CONSOLIDATED FINANCIAL STATEMENTS

– GROUP ANNUAL REPORT 201 3

2013 Annual Report

Board of Directors Report 2013 > page 3 – page 5 Responsibility statement > page 31 Consolidated statement of comprehensive income 2013 for the Group > page 6 Consolidated statement of financial position 2013 for the Group > page 7 Consolidated cash flow statement 2013 for the Group > page 8 Consolidated statement of changes in equity 2013 for the Group > page 9 Notes to the financial statements for the Group > page 10 – page 30 Income statement 2013 for ASA > page 34 Financial position 2013 for ASA > page 35 Cash flow statement 2013 for ASA > page 26 Notes to the financial statements for ASA > page 37 – page 46 Corporate Governance > page 32 Independent auditors' report 2013 > page 47

BOARD OF DIRECTORS REPORT

The business activity of the Group is investment and management related to shipping, rig, real estate, stock trading and similar business activities.

A LOOK BACK ON 2013

The year 2013 turned out to be a good year for the shipping and tanker industry with an increase of the Oslo Shipping Index of approximately 50%. The Oslo Energy Drilling Index increased by 22% whiles the Oslo Børs Benchmark index increased by 21%.

The Group has no vessel under operation. Hence the Group has no direct exposure to the shipping market.

FINANCIAL RESULTS 2013 (GROUP)

The Group reports a total comprehensive income for 2013 of NOK 40.8 million (NOK 12.4 million).

The major items of the Groups net comprehensive income consist of dividends from SD Standard Drilling Plc of NOK 20.9 million, as well as an impairment of NOK 17.5 million on the same investment as an indirect result of the paid dividends. Further net positive change in available-for-sale financial assets generated other comprehensive income of NOK 36.4 million.

Gross income for 2013 were NOK 3,3 million (2012 NOK 0 million excluding discontinued operations).

Total operating expenses for 2013 were NOK 4,2 million (2012 NOK 9.7 million excluding discontinued operations).

Net operating profit for 2013 was NOK -0.8 million (2012 NOK -9.7 million excluding discontinued operations).

Operating profit before interest, taxes, depreciation and amortization (EBITDA) for 2013 was NOK 2.6 million (2012 NOK -9.2 million excluding discontinued operations). Net financial items for 2013 were NOK 4.1 million (2012 NOK -1.1 million).

Earnings per share for 2013 were NOK 0.05 (2012 NOK 0.25).

As per the end of the year, the Company had a total of 128 shareholders and a total of 86,777,409 shares outstanding, the same number of shares being the average number of shares outstanding throughout the year. The Company's 20 largest shareholders controlled about 99 percent of the total number of shares outstanding at year end.

LIQUIDITY AND CASH FLOW

The net cash balance as of 31 December 2013 was TNOK 102 864 (2012: TNOK 146 852). The net change in cash over the year was TNOK -43 988 (2012 TNOK 46 957). The negative change in cash in 2013 comes as a result of net investment in financial assets.

FINANCIAL POSITION

As at 31 December 2013, the Group's total assets amounted to NOK 217.7 million (2012 NOK 195.9 million). Total equity was NOK 217.2 million (2012 NOK 176,4 million).

It is the opinion of the board of directors that the Group is in a sound financial position with an equity ratio of about 99.7 % (90.0 %.) Please see further information described under Going Concern.

RISK FACTORS

The Group is exposed to a limited number of different risk factors. The most significant risk factors are market risk, legal risk, credit risk and liquidity risk.

Market risk: The investments in shares and other financial instruments expose the group to market risk in form of equity price risk. The Group moderates this risk through careful selection of securities for investment

Legal risk: The Group has been presented a claim of USD 2 million in relation to the time charterparty of the vessel MT Saga Agnes. The matter will be resolved through arbitration.

Credit risk: The Group is exposed to credit risk, inherent in the risk that the counterparty will be unable to pay amounts in full when due. The Group have normally insignificant amounts of outstanding receivables. However, this risk is also applicable to bank deposits. The risk is limited through the use of financial institutions with solid credit rating for bank deposits and settlement of transactions.

Liquidity risk: The Group continuously monitors the liquidity requirements, in order to ensure sufficient cash for meeting the operational needs. The Group has no outstanding debt or capital commitments.

Saga Tankers manages these risk factors through internal reporting and control procedures as well as consulting with external advisors. The Group's risk factors are described in more detail in note 19.

HEALTH, SAFETY AND ENVIRONMENT (HSE)

A good and safe working environment has been given a high priority in Saga Tankers. The Group's goal is to ensure that it operates in such a way that no detrimental effects are made on either people or the environment in which we operate. The Group's objective is to ensure safe and secure operations. The business operates in compliance with national and international requirements and regulations. There have been no work-related accidents resulting in sick leave during 2013.

Saga Tankers aims to have a workplace free from discrimination on the basis of gender, sex and race in matters such as pay, promotion and recruitment. At year end the Group had one employee.

The Group is not involved in any research or development projects, and has not booked any such costs during 2013.

CORPORATE SOCIAL RESPONSIBILITY

The Group has no formalized guidelines regarding corporate responsibility. However, The Group is constantly focused on conduction its business through a sound code of ethics.

FINANCIAL RESULTS OF PARENT COMPANY

Saga Tankers ASA (the Parent Company) reports a net profit for 2013 of NOK 1.6 million (2012 NOK 4.9 million).

Gross revenues for 2013 were NOK 3.3 million (2012 NOK 1.6 million).

Total operating expenses for 2013 were NOK 4.0 million (2012 NOK 8.4 million).

Operating profit before interest, taxes, depreciation and amortization (EBITDA) for 2013 was NOK -0.1 million (2012 NOK -14.1 million).

Net financial items for 2013 were NOK 2.3 million (2012 NOK 11.7 million).

The Board of Directors proposes that the net profit for 2013 of NOK 1.6 million is attributed to accumulated losses.

CORPORATE GOVERNANCE

The Group strives to comply with the NUES corporate governance guidelines.

Please see the Company's website for a description of the Corporate Governance policies and information about the Company's deviations from the NUES guidelines during 2013.

SUBSEQUENT EVENTS

After the year end, the Chairman of the Board, Mr. Øystein Stray Spetalen has acquired additional 574 097 of the shares outstanding, bringing his ownership up to 96.5% in the Company. Each of the remaining shareholders can, pursuant to the Norwegian Public Limited Liability Companies Act section § 4-25 and the Securities Trading Act section § 6-22, require Mr. Spetalen to acquire its remaining shares.

INVESTMENT IN SHARES

After reviewing multiple investment opportunities throughout the year, the Group made some investment in 2013. The Group has increased the investment in both Prospector Offshore Drilling S.A and S.D Standard Drilling Plc.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE PERIOD 01.01– 31.12

NOK 1000	NOTE	2013	2012 Restated (a)
OPERATING INCOME
Net gains and losses on Available-for-sale financial assets	4, 22	3 276	-
Other income	4	58	-
GROSS INCOME		3 334	-

OPERATING EXPENSES
Employee benefit expenses	6	2 314	4 284
Administrative expenses	6,17	1 922	5 326
Depreciation/amortization	11	-	105
TOTAL OPERATING EXPENSES		4 236	9 715

Loss(-gain) sale fixed assets	11	-53	-

NET OPERATING PROFIT /LOSS (-)		-847	-9 715

FINANCIAL INCOME /EXPENSES (-)
Interest income		1 769	12
Interest expenses Net foreign exchange gain/loss (-)		-2 2 334	-1 519 506
Other financial Income/expenses (-)		2	-99
NET FINANCIAL INCOME /EXPENSES (-)		4 103	-1 100

Share of profit from associates	5	1 074

NET PROFIT BEFORE TAX		4 329	-10 815

Taxes	12	-	-

NET PROFIT / LOSS(-) FROM CONTINUING OPERATIONS		4 329	-10 815

DISCONTINUED OPERATIONS
Profit for the year from discontinued operations	24	-	32 126

NET PROFIT / LOSS (-) FOR THE YEAR		4 329	21 311

Items that may be subsequently reclassified to profit or loss
Change in available-for-sale financial assets	22	36 446	3 033
Currency translation differences		-	-11 962
OTHER COMPREHENSIVE INCOME		36 446	-8 929

TOTAL COMPREHENSIVE INCOME		40 775	12 381
Basic and diluted earnings per share	16	0,05	0,25
Earnings per share discontinued operations		-	0,37
Average number of shares in the period	16	86 777 409	86 777 409
Number of shares outstanding at period end	16	86 777 409	86 777 409

The notes on pages 10 to 30 are an integral part of these consolidated financial statements.

(a) See note 2

NOK 1000	NOTE	31 Dec 2013	31 Dec 2012 Restated (a)	1 Jan 2012 Restated (a)
ASSETS
Non-current assets
Available-for-sale financial assets	19,20,22	99731	34 648
Associates	5	15 0 74	14 000
Other fixed assets	11		278	360
Total non-current assets		114 805	48 9 26	360
Current assets
Trade receivables and other receivables	9,19,20			5 5 4 5
Other current assets	8	65	138	1780
Cash and cash equivalents	$\overline{7}$	102 864	146852	100 895
Total current assets		102 930	146 990	108 221
Assets of disposal group classified as held for sale	11, 24			184796
TOTAL ASSETS		217735	195 916	293 376
EQUITY AND LIABILITIES
Share capital	15	86 777	86777	86777
Other equity		883 696	883 696	883 696
Total paid-in capital		970 473	970 473	970 473
Accumulated losses		$-790117$	$-794446$	$-815757$
Other components of equity		36831	385	9314
Total equity		217 187	176 411	164 030
LIABILITIES
Net pension liabilities	13			1 2 3 5
Total non-current liabilities				1 2 3 5
Short-term interest-bearing debt	14, 24			118 693
Tonnage tax payable				126
Trade and other payables	19,20	6	17753	1373
Other current liabilities	10	543	1752	7919
Total current liabilities		548	19505	128 111
Total liabilities		548	19 505	129 345

CONSOLIDATED CASH FLOW STATEMENT FOR THE PERIOD 01.01 – 31.12

NOK 1000	NOTE	2013	2012 Restated (a)
Profit before tax		4 329	21 311
Profit share from associates	5	-1 074	-
Interest expense		-	1 519
Depreciation	11	-	105
Impairment charge	22	17 523	-
Loss/(gain) sale fixed asset		-53	-605
Foreign exchange losses /(gains)		-2 334	-9 056
Increase/decrease receivables and prepayments		73	6 972
Increase/decrease payables and accruals		-18 957	-1 333
Increase/decrease other provisions		-	11 304
Interest paid		-	-1 519
Net cash flow from operating activities		-493	28 698

Investment in Available-for-sale financial assets	22	-66 468	-47 534
Divestment in Available-for-sale financial assets	22	20 308
Proceeds from sale of vessel		-	180 049
Proceeds from sale of other fixed assets	11	331

Net cash flow from investing activities		-45 829	132 515

Repayments of long term borrowings	14	-	-115 256
Net cash flow from financing activities		-	-115 256

Net change in cash and cash equivalents	7	-46 322	45 957

Cash and cash equivalents at the beginning of period		146 852	100 895

Cash and cash equivalents at end of period	7	102 864	146 852
Net foreign exchange differences (unrealized)		2 334	-

(a) See note 2

(b) The notes on pages 10 to 30 are an integral part of these consolidated financial statements.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER

2013				Available	Exchange
	Issued	Other	Accumulated	for-sale reserve	difference currency
NOK 1000	capital	equity	losses		translations	Total
Equity as at 1 January 2013
Restated (a)	86 777	883 696	-794 446	3 033	-2 648	176 411

Net profit/(-loss)	-	-	4 329	-	-	4 329
Other comprehensive income	-	-	-	36 446	-	36 446
Total comprehensive income	-	-	4 329	36 446	-	40 775

Equity per ending bal. 31
December 2013	86 777	883 696	-790 117	39 479	-2 648	217 187

2012
NOK 1000	Issued capital	Other equity	Accumulated losses	Available for-sale reserve	Exchange difference currency translations	Total
Equity as at 1 January 2012
Restated (a)	86 777	883 696	-815 757	-	9 314	164 030

Net profit/(-loss)	-	-	21 311	-	-	21 311
Other comprehensive income	-	-	-	3 033	-11 962	-8 929
Total comprehensive income	-	-	21 311	3 033	-11 962	12 381

Equity per ending bal. 31
December 2012 Restated (a)	86 777	883 696	-794 446	3 033	-2 648	176 411
(a) See note 2

The notes on pages 10 to 29 are an integral part of these consolidated financial statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENT

NOTE 1 – CORRPORATE INFORMATION

Saga Tankers ASA ("the Company") is a publicly limited company incorporated and domiciled in Norway. The address of the head office is Sjølyst Plass 2, 0278 Oslo. The Company was incorporated on 24 March 2010 and was listed on the Oslo Stock Exchange "Axess"-list on 18 June 2010.

The consolidated financial statements for the year ended 31 December 2013, were approved by the Board of Directors on 23 April 2014, and will be presented for approval at the Annual General Meeting on 30 May 2014.

The business activity of the Group is investment and management related to shipping, rig, real estate, stock trading and similar business activities.

NOTE 2 – CHANGES IN ACCOUNTING POLICY AND RESTATEMENTS

The Group has prior to the fourth quarter 2012 operated one type of vessel, VLCC. During Q4 2012, the Group had sold all assets and did not own any revenue generating assets compared to earlier periods of 2012. The Group's main business now revolves around investing and trading in financial instruments, where the Group's cash flows and economic returns are now principally denominated in Norwegian Kroner (NOK) – i.e. change in functional currency from 1 April 2013. From 1 April 2013, Saga Tankers ASA Group also changed the currency in which it presents its consolidated and parent Company Financial Statements from US Dollars to Norwegian Kroner (NOK).

A change in presentation currency is a change in accounting policy which is accounted for retrospectively. Statutory financial information included in the Group's Annual Report and Accounts for the year ended 31 December 2012 previously reported in US Dollars has been restated into Norwegian Kroner using the procedures outlined below:

Assets and liabilities denominated in non-Norwegian Kroner currencies were translated into Norwegian Kroner at closing rates of exchange. Non-Norwegian Kroner trading results were translated into Norwegian Kroner at average rates of exchange. Differences resulting from the retranslation of the opening net assets and the results for the year have been taken to currency translations; and
Share capital, share premium and other reserves were translated at the historic rates prevailing at the dates of transactions.
All exchange rates used were the rates denominated by the Norges Bank.

The exchange rates of US Dollar to Norwegian Kroner over the periods included in this Annual Report and Accounts are as follows:

	US Dollar/Norwegian Kroner exchange rates	2013	2012	2011
Closing rate		6,0837	5,5876	5,9946
Average rate		5,8770	5,8210	5,6074

The consolidated accounts for the year 2012 have been restated in order to reflect the operation of vessels to be a discontinued operation. Further the investments in Vallhall Fotballhall KS and associated companies, has been reclassified from available for sale financial assets to investment in associated companies in order to reflect the group and related entities combined influence of this investment in 2012.

Restatement of balance 1 January 2012

NOK 1000	USD as reported previously	NOK calculated from USD at 5,9946	1 Jan 2012 Restated (a)	Change	Note
ASSETS
Non-current assets
Other fixed assets	60	360	360	-
Total non-current assets	60	360	360	-

Current assets
Trade receivables and other receivables	924	5 545	5 545	-
Other current assets	297	1 780	1 780	-
Cash and cash equivalents	16 831	100 895	100 895	-
Total current assets	18 053	108 221	108 221	-
Assets of disposal group classified as held for sale	30 827	184 796	184 796	-
TOTAL ASSETS	48 941	293 376	293 376	-

EQUITY AND LIABILITIES
Share capital	14 620	87 641	86 777	-864	1
Other equity	7 498	892 146	883 696	-8 450	1
Total paid-in capital	22 118	979 787	970 473	-9 314
Accumulated losses	-136 082	-815 757	-815 757	-
Other components of equity	-	-	9 314	9 314	1
Total equity	27 363	164 030	164 030	-

LIABILITIES
Net pension liabilities	206	1 235	1 235	-
Total non-current liabilities	206	1 235	1 235	-

Short-term interest-bearing debt	19 800	118 693	118 693	-
Tonnage tax payable	21	126	126	-
Trade and other payables	229	1 373	1 373	-
Other current liabilities	1 321	7 919	7 919	-
Total current liabilities	21 371	128 111	128 111	-
Total liabilities	21 577	129 345	129 345	-

TOTAL EQUITY AND LIABILITIES	48 941	293 376	293 376	-

Notes:

Currency translation differences caused by paid in equity held at historical exchange rate

Restatement of balance 31 December 2012

NOK 1000	USD as reported previously	NOK calculated from USD at 5,5876	31 Dec 2012 Restated (a)	Change	Note
ASSETS
Non-current assets
Available-for-sale financial assets	8 712	48 679	34 648	-14 031	1,2
Associates	-	-	14 000	14 000	1
Other fixed assets	42	235	278	43	2
Total non-current assets	8 754	48 914	48 926	12

Current assets
Other current assets	25	140	138	-2	2
Cash and cash equivalents	26 281	146 848	146 852	4	2
Total current assets	26 306	146 987	146 990	3
TOTAL ASSETS	35 060	195 901	195 916	15

EQUITY AND LIABILITIES
Share capital	14 620	81 691	86 777	5 087	3
Other equity	148 825	831 575	883 696	52 121	3
Total paid-in capital	163 445	913 265	970 473	57 207
Accumulated losses	-132 421	-739 916	-794 446	-54 531	3
Other components of equity	548	3 062	385	-2 677	3
Total equity	31 572	176 412	176 411	-1

LIABILITIES
Trade and other payables	3 174	17 735	17 753	18	2
Other current liabilities	314	1 755	1 752	-3	2
Total current liabilities	3 488	19 490	19 505	15
Total liabilities	3 488	19 490	19 505	15
TOTAL EQUITY AND LIABILITIES	35 060	195 901	195 916	15

Notes:

Reclassification of investment from Available-for-sale financial assets to Associates
Round-off due to reporting in USD 1 000 and minor exchange differences.
Currency translation differences caused by paid in equity held at historical exchange rate

NOTE 3 – ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been applied to all the years presented, unless otherwise stated.

Basis of preparation

The financial statements for Saga Tankers for the financial year 2013 have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU. The IFRS principles have been applied consistently since incorporation. Below is a summary of the Group's accounting policies to be applied in the consolidated financial statements.

The consolidated financial statements are presented in NOK and all numbers are rounded to the nearest thousands, except where otherwise indicated.

In line with practice, the statement of comprehensive income is presented on a mixed basis (a blend of expenses by nature and function), as this is assessed to be the most relevant and reliable presentation.

Going concern

The financial statements have been prepared on the going concern assumption. For additional information see Board of Director's report.

Basis of consolidation

The consolidated financial statements comprise the financial statements of Saga Tankers ASA and its subsidiaries (the "Group") as of 31 December each year.

Subsidiaries

Subsidiaries are fully consolidated from the date of acquisition, which is defined as the date on which the Group obtains control. Control is obtained when the Group has the power to govern the financial and operating policies. This is usually achieved when the Group owns, either directly or indirectly, more than 50 per cent of the share capital, has corresponding voting rights, or otherwise has an actually controlling interest. Subsidiaries are de-consolidated from the date on which control ceases.

The financial statements of the subsidiaries are prepared for the same reporting year as the parent company, using consistent accounting policies.

All inter-company transactions and balances are eliminated in the consolidated financial statements.

Associates

Associates are all entities over which the group has significant influence but not control, generally accompanying a shareholding of between 20% and 50% of the voting rights. Investments in associates are accounted for using the equity method of accounting. Under the equity method, the investment is initially recognized at cost, and the carrying amount is increased or decreased to recognize the investor's share of the profit or loss of the investee after the date of acquisition. The group's investment in associates includes goodwill identified on acquisition.

If the ownership interest in an associate is reduced but significant influence is retained, only a proportionate share of the amounts previously recognized in other comprehensive income is reclassified to profit or loss where appropriate.

The group's share of post-acquisition profit or loss is recognized in the income statement, and its share of post-acquisition movements in other comprehensive income is recognized in other comprehensive income with a corresponding adjustment to the carrying amount of the investment. When the group's share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the group does not recognize further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.

The group determines at each reporting date whether there is any objective evidence that the investment in the associate is impaired. If this is the case, the group calculates the amount of impairment as the difference between the recoverable amount of the associate and its carrying value and recognizes the amount adjacent to 'share of profit/ (loss) of associates in the income statement.

Dilution gains and losses arising in investments in associates are recognized in the income statement.

Significant accounting judgments, estimates and assumptions

The preparation of financial statements in accordance with IFRS requires management to make judgments, estimates and assumptions that may affect assets, liabilities, revenues, expenses and information in notes to the financial statement. Estimates are management's best knowledge based on information available at the date the financial statements are authorized for issue. Actual results may differ from these estimates. Such changes will be recognized when new estimates can be determined with certainty.

Depreciation of vessels

Depreciation is based on management estimates of the future life of the vessels and residual values. Estimates may change due to changes in scrap value, technological development, competition and environmental and legal requirements. The management reviews the future useful life of the vessels and each component periodically taking into consideration the above mentioned factors. In case of changes in estimated useful lives and/or residual values, the depreciation of the vessels is adjusted prospectively.

Revenue recognition

Voyage revenue:

The Group recognizes voyage revenues and voyage related expenses proportionally over the estimated length of each voyage, on a discharge to discharge basis. At the time of discharge, management generally knows the next load port and expected discharge port, ensuring that the calculation of voyage revenues and costs over time can be estimated with a satisfactory degree of accuracy.

Summary of significant accounting policies

Vessel revenue and expense recognition

Operating revenues are recognized when persuasive evidence of an agreement exist, the service has been delivered, fees are fixed and determinable, collection is probable and when other significant obligations have been fulfilled.

Revenues and expenses related to voyage charters are recorded based on percentage of completion (the number of days the voyage lasted in the period). In determining this percentage, the Group uses a discharge-to-discharge basis for all spot voyages. With this method a voyage is defined as starting after unloading at the end of the previous voyage, as long as a signed contract is in place. Revenues are not allocated to ballast days, unless a signed contract is in place.

Revenues from time charters accounted for as an operating lease are recognized as a time charter per day less days off hire. Demurrage revenue is recognized if it is considered probable that the Group will receive payment.

Other operating expenses include expenses such as crew cost, repairs and maintenance, insurance, communication and a share of administration costs relating to voyages for the period. Other operating expenses are recognized when incurred.

Revenue from investment and trading of financial instruments

Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods supplied, stated net of discounts, returns and value added taxes. The group recognizes revenue when the amount of revenue can be reliably measured; when it is probable that future economic benefits will flow to the entity; and when specific criteria have been met for the group's activity (i.e. at trade date).

The group indulges in investment and trading of financial instruments as part of its core business. All such instruments are classified as available-for-sale assets, unless the Group exercises significant control of the investment, in which case the investment will be classified as associate. See the group accounting policy describing Financial Instruments below.

Dividend Income

Dividend income is recognised when the right to receive payment is established. The company classifies such income as 'Other Income' on the face of Consolidated Statement of Comprehensive Income.

Foreign currency

The financial statements are presented in NOK, which is also the functional currency for all the companies in the Group.

Transactions in foreign currencies are recorded at the exchange rate in effect at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the exchange rate at the financial position date. Nonmonetary items that are measured at historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions.

Inventories

Inventories mainly consist of bunker and are recognized at cost. The consumption of bunker is recognized in accordance with the first-in-first-out principle (FIFO).

Vessels and dry-docking

Vessels are stated at historical cost, less accumulated depreciation and impairment losses, if any. The cost of the vessels comprises its purchase price and any costs directly attributable to bringing the asset to be capable of operating in the manner intended by management. In situations where it can be clearly demonstrated that expenditures have resulted in an increase in the future economic benefits, the expenditures are capitalized to the vessels. Ordinary repairs and maintenance costs are expensed during the financial period in which they occur.

Depreciation is calculated on a straight-line basis, taking residual values into consideration. Components with different economic useful life are depreciated on a straight-line basis over the components useful life.

Costs related to major inspections/classification (dry-docking) are recognized as part of the carrying amount of the vessels if certain recognition criteria are satisfied. The recognition is made when the dry-docking has been performed and is depreciated based on estimated time to the next special survey. Any remaining carrying amount of the cost of the previous inspection is derecognized. The remaining costs that do not meet the recognition criteria are expensed as repairs and maintenance.

The residual values and useful lives of the assets are reviewed and adjusted prospectively, if appropriate, at each financial position date.

Impairment of non financial assets

(i) Vessels and other assets carried at amortized cost

The vessels and other assets carried at amortized cost are reviewed for indication of impairment at each reporting date, and whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Whenever the carrying amount of an asset exceeds its recoverable amount, an impairment loss is recognized. The recoverable amount is the higher of an assets net selling price and its value in use. The net selling price is the amount obtainable from the sale of an asset in an arm's length transaction less the costs of disposal, while value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life. Recoverable amounts are estimated for individual assets if possible, or else for the cash-generating unit.

Impairment of financial assets

For loans and receivables category, the amount of the loss is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset's original effective interest rate. The carrying amount of the asset is reduced and the amount of the loss is recognised in the consolidated income statement. If a loan or held-to-maturity investment has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract. As a practical expedient, the group may measure impairment on the basis of an instrument's fair value using an observable market price.

Reversal of impairment losses recognized in prior years is recorded in profit and loss if there is an indication that previous impairment losses recognized no longer exist or have decreased.

(ii) Assets classified as available for sale

The group assesses at the end of each reporting period whether there is objective evidence that a financial asset or a group of financial assets is impaired. For debt securities, the group uses the criteria referred to in (i) above. In the case of equity investments classified as available for sale, a significant or prolonged decline in the fair value of the security below its cost is also evidence that the assets are impaired. IFRS standards indicates that a drop of more than 20% is classified as significant and that if the assets are below the cost price for six to twelve months, the period is considered to be prolonged. If any such evidence exists for available-for-sale financial assets, the cumulative loss – measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in profit or loss – is removed from equity and recognised in profit or loss. Impairment losses recognised in the consolidated income statement on equity instruments are not reversed through the consolidated income statement. If, in a subsequent period, the fair value of a debt instrument classified as available for sale increases and the increase can be objectively related to an event occurring after the impairment loss was recognised in profit or loss, the impairment loss is reversed through the consolidated income statement.

Financial instruments

The group classifies its financial assets and liabilities in the following categories: loans and receivables, other financial liabilities and available for sale. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition.

Loans and receivables: Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise when the Group provides money, goods or services directly to a debtor with no intention of trading the receivable. Loans and receivables are initially recognized at fair value plus directly attributable transaction costs. After initial measurement, such financial assets are subsequently measured at amortized cost using the effective interest method, less impairment. Gains and losses are recognized in profit and loss when the loans and receivables are de-recognized or impaired, as well as through the amortization process. They are included in current assets, except for maturities greater than 12 months after the end of the reporting period. These are classified as non-current assets. The group's loans and receivables comprise 'trade and other receivables' and 'cash and cash equivalents' in the balance sheet.

Available-for-sale financial assets are non-derivatives that are either designated in this category or not designated in any other categories. They are included in non-current assets unless the investment matures or management intends to dispose of it within 12 months of the end of the reporting period. The financial assets are denominated in NOK and are measured at Fair value. Listed shares are valued at quoted market price at each balance sheet date. Partnership shares/other shares acquired just before year end from an independent third parties are deemed to have an acquisition cost considered as its fair value. Other assets in this category not traded in an active market are valued based on valuation techniques, which is considered to be their fair value. Changes in the fair value of monetary and non-monetary securities classified as available for sale are recognised in other comprehensive income. When securities classified as available for sale are sold, the accumulated fair value adjustments recognised in equity are included in the income statement as 'Net gains and losses from AFS assets'.

Other financial liabilities: Other financial liabilities are initially recognized at fair value plus directly attributable transaction costs. After initial recognition other financial liabilities are subsequently measured at amortized cost using the effective interest rate method. Gains and losses are recognized in the income statement when the liabilities are derecognized as well as through the effective interest method amortization process.

Trade receivables and other receivables

Current trade receivables and other receivables are initially recorded at their fair value and subsequently measured at amortized cost using the effective interest method, less provision for impairment.

Trade payables and other payables

Current trade and other payables are recognized initially at fair value and subsequently measured at amortized cost using the effective interest method.

Cash, cash equivalents and cash flow statement

Cash represents cash on hand and deposits with bank that is callable on demand.

Cash equivalents represent short-term, highly liquid investments which are readily convertible into known amounts of cash with original maturities of three months or less and that are subject to an insignificant risk of change in value.

The cash flow statement is prepared using the indirect method.

Financial liabilities

Interest-bearing debt is initially recognized at fair value when the Group becomes a party to the contractual provisions of the instrument. After initial recognition, interest bearing loans and borrowings are subsequently measured at amortized cost using the effective interest method. Amortized cost is calculated by taking into account any issue costs, and any discount or premium on the settlement. Financial liabilities are presented as current if the liability is due settled within 12 months after the financial position date, whereas liabilities with the legal right to be settled more than 12 months after the financial position date are classified as non-current.

Financial liabilities are derecognized from the financial position when the contractual obligation expires, is discharged or cancelled. Gains and losses arising on the repurchase, settlement or cancellation of liabilities are recognized respectively in interest income and other financial items and interest and other finance expenses.

Where an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognizing of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognized in profit or loss.

Provisions

Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognized as financial expense.

Equity

Transaction costs related to an equity transaction are recognized directly in equity after deduction of tax.

Ordinary taxation

All companies within the Group are subject to the ordinary Norwegian taxation regime. Current income taxes are measured at the amount expected to be paid to (recovered from) authorities, deferred tax assets/liabilities are calculated based on temporary differences at the reporting date. Deferred tax assets are recognized to the extent that it is probable that they can be utilized in the future. Dividends and capital gains are taxed according to the Norwegian exemption model.

Financial position classification

Current asset and current liabilities include items due less than one year from the financial position date, and items tied to the operating cycle. The current portion of long-term debt is included as current liabilities.

Non-current assets held for sale

Non-current assets are classified separately as held for sale in the balance sheet when their carrying amount will be recovered through a sale transaction rather than through continuing use. This condition is met only when the sale is highly probable, the asset is available for immediate sale in its present condition, and management is committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification. Liabilities directly associated with the assets classified as held for sale and expected to be included as part of the sale transaction are correspondingly also classified separately.

Related parties

Parties are related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also related if they are subject to common control or common significant influence. All transactions between the related parties have been made on an arm's length basis and are settled on a regular basis.

Contingent liabilities

Contingent liabilities are defined as possible obligations that arises from past events whose existence depends on one or more future event not wholly within the control of the entity, or present obligations that are not recognized because it is not probable that they will lead to an outflow or resources.

Contingent liabilities are not recognized on the balance sheet unless arising from assuming assets and liabilities in a business combination. Significant contingent liabilities are disclosed unless the possibility of an outflow of resources embodying economic benefit is a remote one.

Contingent assets are not accounted for unless virtually certain.

Events after financial position date

New information regarding the Group's situation on the financial position date is taken into account in the financial statements. Events occurring after the financial position date, that do not affect the Group on the financial position date but will affect the Group's situation in the future, are disclosed if significant.

New and amended standards adopted by the group

The following standards have been adopted by the group for the first time for the financial year beginning on or after 1 January 2013:

Amendment to IAS 1, 'Financial statement presentation' regarding other comprehensive income: The main change resulting from these amendments is a requirement for entities to group items presented in 'other comprehensive income' (OCI) on the basis of whether they are potentially reclassifiable to profit or loss subsequently (reclassification adjustments).

Amendment to IFRS 7, 'Financial instruments: New disclosure requirement': Disclosure on asset and liability offsetting. This amendment includes new disclosures to facilitate comparison between those entities that prepare IFRS financial statements to those that prepare financial statements in accordance with US GAAP. The application of the amendment does not have any impact on the financial statements for 2013.

IFRS 13, 'Fair value measurement': The standard aims to improve consistency and reduce complexity by providing a precise definition of fair value and a single source of fair value measurement and disclosure requirements for use across IFRSs. The requirements, which are largely aligned between IFRSs and US GAAP, do not extend the use of fair value accounting but provide guidance on how it should be applied where its use is already required or permitted by other standards within IFRSs.

IAS 19, 'Employee benefits': The standard was revised in June 2011. The changes on the group's accounting policies has been as follows: to immediately recognize all past service costs; and to replace interest cost and expected return on plan assets with a net interest amount that is calculated by applying the discount rate to the net defined benefit liability (asset). The standard does not have any impact on the financial statements for 2013 as the Group did not have any defined benefit plan during the year. The impact of applying the standard retrospectively for 2012 does not have any impact for the comparative 2012 financial statements.

New standards and interpretations not yet adopted

A number of new standards and amendments to standards and interpretations are effective for annual periods beginning after 1 January 2013, and have not been applied in preparing these consolidated financial statements. None of these is expected to have a significant effect on the consolidated financial statements of the Group.

Standards issued but not yet effective

IFRS 9 Financial instruments: The effective date for IFRS 9 is not yet finalized.

IFRS 10 Consolidated Financial Statements: IFRS 10 is effective for annual periods beginning on or after 1 January 2014 for entities following IFRS as adopted by the EU.

IFRS 11 Joint Agreements: IFRS 11 is effective for annual periods beginning on or after 1 January 20142014 for entities following IFRS as adopted by the EU.

IFRS 12 Disclosure of Interest in Other Entities: IFRS 12 is effective for annual periods beginning on or after 1 January 2014 for entities following IFRS as adopted by the EU.

IAS 27 (revised) Separate Financial Statements: The amendment is effective for annual periods beginning on or after 1 January 2014 for entities following IFRS as adopted by the EU.

IAS 28 (revised) Investments in Associates and Joint Ventures: The amendment is effective for annual periods beginning on or after 1 January 2014 for entities following IFRS as adopted by the EU.

Amendments to IAS 32 Offsetting Financial Assets and Financial Liabilities: The amendment is effective for annual periods beginning on or after 1 January 2014.

Amendment to IAS 36 'Impairment of assets' on recoverable amount disclosures: The amendment is effective for annual periods beginning on or after 1 January 2014.

Amendment to IAS 39 Financial Instruments: Recognition and Measurement, 'Novation of derivatives': The amendment is effective for annual periods beginning on or after 1 January 2014.

IFRIC 21, 'Levies': This interpretation of IAS 37, 'Provisions, contingent liabilities and contingent assets' setting out the criteria for the recognition of a liability, more specifically the obligating event that give rise to a liability is effective for annual periods beginning on or after 1 January 2014

The above new IFRS standards, amendments and interpretations are not expected to have an impact on the Group's financial statements or that impact is not known or reasonably estimable.

NOTE 4 – OPERATING SEGMENTS

The Group has prior to Q4 2012 operated one type of vessel, VLCC. Operations for 2012 are restated as discontinued operations.

For 2012 and 2013, operations consist of investments in financial instruments which are reported on an accumulated basis.

NOTE 5 – INVESTMENT IN ASSOCIATES

	2013	2012
At January 1	14 000	-
Additions	-	14 000
Share of profit	1 118	-
Amortization of surplus value	-44	-
At 31 December	15 074	14 000

The group's share of the results of its principal associates, and its aggregated assets and liabilities are as follows:

31 December 2013

Name	Country of Incorporation	Assets	Surplus value	Liabilities	Revenue	Profit	% Interest held
Vallhall Fotballhall AS	Norway	1 294	475	284	-	107	19,15%
Vallhall Fotballhall Drift AS	Norway	419	-	255	2 227	4	20,00%
Vallhall Fotballhall KS	Norway	18 034	2 710	7 319	2 145	1 007	17,23%
		19 746	3 185	7 858	4 372	1 118

31 December 2012
Name	Country of Incorporation	Assets	Surplus value	Liabilities	Revenue	Profit	% Interest held
Vallhall Fotballhall AS	Norway	1 182	482	279	-	-	19,15%
Vallhall Fotballhall Drift AS	Norway	418	-5	258	-	-	20,00%
Vallhall Fotballhall KS	Norway	17 789	2 752	8 081	-	-	17,23%
		19 389	3 229	8 618	-	-

Although the group holds less than 20 % of the equity shares in Vallhall Fotballhall AS and Vallhall Fotballhall KS, the group exercises significant influence by virtue of board representation by the management of the group. Further, the Ferncliff TIH 1 group holds approximately 35 % of these companies. Ferncliff TIH 1 is controlled by Øystein Stray Spetalen, the majority shareholder and chairman of the Saga Tankers group.

All remaining surplus values as of 2013, are identified as surplus value of building and amortized by 1,5% p.a.

NOTE 6 – ADMINISTRATIVE EXPENSES

NOK 1000	2013	2012
Employee benefit expenses
Salaries	2 020	4 156
Social security costs	285	722
Pension expenses (note 13)	-	-943
Other personnel expenses	9	349
Total employee benefit expenses	2 314	4 284

Number of man-years	1	2

Administrative expenses
Management fee (note 19)	-	1 915
Other fees	1 353	1 048
Travel expenses and membership fees	3	378
Other administrative expenses	566	1 985
Total administrative expenses	1 922	5 326

Remuneration to the Board of Directors and executive management

2013
NOK 1000
Name	Position	Salary and bonus	Other benefits	Pension cost	Director's fees
Espen Lundaas	CEO/CFO	1 500	-	-	-
Øystein Stray Spetalen	Chairman	-	-	-	140
Martin Nes	Board member	-	-	-	100
Brita Eilertsen	Board member	-	-	-	100
Total remuneration		1 500	-	-	340

2012

NOK 1000
Name	Position	Salary and bonus	Other benefits	Pension cost	Director's fees
Jon Christian Syvertsen 1)	CEO	757	-	-	-
Fredrik Platou 2)	CEO/CFO	3 266	163	-	-
Øystein Stray Spetalen 3)	Chairman	-	-	-	-
Arne Blystad 4)	Chairman	-	-	-	215
Espen Lundaas 5)	Board member	-	-	-	-
Per Ola Baalerud 6)	Board member	-	-	-	157
Brita Eilertsen	Board member	-	-	-	175
Total remuneration		4 022	163	-	547

1) CEO until 1 July 2012

2) CEO from 1 July 2012 until 1 January 2013

3) Chairman from 7 September 2012

4) Chairman until 7 September

5) Board member since 7 September, CEO from 1 January 2013

6) Board member until 7 September

The Group had no outstanding loans or guarantees in favor of any member of the Board of Directors or company management in 2013.

Guidelines for determining salaries and other compensation for company management

In accordance with the regulations in paragraph 6-16a in the Norwegian Public Limited Companies Act, the Board of Directors has established a statement regarding remuneration. The focus of the company is to hire qualified managers and to pay according to the market. Salary and remuneration of the CEO and CFO is determined by the Board of Directors, and payments to other employees are determined by the CEO according to guidelines from the Board of Directors. For the fiscal year ending 31. December 2013, the position as CEO and CFO has been occupied by the same employee. The Group has no other employees.

Saga Tankers Group's compensation schemes include only a limited number of benefits in kind. These benefits are offered in line with what is common practice in international labor markets and typically include personal communication equipment, access to media, and car and parking arrangements

The Statement on the determination salary and other remuneration for senior executives will be presented at the annual general meeting and made available on the Company's webpage.

Stock options program to Board members and Company employees

No stock options or right to stock options are held by members of the board of directors or any of the Company's employees at 31 December 2013.

AUDIT FEES
NOK 1000	2013	2012

Audit fees (excluding VAT 2012,
including VAT 2013)
Audit services	618	454
Other attestation services	-	-
Tax service	-	-
Other non-audit services	51	41
Total	669	495

Fees to the Group's auditors are included in Administrative Expenses.

NOTE 7 – CASH AND CASH EQUIVALENTS

The Group's cash and cash equivalents are denominated in the following currencies:

	31 Dec	31 Dec	1 Jan
NOK 1000	2013	2012	2012

US Dollars	74 118	141 741	100 248
Norwegian kroner	28 747	5 113	647
Total cash and cash equivalents	102 864	146 852	100 895

Restricted cash
Employee tax accounts	135	877	179

Interest income is earned at floating interest rates.

NOTE 8 –OTHER CURRENT ASSETS

NOK 1000	31 Dec 2013	31 Dec 2012	1 Jan 2012

Other receivables	-	130	1 780
Prepayments	65	8	-
Total other current assets	65	138	1 780

NOTE 9 – TRADE RECEIVABLES AND OTHER RECEIVABLES

The outstanding amount of trade receivables at 31 December 2013 was NOK 0 (31 December 2012 of NOK 0, 1 January 2012 NOK 5,5 million). The Group has not booked any loss on trade receivables or any other current assets as per year end.

NOTE 10 – OTHER CURRENT LIABILITIES

	31 Dec	31 Dec	1 Jan
NOK 1000	2013	2012	2012
Public duties payable	180	1 153	324
Deferred revenue on Saga Agnes	-	-	6 546
Other current liabilities	363	618	1 049
Total	543	1 752	7 919

Other current liabilities are non-interest bearing. Other current liabilities are normally settled on 30 to 60 day terms. Deferred revenues are revenues invoiced, but not earned yet per 31 December.

NOTE 11 – VESSELS AND OTHER FIXED ASSETS

2013	Other assets	Total
NOK 1000
Acquisition cost, opening balance 01.01.13	575	575
Acquisitions during the year	-	-
Disposals during the year	-575	-575
Acquisition cost at 31.12.13	-	-

Accumulated depreciation, opening balance 01.01.13	297	297
Depreciation during the year	-	-
Disposals during the year	-297	-297
Accumulated depreciation at 31.12.13	-	-
Net book value at 31.12.12	-	-

2012
NOK 1000
Acquisition cost, opening balance 01.01.2012	575	575
Acquisitions during the year	-	-
Disposals during the year	-	-
Acquisition cost at 31.12.12	575	575

Accumulated depreciation, opening balance 01.01.12	192	192
Depreciation during the year	105	105
Accumulated depreciation at 31.12.12	297	297
Net book value at 31.12.12	278	278

Sale of vessels

During 2011 the group sold the vessels Saga Julie, Saga Unity and Saga Chelsea. In 2012 the last vessel in the group, Saga Agnes was sold.

Sale of other fixed assets

Other fixed assets were sold during the first quarter 2013. Sales price was TNOK 331, resulting in gain of TNOK 53

Depreciation of vessels

Assets have been depreciated on a straight-line basis over their expected useful lives as follows:

VLCC vessels:	25 years (10-15 years remaining useful lifetime, depending on the vessel)
Cars:	5 years

Certain components, such as costs recognized in connection with major classification/dry-docking have a shorter useful lifetime. The associated drydocking costs are depreciated over the period until next special survey depending on the duration until such special-survey/drydocking is expected to take place (usually every 2.5 to 5 years).

ASSETS HELD FOR SALE 2011

Assets held for sale as of 1. January 2012 consists of net sale price for the vessel Saga Agnes, as sold in 2012.

NOTE 12 – TAX

NOK 1000	2013	2012

Current tax expense	-	-
Deferred tax expense	-	-
Tax expense	-	-

Reconciliation of tax expenses
Net profit before tax	4 329	21 311

Tax expense based on nominal tax rate 28%	1 212	5 967
Permanent differences	-11 653	-23 469
Other tax benefits receivables	10 648	-22 628
Not recognized deferred tax assets	-207 436	43 894
Currency effects	-	-3 764
Tax expense	-	-

Reconciliation of deferred tax (-)/ deferred tax assets 28 % for 2012, 27 % for 2013
Fixed and other assets	120 541	114 357
Deferred tax loss sale of assets	103 318	107 145
Net tax loss carried forward	59 949	62 376
Deferred tax assets	283 808	283 878
Net deferred tax assets not recognized	-283 808	-283 878
Deferred tax (-)/ deferred tax assets in the balance sheet	0	0

Tax on other comprehensive income
Other comprehensive income	36 446	-8 929
Income tax related to other comprehensive income	-	-

The Group has per the balance sheet not recognized any deferred tax asset as the possible utilization of this asset is not considered probable.

NOTE 13 – PENSIONS

The groups defined benefit scheme was terminated as of 1. January 2013. No further obligations are present.

NOTE 14 – INTEREST BEARING DEBT

NOK 1000	31 Dec 2013	31 Dec 2012	1 Jan 2012

Current portion of long-term debt	-	-	118 693

Material loan agreements

The subsidiaries as borrowers and guarantors and the Company as guarantor entered into a Term Loan Facility with DNB in 2010. The loan was secured by first priority mortgages registered against the vessels previously owned by the Group, pledge over the subsidiaries' and the Company's bank accounts, assignments of the vessels' earnings, rights under swap agreements (if entered into) and insurances, factoring agreements registered against each of the subsidiaries, unconditional and irrevocable guarantees from all subsidiaries and the Company The loan was denominated in USD.

The facility was repaid in its full as a balloon payment when Saga Agnes was delivered to its new owners in end July 2012.

NOTE 15 – ISSUED CAPITAL AND SHAREHOLDERS

Issued capital
2013
				Other paid
NOK 1000	Number of shares	Share capital Own shares		in capital
Opening balance 01.01.2013	86 777 409	86 777	-	883 696

Ending balance 31.12.2013	86 777 409	86 777	-	883 696

2012
				Other paid
NOK 1000	Number of shares	Share capital Own shares		in capital
Opening balance 01.01.2012	86 777 409	86 777	-	883 696

Ending balance 31.12.2012	86 777 409	86 777	-	883 696

The nominal value per share as of 31.12.2013 was NOK 1 per share.

All issued shares have a nominal value of NOK 1 and are of equal rights. Saga Tankers ASA is incorporated in Norway, listed on the Oslo Exchange Axess list, and the share capital is denominated in NOK. As of 31 December 2013 the Company had 128 shareholders. The Company's largest shareholders are presented in the table below.

Overview of the largest shareholders as per 31.12.2013

	NAME	31.12.2013
1	SPETALEN	95,89 %
2	SELACO AS	0,65 %
3	KOLBERG MOTORS AS	0,31 %
4	KOLBERG	0,31 %
5	NORDSTJERNEN AS	0,27 %
6	SKIBSAKTIESELSKAPET ABACO	0,23 %
7	RAMS AS	0,18 %
8	JEBSEN	0,13 %
9	NISTUÅ II AS	0,12 %
10	MYKLAND INVEST AS	0,12 %
11	GADD HOLDING	0,12 %
12	NGUYEN	0,12 %
13	T SANDVIK AS	0,10 %
14	PAK INVEST AS	0,09 %
15	VOLDMO	0,08 %
16	INITIUM INVEST AS	0,07 %
17	KRISTIAN HODNE AS	0,07 %
18	ARAMIS FLEKKEFJORD AS	0,06 %
19	PIKHAUGEN II AS	0,06 %
20	BUSINESSPARTNER AS	0,05 %
	OTHER	0,96 %
	TOTAL	100,00%

Shareholders per country per 31.12.2013

	SHARES	OWNER'S SHARE %
Norway	86 760 491	99,981 %
Sweden	11 000	0,013 %
Great Britain	3 908	0,005 %
Luxemburg	2 000	0,002 %
Columbia s	10	0,000 %
Total	86,777,409	100,00 %

Total paid in capital Please see table above.

Shareholders rights There are currently no limitations in voting rights or trade limitations related to the Saga Tankers share.

Power of attorney to repurchase own shares The Board held no authorization to repurchase own shares as per 31.12.2013.

Authorization to raise convertible loans The Board held no authorization to raise convertible bonds as per 31.12.2013.

Stock option arrangements

The Company/Group held no stock option or synthetic stock option agreements as of 31.12.2013.

NOTE 16 – EARNINGS PER SHARE

Basic earnings per share are calculated by dividing net profit for the year attributable to ordinary equity holders by the weighted average number of ordinary shares outstanding during the year, excluding ordinary shares purchased by the company and held as treasury shares. The company has no such treasury shares as of 31 December 2013.

Diluted earnings per share are calculated by dividing the net profit attributable to ordinary equity holders by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on the conversion of all dilutive potential ordinary shares to ordinary shares. The Company does not have any potential dilutive ordinary shares in addition to its ordinary outstanding number of shares as per 31 December 2013.

NOK 1000	2013	2012
Net profit/(loss) attributable to the shareholders	4 329	21 311

Number of shares
Weighted average number of ordinary shares outstanding	86,777,409	86,777,409
Weighted average number of shares outstanding, diluted	86,777,409	86,777,409
Number of shares outstanding at period end	86,777,409	86,777,409

NOK per share
Basic earnings per share	0,05	0,25

NOTE 17 – RELATED PARTIES

Until December 2012, the Group's main office was located in the Blystad Group building in Oslo, where administrative services were supplied by Arne Blystad AS, a company within the Blystad Group. All administrative services including accounting and office renting were governed by Services Agreement, which was subsequently cancelled during December 2012. In December 2012, the Company moved its head offices to Sjølyst Plass 2, 0278 Oslo, sharing office locations with Ferncliff TIH 1 AS, the holding company of the Chairman of the Board of Directors, who also became the Company's largest shareholder.

All transactions with related parties have been made on an arm's length basis and are settled on a regular basis. Goods and/or services purchased from related parties have been priced at industry standard rates. Transactions with related parties are specified below:

RELATED PARTY TRANSACTIONS

2013
NOK 1000	Year	Sales to related parties	Purchases from related parties	Amounts owed by related parties	Amounts owed to related parties
Tycoon Industrier AS	2013	-	160	-	-

2012
NOK 1000	Year	Sales to related parties	Purchases from related parties	Amounts owed by related parties	Amounts owed to related parties
Songa Shipmanagement Ltd	2012	-	1 636	-	-
Arne Blystad AS	2012	-	1 915	-	-

NOTE 18 – SUBSIDIARIES

The consolidated financial statements include the financial statements of Saga Tankers ASA and its subsidiaries listed in the table below:

Country of incorporation	Ownership share	Consolidated in the Group financial statements from

Norway	100 %	2010
Norway	100 %	2010
		2010
Norway	100 %	2010
	Norway	100 %

The subsidiaries have their offices in Oslo, Norway.

NOTE 19 –FINANCIAL RISKS MANAGEMENT

Through its activities the Group is exposed to a variety of financial risks: market risk including currency risk, credit risk and liquidity risk. The Group's overall risk management program focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the Group's financial performance. To reduce and manage these risks, management periodically assesses the Group's financial market risk in general. The Group has no hedging instruments nor entered into any derivatives during 2013.

Equity price risk

The Group invests in both marketable securities on different stock exchanges as well unlisted securities in order to take advantage of market movements in the equity markets.

All marketable securities present a risk of loss of capital. The Group moderates this risk through a careful selection of securities. The maximum risk resulting from financial instruments is determined by the fair value of the financial instruments. The Group's overall market positions are monitored on a quarterly basis. The Group's maximum exposure to risk at the balance sheet date is NOK 114.8 million (2012:NOK 48.6 million).

At December 31 2013, the impact of increases/decreases of the Oslo Stock Exchange and Oslo Axess on the group's post-tax profit for the year and on equity would have been as shown below. The analysis is based on the assumption that the equity indexes had increased/decreased by 5% with all other variables held constant and all the group's equity instruments moved according to the historical correlation with the index.

Increase of 5 %

Index	Impact on post-tax profit in TNOK		Impact on other components of equity in TNOK
	2013	2012	2013	2012
Oslo Stock Exchange	-	-	-	-
Oslo Axess	-	-	2 824	993
Total	-	-	2 824	993

Decrease of 5 %

Index		Impact on post-tax profit in TNOK	Impact on other components of equity in TNOK
	2013	2012	2013	2012
Oslo Stock Exchange	-	-	-	-
Oslo Axess	-178	-13	-2 646	-980
Total	-178	-13	-2 646	-980

Currency Risk

The value of monetary assets and liabilities denominated in foreign currencies will fluctuate due to changes in foreign exchange rates. The majority of the Group's financial assets and liabilities are denominated in Norwegian Kroner and at December 31 2013, the only material assets and liabilities denominated in foreign currencies are USD bank accounts of USD 12 406 258, denominated at NOK 74 117 732.

The Group monitors its exposure to currency risk on a regular basis.

At December 31 2013, had the exchange rate between the US Dollar and the Norwegian Kroner increased/ (decreased) by 5 percent with all other variables held constant, the decrease or increase respectively in net assets and the income statement +/(-) TNOK 3 706.

Tax risk

Saga Tankers is subject to taxation by Norwegian authorities. Any change in taxation regime may affect the payable taxes of Saga Tankers.

Legal risk

The Charterer of the vessel MT Saga Agnes ("Saga Agnes") redelivered the vessel from its contract to the Company on 27 July 2012. After redelivering the vessel to the Group, the Charterers of Saga Agnes AS has presented the Group with a claim of about USD 2 million related to the time charterparty for the vessel "Saga Agnes. The matter will be resolved through arbitration. Saga Tankers ASA acts as guarantor under the named charterparty. No reserves has been made for this claim, as it is considered by the management of the group to be unlikely that the claim will be supported by the arbitration.

Credit Risk

The Group is exposed to credit risk, inherent in the risk that a counterparty will be unable to pay amounts in full when due. Allowances are made for credit losses that have been incurred by the balance sheet date, if any. The maximum exposure to credit risk on cash and cash equivalents and trade and other receivables (ignoring collateral and credit quality) at December 31, 2013 was NOK 102,9 million (2012:NOK 146,9 million ).

Concentration of credit risk exists to the extent that at December 31, 2013 all cash and cash equivalents were held at one single financial institution with credit ratings according to Standard & Poor's of A+ or better:

Rating	Geographical segment	2013	2012


A+	Norway	102 864	146 852

		102 864	146 852

Liquidity risk

The group monitors rolling forecasts of the group's liquidity requirements to ensure it has sufficient cash to meet operational needs. The group has no outstanding debt or capital commitments.

At the reporting date, the group held cash and cash equivalents of TNOK 102 864 (2012: TNOK 146 852) and other liquid assets of TNOK 0 (2012: TNOK 138) that are expected to readily generate cash inflows for managing liquidity risk.

Capital Management

The group's objectives when managing capital are to safeguard the group's ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.

In order to maintain or adjust the capital structure, the group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. The Group monitors the available cash and projected capital expenditure requirements so that they can capitalize on attractive investment opportunities when such arise. The Group considers the available cash and the existing credit lines, if any, to be at an appropriate level for the short to medium term.

Fair value estimation

The table below analyses financial instruments carried at fair value, by valuation method. The estimated fair value has been determined by the Group using appropriate market information and valuation methodologies. The different levels have been defined as follows:

Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1).
Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (Level 2).
Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (Level 3).

The following table presents the group's financial assets and liabilities that are measured at fair value at 31 December 2013.The fair value of financial instruments does not significantly deviate from their carrying amount.

Available-for-sale assets (Equity securities) in NOK	2013	2012
Listed shares (Level 1)	99 731	34 648
Total	99 731	34 648

There were no transfers between the levels during the year.

(a) Financial instruments in level 1

The fair value of financial instruments traded in active markets is based on quoted market prices at the balance sheet date. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm's length basis. The quoted market price used for financial assets held by the group is the current bid price. These instruments are included in Level 1. Instruments included in Level 1 comprise primarily Oslo Axess, OSE, DAX and FTSE 100 equity investments classified as trading securities or available for sale.

(c) Financial instruments in level 2

The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined by using valuation techniques. These valuation techniques maximize the use of observable market data where it is available and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

If one or more of the significant inputs is not based on observable market data, the instrument is included in Level 3. Specific valuation techniques used to value financial instruments include:

Quoted market prices or dealer quotes for similar instruments;
Other techniques, such as discounted cash flow analysis, are used to determine fair value for the remaining financial instruments.

NOTE 20 – FINANCIAL INSTRUMENTS

Set out below is a comparison by category for carrying amounts and fair values of all of the Group's financial instruments that are carried in the financial statements.

2013
NOK 1000	Carrying amount	Fair value	Fair Value Hierarchy level
Loans and receivables
Cash and cash equivalents	102 864	102 864	1
Trade receivables	-	-	2

Available-for-sale assets
Available-for-sale shares	99 731	99 731	1

Other financial liabilities
Trade payables	6	6	2
Other current liabilities	543	543	2

2012
NOK 1000	Carrying amount	Fair value	Fair Value Hierarchy level
Loans and receivables
Cash and cash equivalents	146 852	146 852	1

Available-for-sale assets
Available-for-sale shares	34 648	34 648	1

Other financial liabilities
Trade payables	17 753	17 753	2
Other current liabilities	1 752	1 752	2

NOTE 21 – SUBSEQUENT EVENTS

As per 22 April 2014, the chairman of the board, Mr. Øystein Stray Spetalen, has acquired an additional 0,66% of the shares outstanding, bringing his ownership up to 96,55 % in the company.

NOTE 22 – AVAILABLE-FOR-SALE FINANCIAL ASSETS

As at year end the Group held the following financial instruments carried at fair value in the statement of financial position:

NOK 1000	2013	2012
At 1 January	34 648	-
Additions	66 468	31 615
Impairment of available-for-sale financial assets	-17 523	-
Increase / (Decrease) in value recognized as other comprehensive income	36 446	3 033
Disposals	-20 308	-
At 31 December	99 731	34 648
Less non-current portion	-99 731	-34 648
Current portion	-	-

Available-for-sale financial assets include the following:

Equity securities in NOK	2013	2012
S.D Standard Drilling, market price	5 242	3 840
Prospector Offshore Drilling, market price	94 489	30 808

All the available-for-sale financial assets shown above are denominated in NOK and are measured at fair value as of year-end.

The group booked an impairment of TNOK 17 523 during 2013 (2012: TNOK 0) related to the investment in S.D. Standard Drilling. The impairment is consequence of the dividends received from the investment.

NOTE 23 – DIVIDENDS PAID AND PROPOSED

No dividends have been paid during 2012 and 2013. The board of Directors has decided not to distribute any dividends in 2014 based on the financial year of 2013.

NOTE 24 – DISCONTINUED OPERATIONS

Cash flows from discontinued operations

NOK 1000	2013	2012
Operating cash flows	-	32 126
Investing cash flows	-	180 049
Financing cash flows	-	-115 256

TOTAL CASH FLOWS	-	96 920

Analysis of the result of discontinued operations is as follows:

NOK 1000	2013	2012
Revenue	-	42 231
Expenses	-	-10 105
PROFIT BEFORE TAX OF DISCONTINUED OPERATIONS	-	32 126
Tax	-	-
PROFIT AFTER TAX OF DISCONTINUED OPERATIONS	-	32 126

Assets and liabilities classified as discontinued operations as per 1 January 2012, was measured to fair value less cost of sale. Hence no gain or loss was recognized in the fiscal year of 2012.

Assets and liabilities held for sale as per 1 January 2012: Vessel: TNOK 184 796 Long term debt: TNOK 118 693

CORPORATE GOVERNANCE

The Group endeavors to comply with the NUES corporate governance guidelines.

Please see the Company's website for information about the Company's deviations from the NUES guidelines during 2013.

FINANCIAL STATEMENT –

PARENT COMPANY SAGA TANKERS ASA

INCOME STATEMENT FOR THE PERIOD 01.01 – 31.12

NOK 1000	NOTE	2013	Restated 2012 (a)
OPERATING REVENUES
Net gains on financial assets		3 257	-
Management income		-	1 630
GROSS REVENUES		3 257	1 630

OPERATING EXPENSES
Employee benefit expenses	3	2 314	4 284
Administration expenses	3,7	1 667	4 046
Depreciation	6	-	105
TOTAL OPERATING EXPENSES		3 981	8 434

Loss (-gain) sale fixed assets	6	-53	-

NET OPERATING PROFIT / LOSS (-)		-670	-6 805

FINANCIAL INCOME / EXPENSES (-)
Interest received from group companies		-	18 947
Interest income		1 767	12
Interest expenses		-2	-
Impairment financial assets	5	-38 076	- 7 684
Net foreign exchange gain/(loss)		38 608	396
Other financial income		2	23
NET FINANCIAL INCOME / EXPENSES (-)		2 299	11 694

NET PROFIT BEFORE TAX		1 629	4 890

Taxes	10	-	-

NET PROFIT / LOSS (-)		1 629	4 890

ATTRIBUTABLE TO
Accumulated losses		1 629	4 890

(a) See note 1

NOK 1000	NOTE	31 Dec 2013	31 Dec 2012 Restated (a)	1 Jan 2012 Restated (a)
ASSETS
Non-current tangible assets
Other tangible assets	6	$\blacksquare$	278	393
Total non-current tangibles assets			278	393

Financial non-current assets
Shares and other financial assets	14	60 232	31628	$\overline{\phantom{a}}$
Associates	9	14 000	14 000
Total financial non-current assets		74 232	45 628
Total non-current assets		74 232	45 906	393
Current assets
Intercompany receivables	5	11708	45 866	117 302
Trade receivables				384
Other current assets		66
Cash and cash equivalents	$\overline{\mathbf{4}}$	89780	101 252	65 605
Total current assets		101 555	147 119	183 291

TOTAL ASSETS		175 787	193 025	183 684
EQUITY AND LIABILITIES
Share capital	11	86777	86777	86777
Other equity	11	883 696	883 696	883 696
Total paid-in capital		970 473	970 473	970 473
Accumulated losses	11	$-795203$	-796 832	-789 275
Total equity		175 270	173 642	181 199

LIABILITIES
Pension liabilities		¥	$\overline{\phantom{a}}$	1 2 3 5
Total non-current liabilities		٠	ä,	1 2 3 5
Trade and other payables		÷.	17724	243
Public duties payable		206	1 1 2 9	330
Other current liabilities		311	531	677
Total current liabilities		517	19384	1 2 5 0

TOTAL COLUTY AND LIADILITIES		175 707	10202	102 604

CASH FLOW STATEMENT FOR THE PERIOD 01.01 – 31.12

NOK 1000	NOTE	2013	2012 Restated (a)
Profit before tax		1 629	4 890
Interest income			-18 947
Impairment financial assets	5	38 076	7 684
Dividends received		17 542
Depreciation	6	-	99
Loss/(-gain) on sale fixed assets		-53
Foreign exchange losses/(gains)		-38 608	-6 129
Increase/decrease receivables and prepayments		-66
Increase/decrease payables and accruals		-18 866	18 638
Pension liability			-1 199
Increase/decrease other provisions			757
Net cash flow from operating activities		-347	5 792

Net cash flow from intercompany receivables		34 158	77 379
Net investment in financial assets		-66 454	-47 534
Divestment in financial assets		20 308	-
Proceeds from sale of fixed assets		331
Net cash flow from investing activities		-11 657	29 844

Interest paid/received		-	12
Net cash flow from financing activities		-	12

Net change in cash and cash equivalents	4	-12 004	35 648

Cash and cash equivalents at beginning of period		101 252	65 605

Cash and cash equivalents at end of period	4	89 780	101 252

Net foreign exchange differences (unrealized)		532
(a) See note 1

NOTES TO THE FINANCIAL STATEMENT

NOTE 1 – CHANGE IN ACCOUNTING POLICY

The Group has prior to Q4 2012 operated one type of vessel, VLCC. During Q4 2012, the Group had sold all assets and did not own any revenue generating assets compared to previously reported quarterly financial statements. The Group's main business now revolves around investing and trading in financial instruments, where the Group's cash flows and economic returns are now principally denominated in Norwegian Kroner (NOK). From 1 April 2013, Saga Tankers ASA changed the currency in which it presents its Financial Statements from US Dollars to Norwegian Kroner (NOK).

A change in presentation currency is a change in accounting policy which is accounted for retrospectively. Statutory financial information included in the Annual Report for the year ended 31 December 2012 previously reported in US Dollars has been restated into Norwegian Kroner using the procedures outlined below:

Assets and liabilities denominated in non-Norwegian Kroner currencies were translated into Norwegian Kroner at closing rates of exchange. Non-Norwegian Kroner trading results were translated into Norwegian Kroner at average rates of exchange. Differences resulting from the retranslation of the opening net assets and the results for the year have been taken to currency translations; and
Share capital, share premium and other reserves were translated at the historic rates prevailing at the dates of transactions.
All exchange rates used were extracted from the Company's underlying financial records or the rates denominated by the Norges Bank.

The exchange rates of US Dollar to Norwegian Kroner over the periods included in this Annual Report and Accounts are as follows:

	US Dollar/Norwegian Kroner exchange rates	2013	2012	2011
Closing rate		6,0837	5,5876	5,9946
Average rate		5,8770	5,8210	5,6074

The investment in Vallhall Fotbalhall KS and associated companies has been reclassified from Shares and other financial assets, to Associates, in order to reflect the company and related parties combined influence on this investments in 2012.

NOTE 2 – ACCOUNTING POLICIES

Accounting principles for the financial statements of Saga Tankers ASA – parent accounts:

General

The financial statements are presented in accordance with the Norwegian Accounting Act and Norwegian general accepted accounting principles in Norway (NGAAP). The accompanying notes are an integral part of the financial statements. The parent company accounts are presented in NOK which also is the functional currency for the parent company.

Estimates

The management has used estimates and assumptions that may have effect on revenues, costs and the valuation of assets and liabilities in the reporting of the annual financial statements. These assumptions are in accordance with generally accepted accounting policies in Norway.

Currency

Transactions in foreign currencies are recorded at the exchange rate in effect at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the exchange rate at the financial position date. Realized currency exchange gains or losses are recorded at the time of payment and recognised as financial income/expense. Non-monetary items that are measured at historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions.

Measurement of revenues and costs

Revenues are recognized as they are earned. Cost is recognized in the same reporting period as the corresponding revenues.

Classification and evaluation of balance sheet items

Current assets and short-term liabilities consist of items due for payment within a year after establishment. Other items are recognized as long-term assets or liabilities. Current assets are valued at the lowest of acquisition value or fair value. Short-term liabilities are recorded at the nominal value at the time of establishment. Non-current assets are valued to the value at the time of acquisition less accumulated depreciation. Long-term loans are valued at nominal value at the time of establishment.

Receivables

Receivables are recorded in the balance sheet at nominal value less provision for doubtful accounts. Provisions for doubtful accounts are based on an individual assessment of the different receivables.

Non-current assets

Non-current assets are recorded in the balance sheet, and are depreciated over the estimated useful economic life of the asset on a straight-line basis. Direct maintenance of the non-current assets is recorded as cost in the profit and loss statement while upgrades and improvements are added to the balance sheet value and depreciated in line with the depreciation of the upgraded asset. An impairment loss is recognized if the fair value of the asset is lower than the book value, and the value reduction is not assumed to be of a short term nature. The impairment loss is reversed if the impairment is no longer recognized.

Taxes

The income tax in the profit and loss statement consists of taxes payable and changes in deferred taxes. Deferred tax and deferred tax benefit is calculated based on temporary differences between tax bases of assets and liabilities and their carrying amount for financial reporting purposes, and is based on nominal values. Net deferred tax benefit is recorded in the balance sheet only in the event that it is probable that is can be utilized in the foreseeable future. Taxes payable and deferred taxes are recorded directly in equity in the event that the tax items are related to equity transactions.

Shares in subsidiaries

Investments in shares in subsidiaries are accounted for using the cost-method in the statutory accounts. An impairment loss is recognized if the fair value is lower than book value and this is viewed as non-temporary. The impairment loss is reversed to the degree that the fair value improve, and that the improvement is not assumed to be of a short-term nature.

Dividends, Group contribution and other distributions are recognized in the same year as they are recognized in the subsidiary's financial statement. If dividends / Group contribution exceed withheld profits after acquisition, the excess amount represents repayment of invested capital, and the distribution will be deducted from the recognized value of the acquisition in the balance sheet for the parent company.

Investments in assosiates

Investments in shares in associates are accounted for using the cost-method in the statutory accounts. An impairment loss is recognized if the fair value is lower than book value and this is viewed as non-temporary. The impairment loss is reversed to the degree that the fair value improve, and that the improvement is not assumed to be of a short-term nature.

Investments in other shares

Investments in shares in other shares are accounted for using the cost-method in the statutory accounts, unless considered as part of trading portfolio. An impairment loss is recognized if the fair value is lower than book value and this is viewed as nontemporary. The impairment loss is reversed to the degree that the fair value improve, and that the improvement is not assumed to be of a short-term nature.

Pensions

The company's defined-benefit pension plan was terminated as of 1 January 2013. The former employees covered by this plan, has received a paid-up Policy. The company have no further obligations and/or liabilities regarding this pension plan.

Share-based compensation plans

The Company held no share-based compensation plans as of 31.12.2013.

Cash, cash-equivalents and cash flow statement

Cash and cash-equivalents include cash, bank deposits and other short deposits that are repayable on demand. The cash flow statement is prepared using the indirect method. Restricted bank deposits related to the operations are included in cash equivalents.

NOTE 3 – SPECIFICATION OF EXPENSES

The expenses for the financial years are specified below:

NOK 1000	2013	2012
Employee benefit expenses
Salaries	1 680	4 162
Board fees	340	332
Social security costs	285	722
Pension expenses (note 10)	-	-1 182
Other personnel expenses	9	250
Total	2 314	4 284

Number of employees	1	0

Other operating expenses
Consultancy fees	1 225	2 788
Other operating expenses	442	1 257
Total other operating expenses	1 667	4 046

Auditor's fees including VAT 2013, excluding VAT 2012
Audit services	506	413
Other attestation services	-	-
Tax services	-	-
Othernon-audit services	163	41
Total	669	454

Remuneration to the Board of Directors and executive management for the period 01.01.13 – 31.12.13

2013
NOK 1000
Name	Position	Salary and bonus	Other benefits	Pension cost	Director's fees
Øystein Stray Spetalen 3)	Chairman	-	-	-	140
Martin Nes	Board member	-	-	-	100
Brita Eilertsen	Board member	-	-	-	100
Espen Lundaas	CEO/CFO	1 500	-	-	-

Total remuneration		1 500	-	-	340

2012
NOK 1000
Name	Position	Salary and bonus	Other benefits	Pension cost	Director's fees
Jon Christian Syvertsen 1)	CEO	757	-	-	-
Fredrik Platou 2)	CEO/CFO	3 266	163	-	-
Øystein Stray Spetalen 3)	Chairman	-	-	-	-
Arne Blystad 4)	Chairman	-	-	-	215
Espen Lundaas 5)	Board member	-	-	-	-
Per Ola Baalerud 6)	Board member	-	-	-	157
Brita Eilertsen	Board member	-	-	-	175
Total remuneration		4 022	163	-	547

1) CEO until 1 July 2012

2) CEO from 1 July 2012 until 1 January 2013

3) Chairman from 7 September 2012
4) Chairman until 7 September 2012
5) Board member since 7 September, CEO from 1 January 2013
6) Board member until 7 September 2012

The company had no outstanding loans, guarantees or sureties in favor of any member of the Board of Directors, company management or other related parties in 2013.

Guidelines for determining salaries and other compensation for company management:

The CEO/CFO of Saga Tankers ASA has no set bonus scheme. It has not been granted any bonus for the year 2013. The senior executive has a mutual three months termination period, and no contractual agreements for severance compensation in case of termination of employment except for salary trough the termination period.

The "Statement on the determination salary and other remuneration for senior executives" will be presented at the annual general meeting and made available on the Company's webpage.

Stock options program to Board members and Company employees

No stock options or right to stock options are held by members of the board of directors or any of the Company's employees at 31 December 2013.

NOTE 4 – CASH AND CASH EQUIVALENTS

The Company's cash and cash equivalents are denominated in the following currencies:

NOK 1000	31 Dec 2013	31 Dec 2012	1 Jan 2012
US Dollars	61 111	96 286	65 005
Norwegian kroner	28 669	4 967	599
Total cash and cash equivalents	89 780	101 252	65 605

Restricted cash
Employee tax account	135	877	192

Interest income is earned at floating interest rates. Restricted cash consists of salary related tax.

NOTE 5 – LOANS TO GROUP COMPANIES

Net book value

NOK 1000	31 Dec	31 Dec	1 Jan
	2013	2012	2012

Saga Agnes AS	11 203	16 902	86 970
Saga Chelsea AS	178	7 136	7 553
Saga Julie AS	253	9 291	8 992
Saga Unity AS	75	12 538	13 788
Intercompany short-term loans	11 708	45 866	117 302

Impairment

NOK 1000	2013	Accumulated

Saga Agnes AS	-7 842	-83 514
Saga Chelsea AS	-7 091	-84 994
Saga Julie AS	-10 393	-124 889
Saga Unity AS	-12 749	-153 079
Impairment of Loan	-38 076	-446 477

Intercompany loans consist of loans to the subsidiaries provided prior years from the parent company for acquisitions of vessels and working capital purposes.

As a result of currency effects, the nominal NOK value of the loans increased by NOK 38 million trough 2013. As a result of this, a corresponding impairment was made.

The Company has, as per NGAAP, evaluated if there are reasons to believe that any negative change in value adjusted equity of the subsidiaries are permanent and should lead to an impairment of the intercompany receivables, and consequently written down the receivables with NOK 446 million to a book value of NOK 12 million

Debtors which fall due later than one year

NOK 1000	31 Dec 2013	31 Dec 2012

Face value	458 185	454 267
Impairment	-446 477	-408 401
Net book value	11 708	45 866

NOTE 6 –OTHER FIXED ASSETS

2013
NOK 1000
Acquisition cost, opening balance 01.01.13	575
Acquisitions during the year	-
Disposals during the year	-575
Acquisition cost at 31.12.13	-

Accumulated depreciation, opening balance 01.01.13	297
Depreciation during the year	-
Accumulated depreciation sold assets	-297
Accumulated depreciation at 31.12.13	-
Net book value at 31.12.13	-

2012
NOK 1000
Acquisition cost, opening balance 01.01.2012	575
Acquisitions during the year	-
Disposals during the year	-
Acquisition cost at 31.12.12	575

Accumulated depreciation, opening balance 01.01.12	192
Depreciation during the year	105
Accumulated depreciation at 31.12.12	297
Net book value at 31.12.12	278

The fixed assets are depreciated on a straight-line basis over expected useful life as follows: Cars: 5 years

Sale of other fixed assets

Other fixed assets were sold during the first quarter 2013. Sales price was TNOK 331, resulting in gain of TNOK 53

Annual rental of non-financial assets

The company has a lease agreement for office space, with a contract period until 30 may 2017 and a mutual termination span of six months. The annual rent for 2013 of TNOK 106. Additional costs TNOK 58 for other mutual costs relating to the premises was also incurred in 2013. It its expected for these costs to remain at approximately this level for the duration of the lease period.

NOTE 7 – RELATED PARTIES

Remuneration to executives is disclosed in note 3, and balance with group companies is disclosed in note 5.

Until December 2012, the Group's main office was located in the Blystad Group building in Oslo, and administrative services have been supplied by Arne Blystad AS, a company within the Blystad Group. Accounting services is performed by Arne Blystad AS through a Services Agreement. Through the Services Agreement, the Group rents office spaces and utilize the extensive resources at Arne Blystad AS with regards to the day-to-day accounting for the Group. In December 2012, the Company moved its head offices to Sjølyst plass 2, 0278 Oslo, sharing office locations with Ferncliff TIH 1 AS, the holding company of the Chairman of the Board of Directors

2013
NOK 1000	Year	Sales to related parties	Purchases from related parties	Amounts owed by related parties	Amounts owed to related parties
Tycoon Industrier AS	2013	-	160	-	-

2012
NOK 1000	Year	Sales to related parties	Purchases from related parties	Amounts owed by related parties	Amounts owed to related parties

Arne Blystad AS	2012	-	1 915	-	-

The Company provided services for its subsidiaries in 2012, and it recognized an income of NOK 1,7 million. For 2013 no services has been rendered, and no income has been recognized.

NOTE 8 - INVESTMENTS IN SUBSIDIARIES

The consolidated financial statements include the financial statements of Saga Tankers ASA and its subsidiaries listed in the table below:

NOK 1000	Country of incorporation	Ownership/ voting rights	Consolidated in the Group financial statements from	Share capital	Net book value

Saga Agnes AS	Norway	100 %	2010	1 000	-
Saga Chelsea AS	Norway	100 %	2010	1 000	-
Saga Julie AS	Norway	100 %	2010	1 000	-
Saga Unity AS	Norway	100 %	2010	1 000	-
Total				4 000	-

The subsidiaries have their offices in Sjølyst Plass 2, 0278 Oslo, Norway. The Group financial statements and notes are presented on the Company's website www.sagatankers.no.

Impairment
NOK 1000	2013	Accumulated

Saga Agnes AS	-	-87 051
Saga Chelsea AS	-	-101 097
Saga Julie AS	-	-92 682
Saga Unity AS	-	-89 518
Impairment subsidiaries	-	-370 348

The impairment of the subsidiaries has been made on basis of their equity. The subsidiaries have for the time being no substantial assets other than cash.

NOTE 9 – ASSOCIATES

Name	Country of Incorporation	Carrying value	Ownership and voting rights	Result 100 %	Equity 100 %
Vallhall Fotballhall AS	Norway	1 385	19,15%	558	5 272
Vallhall Fotballhall Drift AS	Norway	156	20,00%	19	823
Vallhall Fotballhall KS	Norway	12 459	17,23%	5 843	7 319
		14 000

NOTE 10 – INCOME TAX

NOK 1000	2013	2012
	-	-
Current tax expense
Deferred tax expense	-	-
Tax expense	-	-
Reconciliation of tax expense
Net income before tax	1 629	4 890
Tax expense based on nominal tax rate 28%	456	1 369
Permanent differences	-681	-44 309
Not recognized deferred tax assets	225	43 989
Currency effects	-	-1 048
Tax expense	-	-
Reconciliation of deferred tax (-)/ deferred tax assets 28 % 2012, 27 % 2013
Tangible assets	-8	5
Receivables	120 549	114 352
Net tax loss carried forward*	3 352	13 899
Net deferred tax assets	123 893	128 256
Net deferred tax assets not recognized	-123 893	-128 256
Deferred tax (-)/ deferred tax assets in the balance sheet	-	-

Tax rate of 27 % adopted by the parliament 13 December 2013, effective as of 1 January 2014, have been used to calculate deferred taxes. The tax rate is 28 % for revenues in Norway for 2013.

* Net tax loss carried forward is available indefinitely for offset against future taxable profits.

The Company has per the balance sheet date not recorded any deferred tax asset as no possible utilization of this asset is foreseen.

NOTE 11 – ISSUED CAPITAL AND SHAREHOLDERS

Issued capital 2013

NOK 1000	Number of shares	Share capital	Other equity	Accumulated losses	Total
Equity per 31 December 2011	86 777 409	86 777	883 696	-789 275	181 199
Net profit / loss (-) for the year 2012	-	-	-	4 890	4 890
Currency translations	-	-	-	-12 447	-12 447
Equity per 31 December 2012	86 777 409	86 777	883 696	-796 832	173 642
Net profit / loss (-) for the year 2013	-	-	-	1 629	1 629
Equity per 31 December 2013	86 777 409	86 777	883 696	-795 203	175 270

The nominal per share as of 31.12.2013 was NOK 1 per share, for all of the Company's shares.

Board authorizations

The board of directors does not have any authorizations to either increase the share capital or to purchase shares in the Company.

As of 31 December 2013 the Company had 128 shareholders.

	NAME	31.12.2013
1	SPETALEN	95,89 %
2	SELACO AS	0,65 %
3	KOLBERG MOTORS AS	0,31 %
4	KOLBERG	0,31 %
5	NORDSTJERNEN AS	0,27 %
6	SKIBSAKTIESELSKAPET ABACO	0,23 %
7	RAMS AS	0,18 %
8	JEBSEN	0,13 %
9	NISTUÅ II AS	0,12 %
10	MYKLAND INVEST AS	0,12 %
11	GADD HOLDING	0,12 %
12	NGUYEN	0,12 %
13	T SANDVIK AS	0,10 %
14	PAK INVEST AS	0,09 %
15	VOLDMO	0,08 %
16	INITIUM INVEST AS	0,07 %
17	KRISTIAN HODNE AS	0,07 %
18	ARAMIS FLEKKEFJORD AS	0,06 %
19	PIKHAUGEN II AS	0,06 %
20	BUSINESSPARTNER AS	0,05 %
	OTHER	0,96 %
	TOTAL	100,00%

Shares owned by the Board, Management and their Related Parties

31.12.2013	# of Shares

Board of Directors
Øystein Stray Spetalen (Chairman)	83 207 085
Martin Nes	-
Brita Eilertsen	-

Group Management
Espen Lundaas (CEO/CFO)	-


Related Parties	-

Total number of shares held by Board members and Group management	83 207 085
Total number of shares held by Board members and Group management in % of total outstanding shares	95,89%

31.12.2012	# of Shares

Board of Directors
Øystein Stray Spetalen (Chairman)	55,978,204

Arne Blystad (Chairman)	26,279,009
Espen Lundaas	-

Per Ola Baalerud	-
Brita Eilertsen	-

Group Management
Jon Christian Syvertsen, CEO	150,000
Fredrik Platou, CEO (CFO)	-

Related Parties	-

Total number of shares held by Board members and Group management	82,407,213
Total number of shares held by Board members and Group management in % of total outstanding shares	94,96 %

Shares and stock options by Board members and Group management

No stock options or rights to stock options are held by members of the board of directors or any of the Company's employees at 31 December 2013.

NOTE 12 –RISKS

The risk exposure of Saga Tankers ASA is considered to be similar as the risks described for the Saga Tankers Group. References are made to note 19 in the Saga Tankers Group consolidated accounts. The sensitivity analysis for the equity instruments in the consolidated accounts, will not be applicable to the Company's accounts, due to differences in accounting principles.

NOTE 13 – SUBSEQUENT EVENTS

As per 22 April 2014, the chairman of the board, Mr. Øystein Stray Spetalen, have acquired an additional 0,66% of the shares outstanding, bringing his ownership up to 96,55 % in the company.

NOTE 14 – SHARES AND OTHER FINANCIAL ASSETS

	2013	2012
At 1 January	31 628	-
Additions	47 707	31 628
Disposals	-1 560	-
Dividends classified as repayments	-17 543	-
At 31 December	60 232	31 628

Shares and other financial assets include the following

	2013	2012
Listed shares	60 232	31 628
Total	60 232	31 628

The financial assets are denominated in NOK and are measured at cost. None of the financial assets have been impaired.

AUDITORS' REPORT

SAGA TANKERS ASA +47 23 01 49 14 Sjølyst Plass 2, 0278 Oslo Norway

INVESTOR RELATIONS Phone: +47 23 01 49 14 e-mail: [email protected]

AI assistant

Saga Pure — Annual Report 2013

3730_rns_2014-04-28_93639c86-be99-4c07-97fa-afb479604c29.pdf

CONTENTS

2013 Annual Report

BOARD OF DIRECTORS REPORT

A LOOK BACK ON 2013

FINANCIAL RESULTS 2013 (GROUP)

LIQUIDITY AND CASH FLOW

FINANCIAL POSITION

RISK FACTORS

HEALTH, SAFETY AND ENVIRONMENT (HSE)

CORPORATE SOCIAL RESPONSIBILITY

FINANCIAL RESULTS OF PARENT COMPANY

CORPORATE GOVERNANCE

SUBSEQUENT EVENTS

INVESTMENT IN SHARES

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE PERIOD 01.01– 31.12

CONSOLIDATED CASH FLOW STATEMENT FOR THE PERIOD 01.01 – 31.12

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER

NOTES TO CONSOLIDATED FINANCIAL STATEMENT

NOTE 1 – CORRPORATE INFORMATION

NOTE 2 – CHANGES IN ACCOUNTING POLICY AND RESTATEMENTS

Restatement of balance 1 January 2012

Restatement of balance 31 December 2012

NOTE 3 – ACCOUNTING POLICIES

Basis of preparation

Going concern

Basis of consolidation

Subsidiaries

Associates

Significant accounting judgments, estimates and assumptions

Depreciation of vessels

Revenue recognition

Voyage revenue:

Summary of significant accounting policies

Vessel revenue and expense recognition

Revenue from investment and trading of financial instruments

Dividend Income

Foreign currency

Inventories

Vessels and dry-docking

Impairment of non financial assets

(i) Vessels and other assets carried at amortized cost

Impairment of financial assets

(ii) Assets classified as available for sale

Financial instruments

Trade receivables and other receivables

Trade payables and other payables

Cash, cash equivalents and cash flow statement

Financial liabilities

Provisions

Equity

Ordinary taxation

Financial position classification

Non-current assets held for sale

Related parties

Contingent liabilities

Events after financial position date

New and amended standards adopted by the group

New standards and interpretations not yet adopted

Standards issued but not yet effective

NOTE 4 – OPERATING SEGMENTS

NOTE 5 – INVESTMENT IN ASSOCIATES

31 December 2013

NOTE 6 – ADMINISTRATIVE EXPENSES

2012

Guidelines for determining salaries and other compensation for company management

NOTE 7 – CASH AND CASH EQUIVALENTS

NOTE 8 –OTHER CURRENT ASSETS

NOTE 9 – TRADE RECEIVABLES AND OTHER RECEIVABLES

NOTE 10 – OTHER CURRENT LIABILITIES

NOTE 11 – VESSELS AND OTHER FIXED ASSETS

Sale of other fixed assets

Depreciation of vessels

ASSETS HELD FOR SALE 2011

NOTE 12 – TAX

NOTE 13 – PENSIONS

NOTE 14 – INTEREST BEARING DEBT

Material loan agreements

Saga Pure Annual Report 2013