. M.R. Chandram S. Chandratat 11/112. Mr. Arne Teigen 11/113. Mr. Sompong Thanasophon 10/114. Vice Admiral Kittichai Senanarong 10/115. Mr. Bjorn Ostrom 9/116. Mr. Sathien Tejapaibul 7/117. Mr. Pichai Chirungsappasuk 1/11

8. Mr. Lance Karl Depew 10/119. Mr. Frode Teigen 9/11

10. Mr. Ole Teigen 10/1111. Mr. Opart Petchmunee 10/11


Board Meetings (cont’d)

(Replaced Dr. Teera Ashakul in August 2004)


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Internal Control and Audit (cont’d)

Reporting

The board of directors is responsible for the accuracy and completeness of the Company’sfinancial statements, which are to be prepared according to generally accepted accountingprinciples. Apart from the financial statements, important information on the Company’sperformance must also be disclosed to ensure transparency. The board of directors is alsoresponsible for the accuracy of the information in the Company annual report. The boardof directors must certify the accuracy of the Company’s financial statements and annualreport. The information contained in these reports must follow the good corporategovernance principles outlined by SET.

Investor Relations

The Company stresses the importance of reporting accurate, complete, and trustworthyinformation within the prescribed time periods to all shareholders, potential investors,clients, regulatory agencies, and other interested parties. The Company has assignedthe Company’s Corporate Affairs Department to be responsible for the preparationof all information that will be released to SET and shareholders. The Corporate AffairsDepartment is responsible for answering all questions or issues raised by shareholders.All pertinent information on the Company is available on the following website:http://www.thoresen.com


1. M.R. Chandram S. Chandratat 5/62. Mr. Sompong Thanasophon 6/63. Vice Admiral Kittichai Senanarong 6/6


Principle 14

Principle 15

During the financial year ended on 30 September 2004, the Company and its subsidiaries had no related partytransactions with major shareholders, directors and related persons.

RELATED PARTY TRANSACTIONS


91

INTERNAL CONTROL

Effective internal control is an important management tool to ensure good corporate governance. Up to thepresent, the Company has focused on five main areas on internal control.

1. Control Environment

The organisation structure of the Company has been appropriately designed to facilitate the managementto effectively manage their activities. In addition, business goals have been formulated for employees to followand have been closely monitored.

2. Risk Assessment

External and internal risks such as currency exchange, oil price, accidents, shortage of skilled personnel,maintenance expenses and so on have been continually evaluated by the management. The mechanism tominimize those risks has been set up and regularly reviewed.

3. Control Activities

Authority and approval assignments have been defined for each department to follow and have beenmonitored regularly. Transactions with major shareholders, directors, management and related partieshave been carefully controlled to conform with the Notification of the Stock Exchange of Thailandregarding Rules and Procedures and Disclosure of Connected Transactions of Listed Companies.

4. Information and Communication

Informative technology has been developed to ensure efficient business operations of the Company andto serve the management’s needs. The accounting records conform with the generally accepted accountingstandards and the accounting files are updated regularly. Documents for the shareholders meetings andthe board of directors meetings have been delivered in an appropriate time and contained sufficient informationfor the shareholders or the board of directors to make decision.

5. Monitoring

The internal audit system has been regularly reviewed by the Internal Audit Department and the results ofthe performed audit had been reported to the Audit Committee. Up to the present, no material deficiencieshave been found. However, recommendations have been provided in some areas such as inventory,cash advance, and procedural matter.

The directors and the management are required to submit securities holding reports to the Company onthe same day as when they submit the reports to SEC and SET in accordance with the SEC and SETNotifications regarding reports of securities holding. They are also required to follow the SET Guideline onInsider Trading which require the directors and executives refraining from securities trading before the disclosureof financial statements or other important information that may affect the price of the securities.

INSIDE INFORMATION CONTROL


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MANAGEMENT DISCUSSION & ANALYSIS

Excluding a Baht 248.8 million loss on exchange rate recorded in the 2003/04 financial year, as a result ofthe Baht having depreciated against the USD, and a Baht 224.2 million gain on exchange recorded in the 2002/03financial year, as a result of the Baht having appreciated against the USD, the total consolidated revenuesof the Company increased from Baht 4,849.2 million in the 2002/03 financial year, to Baht 10,619.9 millionin the 2003/04 financial year, an increase of Baht 5,770.69 million, an increase which was almost entirely due tohigher freight charges, combined with a larger fleet.

The total consolidated expenses of the Company, before interest expense and income tax, and excluding theBaht 248.8 million loss on exchange recorded in the 2003/04 financial year, increased from Baht 3,929.0 millionin the 2002/03 financial year, to Baht 5,740.7 million in the 2003/04 financial year, an increase of Baht 1,811.7million, mainly as a result of higher vessel operating expenses and higher depreciation charges.

Vessel operating expenses, which increased by Baht 1,242.33 million over the previous year, consisted of ownerexpenses (crew, repair and maintenance, insurances, onboard administration and communication, and amortisationof dry-docking and special survey expenses), and voyage related expenses (loading and discharging, fuel oils, portand agency expenses).

Owner expenses increased from Baht 1,062.30 million in the 2002/03 financial year, to Baht 1,662.81 millionin the 2003/04 financial year, an increase of 56.52 %, mainly as a result of the the fleet being significantlylarger, with vessel days having increased from 9,923 in the 2002/03 financial year, to 14,631 in the 2003/04financial year, an increase of 47.5 %.

Expressed in Baht per vessel per day, owner expenses only increased from Baht 107,054 in the 2002/03financial year, to Baht 113,650 in the 2003/04 financial year, an increase of 6.16 %. Taking into considerationthat the average size of our vessels increased from 22,954 DWT in the 2002/03 financial year, to 25,767 DWTin the 2003/04 financial year, an increase of 12.3 %, the increase in owner expenses recorded were almostentirely attributed to the larger fleet, and the fact that the average vessel was larger in size.

Voyage related expenses increased from Baht 2,038.65 million in the 2002/03 financial year, to Baht 2,680.48million in the 2003/04 financial year, an increase of Baht 641.83 million, an increase which was mainly due toavailable vessel days having increased by 47.5 %, and the average vessel size having increased 12.3 %, duringthe period.

It should be noted that voyage related expenses, which consist of such expenses as loading and dischargeexpenses, port and canal fees, agency fees, and cost of fuels, can fluctuate quite a lot from one period to the next,depending on how the fleet is employed. A vessel employed in a liner trade will receive a higher freight rate ascompared to a vessel chartered out to a third party, as in the case of a liner trade, the owner will cover all voyagerelated expenses himself (such expenses are basically built into the freight rate), whilst the charterer will paysuch expenses directly when a vessel is chartered out.


93

MANAGEMENT DISCUSSION & ANALYSIS

Other expenses, service and administrative expenses, increased from Baht 483.6 million in the 2002/03financial year, to Baht 628.57 million in the 2003/04 financial year, an increase of Baht 144.98 million, or 30.0%,which compares very favourably to the 47.5% increase in vessel days during the period. Depreciation chargesdid however show a much larger increase, having increased from Baht 341.1 million in the 2002/03 financial year,to Baht 764.2 million in the 2003/04 financial year, an increase of Baht 423.1 million, or 124.0 %. Such increaseddepreciation charges were the direct result of the increase in vessel days, and the fact that the average vesselwas younger, better equipped, and thus more expensive, as compared to the year before.

The total consolidated assets of the Company increased from Baht 5,763.6 million in the 2002/03 financial year,to Baht 15,766.99 million in the 2003/04 financial year, an increase of Baht 10,003.39 million. Such increasewas mainly the result of a Baht 6,155.69 million increase in property and equipment, being a direct result ofthe Company’s fleet renewal programme, whereby the fleet composition changed from 33 vessels with anaverage DWT and age of 22,954 and 20 years as at 30 September 2003, to 43 vessels with an average DWTand age of 25,767 and 18.6 years as at 30 September 2004, and a Baht 2,617.8 million increase in cash andshort term investments. Other assets, such as accounts receivable, increased by Baht 504.08 million as a resultof freight rates, and the vessel fleet, both having increased substantially during the period.

With regard to liabilities, the total consolidated liabilities of the Company increased from Baht 4,072.4 millionas of 30 September 2003, to Baht 9,071.9 million as of 30 September 2004, an increase of Baht 4,999.47 million.Such increase was mainly due to a Baht 4,767.3 million net increase in long term loans, including the currentportion of such loans used to finance the Company’s fleet renewal programme explained above, a Baht 245.0million decrease in short-term loans, and a Baht 449.66 million increase in trade accounts payable and accruedexpenses, resulting from the larger fleet.

In terms of cash flow, the Company recorded an increase in the cash flows from operating activities,from Baht 928.2 million in the 2002/03 financial year, to Baht 5,195.8 million in the 2003/04 financial year,an increase of Baht 4,267.6 million. The current ratio improved very much as a result, standing at a solid 2.18as at 30 September 2004, as compared to 0.72 the year before. The debt-equity ratio also improved quitesignificantly, standing at 1.36 as of 30 September 2004, as compared to 2.42 the year before, despite the Companyhaving substantially expanding its asset base during the period.

The Company’s cash and short term investments increased from Baht 281.8 million as at 30 September 2003,to Baht 2,899.7 million as at 30 September 2004, an increase of Baht 2,617.9 million, whilst bank overdraftsand short term loans decreased from Baht 304.3 million as at 30 September 2003, to Baht 10.8 million as at30 September 2004, a decrease of Baht 293.5 million.

The overall dry bulk market has further improved since the end of the 2003/04 financial year, and the Companyhas (as at November 2004) already locked in around 55 % of next year’s total available capacity on timecharters, and contracts of affreightments, both at high rates. It is therefore the opinion of the managementthat the financial performance, and operating cash flow, will both record further and significant improvementsalso in the coming year.


94

Investments of the Company in other companies for more than 10% of the other companies’ sharesas of 30 September 2004

No. Type of # of Issued # of Invested % of ParShares Shares Shares Holding Value

COMPANY INVESTMENTS

TTTTType of Business : Interype of Business : Interype of Business : Interype of Business : Interype of Business : International Maritime Tnational Maritime Tnational Maritime Tnational Maritime Tnational Maritime Transporransporransporransporransportationtationtationtationtation

1 .1 .1 .1 .1 . Thoresen & Co., (Bangkok) Ltd.Thoresen & Co., (Bangkok) Ltd.Thoresen & Co., (Bangkok) Ltd.Thoresen & Co., (Bangkok) Ltd.Thoresen & Co., (Bangkok) Ltd. Ordinary 9,470,000 9,470,000 99.9 10

26/26-27 Orakarn Building Preference 3,030,000 3,029,994 - -8th Floor, Chidlom Road, Khet Pathumwan, Bangkok 10330Tel. : +66 (0) 2250-0569 Fax : +66 (0) 2254-9417

2 .2 .2 .2 .2 . Helios Shipping Co., Ltd.Helios Shipping Co., Ltd.Helios Shipping Co., Ltd.Helios Shipping Co., Ltd.Helios Shipping Co., Ltd. Ordinary 800,000 799,993 99.9 100

3 .3 .3 .3 .3 . Hermes Shipping Co., Ltd.Hermes Shipping Co., Ltd.Hermes Shipping Co., Ltd.Hermes Shipping Co., Ltd.Hermes Shipping Co., Ltd. Ordinary 270,000 269,994 99.9 100

4 .4 .4 .4 .4 . Herakles Shipping Co., Ltd.Herakles Shipping Co., Ltd.Herakles Shipping Co., Ltd.Herakles Shipping Co., Ltd.Herakles Shipping Co., Ltd. Ordinary 250,000 249,993 99.9 100

5 .5 .5 .5 .5 . Heron Shipping Co., Ltd.Heron Shipping Co., Ltd.Heron Shipping Co., Ltd.Heron Shipping Co., Ltd.Heron Shipping Co., Ltd. Ordinary 250,000 249,993 99.9 100

6 .6 .6 .6 .6 . Hermelin Shipping Co., Ltd.Hermelin Shipping Co., Ltd.Hermelin Shipping Co., Ltd.Hermelin Shipping Co., Ltd.Hermelin Shipping Co., Ltd. Ordinary 1,000,000 999,993 99.9 100

7 .7 .7 .7 .7 . Thor Star Shipping Co., Ltd.Thor Star Shipping Co., Ltd.Thor Star Shipping Co., Ltd.Thor Star Shipping Co., Ltd.Thor Star Shipping Co., Ltd. Ordinary 300,000 299,993 99.9 100

8 .8 .8 .8 .8 . Thor Skipper Shipping Co., Ltd.Thor Skipper Shipping Co., Ltd.Thor Skipper Shipping Co., Ltd.Thor Skipper Shipping Co., Ltd.Thor Skipper Shipping Co., Ltd. Ordinary 300,000 299,993 99.9 100

9 .9 .9 .9 .9 . Thor Sailor Shipping Co., Ltd.Thor Sailor Shipping Co., Ltd.Thor Sailor Shipping Co., Ltd.Thor Sailor Shipping Co., Ltd.Thor Sailor Shipping Co., Ltd. Ordinary 300,000 299,993 99.9 100

1 0 .1 0 .1 0 .1 0 .1 0 . Thor Sun Shipping Co., Ltd.Thor Sun Shipping Co., Ltd.Thor Sun Shipping Co., Ltd.Thor Sun Shipping Co., Ltd.Thor Sun Shipping Co., Ltd. Ordinary 400,000 399,993 99.9 100

1 1 .1 1 .1 1 .1 1 .1 1 . Thor Spirit Shipping Co., Ltd.Thor Spirit Shipping Co., Ltd.Thor Spirit Shipping Co., Ltd.Thor Spirit Shipping Co., Ltd.Thor Spirit Shipping Co., Ltd. Ordinary 400,000 399,993 99.9 100

1 2 .1 2 .1 2 .1 2 .1 2 . Thor Sky Shipping Co., Ltd.Thor Sky Shipping Co., Ltd.Thor Sky Shipping Co., Ltd.Thor Sky Shipping Co., Ltd.Thor Sky Shipping Co., Ltd. Ordinary 400,000 399,993 99.9 100

1 3 .1 3 .1 3 .1 3 .1 3 . Thor Sea Shipping Co., Ltd.Thor Sea Shipping Co., Ltd.Thor Sea Shipping Co., Ltd.Thor Sea Shipping Co., Ltd.Thor Sea Shipping Co., Ltd. Ordinary 400,000 399,993 99.9 100

1 4 .1 4 .1 4 .1 4 .1 4 . Thor Master Shipping Co., Ltd.Thor Master Shipping Co., Ltd.Thor Master Shipping Co., Ltd.Thor Master Shipping Co., Ltd.Thor Master Shipping Co., Ltd. Ordinary 1,880,000 1,879,993 99.9 100

(formerly named “Hai Meng Shipping Co., Ltd.”)

1 5 .1 5 .1 5 .1 5 .1 5 . Thor Merchant Shipping Co., Ltd.Thor Merchant Shipping Co., Ltd.Thor Merchant Shipping Co., Ltd.Thor Merchant Shipping Co., Ltd.Thor Merchant Shipping Co., Ltd. Ordinary 200,000 199,994 99.9 100

(formerly named “ Hai Lee Shipping Co., Ltd.”)

1 6 .1 6 .1 6 .1 6 .1 6 . Thor Mariner Shipping Co., Ltd.Thor Mariner Shipping Co., Ltd.Thor Mariner Shipping Co., Ltd.Thor Mariner Shipping Co., Ltd.Thor Mariner Shipping Co., Ltd. Ordinary 350,000 349,994 99.9 100

(formerly named “ Thoresen Ship Agencies Ltd.”)

1 7 .1 7 .1 7 .1 7 .1 7 . Thor Mercury Shipping Co., LtdThor Mercury Shipping Co., LtdThor Mercury Shipping Co., LtdThor Mercury Shipping Co., LtdThor Mercury Shipping Co., Ltd. Ordinary 600,000 599,994 99.9 100

(formerly named “Thoresen Barge Services Ltd.”)

1 8 .1 8 .1 8 .1 8 .1 8 . Thor Captain Shipping Co., LtdThor Captain Shipping Co., LtdThor Captain Shipping Co., LtdThor Captain Shipping Co., LtdThor Captain Shipping Co., Ltd. Ordinary 1,530,000 1,529,994 99.9 100

(formerly named “Halldor Shipping Co., Ltd.”)

1 9 .1 9 .1 9 .1 9 .1 9 . Thor Pilot Shipping Co., Ltd.Thor Pilot Shipping Co., Ltd.Thor Pilot Shipping Co., Ltd.Thor Pilot Shipping Co., Ltd.Thor Pilot Shipping Co., Ltd. Ordinary 800,000 799,993 99.9 100

(formerly named “Hero Shipping Co., Ltd.”)

2 0 .2 0 .2 0 .2 0 .2 0 . Thor Jasmine Shipping Co., Ltd.Thor Jasmine Shipping Co., Ltd.Thor Jasmine Shipping Co., Ltd.Thor Jasmine Shipping Co., Ltd.Thor Jasmine Shipping Co., Ltd. Ordinary 700,000 699,993 99.9 100

(formerly named “Hernes Shipping Co., Ltd.”)

2 1 .2 1 .2 1 .2 1 .2 1 . Thor Champion Shipping Co., Ltd.Thor Champion Shipping Co., Ltd.Thor Champion Shipping Co., Ltd.Thor Champion Shipping Co., Ltd.Thor Champion Shipping Co., Ltd. Ordinary 750,000 749,993 99.9 100

(formerly named “Hermod Shipping Co., Ltd.”)

2 2 .2 2 .2 2 .2 2 .2 2 . Thor Orchid Shipping Co., Ltd.Thor Orchid Shipping Co., Ltd.Thor Orchid Shipping Co., Ltd.Thor Orchid Shipping Co., Ltd.Thor Orchid Shipping Co., Ltd. Ordinary 472,500 472,493 99.9 100

2 3 .2 3 .2 3 .2 3 .2 3 . Thor Navigator Shipping Co., Ltd.Thor Navigator Shipping Co., Ltd.Thor Navigator Shipping Co., Ltd.Thor Navigator Shipping Co., Ltd.Thor Navigator Shipping Co., Ltd. Ordinary 450,000 449,993 99.9 100

(formerly named “Hermion Shipping Co., Ltd.”)

2 4 .2 4 .2 4 .2 4 .2 4 . Thor Commander Shipping Co., Ltd.Thor Commander Shipping Co., Ltd.Thor Commander Shipping Co., Ltd.Thor Commander Shipping Co., Ltd.Thor Commander Shipping Co., Ltd. Ordinary 1,150,000 1,149,993 99.9 100

(formerly named “Hai Hing Shipping Co., Ltd.”)

2 5 .2 5 .2 5 .2 5 .2 5 . Thor TThor TThor TThor TThor Transporransporransporransporransporter Shipping Co., Ltd.ter Shipping Co., Ltd.ter Shipping Co., Ltd.ter Shipping Co., Ltd.ter Shipping Co., Ltd. Ordinary 2,000,000 1,999,993 99.9 100

(formerly named “ Helikon Shipping Co., Ltd.”)

2 6 .2 6 .2 6 .2 6 .2 6 . Thor Lotus Shipping Co., Ltd.Thor Lotus Shipping Co., Ltd.Thor Lotus Shipping Co., Ltd.Thor Lotus Shipping Co., Ltd.Thor Lotus Shipping Co., Ltd. Ordinary 630,000 629,993 99.9 100

(formerly named “Thoresen Auto Transport Limited”)


95

COMPANY INVESTMENTS


TTTTType of Business : Interype of Business : Interype of Business : Interype of Business : Interype of Business : International Maritime Tnational Maritime Tnational Maritime Tnational Maritime Tnational Maritime Transporransporransporransporransportationtationtationtationtation

2 7 .2 7 .2 7 .2 7 .2 7 . Thor TThor TThor TThor TThor Trader Shipping Co., Ltdrader Shipping Co., Ltdrader Shipping Co., Ltdrader Shipping Co., Ltdrader Shipping Co., Ltd. Ordinary 450,000 449,993 99.9 100

2 8 .2 8 .2 8 .2 8 .2 8 . Thor TThor TThor TThor TThor Traveller Shipping Co., Ltdraveller Shipping Co., Ltdraveller Shipping Co., Ltdraveller Shipping Co., Ltdraveller Shipping Co., Ltd. Ordinary 450,000 449,993 99.9 100

2 9 .2 9 .2 9 .2 9 .2 9 . Thor VThor VThor VThor VThor Venturenturenturenturenture Shipping Co., Ltd.e Shipping Co., Ltd.e Shipping Co., Ltd.e Shipping Co., Ltd.e Shipping Co., Ltd. Ordinary 750,000 749,993 99.9 100

3 0 .3 0 .3 0 .3 0 .3 0 . Thor Nautica Shipping Co., Ltd.Thor Nautica Shipping Co., Ltd.Thor Nautica Shipping Co., Ltd.Thor Nautica Shipping Co., Ltd.Thor Nautica Shipping Co., Ltd. Ordinary 500,000 499,993 99.9 100

3 1 .3 1 .3 1 .3 1 .3 1 . Thor Confidence Shipping Co., Ltd.Thor Confidence Shipping Co., Ltd.Thor Confidence Shipping Co., Ltd.Thor Confidence Shipping Co., Ltd.Thor Confidence Shipping Co., Ltd. Ordinary 500,000 499,993 99.9 100

3 2 .3 2 .3 2 .3 2 .3 2 . Thor Guardian Shipping Co., Ltd.Thor Guardian Shipping Co., Ltd.Thor Guardian Shipping Co., Ltd.Thor Guardian Shipping Co., Ltd.Thor Guardian Shipping Co., Ltd. Ordinary 750,000 749,993 99.9 100

3 3 .3 3 .3 3 .3 3 .3 3 . Thor TThor TThor TThor TThor Triumph Shipping Co., Ltd.riumph Shipping Co., Ltd.riumph Shipping Co., Ltd.riumph Shipping Co., Ltd.riumph Shipping Co., Ltd. Ordinary 600,000 599,993 99.9 100

3 4 .3 4 .3 4 .3 4 .3 4 . Thor Nexus Shipping Co., Ltd.Thor Nexus Shipping Co., Ltd.Thor Nexus Shipping Co., Ltd.Thor Nexus Shipping Co., Ltd.Thor Nexus Shipping Co., Ltd. Ordinary 750,000 749,993 99.9 100

3 5 .3 5 .3 5 .3 5 .3 5 . Thor Neptune Shipping Co., Ltd.Thor Neptune Shipping Co., Ltd.Thor Neptune Shipping Co., Ltd.Thor Neptune Shipping Co., Ltd.Thor Neptune Shipping Co., Ltd. Ordinary 750,000 749,993 99.9 100

3 6 .3 6 .3 6 .3 6 .3 6 . Thor TThor TThor TThor TThor Tribute Shipping Co., Ltd.ribute Shipping Co., Ltd.ribute Shipping Co., Ltd.ribute Shipping Co., Ltd.ribute Shipping Co., Ltd. Ordinary 550,000 549,993 99.9 100

3 7 .3 7 .3 7 .3 7 .3 7 . Thor Jupiter Shipping Co., Ltd.Thor Jupiter Shipping Co., Ltd.Thor Jupiter Shipping Co., Ltd.Thor Jupiter Shipping Co., Ltd.Thor Jupiter Shipping Co., Ltd. Ordinary 850,000 849,993 99.9 100

3 8 .3 8 .3 8 .3 8 .3 8 . Thor Alliance Shipping Co., Ltd.Thor Alliance Shipping Co., Ltd.Thor Alliance Shipping Co., Ltd.Thor Alliance Shipping Co., Ltd.Thor Alliance Shipping Co., Ltd. Ordinary 800,000 799,993 99.9 100

3 9 .3 9 .3 9 .3 9 .3 9 . Thor Nautilus Shipping Co., Ltd.Thor Nautilus Shipping Co., Ltd.Thor Nautilus Shipping Co., Ltd.Thor Nautilus Shipping Co., Ltd.Thor Nautilus Shipping Co., Ltd. Ordinary 500,000 499,993 99.9 100

4 0 .4 0 .4 0 .4 0 .4 0 . Thor Wind Shipping Co., Ltd.Thor Wind Shipping Co., Ltd.Thor Wind Shipping Co., Ltd.Thor Wind Shipping Co., Ltd.Thor Wind Shipping Co., Ltd. Ordinary 2,000,000 1,999,993 99.9 100

4 1 .4 1 .4 1 .4 1 .4 1 . Thor Wave Shipping Co., Ltd.Thor Wave Shipping Co., Ltd.Thor Wave Shipping Co., Ltd.Thor Wave Shipping Co., Ltd.Thor Wave Shipping Co., Ltd. Ordinary 2,000,000 1,999,993 99.9 100

4 2 .4 2 .4 2 .4 2 .4 2 . Thor Dynamic Shipping Co., Ltd.Thor Dynamic Shipping Co., Ltd.Thor Dynamic Shipping Co., Ltd.Thor Dynamic Shipping Co., Ltd.Thor Dynamic Shipping Co., Ltd. Ordinary 3,600,000 3,599,993 99.9 100

4 3 .4 3 .4 3 .4 3 .4 3 . Thor Enterprise Shipping Co., Ltd.Thor Enterprise Shipping Co., Ltd.Thor Enterprise Shipping Co., Ltd.Thor Enterprise Shipping Co., Ltd.Thor Enterprise Shipping Co., Ltd. Ordinary 3,000,000 2,999,993 99.9 100

4 4 .4 4 .4 4 .4 4 .4 4 . Thor Harmony Shipping Co., Ltd.Thor Harmony Shipping Co., Ltd.Thor Harmony Shipping Co., Ltd.Thor Harmony Shipping Co., Ltd.Thor Harmony Shipping Co., Ltd. Ordinary 3,500,000 3,499,993 99.9 100

4 5 .4 5 .4 5 .4 5 .4 5 . Thor Integrity Shipping Co., Ltd.Thor Integrity Shipping Co., Ltd.Thor Integrity Shipping Co., Ltd.Thor Integrity Shipping Co., Ltd.Thor Integrity Shipping Co., Ltd. Ordinary 2,800,000 2,799,993 99.9 100

4 6 .4 6 .4 6 .4 6 .4 6 . Thor Nectar Shipping Co., Ltd.Thor Nectar Shipping Co., Ltd.Thor Nectar Shipping Co., Ltd.Thor Nectar Shipping Co., Ltd.Thor Nectar Shipping Co., Ltd. Ordinary 2,100,000 2,099,993 99.9 100

(formerly named “Heritage Shipping Co., Ltd.”)

4 7 .4 7 .4 7 .4 7 .4 7 . Thor Nereus Shipping Co., Ltd.Thor Nereus Shipping Co., Ltd.Thor Nereus Shipping Co., Ltd.Thor Nereus Shipping Co., Ltd.Thor Nereus Shipping Co., Ltd. Ordinary 1,650,000 1,649,993 99.9 100

(formerly named “Hektor Shipping Co., Ltd.”)

Note : The registered office address of companies in item No. 2 – 47 is 26/32 Orakarn Building 10th Floor, Soi Chidlom, Ploenchit Road,Kwaeng Lumpinee Bangkok 10330 Tel. : +66 (0) 2250-0569 Fax : +66 (0) 2254-8436

TTTTType of Business : Stevedoringype of Business : Stevedoringype of Business : Stevedoringype of Business : Stevedoringype of Business : Stevedoring

4 8 .4 8 .4 8 .4 8 .4 8 . Chidlom TChidlom TChidlom TChidlom TChidlom Transporransporransporransporransport & Services Co., Ltdt & Services Co., Ltdt & Services Co., Ltdt & Services Co., Ltdt & Services Co., Ltd. Ordinary 5,000 4,994 99.9 1,000

26/49 Orakarn Building 14th Floor,

Soi Chidlom, Ploenchit Road, Khet Pathumwan, Bangkok 10330

Tel. : +66 (0) 2655-5148-50 Fax : +66 (0) 2655-5147

TTTTType of Business : Ship Agenciesype of Business : Ship Agenciesype of Business : Ship Agenciesype of Business : Ship Agenciesype of Business : Ship Agencies

4 9 .4 9 .4 9 .4 9 .4 9 . ISS Thoresen Agencies Ltd.ISS Thoresen Agencies Ltd.ISS Thoresen Agencies Ltd.ISS Thoresen Agencies Ltd.ISS Thoresen Agencies Ltd. Ordinary 500,000 499,993 99.9 100

26/26-27 Orakarn Building 8th Floor,


Tel. : +66 (0) 2250-0569 Fax : +66 (0) 2253-9497

5 0 .5 0 .5 0 .5 0 .5 0 . Thoresen Shipping FZEThoresen Shipping FZEThoresen Shipping FZEThoresen Shipping FZEThoresen Shipping FZE Ordinary 1 1 100.0 550,50019th Floor, Golden Tower, Al Buheira Corniche Road, Dirhams

Opp. Marbella Resorts

P.O. Box 27500, Sharjah-United Arab Emirates

Tel. +971-6-574-2244 Fax. 971-6-574 4244

5 1 .5 1 .5 1 .5 1 .5 1 . Gulf Agency Company (Thailand) Ltd.Gulf Agency Company (Thailand) Ltd.Gulf Agency Company (Thailand) Ltd.Gulf Agency Company (Thailand) Ltd.Gulf Agency Company (Thailand) Ltd. Ordinary 22,000 11,210 51.0 1,00026/30-31 Orakarn Building 9th Floor,


Tel. : +66 (0) 2650-7400 Fax : +66 (0) 2650-7401


96

COMPANY INVESTMENTS


TTTTType of Business : Ship Agenciesype of Business : Ship Agenciesype of Business : Ship Agenciesype of Business : Ship Agenciesype of Business : Ship Agencies

5 2 .5 2 .5 2 .5 2 .5 2 .Thoresen (Indochina) S.A.Thoresen (Indochina) S.A.Thoresen (Indochina) S.A.Thoresen (Indochina) S.A.Thoresen (Indochina) S.A. Ordinary 2,500 1,250 50.0 100

12A Floor, Bitexco Building, US Dollar19-25 Nguyen Hue Boulevard District 1, Ho Chi Minh City, Vietnam

Tel. : +84 8 821 5423 Fax : +84 8 821 5424

TTTTType of Business : Ship Brype of Business : Ship Brype of Business : Ship Brype of Business : Ship Brype of Business : Ship Brokerageokerageokerageokerageokerage

5 3 .5 3 .5 3 .5 3 .5 3 .Fearnleys (Thailand) Ltd.Fearnleys (Thailand) Ltd.Fearnleys (Thailand) Ltd.Fearnleys (Thailand) Ltd.Fearnleys (Thailand) Ltd. Ordinary 20,000 10,194 51.0 100

26/55 Orakarn Building 15th Floor,Soi Chidlom, Ploenchit Road, Khet Pathumwan, Bangkok 10330Tel. +66 (0) 2253-6160 Fax. +66 (0) 2655-2716

TTTTType of Business : Ofype of Business : Ofype of Business : Ofype of Business : Ofype of Business : Offshorfshorfshorfshorfshore Related Servicese Related Servicese Related Servicese Related Servicese Related Services

5 4 .5 4 .5 4 .5 4 .5 4 .Mermaid Maritime Ltd.Mermaid Maritime Ltd.Mermaid Maritime Ltd.Mermaid Maritime Ltd.Mermaid Maritime Ltd. Ordinary 20,394,000 10,197,000 50.0 10

26/49 Orakarn Building, 14th FloorSoi Chidlom, Ploenchit Road, Khet Pathumwan, Bangkok 10330Tel. : +66 (0) 2255-3115-6 Fax : +66 (0) 2255-1079

TTTTType of Business : Ship Maintenance & Repairsype of Business : Ship Maintenance & Repairsype of Business : Ship Maintenance & Repairsype of Business : Ship Maintenance & Repairsype of Business : Ship Maintenance & Repairs

5 5 .5 5 .5 5 .5 5 .5 5 .TTTTT.S.C. Maritime Ltd..S.C. Maritime Ltd..S.C. Maritime Ltd..S.C. Maritime Ltd..S.C. Maritime Ltd. Ordinary 100,000 99,993 99.9 100

53/64 Moo 10, Tambon Tungsukla,Amphor Sriracha, Cholburi 20230Tel. : +66 (0) 3849-1590 Fax : +66 (0) 3849-1591

TTTTType of Business : Marine Suppliesype of Business : Marine Suppliesype of Business : Marine Suppliesype of Business : Marine Suppliesype of Business : Marine Supplies

5 6 .5 6 .5 6 .5 6 .5 6 .Chidlom Marine Services & Supplies Ltd.Chidlom Marine Services & Supplies Ltd.Chidlom Marine Services & Supplies Ltd.Chidlom Marine Services & Supplies Ltd.Chidlom Marine Services & Supplies Ltd. Ordinary 200,000 199,993 99.9 100

26/49 Orakarn Building 14th Floor,Soi Chidlom, Ploenchit Road, Khet Pathumwan, Bangkok 10330Tel. : +66 (0) 2655-5148-49 Fax : +66 (0) 2655-5147

TTTTType of Business : P & I Club Reprype of Business : P & I Club Reprype of Business : P & I Club Reprype of Business : P & I Club Reprype of Business : P & I Club Representationesentationesentationesentationesentation

5 7 .5 7 .5 7 .5 7 .5 7 .Thai P & I Services International Ltd.Thai P & I Services International Ltd.Thai P & I Services International Ltd.Thai P & I Services International Ltd.Thai P & I Services International Ltd. Ordinary 10,000 9,000 90.0 100

26/49 Orakarn Building 14th Floor,Soi Chidlom, Ploenchit Road, Khet Pathumwan, Bangkok 10330Tel. : +66 (0) 2255-7227-9 Fax : +66 (0) 2655-5291

TTTTType of Business : Marine Communicationype of Business : Marine Communicationype of Business : Marine Communicationype of Business : Marine Communicationype of Business : Marine Communication

5 8 .5 8 .5 8 .5 8 .5 8 .Horizon Mobile Communications Co., Ltd.Horizon Mobile Communications Co., Ltd.Horizon Mobile Communications Co., Ltd.Horizon Mobile Communications Co., Ltd.Horizon Mobile Communications Co., Ltd. Ordinary 204,500 69,845 34.15 100

26/56-58 Orakarn Building 16th Floor,Soi Chidlom, Ploenchit Road, Khet Pathumwan, Bangkok 10330Tel. : +66 (0) 2250-1374-7 Fax : +66 (0) 2652-7232

TTTTType of Business : Charype of Business : Charype of Business : Charype of Business : Charype of Business : Chartering Servicestering Servicestering Servicestering Servicestering Services

5 9 .5 9 .5 9 .5 9 .5 9 .Thoresen Chartering (Pte) Ltd.Thoresen Chartering (Pte) Ltd.Thoresen Chartering (Pte) Ltd.Thoresen Chartering (Pte) Ltd.Thoresen Chartering (Pte) Ltd. Ordinary 100,000 100,000 100.0 S$ 1

8 Cross Street # 11-00, PWC Building, Singapore 048424

6 0 .6 0 .6 0 .6 0 .6 0 .Thoresen Chartering (HK) LimitedThoresen Chartering (HK) LimitedThoresen Chartering (HK) LimitedThoresen Chartering (HK) LimitedThoresen Chartering (HK) Limited Ordinary 500,000 499,999 99.9 HK$ 1

Room 403, 4th Floor, Printing House, 6 Duddell Street,Central, Hongkong

TTTTType of Business : Porype of Business : Porype of Business : Porype of Business : Porype of Business : Port Operationst Operationst Operationst Operationst Operations

6 1 .6 1 .6 1 .6 1 .6 1 .Sharjah Ports ServicesSharjah Ports ServicesSharjah Ports ServicesSharjah Ports ServicesSharjah Ports Services Ordinary 20,000 9,800 49.0 100

P.O. Box 510 Port Khalid, Shajah, United Arab Emirates. (indirect DirhamsTel. 971-6-528 1327 Fax : 971-6-528 1425 holding)