Investor relation policy
I.M. Skaugen ASA aims to keep shareholders, analysts and investors updated to the Company's operations in a timely fashion, both by releasing information regularly and holding presentations. The financial calendar showing publication dates for the company's quarterly interim reporting is available on our website.

I.M. Skaugen has for several years focused on achieving and maintaining a transparent and accountable financial reporting system. Accurate and thorough information is vital for securing reasonable pricing for the company, based on underlying values and earnings. It is our policy to report promptly, within 10 working days of the end of each quarter.

Open investor presentations are arranged on a regular basis. The CEO reviews the results and comments on the performance as well as the outlook. The CFO also participates at these presentations, as do other members of the corporate ­management from time to time.

These presentations are available at the Group's website. Beyond this, the Group maintains a regular dialogue with and conducts presentations to analysts and investors.

Shareholder Policy
The company’s shareholder policy aims to create shareholder value through our emphasis on ”Cost and Service Leadership”, constantly improving customer service and focusing on operational efficiency, thereby growing the business profitability.

I.M. Skaugen’s goal of creating value for its shareholders means a continuous focus on ensuring that the company’s balance sheet and its financing - inclusive of its equity - is adapted to the company’s objectives, strategy and risk profile.

The Board of Directors has adopted a financial policy that amongst others have targeted an equity ratio (book equity in percent of total assets) of no less than 30 per cent.

The company favors a dividend policy based on financial performance, but the increase in share price should, over time, account for the largest part of the return on shareholder investment. When appropriate, and particularly when the share price is considered low, the company aims to buy back its own shares from the market.

In correspondence with the Norwegian code of practice for corporate governance shareholders have the opportunity at each annual general meeting to approve any mandate to the Board of Directors to issue shares or purchase own shares.

Board of Directors of I.M. Skaugen ASA
Please refer to our web site www.skaugen.com for information on the membership of the Board, including details related to the date of election, term of office, relevant expertise, other appointments and/or employment, as well as details of any business or personal connection to the company.

Mandates granted to the Board of Directors
On 1 March, 2005, the company's Ordinary Annual General Meeting renewed the authorisation, granted to the Board of Directors, to acquire up to 600,231 treasury shares on behalf of the company, corresponding to 10 per cent of the current share capital. The highest price that may be paid is NOK300, and the lowest price is NOK1. The authorisation remains in effect for 18 months from 1 March 2005.

The authorisation is registered in the Register of Business Enterprises.

The IMSK share performance
The IMSK share price on the Oslo Stock Exchange increased by 52 per cent during 2005, from NOK154 to NOK235, with a low of NOK155 in January and a high of NOK 248 in December. The average share price during the year was NOK195 with a yield of 64 per cent, including the dividend of NOK7.50 per share paid in March and the extraordinary dividend of NOK 10 per share in December. During the same period the Oslo Stock Exchange Benchmark Index (OSEBX) increased by 40 per cent and the OSE 2030 Transportation Index (OSE2030GI) by 34 per cent.

Dividend
As communicated when the Board made a proposal to pay dividend in December 2005 no dividend proposal will be passed in the ordinary meeting held in 2006. Due to the changes in the Norwegian tax legislation it would be unfavorable for the Norwegian personal shareholders to have dividend declared at the ordinary general meeting of the company in 2006 with subsequent payment. Therefore the Board decided to propose an extraordinary dividend distribution in December 2005 related to the full calendar year 2005, rather than in 2006, as would be normal course of business.

Liquidity provider sceme
On the 25 April 2005, I.M. Skaugen ASA and Pareto Securities entered into a market making agreement for the IMS share. The trading was initiated on the 26 April 2005. The goal with the market making is to increase the general liquidity and interest in the share and create a stable and consistent trade. By entering into the agreement with the condition that Pareto fulfils the agreement requirements the IMS share was categorised in the Match segment on OSE. The Match categorisation and the fact that Pareto is placing committed orders increase the investment confidence.

The trading has been handled by the Pareto market makers by placing committed buy/sell orders with a spread of less than 4% of the share price during at least 85% of the OSE opening hours.

The trading in the IMS share has increased significantly since the start up of the market making. In the period from 30.08.04 to 15.04.05 the average daily trading was 2,113 shares. From the start up of the market making and throughout the year the average daily trading had increased with 73% to 3,662 shares. See figure below.

20 largest shareholders in I.M. Skaugen ASA

Repurchase of shares
At year-end 2005, I.M. Skaugen held 22,323 treasury shares.   The total number of shares repurchased since 1999 is 1,181,131 and total investment has been NOK70 million or NOK88.13 per share.

Convertible bond
A convertible bond for NOK124 mill was placed in the Norwegian market in June 2001 (ticker code IMSK00). The bonds can be converted to IMS shares prior to May 2006 and at a conversion price of NOK60. NOK56.5 mill of the bonds have been converted into 941,662 shares. IMS has re-purchased NOK35 million of the bonds, which have been written down. The outstanding bond programme at year-end of NOK 32.5 million could increase the share capital of I.M. Skaugen by 541,666 shares to 6,952,304, up from 6,410,638 shares - or by 8.4 per cent. One of the bond holders has in early January called for conversion of its holding of NOK 14.5 million.

Risk adjustments

Bond
IMS placed a NOK bond of NOK300 mill in the Norwegian market in May 2004 (ticker code IMSK01). The bond carries a coupon of three months NIBOR + 4.75 per cent and matures on 2nd June 2009. In December 2005 IMS repurchased NOK 135 million and now owns NOK 188.5 million or 63 per cent of the bond.

Five years bond loan
IMS placed a new five-year USD bond of USD75 mill in the Norwegian market in Dec 2005 (ticker code IMSK02). The bond carries a coupon of three months LIBOR + 2.80 per cent and matures on 14 December 2010. The proceeds has been used refinancing and strengthen the balance sheet and financial resources moving forward.