Annual Report 2012 ODIN Equity Mutual Funds - Institutional Funds

February 2013

Contents



3 4-7 8-9 10-12 13-14 15 17-20 21-24 25-29 30-34 35-38 49-43 44-47 48 49

Comments from CEO Market Comments Why responsible investments are important This is how we invest Report from the Board of Directors for 2012 Notes ODIN Norge II comments and annual report ODIN Sverige II comments and annual report ODIN Norden II comments and annual report ODIN Europa II comments and annual report ODIN Finland II comments and annual report ODIN Global II comments and annual report ODIN Eiendom comments and annual report Auditor’s Report for 2012 Notice of election meeting

The English text in this annual report is a direct translation of the original Norwegian text. All figures are published in NOK.

The Company is a wholly owned subsidiary of SpareBank 1 Gruppen AS Company registration number: SpareBank 1 Gruppen AS ODIN Forvaltning AS ODIN Fonder, branch to ODIN Forvaltning AS, Norway ODIN Rahastot

ODIN Fund Management AS Fjordalléen 16, N-0250 Oslo, P.O. Box 1771 Vika, N-0122 Oslo, Norway Telephone: +47 24 00 48 00 Fax: +47 24 00 48 01 E-mail: [email protected] www.odinfundmanagement.com www.odinfond.no 

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975 966 372 957 486 657 516402-8044 1628289-0

ODIN Fonder, Stureplan 13, S-111 45 Stockholm. Box 238, S-101 24 Stockholm Telephone: +46 8 407 14 00 Fax: +46 8 407 14 66 E-mail: [email protected]  www.odinfonder.se

ODIN Rahastot, Mannerheimvägen 14 A, FIN-00100 Helsinki Telephone: +358 (0) 9 4735 5100 Fax: +358 (0) 9 4735 5101 E-mail: [email protected] www.odin.fi

ODIN FUND MANAGEMENT  ANNUAL REPORT 2012

Comments from the CEO

«You’ve chosen the right fund manager» When I took on the task of leading ODIN in the middle of 2012, I was excited - as one often is when starting a new job in a new place and with new colleagues. It did not take long before I had a good feeling – a feeling of coming home. You’ve chosen the right fund manager, Rune, I said to myself at that time. Let me explain why. My experience of management organisations such as Folketrygdfondet, the Rasmussen Group and Norfund (The Norwegian Investment Fund for Developing Countries) has made me aware that managing other people’s money requires a particularly high level of responsibility, professionalism and compliance. And these are all qualities that I have found in abundance here at ODIN. ODIN’s managing organisation is in a phase in which we are reaping the fruits of processes that have been ongoing for some time. 2012 was a year in which our management on the whole delivered very good results. That shows some of the strength that now lies in our carefully considered investment process and the value-oriented philosophy that underpins the investment decisions we make on behalf of our unit holders. Not everyone understands the great difference between being a long-term investor and a short-term trader in the financial market. Although we buy and sell the same securities, there is in reality a huge difference between these two approaches to investments. At ODIN, we invest for the long term. We do not pretend that we can forecast the short-term movements in the financial market. However, our investment process makes us highly capable of differentiating good companies from bad ones. As investors, we believe that our unit holders will receive the best return over time if we invest in those companies that are cleverest at creating value. In the long term, it is the companies’ ability to create value that is crucial to the return our unit holders achieve. I think the following quote by Börje Ekholm, the CEO of Investor AB, an important Swedish investment company, ODIN FUND MANAGEMENT  ANNUAL REPORT 2012

also fits ODIN’s approach: “We don’t trade shares. We own great companies. We don’t focus on beating the market in the short term. We want our investments to beat their competitors in the long term.” Another aspect of ODIN’s long-term view is that we are not just passing through the shareholder lists, we play an active role as an owner. We use our ownership to work systematically to steer the companies in what we believe to be the right direction. In this work, we focus not only on shareholder value but also on the environment and social factors. You can read more about this, among other issues, in this annual report. Bearing in mind that we spend a lot of time and effort on finding the cleverest companies and following them up closely, it is also natural for our funds to have concentrated portfolios. We do not spread the money we have been asked to manage widely around the market and hope for the best. We make active choices based on what we are convinced are the cleverest companies and follow these companies up to help them succeed. This means that each choice of investment has a considerable effect on us. We want to tell you about these choices and this work. Through our in-depth fund reports and market comments, you have a chance to see the world and financial markets from our perspective. You can do so not only in this annual report but also in our electronic newsletters, which you can subscribe to on via our website. As mentioned, I’m very comfortable with ODIN’s perspective on the world and look forward to continue leading this good team of highly competent employees. So I also feel I’m on solid ground when I state that your choice of ODIN as your fund manager is a good one. I wish you a successful 2013 and hope you enjoy reading this report! Rune Selmar I3I

Market Comments

A good year Many people are surprised when they see what a good year 2012 actually was, both for the market in general but also for the ODIN funds in particular. You could have made a lot of money if you had known with certainty this time last year that the Euro would hold its ground and that none of the Eurozone countries would default on their national debt. The broad European stock market delivered 11,1 per cent, and the bombed-out Greek stock market delivered 26,3 per cent (numbers in NOK). Don’t we all wish we had invested everything there at this time last year… In all modesty, we would of course like to mention that ODIN also delivered solid returns in 2012. 10 out 12 equity funds and all balanced funds beat their benchmarks. Our actively managed bond fund had a fantastic year, with returns exceeding 15 per cent. We have been through a rough period the last few years, and we have worked hard to retain your trust in our expertise. Consequently it is especially satisfying to note the good results in 2012. Naturally, both you as our client and we as portfolio managers have a longer perspective than a year, but satisfying results from the job done so far strengthens our belief that we are heading in the right direction. At the same time, our impression is that many are surprised to learn how well 2012 actually turned out. This is understandable. If you have been following the news, both in financial and other media, you will have had plenty of reason to worry. In addition to a lot of political turbulence, with important election campaigns and regime shifts, there were the ongoing Euro crisis, quarrels regarding budgetary and tax reforms in the USA, natu-

ral disasters such as Hurricane Sandy, accidents like the Concordia shipwreck, the civil war in Syria, the nuclear programme in Iran, the increased conflict in the South China Sea and rocket launches in North Korea. The nature and function of the media is to put the spotlight on challenges. But consequently, the media’s agenda is not always a representative reflection of the prevailing mood in the financial markets, as 2012 demonstrates. This will make for an interesting 2013… The Speaker said: “What has happened, will happen again, and what has been done will be done again, and there is nothing new under the sun.” (Ecclesiastes 1:9) Many of you who take a brief look at the list below may think just that – there is not a lot that is new here. But those who take a look underneath the surface will discover that the world is actually moving forward, perhaps not always at a very high speed but there is nonetheless progress. And we believe that it is exactly the progress in the main topics on the agenda which will make 2013 a rather interesting year. The following overview gives us some key points to follow in the year ahead:

ODIN has based its market comments on the views of sources that are considered to be reliable. However, ODIN cannot guarantee that the information provided by its sources is either accurate or complete. Statements in this annual report reflect ODIN’s views on the market at the time when the annual report was being prepared. I4I

Market Comments

Low interest-rates complicates the hunt for returns

World War III to be fought using currencies?

Leading central banks such as the US Federal Reserve, Bank of Japan, Bank of England and ECB are doing what they can to keep interest rates low and their economies running, among other things by printing money – a lot of money.

The large central banks’ eagerness to print money devalues their respective currencies. This benefits the country’s export industries but is correspondingly unfavourable to foreign companies that want to sell goods to the country’s inhabitants.

When inflation and very low interest rates combine in negative expected real rate of return on long-term government securities, people and institutions with large fortunes have to seek a return elsewhere. Many have invested in corporate bonds and this market is currently at its busiest level ever. Gold has been another alternative and has set new price records over the past few years.

This creates major difficulties for emerging economies that obtain a lot of their revenues from exports to rich countries. A currency conflict that comes to a head between rich countries and the emerging economies may have huge consequences for international trade in the short term and lead to a lot of turbulence in the financial markets.

However, for a long-term investor, the current price levels for bonds and gold do not provide any reason to expect as fantastic developments in the future. More and more investors will look to the stock market to find investment opportunities, and this will lead to share prices rising.

In longer perspective it shouldn’t be any conflicts for there to be growth in emerging economies such as Brazil, India and China on the one hand and in the USA, Japan and Europe on the other. By trade, everyone can become richer. But the road to a more harmonious balance will probably be a bumpy one.

China’s route from factory to market place

Broken BRICs

Despite a lot of concern about China’s lower growth rate, the year ended with positive figures for the manufacturing industry and the purchasing managers’ confidence in the future was at the same high level as that measured in November. This strengthens our faith in a controlled slow down of China’s growth.

Not only China but all the four large emerging economies have faced challenges lately. However, unlike China, which wants to turn more towards domestic consumption, Brazil and India in particular need more investments to maintain sound growth in their economies. But this is exactly what they are finding it difficult to do.

Changing the basis for its economic growth from mainly investments towards more emphasis on domestic consumption has been a strategic goal for China. The country also sorely needs reform in a number of other areas in order to overcome structural problems that are impeding growth.

The reduction in assistance from rich export markets has helped to push the structural challenges faced by the BRIC countries up to the surface. Key issues for Brazil, Russia, India and China are corruption, suffocating bureaucracy, unpredictable political protectionism and other risk factors that frighten off both foreign business players and financial investors.

President Xi is an enigmatic figure and several people have questioned the eagerness to introduce reforms of the other members of the country’s top leadership – primarily in relation to political reforms. In the economic area, the modernisation will probably continue as before, with particular emphasis on reforming towns and achieving more sustainable urbanisation.

The BRIC countries are key growth engines in the global economy and many people are waiting in great suspense to see how they will handle these challenges.

Market Comments The motor of US spending Despite massive media coverage of the fiscal cliff and debt ceiling crises in the USA, these are not as dangerous as one could believe. Both are crises that have been inflicted on the USA by politicians – and are necessary mechanisms to force a compromise in a deadlocked situation. A permanent solution to the USA’s public economy problem of too low incomes compared to expenses requires extensive budgetary and/or tax changes. The challenge lies in the fact that this must be tackled during a period of high unemployment and great social differences. The way in which the authorities choose to save money is therefore just as important as the amount they save. This is important for us too, since the US market is important to many of the companies in which we own shares. A permanent revitalisation of the USA’s middle class, as President Obama and others want to see, will probably be very beneficial to the global economy in time.

A glimpse of a new, dynamic eurozone The rumours of the euro’s death are exaggerated. In fact, the risk of the euro collapsing is less now than it has been for quite some time. At the end of 2012, European politicians even managed to agree on a common banking supervisory authority, an important step in the direction of a new and much more institutionally robust eurozone. The hardest hit countries in Europe have also shown a willingness to tighten their spending and introduce reforms.These developments show clearly how crises can function constructively as change mechanisms in political processes, and progress in the reform work is beneficial to long-term exposure to Europe. A lot of work remains but, if its members can manage to implement all the necessary structural reforms, the eurozone may emerge from this crisis as the most dynamic of all the western economies. Europe is hurting but is actually starting to get a grip.

Sorting out the banking industry

The shale revolution

Looking at the global banking industry in detail currently appears to be like taking a trip around the haunted house at a fairground, and in 2012 several skeletons fell out of the cupboard. The foremost of these was the so-called Libor scandal, in which around 20 banks are being investigated due to allegations that they manipulated this important benchmark interest rate. The authorities are introducing a huge pile of new regulations, in which the global Basel III regulations for capital reserves and liquidity are the most important.

In November 2012, the International Energy Agency (IEA) published its annual World Energy Outlook analysis. One of the surprising news in the analysis was the IEA’s prediction that the USA will pull ahead of Saudi Arabia and Russia to become the world’s biggest oil producer in 2017. The IEA also predicts that the USA will be self-sufficient in energy in 2030 as a result of the ongoing revolution in the extraction of shale gas and shale oil.

The sorting out and regulation of this key sector has been high on the agenda ever since the financial crisis in 2008 and will probably be an important topic for quite some time. The trip around the haunted house is not over yet and the regulation work will take time.

This may lead to epoch-making changes in the commodity markets and energy transport sector as well as in global politics. The transport routes for gas and oil will change, gas will take over from coal in several places, OPEC’s influence will weaken and the price volatility in the oil and gas markets may increase. The size of these changes means that the market will spend a lot of time and effort in future in order to get a hold on this.

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ODIN FUND MANAGEMENT  ANNUAL REPORT 2012

Market Comments Record-high oil and gas investments Despite the shale revolution and a weak global economy, we are currently in a trend with a high level of activity in the upstream oil and gas sector. The demand for oil and gas is increasing while existing reserves are shrinking rapidly. To meet demand, we must find and develop more and more new reserves worldwide. These are long-term processes that require a lot of resources and are the reason for the oil companies’ investments in the exploration for and development of new fields being at a historically high level both in Norway and worldwide. According to Barclays Bank’s annual forecast regarding global investments in exploration and development in 2013, the strongest growth will probably take place in Latin America, South East Asia/ Australia and the Middle East, but almost all areas will probably experience some increase in activity. This means, among other things, strong demand for oil service companies. Our recommendation

Few people predicted a good 2012, while many feared the worst. This is an important explanation for why the return was so good: the prices were low to start with because a positive outcome was uncertain. This example illustrates how difficult it is to forecast short-term movements in the financial markets. When trying to forecast the future, the simplest solution is often the best. In his book entitled The Signal and the Noise: Why So Many Predictions Fail – but Some Don’t, statistician Nate Silver analyses what characterises good and bad forecasts. Silver became world-famous last autumn because of his accurate predictions about the US presidential election, and the book was published shortly afterwards. One reason for the failings of many economic forecasts is that economists have a tendency to bury themselves in the enormous amounts of data constantly being produced by the financial markets, according to Silver. They often end up finding correlations and patterns that are in practice random and not predictable at all. They misinterpret noise as signals, he claims. Instead of digging through mountains of data, Silver proposes that a better approach is to look at the foundations of the phenomenon being analyzed, take the average of several independent forecasts and reduce the complexity of the forecast as much as possible. Apparently, financial services professionals can learn a lot from weather forecasters in this regard. They have actually become quite good at predicting the weather and one important reason for this is that weather forecasters sysODIN FUND MANAGEMENT  ANNUAL REPORT 2012

Take a long-term view – don’t forget equities “It’s difficult to predict, especially the future,” said Storm P, a famous Danish writer. But, when trying to do so, the simplest is often the best. Unlike weather forecasts, the likelihood of a stock market prediction coming true increases in proportion to the time horizon. A weather forecast should therefore be short term, while a stock market prediction should be long term and cover short-term cycles and fluctuations. In the short term, the market’s fluctuations are namely almost impossible to predict with any degree of certainty. So we do not advise anyone to base their investments on short-term expectations. However, in the long term the stock market is more predictable. The longer a time horizon you have, the more likely it is that you will achieve a good return. We therefore recommend that you include a sizeable percentage of long-term equity investments in your portfolio in 2013.

tematically learn from their mistakes and adjust their models subsequently. Another important reason is that weather forecasters know their limitations and do not predict the weather for much more than one week into the future. Unlike weather forecasts, in the financial markets it is worth noting that the likelihood of a prediction being correct actually increases in proportion to the time horizon. Where a weather forecast should be short-term, a stock-market prediction should thus be long-term and span cycles and fluctuations in the short term in order to be credible and useful. In the short term, it is impossible to forecast the stock market’s movements with any useful degree of certainty, but in the long term it behaves quite predictably: the longer our time horizon, the more likely it is that we will achieve a good return. We have no guarantee of this, but we do have probability comfortably on our side, supported by fundamental economic factors and long historical experience. There are many indications that 2013 may be a good year for equity markets. However, we do not advise anyone to base their investments on such short-term expectations. On the other hand, we do advise everyone to have a significant share of long-term share investments in their portfolio – including in 2013. Jarle Sjo, CIO

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ESG = Environmental, Social & Governance

Why responsible investments are important Even hardened finance people have gradually come to realise the positive effect on their reputation of complying with established principles for responsible investment. However, responsible investments can give us fund managers much more than just an attractive halo. As active stock pickers, it is our experience at ODIN that working on responsible investments also gives us greater insight, especially into how to protect ourselves against downside risk. This is valuable because, in order to achieve good results as a portfolio manager, it is at least as important to avoid making large wrong investments as it is to find big winners. Many years of alternating crises in the financial markets have made protection against so-called downside risk quite an important topic for most investors. More than just customer care For many of our customers, it is a prerequisite that ODIN must invest responsibly as regards the environment, social consequences and proper corporate governance of the listed companies. Such customer demands have made responsible investments, including the signing of the UN Principles for Responsible Investment, into a hygiene factor for serious management environments. ODIN has also signed the UN Principles for Responsible Investment. But for us this is about more than just reputation building. We have worked for a long time to integrate environmental issues, social conditions and proper corporate governance into our investment process and day-to-day portfolio management as key assessment criteria. One important reason for this is that the questions which must be asked when these criteria are to be assessed reveal information about and insight into such things as the operational risk in the companies in which we own or are considering buying shares. I8I

Follows from our philosophy Our approach to responsible investments is linked to our fundamental investment philosophy. We are valueoriented, active stock pickers who conduct thorough analyses of all potential investments. We manage concentrated fund portfolios with relatively few companies and have a long-term perspective for each individual investment. This means we have strong incentives and good opportunities to know and understand the fundamental valuecreation and risk drivers in each company and to play an active role in the corporate governance of our portfolio companies. Thorough documentation For those companies that pass our test, we will have obtained and processed information on their effect on the environment, social conditions and proper corporate governance. This information is updated continuously for companies included in the portfolio. Because the quality of data and analyses is crucial to the effective integration of responsible investments, we have among other things chosen to hire Hermes Equity Ownership Services, a world-leading agency, to assist us. Apart from the reports we receive from Hermes, we also obtain a lot of information ourselves, including through in-depth talks with key persons in our portfolio companies.

ODIN FUND MANAGEMENT  ANNUAL REPORT 2012

ESG = Environmental, Social & Governance

Not everything should be owned Although we place most emphasis on being an active and constructive investor in the companies in which we own shares, there are some companies that we do not want to invest in, either because of what the company does or because of the way that it does it. As an example of the former, ODIN will not invest in companies that obtain a significant share (>5 per cent) of their revenue from the manufacture and sale of controversial weapons (such as nuclear weapons, landmines, cluster bombs and chemical or biological weapons). ODIN also refuses to invest in companies which clearly contravene laws, rules or international treaties or conventions - in accordance with the principles stated in the UN Global Compact.

Cooperation and promotion In addition to our own choices of investments and independent conduct as an owner, we also place emphasis on cooperating constructively with other investors in order to influence companies in a positive direction. Our memberships of Norway’s Owner Forum, Sweden’s Sustainable Investment Forum and Finland’s Sustainable Investment Forum are examples of this. We are also aware of our responsibility for keeping these issues high on the agenda in future and actively try to improve our own and other parties’ ability to act as responsible owners.

Relevant issues from our portfolios Our analyses and data received from Hermes Equity Ownership Services have revealed four issues in ODIN portfolio companies which are considered to be especially worthy to comment. The recommendations from Hermes and our own assessment indicate that it is possible and likely that we can influence these companies in a positive direction through our ownership. We will therefore prioritise following up these issues in our contact with the companies: Halliburton and Transocean Ltd – the experience gained from the accident and oil spills from the Deepwater Horizon rig in the Gulf of Mexico has raised serious questions about the companies’ handling of environmental risks and it is important that they actively address this issue. Hyundai Motor Co – despite improvements in the company’s relationships with its permanent employees, there is still reason to monitor the company’s relationships with its temporary employees internationally and these employees’ working conditions. The company’s management has been constructive and active in the dialogue on these issues. Syngenta AG – it is disappointing and rather worrying that the company has not so far taken part constructively in the important international debate on gene-modified food, and is thus allowing the counterarguments to prevail. Combined with an aggressive sales practice which also gives rise to opposition, this may weaken the market basis for the company’s products over time and have serious effects on the world’s access to food. The company is willing to listen to ideas on this topic and we will help to keep the issue high on the agenda.

ODIN FUND MANAGEMENT  ANNUAL REPORT 2012

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ODINs Investment Process

This is how we invest ODIN is a selective asset manager. We believe that the best result over time is achieved when an experienced and close-knit team of managers creates concentrated portfolios through a thorough investment process. All ODIN funds are actively managed, which means that we deliberately choose which individual investments we want to include in our various funds. This also means we are an active owner in the companies in which we invest, in order to protect our unit holders’ interests in the best way possible. There are three fundamental elements in ODIN’s management model:

Interacting expertise

A close-knit team of experienced managers

Concentrated portfolios

We only include the best investment opportunities

A consistent approach

All individual investments are examined according to the same framework

Interacting expertise Sharing knowledge and information, making each other good and working towards a common goal are the mainstays of ODIN’s management culture. For this reason, we place emphasis on close collaboration between our experienced managers and analysts. I 10 I

Even the most advanced computer cannot match the experience-based knowledge and intuition, and analytical and creative qualities, that are necessary for being a good stock picker. And when several experienced managers work well together towards a common goal, the whole becomes greater than the sum of its parts. We believe that portfolio management consists of equal parts of craftsmanship and science and equal parts of teamwork and individual performance. Our management culture and team spirit are therefore crucial reasons for our success . A lot has been written about the importance of team spirit, esprit de corps, etc, in creating results. Andrew Carnegie said: “Teamwork is the ability to work together toward a common vision and direct individual accomplishments toward organizational objectives. It is the fuel that allows common people to attain uncommon results.” Concentrated portfolios We believe it is possible to pick good investments at an attractive price and that if we keep to these alone we will achieve a greater return than if we spread the portfolio widely in the market. For this reason, we pick out and invest in a small selection of only the best investment opportunities that we find. This means each individual choice of investment has a noticeable effect on us. Our goal is to keep the portfolios at between 30 and 40 companies. This means that ‘normal shareholdings have 2-3 per cent of the fund and a good return on an investment has a noticeable effect on the fund. The gain, in the form of a spread of risk, from spreading the ODIN FUND MANAGEMENT  ANNUAL REPORT 2012

ODINs Investment Process

portfolio across more companies than this would be marginal and the effect of each individual choice of investment would also be marginalised.

portfolio candidates. Only those which we regard as the strongest are retained and this helps to ensure that the quality of the portfolio is always high.

Active portfolio management involves constantly balancing an overview over the whole and insight into the individual parts. By concentrating the portfolio, managers can have a closer relationship with both the entire portfolio and each individual company. That makes us better equipped to notice and assess new information that affects each of our investments, so that we have good control over both the company-specific and total risk in the portfolios.

A consistent approach One important condition for being able to compare and contrast quite different companies is our consistent and thorough framework for analysing and assessing all potential investments. We look at companies from several different angles, including their market position, competitive situation, sales growth, margin developments, cash flow, cost of capital, management and corporate governance as well as environmental, social and governance (ESG) issues and other risk factors. An important tool in this analysis is the ODIN Company Scorecard, in which the analyses are summarised and assessed on a uniform scale across different types of companies and sectors. The scorecard summarises the background for each investment and triggers for reassessment and a possibly sale. In this way, everyone in the team can relate to each other’s analyses and investment decisions on the same basis and we are ensured a systematic approach that minimises the risk of known psychological pitfalls.

Since we also place emphasis on active ownership in order to counteract company-specific risks, insight is at least as important as an overview in risk assessments. In addition, we must make sure that the portfolio has a good balance of sector-specific risk factors and liquidity risks and there are rules for this in relation to each fund. When we set a limit for the number of individual investments in the portfolios, this means that all portfolio investments are constantly being challenged by new

A thorough investment process ODIN’s investment process consists of five main steps:

Principles for responsible investment (ESG) Risk monitoring based on each fund’s rules Market monitoring, searches and filtration

Analysis



Decision to buy

Monitoring of the portfolio

Decision to sell

List of candidates Documentation

ODIN FUND MANAGEMENT  ANNUAL REPORT 2012

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ODINs Investment Process

The first is market monitoring, searches and filtration. Here we apply a number of different filtration criteria to find promising investment opportunities. Our opinion on key value-drivers in the economy plays a major role here, as does our prioritisation of companies that can create a sound return on capital. We use recognised tools such as Bloomberg and FactSet and reliable third-party analysts in this work. Based on this extensive search, we apply our analysis framework to the most promising investment opportunities. The investment opportunities that pass this test are then put on our buy list. The next job is then to find as many shares as we want at as favourable a price as possible in the market. This work is carried out by a separate trading manager in the management team. The existing portfolio is monitored constantly in order to pick up on any important changes in the companies in which we have invested. We use SimCorp Dimension as a platform for administering all our fund portfolios. From SimCorp, we create, among other things, fact sheets for each fund (Fund Fact Sheet) which provide a regular snapshot of the fund’s composition, return and risks. Each investment decision we make includes the price level at which we believe the company has fulfilled its potential. Shares in companies that reach this level are sold. If a company does not develop as we expected when we bought the share and our view of the company’s future prospects changes in a negative direction as a result, this company’s shares are also sold.

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In addition to the potential of the individual investments, it is important that the portfolio as a whole has good liquidity and a balanced composition and that the fund meets all the requirements stipulated by our own, the industry’s and public authorities’ regulations. Investment opportunities that do not quite pass our test but which nonetheless have a potential which we believe may become clearer in the future are put on our list of candidates. Former portfolio investments also end up there. This list is monitored continuously and, when factors that indicate a new assessment arise, these trigger a new assessment by us. Over time, the list of candidates has become an important source of new investment opportunities as more and more corporate analyses are issued. Throughout the process, we have documentation which means we can return to a previous date in the fund’s history and use our own investment history as a basis for analysis and further development. Documentation also forms an important basis for the ongoing compliance and risk management work as well as for the work on responsible investments which is deeply integrated into the investment process and the analysis of each individual investment (read more about this in a separate article).

ODIN FUND MANAGEMENT  ANNUAL REPORT 2012

Report from the Board of Directors for 2012

ODIN’s in-house managed equity funds include funds in the categories Norwegian funds (ODIN Norge II), Swedish funds (ODIN Sweden II), Nordic funds (ODIN Norden II), European funds (ODIN Europa II), Global funds (ODIN Global II) other regional funds (ODIN Finland II) and sector funds (ODIN Eiendom). The equity funds are managed according to an index independent and-value oriented investment philosophy. The funds can freely invest within the limits stipulated in their regulations. The funds’ goal is to provide the unit-holders with the best possible absolute return over time. The funds mandates and fees have not been changed during 2012. At the year-end 2012, ODIN Forvaltning AS managed: NOK Equity Fund 82 million ODIN Norge II 479 million ODIN Sverige II 45 million ODIN Norden II 80 million ODIN Europa II 35 million ODIN Finland II

on a fundamental analysis and are made on the background of in-house company analyses. Investments are made in those sectors that the manager possesses a good knowledge of and has a deep insight into. Monitoring of compliance with internal and external framework conditions is made by daily reports to the group management and the fund manager. ODIN has a permanent function which is responsible for risk management. The company has established a risk-management strategy containing general guidelines for risk management in the mutual funds and risk profiles for each mutual fund. The function responsible for risk management monitors and measures the risk in relation to the funds’ risk profiles. Redemptions during the period The funds have not experienced any extraordinarily large redemptions of units that have affected the value of their units during the year. The companies’ routines for subscribing for and redeeming units ensure equal treatment for the unit-holders. The largest amount redeemed in 2012 comprised: Equity Fund

190 million ODIN Global II

ODIN Norge II

29.68 %

211 million ODIN Eiendom

ODIN Sverige II

10.21 %

ODIN Norden II

62.19 %

ODIN Europa II

5.00 %

ODIN Finland II

16.05 %

ODIN Global II

5.44 %

ODIN Eiendom

2.30 %

Handelsbanken (Org.nr. 971171324) is the trustee for the funds. Financial risk and risk management The financial risk relating to investments in equity funds is traditionally measured as being the price volatility or fluctuations in the fund’s unit values. Measured in this way, investments in shares and equity funds always involve a certain risk – in the sense that the value of the units will vary from day to day and over time. Equity funds should be a longterm investment alternative. The Norwegian Mutual Fund Association recommends a minimum investment period of at least five years. The funds’ performances are compared to their own benchmark indices. ODIN’s managers may freely compose the funds’ portfolios, irrespective of the benchmark indices to which the funds are compared. Since the funds are managed according to an index independent investment philosophy, performance will deviate from the benchmark indices. Over time, the result will be that the funds perform either worse or better than the benchmark indices. Historic returns in ODIN’s various equity funds are available under each funds annual report. The funds’ independence of the indices and the manager’s knowledge and experience are important prerequisites for good investment decisions. The investment decisions are based

ODIN FUND MANAGEMENT  ANNUAL REPORT 2012

Continued operations All activity linked to the funds is carried out by ODIN Forvaltning AS. The various funds have in that respect no employees. The fund’s accounts have been prepared on the basis of the going concern assumption. The management company, ODIN Forvaltning AS, is in a healthy economic and financial position. The profit for the year and their appropriation The 2012 annual accounts show that the funds made the following profit: ODIN Norge II had a profit of NOK 9 895 000 which has been appropriated as follows: Appropriation

NOK

Dividends distributed to unit holders:

3 831 000

Transfered to equity:

6 064 000

Total appropriated:

9 895 000

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Report from the Board of Directors for 2012 ODIN Sverige II had a profit of NOK 106 658 000 which has been appropriated as follows: Appropriation

NOK

Dividends distributed to unit holders:

18 309 000

Transfered to equity:

88 349 000

Total appropriated:

106 658 000

ODIN Norden II had a profit of NOK 26 068 000 which has been appropriated as follows:

ODIN Global II had a profit of NOK 22 820 000 which has been appropriated as follows: Appropriation

NOK

Transfered to equity:

22 820 000

ODIN Eiendom had a profit of NOK 33 733 000 which has been appropriated as follows: Appropriation

NOK

Dividends distributed to unit holders:

Appropriation

NOK

Dividends distributed to unit holders:

3 340 000

Transfered to equity:

22 728 000

Total appropriated:

26 068 000

ODIN Europa II had a profit of NOK 15 802 000 which has been appropriated as follows: Appropriation

NOK

Dividends distributed to unit holders:

2 039 000

Transfered to equity:

13 763 000

Total appropriated:

15 802 000

5 150 000

Transfered to equity:

28 582 000

Total appropriated:

33 733 000

The returns in ODIN’s equity funds vary from one year to year. The board of ODIN Fund Management is satisfied with the fact that five of seven equity funds performed better than their benchmark indices in 2012. The Board is confident that the valueoriented investment philosophy applied by ODIN, and the measures implemented in 2011 and 2012, is a good foundation on which to create good long-term results.

ODIN Finland II had a profit of NOK 5 130 000 which has been appropriated as follows: Appropriation

NOK

Transfered to equity:

5 130 000

Oslo, 8 February 2013

The Board of ODIN Forvaltning AS

Kirsten Idebøen Chairman of the Board (sig.)

Harald Elgaaen (sig.)

Tore Haarberg (sig.)

I 14 I

Stine Rolstad Brenna (sig.)

Jan Friestad (sig.)

Tone Rønoldtangen (sig.)

Anne Bruun-Olsen (sig.)

Joachim Høegh-Krohn (sig.)

Rune Selmar Managing Director (sig.)

ODIN FUND MANAGEMENT  ANNUAL REPORT 2012

Notes Note 1 - Note on the principle: ­- Financial instruments: All financial instruments, including shares, bonds, certificates and derivates, are assessed at their actual value (market value). - The determination of actual value: The actual values of the ecurities in the fund’s portfolio are determined on the ba sisof the sales prices Bloomberg at 4.30pm on each day that the stock market is open. If no sales of the securities have been registered on the stock exchange that day, an estimated sales value is used. - Foreign currencies: Securities and bank deposits in foreign currencies are evaluated at the daily rate (information from Six/Bloomberg at 4.30pm). - Inclusion of transaction costs: The transaction costs relating to the purchase of securities (broker’s commission) are included in the securities’ cost prices. - Dividends to unit-holders: The funds, except ODIN Finland II and ODIN Global II, do distribute dividends. - Allocation of acquisition prices: When the funds’ securities are sold, the gain/loss on the sale is calculated based on the average cost price of the sold securities. Note 2 - Financial derivatives: The funds have not had any financial-derivative holdings during the year and do not have any at the year-end. Note 3 - Financial market risk: The balance sheet in the funds’ annual accounts reflects the funds’ market value, in Norwegian kroner (NOK), on the last stock-exchange day of the year. The funds are equity funds whose operations expose them to share-price and foreignexchange risks. The management of the share-price risk is discussed in the annual report. Please refer to this report for further details. The equity funds have an open foreign-exchange position. Note 4 - Asset turnover: A fund’s asset-turnover rate states the amount of securities purchased or sold by a fund during a period. A low asset-turnover rate indicates a lower rate of purchasing/selling activity (trading) than a high asset-turnover rate. The asset-turnover rate is calculated by taking the sum of all the fund’s sales and purchases of securities, dividing this amount into two and then dividing the resultant figure by the fund’s average total assets during the accounting year. The funds’ asset-turnover rates for 2012 were: Fund ODIN Norge II

0,49

ODIN Sverige II

0,44

ODIN Norden II

1,22

ODIN Europa II

0,46

ODIN Finland II

0,26

ODIN Global II

0,49

ODIN Eiendom

0,33

ODIN FUND MANAGEMENT  ANNUAL REPORT 2012

Note 5/6 - Commission revenues/Costs: ODIN Forvaltning AS compensates the funds for brokerage costs in the case of large net subscriptions/redemptions. Note 7 - Management fee: The management fees are calculated daily based on the funds’ total assets according to that day’s evaluation of the funds’ assets. The fees are paid to the management company monthly. The funds’ management fee is 0,9% p.a. ODIN Eiendom s’ management fee is 1 per cent. Note 8 - Other income and costs: Other portfolio income represents the difference between the original book value of foreign-currency bank deposits and the value of these deposits as at 31 December. Other income represents gains from underwriting fees (income from the funds underwriting a part of a share issue to the market). Other costs reflects the funds’ delivery costs invoiced by custodian banks. The basis for the calculations is the number of deliveries multiplied by the delivery cost per unit per market. In August 2012, ODIN announced that, like other mutual fund providers, we have been striving to obtain a refund of the withholding tax that foreign authorities have unlawfully deducted from the dividend paid to ODIN’s equity funds. This tax contravenes the principles regarding the free flow of capital stated in the EU Treaty/EEA Agreement. ODIN has applied for a refund of withholding tax to several countries, and has appealed against several decisions, including in Sweden, Finland, Germany and France. On 10 January 2013, the withholding tax for 2004-2008 was refunded to ODIN by the Swedish tax authorities– a total of SEK 148 million for all the ODIN equity funds that have received dividend from Swedish companies during the period in question. The company’s other applications for refunds have not been processed yet. The additional return from the refunded withholding tax will be credited to unit holders that are invested in the fund on the date when the amount is credited to the fund. In connection with this, ODIN Forvaltning has decided to debit the direct costs incurred in connection with this work to the respective funds. This cost is assumed to be NOK 2 million for all of ODIN’s equity funds and will be debited to the funds in 2013. The cost will be allocated according to the fund’s assets under management.

I 15 I

I 16 I

ODIN FUND MANAGEMENT  ANNUAL REPORT 2012

Fund commentary - ODIN Norge II

Strong end to a difficult year Carl Erik Sando, Portfolio manager

2012 ended with a rise of 10.5 per cent for ODIN Norge II. The fund’s benchmark ended the same period up 21.0 per cent. The volume traded on the Oslo Stock Exchange was relatively weak throughout 2012 and the investors’ desire for liquidity in their investments favoured the few large companies at the expense of the many small ones whose share prices lagged behind. Despite a strong final spurt at the end of the year, ODIN Norge II therefore ended up clearly behind its benchmark in 2012, like many other actively managed Norwegian funds in this market climate. There are many cyclical companies on the Oslo Stock Exchange and their share prices fluctuate widely based on changes in the price of oil and other commodities. But despite great uncertainty about the outlook for the world economy, the analyst estimates predict good earnings for Norwegian companies, with an expected return on equity of 13 per cent in 2013. Compared to the expected interest-rate level, investors will thus earn a lot on Norwegian shares.

ODIN FUND MANAGEMENT  ANNUAL REPORT 2012

30%

Performance 2012

25% 20% 15% 10% 5% 0% -5% Jan.12 jan.12

Apr. 12 apr.12

Index

Jul.12 jul.12

Oct.12 okt.12

ODIN Norge II

I 17 I

ODIN Norge II - Annual Report 2012 ODIN Norge II

1) Benchmark Total return Since start 10/05/2004 (p.a.)

Last 5 years (p.a.) Last 3 years (p.a.)

128,37% 10,03%

135,33% 10,41%

-6,95% -0,38%

-5,70% -0,44%

-2,78% 6,04%

-2,93% -6,48%

2012

10,51%

21,01%

-10,50%

2011

-28,60%

-18,87%

-9,72%

2010

25,05%

21,54%

3,50%

2009

51,80%

72,10%

-20,30%

2008

-50,27%

-57,71%

7,45%

2007

4,82%

10,10%

-5,28%

2006

26,92%

33,13%

-6,21%

2005

54,69%

39,59%

15,10%

2004

48,97%

32,45%

16,52%

ODIN Norge II

Oslo Børs Fondindeks measured in NOK Return in year of inception is calculated from the inception date for both fund and benchmark.

Index

This fund and ODIN Forvaltning AS are registered in Norway and regulated by Finanstilsynet (the Financial Supervisory Authority of Norway). Please note that the historical return is not a guarantee of future returns. The future return will among other things depend on market developments, the manager’s skills, the fund’s risk level and the costs of buying units and managing the fund. The return may be negative as a result of share losses. ODIN Forvaltning employees may trade for their own account in several types of financial instruments. This means that ODIN Forvaltning employees may own securities in companies that are referred to in this report as well as units in ODIN’s mutual funds. The employees’ own-account trading is to take place in accordance with ODIN Forvaltning AS’s internal guidelines on employee ownaccount trading, which have been prepared pursuant to the Norwegian Securities Trading Act and the Norwegian Fund and Asset Management Association’s industry standard. ODIN Forvaltning AS may only be held responsible for information in this document that is misleading, inaccurate or inconsistent in relation to relevant information in the prospectus. I 18 I

ODIN FUND MANAGEMENT  ANNUAL REPORT 2012

ODIN Norge II - Annual Report 2012 ODIN Norge II

NOK 1000

1.Interest income 2.Dividend 3.Gain/loss on sale 4.Net change unrealised price gains/losses 5.Other portfolio revenues/costs

38 3,848 -15,883 22,950 2

8

NOK 1000

99 10,638 -44,153 -66,287 0

11 11 11

1.Shares 2.Convertible securities 3.Warrants 1. Accrued, not yet received, revenues 2.Other receivables

6.Commission revenue from subscription and redemption 7.Costs of subscribing for and redeeming units 8.Administrative fee 9.Other revenues 10.Other costs

6 0 -1,044 21 -43

5 6 7 8

80,167 0 0

123,475 0 0

0 22 1,773

9 107 4,195

47,033 54,720

77,182 79,786

64

568

63 0 -2,573 3 -60 1.Unit equity at nominal value 2.Premium/discount 9,10

11.Tax cost

0

0

1.Net amount distributed to unit-holders during the year 2.Allocated for distribution to unit-holders 3.Transferred to/from accrued equity

3,831 0

10,626 0

Equity as at 31/12/2011 Subscriptions in 2012 Redemptions in 2012 Dividends distributed to unit-holders in 2012

127,216,837 9,090,956 -63,067,465 2,593,007

Equity as at 31/12/2012

1

2

81,897,316

3

4

5

6

Lower risk

Lower possible return

Total liabilities

Amount of shares NAV 31/12

470,333 174.13

771,819 164.83

1,577,838 246.81

By NAV is meant the fund’s total assets divided by the number of units issued. There are no redemption costs for the unit-holders. No special agreements have been entered into with major unitholders regarding any limitation of the equity fund’s duty to redeem units. The fund has not redeemed any holdings that have affected the value of its units during the year.

7 Higher risk

Volatility (3 years)

20,07

20,58

Higher possible risk

The scale indicates the link between the risk involved in and possible return on an investment in the mutual fund. A low score indicates a low level of risk while a high score indicates a high level of risk. Note that achieving the lowest score does not mean the investment is risk-free. The indicator is based on fluctuations in the mutual fund’s historical year-end prices. The fluctuations are measured by the weekly returns that have been recorded for more than the past five years. Large historical fluctuations mean it is more likely that the investment may fluctuate a lot in the future too. The probability of the investment’s value rising and falling a lot in the future is thus greater if there have been large historical fluctuations. Large fluctuations may also mean there is a greater chance of the price falling to below that paid for the investment and of the return being negative due to share price losses. Past performance is no guarantee of future performance. Historical fluctuations in price will therefore not necessarily provide a correct picture of the fund’s future risk profile. The mutual fund’s score is thus not fixed and will normally change over time.

ODIN FUND MANAGEMENT  ANNUAL REPORT 2012

I 19 I

ODIN Norge II ODIN Norge II - Annual Report 2012

Local currency

NOK 1000

NOK 1000

NOK 1000

Aker Solutions

Energy

17 619

112,90

1 154

1 989

835

2,43%

0,01%

Atea

Information technology

35 166

60,00

2 048

2 110

62

2,58%

0,03%

Austevoll Seafood

Consumer staples

23 187

28,50

897

661

-236

0,81%

0,01%

BW Offshore

Energy

175 143

5,15

2 360

902

-1 458

1,10%

0,03%

BWG Homes

Consumer discretionary

70 011

12,05

1 286

844

-442

1,03%

0,05% 0,04%

DOF

Energy

46 017

27,00

1 924

1 242

-682

1,52%

Det Norske Oljeselskap

Energy

47 339

82,50

1 961

3 905

1 944

4,77%

0,03%

Ekornes

Consumer discretionary

25 569

92,50

2 140

2 365

225

2,89%

0,07%

Electromagnetic Geoservices

Energy

140 420

13,06

1 119

1 834

715

2,24%

0,07%

Farstad Shipping

Energy

16 731

130,00

2 255

2 175

-80

2,66%

0,04%

Ganger Rolf

Energy

12 777

125,50

2 008

1 604

-404

1,96%

0,04%

Gjensidige Forsikring

Financials

35 859

79,40

2 183

2 847

664

3,48%

0,01%

Hafslund B

Utilities

66 806

45,30

4 046

3 026

-1 020

3,70%

0,08%

I.M. Skaugen

Energy

35 644

18,80

1 390

670

-720

0,82%

0,13%

Kongsberg Gruppen

Industrials

26 707

124,50

2 411

3 325

914

4,06%

0,02%

Nordic Semiconductor

Information technology

152 399

14,50

2 218

2 210

-9

2,70%

0,09%

Norsk Hydro

Materials

106 560

27,88

3 818

2 971

-847

3,63%

0,01%

Petroleum Geo-Services

Energy

32 900

95,35

2 584

3 137

553

3,83%

0,02%

Photocure

Health care

28 388

38,00

1 188

1 079

-110

1,32%

0,13%

Pronova Biopharma

Health care

101 440

12,35

1 472

1 253

-219

1,53%

0,03%

Q-Free

Information technology

95 150

19,10

1 586

1 817

231

2,22%

0,14%

Royal Caribbean Cruises (NOK)

Consumer discretionary

7 746

184,00

1 479

1 425

-54

1,74%

0,01%

SalMar

Consumer staples

73 328

44,70

3 159

3 278

119

4,00%

0,06%

Scana Industrier

Materials

330 381

1,23

1 730

406

-1 323

0,50%

0,11%

Schibsted

Consumer discretionary

13 940

235,50

1 964

3 283

1 319

4,01%

0,01%

Sparebank 1 SMN,

Financials

62 987

34,80

2 666

2 192

-474

2,68%

0,05%

Sparebank 1 SR-Bank

Financials

98 851

37,20

4 322

3 677

-645

4,49%

0,04%

Statoil

Energy

38 316

139,00

4 929

5 326

397

6,50%

0,00%

Subsea 7

Energy

27 250

132,10

3 301

3 600

298

4,40%

0,01%

Telenor

Telecommunication services

18 128

112,20

1 707

2 034

327

2,48%

0,00%

Tomra Systems

Industrials

33 540

50,25

1 404

1 685

282

2,06%

0,02%

VIZRT

Information technology

61 686

19,90

1 428

1 228

-200

1,50%

0,09%

Veidekke

Industrials

25 261

44,00

1 007

1 111

104

1,36%

0,02%

Wilh. Wilhelmsen Holding B

Industrials

18 051

157,00

2 685

2 834

149

3,46%

0,04%

Yara International

Materials

22 357

273,80

5 791

6 121

330

7,47%

0,01%

1) The Industry Classification is based on the Global Industry Classification Standard (GICS) from Morgan Stanley AND Standard & Poor 2) Costprice is based on average

I 20 I

ODIN FUND MANAGEMENT  ANNUAL REPORT 2012

Fund commentary - ODIN Sverige II

A good year for ODIN Sverige II Tomas Ramsälv Portfolio manager

2012 ended with a rise of 20.3 per cent for ODIN Sverige II. The fund’s benchmark ended the same period up 15.9 per cent.

Throughout 2012, the stock market alternated between hope and desperation, driven by macro indicators, political processes and central bank stimuli. The positive start to the first quarter turned to unrest during the summer, but changed back to renewed optimism in the autumn when figures from the USA and China, in particular, improved the outlook. On the whole, it was a good year for ODIN Sverige II, whose return was in line with that of the Swedish stock market. During the year, we significantly reduced the number of shareholdings in the portfolio. We sold all our shares in 10 companies that had a low weight in the portfolio and were inhibited by poor liquidity, and this has improved the quality of the portfolio. With the prospect of a cautious recovery in the global economy in future driven by the USA and China, we are well positioned for the new year.

ODIN FUND MANAGEMENT  ANNUAL REPORT 2012

25%

Performance 2012

20% 15% 10% 5% 0% -5% Jan.12 jan.12

Apr. 12 apr.12

Index

Jul.12 jul.12

Oct.12 okt.12

ODIN Sverige II

I 21 I

ODIN Sverige II - Annual Report 2012 ODIN Sverige II

1) Benchmark Total return Since start 08/06/2004 (p.a.)

Last 5 years (p.a.) Last 3 years (p.a.)

133,67% 10,42%

109,27% 9,01%

24,39% 1,41%

5,61% 11,09%

4,01% 10,64%

1,60% 0,45%

2012

20,27%

15,92%

4,35%

2011

-16,60%

-14,04%

-2,56%

2010

36,84%

36,08%

0,76%

2009

47,08%

35,30%

11,78%

2008

-34,88%

-33,61%

-1,26%

2007

-16,69%

-9,85%

-6,84%

2006

42,86%

35,99%

6,88%

2005

31,97%

28,43%

3,54%

2004

13,15%

9,13%

4,02%

ODIN Sverige II

OMXSB Cap GI measured in NOK Return in year of inception is calculated from the inception date for both fund and benchmark.

Index

This fund and ODIN Forvaltning AS are registered in Norway and regulated by Finanstilsynet (the Financial Supervisory Authority of Norway). Please note that the historical return is not a guarantee of future returns. The future return will among other things depend on market developments, the manager’s skills, the fund’s risk level and the costs of buying units and managing the fund. The return may be negative as a result of share losses. ODIN Forvaltning employees may trade for their own account in several types of financial instruments. This means that ODIN Forvaltning employees may own securities in companies that are referred to in this report as well as units in ODIN’s mutual funds. The employees’ own-account trading is to take place in accordance with ODIN Forvaltning AS’s internal guidelines on employee ownaccount trading, which have been prepared pursuant to the Norwegian Securities Trading Act and the Norwegian Fund and Asset Management Association’s industry standard. ODIN Forvaltning AS may only be held responsible for information in this document that is misleading, inaccurate or inconsistent in relation to relevant information in the prospectus. I 22 I

ODIN FUND MANAGEMENT  ANNUAL REPORT 2012

ODIN Sverige II - Annual Report 2012 ODIN Sverige II

NOK 1000

1.Interest income 2.Dividend 3.Gain/loss on sale 4.Net change unrealised price gains/losses 5.Other portfolio revenues/costs

221 18,413 21,332 72,255 -1,027

8

524 31,160 25,550 -197,043 -125

NOK 1000

11 11 11

1.Shares 2.Convertible securities 3.Warrants

466,845 0 0

651,503 0 0

53 34 12,302

0 2 8,985

270,807 -610,085

431,044 -482,742

404

738

1. Accrued, not yet received, revenues 2.Other receivables 6.Commission revenue from subscription and redemption 7.Costs of subscribing for and redeeming units 8.Administrative fee 9.Other revenues 10.Other costs

26 0 -4,419 0 -96

5 6 7 8

0 0 -7,060 0 -153 1.Unit equity at nominal value 2.Premium/discount 9,10

11.Tax cost

1.Net amount distributed to unit-holders during the year 2.Allocated for distribution to unit-holders 3.Transferred to/from accrued equity

-48

-4,346

18,309 0

26,619 0

Equity as at 31/12/2011 Subscriptions in 2012 Redemptions in 2012 Dividends distributed to unit-holders in 2012

659,751,832 28,705,956 -298,850,028 873,788

Equity as at 31/12/2012

478,830,167

1

2

3

4

5

6

Lower risk

Lower possible return

Total liabilities

Amount of shares NAV 31/12

2,708,066 176.82

4,310,437 153.06

4,450,137 191.63

By NAV is meant the fund’s total assets divided by the number of units issued. There are no redemption costs for the unit-holders. No special agreements have been entered into with major unitholders regarding any limitation of the equity fund’s duty to redeem units. The fund has not redeemed any holdings that have affected the value of its units during the year.

7 Higher risk

Volatility (3 years)

18,40

17,49

Higher possible risk

The scale indicates the link between the risk involved in and possible return on an investment in the mutual fund. A low score indicates a low level of risk while a high score indicates a high level of risk. Note that achieving the lowest score does not mean the investment is risk-free. The indicator is based on fluctuations in the mutual fund’s historical year-end prices. The fluctuations are measured by the weekly returns that have been recorded for more than the past five years. Large historical fluctuations mean it is more likely that the investment may fluctuate a lot in the future too. The probability of the investment’s value rising and falling a lot in the future is thus greater if there have been large historical fluctuations. Large fluctuations may also mean there is a greater chance of the price falling to below that paid for the investment and of the return being negative due to share price losses. Past performance is no guarantee of future performance. Historical fluctuations in price will therefore not necessarily provide a correct picture of the fund’s future risk profile. The mutual fund’s score is thus not fixed and will normally change over time.

ODIN FUND MANAGEMENT  ANNUAL REPORT 2012

I 23 I

ODIN Sverige II ODIN Sverige II - Annual Report 2012

Local currency

NOK 1000

NOK 1000

NOK 1000

207 700

185,00

23 975

32 964

8 989

6,88%

1,00%

29 110

429,70

11 337

10 731

-606

2,24%

0,03%

SEK/NOK= 85,7900 Addtech B

Industrials

Autoliv

Consumer discretionary

B&B Tools B

Industrials

310 000

63,75

23 714

16 954

-6 759

3,54%

1,13%

Be Group

Industrials

452 120

16,70

16 512

6 477

-10 035

1,35%

0,90%

Beijer Alma B

Industrials

218 302

117,00

20 560

21 912

1 352

4,58%

0,81%

Boliden

Materials

181 290

122,30

16 293

19 021

2 728

3,97%

0,07%

Concordia Maritime B

Energy

466 300

10,00

7 466

4 000

-3 466

0,84%

1,07%

Duni

Consumer discretionary

382 000

59,00

17 500

19 335

1 835

4,04%

0,81%

Hexpol

Materials

103 200

341,00

8 466

30 191

21 725

6,31%

0,31%

Intrum Justisia

Industrials

193 500

96,50

14 788

16 019

1 231

3,35%

0,24%

Lagercrantz Group B

Information technology

295 600

71,00

9 641

18 005

8 365

3,76%

1,34%

Lammhults Design Group

Industrials

126 900

20,10

4 613

2 188

-2 424

0,46%

1,73%

Loomis B

Industrials

214 700

104,00

14 279

19 156

4 877

4,00%

0,31%

Malmbergs Elektriska B

Industrials

107 600

50,00

4 101

4 616

514

0,96%

1,49%

Nolato B

Information technology

113 500

78,00

6 438

7 595

1 157

1,59%

0,48%

Nordea (Sek)

Financials

683 000

62,40

38 421

36 563

-1 858

7,64%

0,02%

Peab B

Industrials

443 122

31,00

14 426

11 785

-2 641

2,46%

0,17%

SKF B

Industrials

136 000

163,70

15 665

19 100

3 434

3,99%

0,03%

Sandvik

Industrials

184 600

103,90

14 807

16 454

1 647

3,44%

0,01%

Scania B

Industrials

104 300

134,80

12 261

12 062

-199

2,52%

0,03%

Sweco B

Industrials

354 600

72,50

14 114

22 055

7 941

4,61%

0,43%

Swedbank

Financials

121 700

127,20

8 747

13 280

4 533

2,77%

0,01%

Systemair

Industrials

154 100

87,00

9 952

11 502

1 549

2,40%

0,30%

Transcom Worldwide A

Industrials

4 514 600

0,54

8 208

2 091

-6 117

0,44%

0,62%

Transcom Worldwide B

Industrials

3 204 900

0,57

1 484

1 567

83

0,33%

0,62%

Trelleborg B

Industrials

252 050

80,70

12 006

17 450

5 444

3,64%

0,10%

Unibet

Consumer discretionary

138 500

203,50

17 722

24 180

6 458

5,05%

0,49%

Volvo B

Industrials

367 094

89,00

28 315

28 029

-287

5,85%

0,02%

ÅF B

Industrials

163 200

154,00

14 092

21 561

7 470

4,50%

0,42%

1) The Industry Classification is based on the Global Industry Classification Standard (GICS) from Morgan Stanley AND Standard & Poor 2) Costprice is based on average

I 24 I

ODIN FUND MANAGEMENT  ANNUAL REPORT 2012

Fund commentary - ODIN Norden II

Slightly less return Truls Haugen, Portfolio Manager

2012 ended with a rise of 12.1 per cent for ODIN Norden II. The fund’s benchmark was up 15.4 per cent during the same time period. 2012 was a relatively good year in the Nordic stock market. In the financial sector, Swedish commercial banks did particularly well and much better than the Norwegian savings banks in our portfolio. Correspondingly, weak developments in Norwegian shipping and the fact that we do not own expensive shares in Danish health company Novo Nordisk also led to our portfolio not doing as well as the market. Despite high returns from good consumer companies such as Marine Harvest, Austevoll and Carlsberg, ODIN Norden II thus did slightly worse than its benchmark in 2012. The Nordic region is an exciting area with a number of quality companies exposed to attractive segments and regions. The price of these companies is still in the lower part of historical price levels, with a few exceptions such as the aforementioned Novo. This is attractive as regards the likelihood of future price rises.

ODIN FUND MANAGEMENT  ANNUAL REPORT 2012

20%

Performance 2012

15% 10% 5% 0% -5% Jan.12 jan.12

Apr. 12 apr.12

Index

Jul.12 jul.12

Oct.12 okt.12

ODIN Norden II

I 25 I

ODIN Norden II - Annual Report 2012 ODIN Norden II

1) Benchmark Total return Since start 25/05/2005 (p.a.)

Last 5 years (p.a.) Last 3 years (p.a.)

41,11% 4,63%

-3,78% 1,36%

55,79% 6,00%

-14,68% -1,37%

-0,90% 7,57%

-2,88% -6,21%

2012

12,14%

15,38%

-3,24%

2011

-22,64%

-15,90%

-6,75%

2010

20,06%

28,40%

-8,34%

2009

39,00%

26,82%

12,17%

2008

-43,06%

-39,51%

-3,55%

2007

-6,26%

1,36%

-7,62%

2006

31,56%

30,97%

0,59%

2005

38,82%

22,79%

16,03%

ODIN Norden II

VINX Benchmark Cap NOK NI measured in NOK VINX Benchmark Cap NOK NI has been the benchmark since 31.12. 2000. Carnegie Total Index Nordic was the benchmark from 30.12.1993 to 30.12.2000. Alfred Berg Nordic Index was the benchmark from 01.06.1990 to 30.12.1993.

Index

This fund and ODIN Forvaltning AS are registered in Norway and regulated by Finanstilsynet (the Financial Supervisory Authority of Norway). Please note that the historical return is not a guarantee of future returns. The future return will among other things depend on market developments, the manager’s skills, the fund’s risk level and the costs of buying units and managing the fund. The return may be negative as a result of share losses. ODIN Forvaltning employees may trade for their own account in several types of financial instruments. This means that ODIN Forvaltning employees may own securities in companies that are referred to in this report as well as units in ODIN’s mutual funds. The employees’ own-account trading is to take place in accordance with ODIN Forvaltning AS’s internal guidelines on employee ownaccount trading, which have been prepared pursuant to the Norwegian Securities Trading Act and the Norwegian Fund and Asset Management Association’s industry standard. ODIN Forvaltning AS may only be held responsible for information in this document that is misleading, inaccurate or inconsistent in relation to relevant information in the prospectus. I 26 I

ODIN FUND MANAGEMENT  ANNUAL REPORT 2012

ODIN Norden II - Annual Report 2012 ODIN Norden II

NOK 1000

1.Interest income 2.Dividend 3.Gain/loss on sale 4.Net change unrealised price gains/losses 5.Other portfolio revenues/costs

22 4,104 -6,497 29,577 -163

8

104 15,907 -44,829 -63,346 -74

NOK 1000

11 11 11

1.Shares 2.Convertible securities 3.Warrants 1. Accrued, not yet received, revenues 2.Other receivables

6.Commission revenue from subscription and redemption 7.Costs of subscribing for and redeeming units 8.Administrative fee 9.Other revenues 10.Other costs

263 0 -963 11 -97

5 6 7 8

43,764 0 0

233,711 0 0

0 2 1,508

0 166 1,292

44,085 -34,688

238,149 -12,695

792

699

23 0 -3,077 0 -95 1.Unit equity at nominal value 2.Premium/discount 9,10

11.Tax cost

-189

-959

1.Net amount distributed to unit-holders during the year 2.Allocated for distribution to unit-holders 3.Transferred to/from accrued equity

3,340 0

14,428 0

Equity as at 31/12/2011 Subscriptions in 2012 Redemptions in 2012 Dividends distributed to unit-holders in 2012

234,470,399 3,397,059 -217,746,558 1,633,224

Equity as at 31/12/2012

1

2

44,482,121

3

4

5

6

Lower risk

Lower possible return

Total liabilities

Amount of shares NAV 31/12

440,855 100.90

2,381,491 98.46

3,041,429 135.47

By NAV is meant the fund’s total assets divided by the number of units issued. There are no redemption costs for the unit-holders. No special agreements have been entered into with major unitholders regarding any limitation of the equity fund’s duty to redeem units. The fund has not redeemed any holdings that have affected the value of its units during the year.

7 Higher risk

Volatility (3 years)

17,44

15,55

Higher possible risk

The scale indicates the link between the risk involved in and possible return on an investment in the mutual fund. A low score indicates a low level of risk while a high score indicates a high level of risk. Note that achieving the lowest score does not mean the investment is risk-free. The indicator is based on fluctuations in the mutual fund’s historical year-end prices. The fluctuations are measured by the weekly returns that have been recorded for more than the past five years. Large historical fluctuations mean it is more likely that the investment may fluctuate a lot in the future too. The probability of the investment’s value rising and falling a lot in the future is thus greater if there have been large historical fluctuations. Large fluctuations may also mean there is a greater chance of the price falling to below that paid for the investment and of the return being negative due to share price losses. Past performance is no guarantee of future performance. Historical fluctuations in price will therefore not necessarily provide a correct picture of the fund’s future risk profile. The mutual fund’s score is thus not fixed and will normally change over time.

ODIN FUND MANAGEMENT  ANNUAL REPORT 2012

I 27 I

ODIN Norden II ODIN Norden II - Annual Report 2012

Local currency

DKK/NOK=

NOK 1000

NOK 1000

NOK 1000

0,9892

Alm. Brand

Financials

24 400

13,90

788

335

-453

0,75%

0,01%

Carlsberg B

Consumer staples

2 237

553,50

1 254

1 225

-30

2,75%

0,00%

FLSmidth & Co

Industrials

2 000

326,20

866

645

-221

1,45%

0,00%

G4S

Industrials

27 910

23,38

629

645

17

1,45%

0,00%

NKT Holding

Industrials

3 170

202,90

1 039

636

-403

1,43%

0,01%

EUR/NOK=

7,3794

Amer Sports

Consumer discretionary

Fortum

Utilities

13 043

11,26

926

1 084

158

2,44%

0,01%

6 980

14,14

1 035

728

-307

1,64%

Huhtamäki

Materials

0,00%

14 970

12,26

1 268

1 354

87

3,04%

Metso

0,01%

Industrials

4 704

32,06

999

1 113

114

2,50%

0,00%

Nokian Renkaat/Tyres

Consumer discretionary

2 550

30,04

421

565

145

1,27%

0,00%

Ramirent

Industrials

13 740

6,21

843

630

-213

1,42%

0,01%

Sampo A

Financials

8 070

24,33

1 146

1 449

302

3,26%

0,00%

UPM Kymmene

Materials

12 390

8,81

988

805

-183

1,81%

0,00%

YIT

Industrials

8 520

14,73

1 059

926

-133

2,08%

0,01%

Aker A

Financials

4 780

212,00

747

1 013

267

2,28%

0,01%

Austevoll Seafood

Consumer staples

30 070

28,50

1 115

857

-258

1,93%

0,01%

BW Offshore

Energy

79 500

5,15

1 269

409

-860

0,92%

0,01%

BWG Homes

Consumer discretionary

25 130

12,05

478

303

-175

0,68%

0,02%

DNB

Financials

11 059

70,40

719

779

60

1,75%

0,00%

Det Norske Oljeselskap

Energy

13 652

82,50

607

1 126

519

2,53%

0,01%

Farstad Shipping

Energy

4 580

130,00

569

595

26

1,34%

0,01%

Infratek

Industrials

22 800

18,60

359

424

65

0,95%

0,04%

Kongsberg Gruppen

Industrials

11 718

124,50

862

1 459

597

3,28%

0,01%

Marine Harvest

Consumer staples

118 893

5,12

371

609

238

1,37%

0,00%

Norsk Hydro

Materials

29 450

27,88

926

821

-105

1,85%

0,00%

Pronova Biopharma

Health care

38 800

12,35

610

479

-131

1,08%

0,01%

Protector Forsikring

Financials

48 911

13,40

415

655

240

1,47%

0,06%

Sparebank 1 SMN,

Financials

20 110

34,80

819

700

-119

1,57%

0,02%

Sparebank 1 SR-Bank

Financials

28 880

37,20

1 218

1 074

-144

2,42%

0,01%

Statoil

Energy

5 880

139,00

765

817

52

1,84%

0,00%

Stolt Nielsen

Industrials

9 315

115,00

1 201

1 071

-130

2,41%

0,01%

Subsea 7

Energy

10 880

132,10

1 495

1 437

-58

3,23%

0,00%

Wilh. Wilhelmsen Holding B

Industrials

11 203

157,00

1 739

1 759

20

3,95%

0,09%

Yara International

Materials

2 198

273,80

607

602

-5

1,35%

0,00%

SEK/NOK= 85,7900 Autoliv

Consumer discretionary

Boliden

Materials

4 354

429,70

1 549

1 605

56

3,61%

0,00%

10 490

122,30

809

1 101

292

2,47%

Hennes & Mauritz B

0,00%

Consumer discretionary

9 504

224,90

1 760

1 834

74

4,12%

0,00%

Investor B

Financials

7 440

169,80

928

1 084

156

2,44%

0,00%

Kinnevik B

Financials

3 800

134,40

338

438

100

0,98%

0,00%

NCC B

Industrials

5 035

136,30

497

589

92

1,32%

0,01%

Nordea (Sek)

Financials

23 600

62,40

1 281

1 263

-17

2,84%

0,00%

SKF B

Industrials

8 110

163,70

701

1 139

438

2,56%

0,00%

Sandvik

Industrials

7 850

103,90

605

700

95

1,57%

0,00%

Securitas B

Industrials

30 235

56,65

1 562

1 469

-93

3,30%

0,01%

Svenska Cellulosa B

Consumer staples

5 286

141,40

455

641

186

1,44%

0,00%

Tele2 B

Telecommunication services

6 230

117,60

611

629

17

1,41%

0,00%

I 28 I

ODIN FUND MANAGEMENT  ANNUAL REPORT 2012

ODIN Norden II - Annual Report 2012 ODIN Norden II

Local currency

NOK 1000

NOK 1000

NOK 1000

89,00

2 093

2 140

48

SEK/NOK= 85,7900 Volvo B

Industrials

28 033

4,81%

0,00%

1) The Industry Classification is based on the Global Industry Classification Standard (GICS) from Morgan Stanley AND Standard & Poor 2) Costprice is based on average

ODIN FUND MANAGEMENT  ANNUAL REPORT 2012

I 29 I

Fund commentary - ODIN Europa II

A strong year for ODIN Europa II 2012 was a year of broad, positive progress in which most of our portfolio companies made a strong contribution to the fund’s return. At the same time, we were not invested in what proved to be the year’s losers in the European market. At the year-end, we could thus note that it had been a very strong year for ODIN Europa II, which achieved a return of all of 23.9 per cent for the year. This was 11,2 percentage points more than the European market index. 2012 is thus another in the row of good periods since we took over the management of the fund in 2004. The fund is now ahead of its benchmark for 2012, the past three and the past five years. Not many people forecast such an outcome at the beginning of 2012, but the companies in the portfolio have proven that they can deliver despite the ongoing euro crisis. We have strong faith in our companies continuing to deliver good results in 2013 and in the stock market appreciating this.

I 30 I

Alexandra Morris, Portfolio manager

20%

Performance 2012

15% 10% 5% 0% -5% jan.12 Jan.12

apr.12 Apr. 12 Index

jul.12 Jul.12

okt.12 Oct.12

ODIN Norden II

ODIN FUND MANAGEMENT  ANNUAL REPORT 2012

ODIN Europa II ODIN Europa II - Annual Report 2012

1) Benchmark Total return Since start 31/01/2006 (p.a.)

-5,84% -0,87%

-4,22% -0,62%

-1,63% -0,25%

Last 5 years (p.a.) Last 3 years (p.a.)

-2,65% 6,47%

-3,85% 2,10%

1,20% 4,36%

2012

23,89%

11,17%

12,72%

2011

-14,76%

-9,63%

-5,13%

2010

14,35%

5,98%

8,38%

2009

24,10%

11,25%

12,85%

2008

-41,69%

-30,67%

-11,02%

2007

-16,63%

-1,00%

-15,63%

2006

29,23%

17,80%

11,43%

ODIN Europa II

MSCI Europe net Index USD measured in NOK Return in year of inception is calculated from the inception date for both fund and benchmark.

Index

This fund and ODIN Forvaltning AS are registered in Norway and regulated by Finanstilsynet (the Financial Supervisory Authority of Norway). Please note that the historical return is not a guarantee of future returns. The future return will among other things depend on market developments, the manager’s skills, the fund’s risk level and the costs of buying units and managing the fund. The return may be negative as a result of share losses. ODIN Forvaltning employees may trade for their own account in several types of financial instruments. This means that ODIN Forvaltning employees may own securities in companies that are referred to in this report as well as units in ODIN’s mutual funds. The employees’ own-account trading is to take place in accordance with ODIN Forvaltning AS’s internal guidelines on employee ownaccount trading, which have been prepared pursuant to the Norwegian Securities Trading Act and the Norwegian Fund and Asset Management Association’s industry standard. ODIN Forvaltning AS may only be held responsible for information in this document that is misleading, inaccurate or inconsistent in relation to relevant information in the prospectus.

ODIN FUND MANAGEMENT  ANNUAL REPORT 2012

I 31 I

ODIN Europa II ODIN Europa II - Annual Report 2012

NOK 1000

1.Interest income 2.Dividend 3.Gain/loss on sale 4.Net change unrealised price gains/losses 5.Other portfolio revenues/costs

7 2,265 548 14,064 -102

8

14 2,724 -15,605 -4,362 -202

NOK 1000

11 11 11

1.Shares 2.Convertible securities 3.Warrants

78,275 0 0

66,248 0 0

437 830 397

449 -7 1,205

100,165 115,046

103,703 116,065

851

53

1. Accrued, not yet received, revenues 2.Other receivables 6.Commission revenue from subscription and redemption 7.Costs of subscribing for and redeeming units 8.Administrative fee 9.Other revenues 10.Other costs

0 0 -679 0 -78

5 6 7 8

47 0 -831 0 -133 1.Unit equity at nominal value 2.Premium/discount 9,10

11.Tax cost

1.Net amount distributed to unit-holders during the year 2.Allocated for distribution to unit-holders 3.Transferred to/from accrued equity

-223

-213

2,039 0

2,507 0

Equity as at 31/12/2011 Subscriptions in 2012 Redemptions in 2012 Dividends distributed to unit-holders in 2012

67,842,331 2,038,601 -5,321,747 765,714

Equity as at 31/12/2012

79,088,325

1

2

Lower risk

Lower possible return

3

4

5

6

Total liabilities

Amount of shares NAV 31/12

1,001,653 78.96

1,037,028 65.42

1,281,089 79.67

By NAV is meant the fund’s total assets divided by the number of units issued. There are no redemption costs for the unit-holders. No special agreements have been entered into with major unitholders regarding any limitation of the equity fund’s duty to redeem units. The fund has not redeemed any holdings that have affected the value of its units during the year.

7 Higher risk

Volatility (3 years)

17,66

12,60

Higher possible risk

The scale indicates the link between the risk involved in and possible return on an investment in the mutual fund. A low score indicates a low level of risk while a high score indicates a high level of risk. Note that achieving the lowest score does not mean the investment is risk-free. The indicator is based on fluctuations in the mutual fund’s historical year-end prices. The fluctuations are measured by the weekly returns that have been recorded for more than the past five years. Large historical fluctuations mean it is more likely that the investment may fluctuate a lot in the future too. The probability of the investment’s value rising and falling a lot in the future is thus greater if there have been large historical fluctuations. Large fluctuations may also mean there is a greater chance of the price falling to below that paid for the investment and of the return being negative due to share price losses. Past performance is no guarantee of future performance. Historical fluctuations in price will therefore not necessarily provide a correct picture of the fund’s future risk profile. The mutual fund’s score is thus not fixed and will normally change over time.

I 32 I

ODIN FUND MANAGEMENT  ANNUAL REPORT 2012

ODIN Europa II - Annual Report 2012

ODIN Europa II

EUR/NOK=

Local currency

NOK 1000

NOK 1000

NOK 1000

7,3794

Anheuser-Busch InBev

Consumer staples

5 509

65,77

1 802

2 674

871

3,38%

0,00%

Michelin

Consumer discretionary

5 042

71,29

2 207

2 652

445

3,35%

0,00%

Sanofi

Health care

4 608

71,11

2 054

2 418

364

3,06%

0,00%

Valeo

Consumer discretionary

6 619

37,77

2 157

1 845

-312

2,33%

0,01%

Adidas

Consumer discretionary

4 865

67,31

1 665

2 416

751

3,06%

0,00%

Allianz

Financials

3 415

104,65

2 401

2 637

236

3,33%

0,00%

Axel Springer

Consumer discretionary

10 003

32,29

2 756

2 383

-373

3,01%

0,01%

BASF

Materials

5 782

71,28

2 297

3 041

745

3,85%

0,00%

Bayer

Health care

3 676

71,90

1 441

1 950

510

2,47%

0,00%

Fraport

Industrials

7 006

43,89

2 326

2 269

-57

2,87%

0,01%

HUGO BOSS

Consumer discretionary

4 520

79,80

2 333

2 662

329

3,37%

0,01%

Leoni

Consumer discretionary

12 192

28,55

2 317

2 569

252

3,25%

0,04%

SAP AG

Information technology

8 095

60,77

2 701

3 630

929

4,59%

0,00%

EUR/NOK=

EUR/NOK=

EUR/NOK=

7,3794

7,3794

7,3794

Astaldi

Industrials

67 407

5,08

2 753

2 524

-229

3,19%

0,07%

Prysmian

Industrials

26 338

15,07

2 484

2 929

445

3,70%

0,01%

Petroleum Geo-Services

Energy

18 621

95,35

1 327

1 776

449

2,24%

0,01%

Subsea 7

Energy

17 767

132,10

2 095

2 347

252

2,97%

0,01%

CHF/NOK=

6,1101

Austriamicrosystems

Information technology

3 496

96,70

901

2 066

1 164

2,61%

0,02%

Swatch Group

Consumer discretionary

6 605

78,70

2 671

3 176

505

4,02%

0,01%

Transocean (CHF)

Energy

9 039

40,46

2 504

2 235

-270

2,83%

0,01%

GBP/NOK=

9,0085

Bunzl

Industrials

32 321

1 009,00

3 047

2 938

-109

3,71%

0,01%

Diageo

Consumer staples

11 105

1 803,50

1 203

1 804

601

2,28%

0,00%

GKN

Consumer discretionary

130 267

230,00

2 036

2 699

663

3,41%

0,01%

IMI

Industrials

35 783

1 095,00

3 078

3 530

452

4,46%

0,01%

Rolls-Royce Holdings

Industrials

35 692

884,00

2 013

2 842

829

3,59%

0,00%

Shire

Health care

16 601

1 899,00

2 681

2 840

159

3,59%

0,00%

Smith & Nephew

Health care

37 142

685,00

1 912

2 292

380

2,90%

0,00%

Standard Chartered

Financials

14 209

1 571,50

2 084

2 012

-73

2,54%

0,00%

Unilever

Consumer staples

12 737

2 379,00

2 315

2 730

414

3,45%

0,00%

Weir Group

Industrials

13 706

1 884,00

2 141

2 326

185

2,94%

0,01%

ODIN FUND MANAGEMENT  ANNUAL REPORT 2012

I 33 I

ODIN Europa II - Annual Report 2012 ODIN Europa II

USD/NOK=

Local currency

NOK 1000

NOK 1000

NOK 1000

31,37

1 961

2 063

102

5,5825

Coca-Cola Enterprises 3)

Consumer staples

11 780

2,61%

0,00%

1) The Industry Classification is based on the Global Industry Classification Standard (GICS) from Morgan Stanley AND Standard & Poor 2) Costprice is based on average 3) All turnover in Europe

I 34 I

ODIN FUND MANAGEMENT  ANNUAL REPORT 2012

Fund commentary - ODIN Finland II

A good year for ODIN Finland II’s unit holders Truls Haugen, Portfolio manager

2012 ended with a rise of 13.5 per cent for ODIN Finland II. The fund’s benchmark was up 10.4 per cent during the same time period. 2012 was a good year for the Finnish stock market. The financial sector, and especially our investment in Pohjola, did exceptionally well and we also received a good contribution from companies such as Huhtamaki, Amer, Nokian Tyres and Marimekko. Weak developments in Fortum, a supply company, also meant that we had the relative advantage of not owning this share. Similarly, during the first half of the year, it was an advantage not to own shares in Nokia, but this company recovered sharply in the second half-year and is now back in our portfolio. Despite the fund doing slightly worse than the market in the second half, 2012 was thus a strong year for ODIN Finland II.

25%

Performance 2012

20% 15% 10% 5% 0% -5% -10% Jan.12 jan.12

Apr. 12 apr.12

Index

Jul.12 jul.12

Oct.12 okt.12

ODIN Finland II

We kept our number of shareholdings stable throughout the year and had 30 companies at the year-end. Of our holdings, 21 produced a positive return while nine made a negative return in 2012. The 10 largest shareholdings make up 50.9 per cent of the portfolio.

ODIN FUND MANAGEMENT  ANNUAL REPORT 2012

I 35 I

ODIN Finland II - Annual Report 2012 ODIN Finland II

1) Benchmark Total return Since start 26/11/2009 (p.a.)

6,06% 1,92%

3,51% 1,12%

2,55% 0,80%

OMX Helsinki Cap GI measured in NOK Return in year of inception is calculated from the inception date for both fund and benchmark.

0,91%

-0,09%

1,01%

2012

Last 3 years (p.a.)

13,53%

10,40%

3,13%

2011

-28,24%

-26,08%

-2,17%

2010

26,15%

22,19%

3,97%

2009

3,20%

3,80%

-0,60%

ODIN Finland II

Index

This fund and ODIN Forvaltning AS are registered in Norway and regulated by Finanstilsynet (the Financial Supervisory Authority of Norway). Please note that the historical return is not a guarantee of future returns. The future return will among other things depend on market developments, the manager’s skills, the fund’s risk level and the costs of buying units and managing the fund. The return may be negative as a result of share losses. ODIN Forvaltning employees may trade for their own account in several types of financial instruments. This means that ODIN Forvaltning employees may own securities in companies that are referred to in this report as well as units in ODIN’s mutual funds. The employees’ own-account trading is to take place in accordance with ODIN Forvaltning AS’s internal guidelines on employee ownaccount trading, which have been prepared pursuant to the Norwegian Securities Trading Act and the Norwegian Fund and Asset Management Association’s industry standard. ODIN Forvaltning AS may only be held responsible for information in this document that is misleading, inaccurate or inconsistent in relation to relevant information in the prospectus. I 36 I

ODIN FUND MANAGEMENT  ANNUAL REPORT 2012

ODIN Finland II ODIN Finland II - Annual Report 2012

NOK 1000

1.Interest income 2.Dividend 3.Gain/loss on sale 4.Net change unrealised price gains/losses 5.Other portfolio revenues/costs

0 1,510 -609 4,828 -37

8

NOK 1000

4 1,952 -4,780 -16,494 -10

11 11 11

1.Shares 2.Convertible securities 3.Warrants 1. Accrued, not yet received, revenues 2.Other receivables

6.Commission revenue from subscription and redemption 7.Costs of subscribing for and redeeming units 8.Administrative fee 9.Other revenues 10.Other costs

0 0 -313 0 -27

5 6 7 8

34,301 0 0

35,699 0 0

-1 1 341

0 2 517

32,642 4,141

38,741 4,744

26

27

0 0 -482 0 -77 1.Unit equity at nominal value 2.Premium/discount 9,10

11.Tax cost

1.Net amount distributed to unit-holders during the year 2.Allocated for distribution to unit-holders 3.Transferred to/from accrued equity

-222

-284

0 0

0 0

Equity as at 31/12/2011 Subscriptions in 2012 Redemptions in 2012 Dividends distributed to unit-holders in 2012

36,189,459 0 -6,702,600 0

Equity as at 31/12/2012

34,616,425

1

2

3

4

5

6

Lower risk

Lower possible return

Total liabilities

Amount of shares NAV 31/12

326,418 106.05

387,412 93.41

358,031 130.18

By NAV is meant the fund’s total assets divided by the number of units issued. There are no redemption costs for the unit-holders. No special agreements have been entered into with major unitholders regarding any limitation of the equity fund’s duty to redeem units. The fund has not redeemed any holdings that have affected the value of its units during the year.

7 Higher risk

Volatility (3 years)

20,02

17,89

Higher possible risk

The scale indicates the link between the risk involved in and possible return on an investment in the mutual fund. A low score indicates a low level of risk while a high score indicates a high level of risk. Note that achieving the lowest score does not mean the investment is risk-free. The indicator is based on fluctuations in the mutual fund’s historical year-end prices. The fluctuations are measured by the weekly returns that have been recorded for more than the past five years. Large historical fluctuations mean it is more likely that the investment may fluctuate a lot in the future too. The probability of the investment’s value rising and falling a lot in the future is thus greater if there have been large historical fluctuations. Large fluctuations may also mean there is a greater chance of the price falling to below that paid for the investment and of the return being negative due to share price losses. Past performance is no guarantee of future performance. Historical fluctuations in price will therefore not necessarily provide a correct picture of the fund’s future risk profile. The mutual fund’s score is thus not fixed and will normally change over time.

ODIN FUND MANAGEMENT  ANNUAL REPORT 2012

I 37 I

ODIN Finland II - Annual Report 2012 ODIN Finland II

Local currency

EUR/NOK=

NOK 1000

NOK 1000

NOK 1000

7,3794

Amer Sports

Consumer discretionary

17 638

11,26

1 194

1 466

272

4,23%

0,01%

Cramo

Industrials

21 300

7,90

2 303

1 242

-1 061

3,59%

0,05%

Fortum

Utilities

15 130

14,14

2 352

1 579

-773

4,56%

0,00%

Huhtamäki

Materials

24 719

12,26

1 878

2 236

359

6,46%

0,02%

KCI Konecranes

Industrials

1 980

25,69

389

375

-13

1,08%

0,00%

Kiinteistösijoitus Citycon

Financials

37 460

2,57

832

710

-122

2,05%

0,01%

Lemminkainen

Industrials

1 290

14,24

260

136

-124

0,39%

0,01%

Marimekko

Consumer discretionary

8 698

14,35

847

921

74

2,66%

0,11%

Metso

Industrials

6 230

32,06

1 504

1 474

-30

4,26%

0,00%

Nokia

Information technology

78 728

2,94

1 797

1 707

-90

4,93%

0,00%

Nokian Renkaat/Tyres

Consumer discretionary

8 910

30,04

1 710

1 975

265

5,71%

0,01%

Nordea (Eur)

Financials

30 430

7,26

1 831

1 629

-201

4,71%

0,01%

Olvi A

Consumer staples

3 830

19,75

458

558

100

1,61%

0,02%

Oriola

Health care

26 490

2,22

764

434

-330

1,25%

0,03%

Outotec

Industrials

4 820

42,47

1 260

1 511

251

4,36%

0,01%

PKC Group

Industrials

8 926

15,43

961

1 016

56

2,94%

0,04%

Pohjola Bank

Financials

21 780

11,24

1 522

1 807

284

5,22%

0,01%

Poyry

Industrials

6 140

2,93

505

133

-373

0,38%

0,01%

Ramirent

Industrials

34 810

6,21

2 270

1 595

-675

4,61%

0,03%

Rapala

Consumer discretionary

34 260

4,84

1 556

1 224

-333

3,53%

0,09%

Rautaruukki

Materials

17 860

5,93

2 144

782

-1 363

2,26%

0,01%

Sampo A

Financials

9 851

24,33

1 532

1 769

236

5,11%

0,00%

Sanoma

Consumer discretionary

7 550

7,42

877

413

-464

1,19%

0,00%

Stora Enso R

Materials

21 112

5,23

896

815

-81

2,35%

0,00%

Technopolis

Financials

20 940

3,79

565

586

21

1,69%

0,03%

TeliaSonera (EUR)

Telecommunication services

46 423

5,15

1 876

1 763

-113

5,09%

0,01%

Tikkurila

Materials

4 370

14,64

519

472

-47

1,36%

0,01%

UPM Kymmene

Materials

14 682

8,81

1 235

954

-281

2,76%

0,00%

Wärtsilä

Industrials

6 160

32,70

1 023

1 486

463

4,29%

0,00%

YIT

Industrials

14 120

14,73

1 886

1 535

-351

4,43%

0,01%

1) The Industry Classification is based on the Global Industry Classification Standard (GICS) from Morgan Stanley AND Standard & Poor 2) Costprice is based on average

I 38 I

ODIN FUND MANAGEMENT  ANNUAL REPORT 2012

Fund commentary - ODIN Global II

A good year for ODIN Global II Oddbjørn Dybvad and Vegard Søraunet Portfolio managers

In total, the portfolio produced a return of 13.7 per cent. This was 6.5 percentage points better than its benchmark, the MSCI World Net Index.

2012 was characterised by a lot of turbulence at the political level. There was a lot of uncertainty about macroeconomic developments, especially due to the long-lasting political tugof-war in Europe and the USA, as well as concerns about the rate of growth in key growth engines such as China, Russia, India and Brazil. At company level, however, we can see sound balance sheets, high margins and strong cash flows in many companies. We select a concentrated portfolio of the very best of these companies, and in 2012 our choice of companies in the consumer and cyclical manufacturing sectors did especially well.

ODIN FUND MANAGEMENT  ANNUAL REPORT 2012

16%

Performance 2012

14% 12% 10% 8% 6% 4% 2% 0% jan.12 Jan.12

apr.12 Apr. 12 Index

jul.12 Jul.12

okt.12 Oct.12

ODIN Global II

I 39 I

ODIN Global II - Annual Report 2012 ODIN Global II

1) Benchmark MSCI World Net Index measured in NOK Total return Since start 16/08/2010 (p.a.)

18,90% 7,56%

14,64% 5,92%

4,26% 1,64%

Return in year of inception is calculated from the inception date for both fund and benchmark. 2012

13,66%

7,18%

6,48%

2011

-7,53%

-4,02%

-3,51%

2010

13,13%

11,44%

1,69%

ODIN Global II

Index

This fund and ODIN Forvaltning AS are registered in Norway and regulated by Finanstilsynet (the Financial Supervisory Authority of Norway). Please note that the historical return is not a guarantee of future returns. The future return will among other things depend on market developments, the manager’s skills, the fund’s risk level and the costs of buying units and managing the fund. The return may be negative as a result of share losses. ODIN Forvaltning employees may trade for their own account in several types of financial instruments. This means that ODIN Forvaltning employees may own securities in companies that are referred to in this report as well as units in ODIN’s mutual funds. The employees’ own-account trading is to take place in accordance with ODIN Forvaltning AS’s internal guidelines on employee ownaccount trading, which have been prepared pursuant to the Norwegian Securities Trading Act and the Norwegian Fund and Asset Management Association’s industry standard. ODIN Forvaltning AS may only be held responsible for information in this document that is misleading, inaccurate or inconsistent in relation to relevant information in the prospectus. I 40 I

ODIN FUND MANAGEMENT  ANNUAL REPORT 2012

ODIN Global II - Annual Report 2012

ODIN Global II

NOK 1000

1.Interest income 2.Dividend 3.Gain/loss on sale 4.Net change unrealised price gains/losses 5.Other portfolio revenues/costs

5 4,353 561 20,257 -239

8

NOK 1000

-15 4,574 -391 -15,395 154

11 11 11

1.Shares 2.Convertible securities 3.Warrants

188,652 0 0

169,975 0 0

249 816 387

432 6 872

158,999 5,528

163,411 5,850

1,066

331

1. Accrued, not yet received, revenues 2.Other receivables 6.Commission revenue from subscription and redemption 7.Costs of subscribing for and redeeming units 8.Administrative fee 9.Other revenues 10.Other costs

13 0 -1,614 0 -66

5 6 7 8

0 0 -1,528 0 -75 1.Unit equity at nominal value 2.Premium/discount 9,10

11.Tax cost

1.Net amount distributed to unit-holders during the year 2.Allocated for distribution to unit-holders 3.Transferred to/from accrued equity

-449

-547

0 0

0 0

Equity as at 31/12/2011 Subscriptions in 2012 Redemptions in 2012 Dividends distributed to unit-holders in 2012

170,953,978 5,000,000 -9,734,923 0

Equity as at 31/12/2012

189,038,576

1

2

3

4

5

6

Lower risk

Lower possible return

Total liabilities

Amount of shares NAV 31/12

1,589,990 118.89

1,634,115 104.62

1,495,187 113.15

By NAV is meant the fund’s total assets divided by the number of units issued. There are no redemption costs for the unit-holders. No special agreements have been entered into with major unitholders regarding any limitation of the equity fund’s duty to redeem units. The fund has not redeemed any holdings that have affected the value of its units during the year.

7 Higher risk

Volatility (3 years)

10,32

8,95

Higher possible risk

The scale indicates the link between the risk involved in and possible return on an investment in the mutual fund. A low score indicates a low level of risk while a high score indicates a high level of risk. Note that achieving the lowest score does not mean the investment is risk-free. The indicator is based on fluctuations in the mutual fund’s historical year-end prices. The fluctuations are measured by the weekly returns that have been recorded for more than the past five years. Large historical fluctuations mean it is more likely that the investment may fluctuate a lot in the future too. The probability of the investment’s value rising and falling a lot in the future is thus greater if there have been large historical fluctuations. Large fluctuations may also mean there is a greater chance of the price falling to below that paid for the investment and of the return being negative due to share price losses. Past performance is no guarantee of future performance. Historical fluctuations in price will therefore not necessarily provide a correct picture of the fund’s future risk profile. The mutual fund’s score is thus not fixed and will normally change over time.

ODIN FUND MANAGEMENT  ANNUAL REPORT 2012

I 41 I

ODIN Global II - Annual Report 2012 ODIN Global II

AUD/NOK=

Local currency

NOK 1000

NOK 1000

NOK 1000

5,7909

ALS

Industrials

95 958

10,93

5 974

6 074

100

3,21%

0,03%

Consumer discretionary

12 340

71,29

5 702

6 492

790

3,43%

0,01%

BASF

Materials

11 395

71,28

4 962

5 994

1 032

3,17%

0,00%

Henkel

Consumer staples

23 853

51,72

7 604

9 104

1 500

4,82%

0,01%

Consumer staples

32 314

39,98

6 886

9 534

2 648

5,04%

0,02%

Hyundai Motor Pref. 2

Consumer discretionary

12 961

75 600,00

3 596

5 117

1 522

2,71%

0,03%

Samsung Electronics Pref.

Information technology

2 435

852 000,00

7 063

10 835

3 772

5,73%

0,01%

EUR/NOK=

7,3794

Michelin

EUR/NOK=

EUR/NOK=

7,3794

7,3794

Kerry Group

KRW/NOK=

EUR/NOK=

0,5223

7,3794

Philips Electron

Industrials

37 957

19,86

5 170

5 563

393

2,94%

0,00%

Norsk Hydro

Materials

238 824

27,88

7 673

6 658

-1 015

3,52%

0,01%

Telecommunication services

57 217

17 828,00

6 030

6 689

659

3,54%

0,00%

ABB (CHF)

Industrials

50 724

18,81

5 994

5 830

-164

3,08%

0,00%

Schweizerische Natl-V

Financials

10 796

41,15

2 281

2 714

433

1,44%

0,05%

Syngenta

Materials

2 680

367,90

4 494

6 024

1 530

3,19%

0,00%

Financials

243 555

9,38

6 742

7 134

392

3,77%

0,01%

Rolls-Royce Holdings

Industrials

66 428

884,00

3 768

5 290

1 522

2,80%

0,00%

Standard Chartered

Financials

38 156

1 571,50

5 733

5 402

-331

2,86%

0,00%

Weir Group

Industrials

36 791

1 884,00

5 217

6 244

1 027

3,30%

0,02%

ZAR/NOK=

0,6557

MTN Group

CHF/NOK=

TRY/NOK=

6,1101

3,1225

Turkiye Garanti Bankasi

GBP/NOK=

I 42 I

9,0085

ODIN FUND MANAGEMENT  ANNUAL REPORT 2012

ODIN Global II - Annual Report 2012 ODIN Global II

USD/NOK=

Local currency

NOK 1000

NOK 1000

NOK 1000

5,5825

3M

Industrials

13 382

92,32

6 374

6 897

523

3,65%

0,00%

Agilent Technologies

Health care

26 202

40,21

6 080

5 882

-199

3,11%

0,01%

Anheuser-Busch ADR.

Consumer staples

3 429

86,89

1 205

1 663

458

0,88%

0,00%

Covidien

Health care

16 353

56,59

4 862

5 166

304

2,73%

0,00%

EMC Corp

Information technology

37 631

25,09

5 725

5 271

-454

2,79%

0,00%

Ensco PLC

Energy

16 924

57,75

4 822

5 456

634

2,89%

0,01%

Halliburton

Energy

27 785

34,16

5 338

5 299

-40

2,80%

0,00%

Illinois Tool Works

Industrials

16 146

60,37

5 085

5 441

357

2,88%

0,00%

Nordson Corp

Industrials

16 537

62,25

5 188

5 747

559

3,04%

0,03%

Oracle

Information technology

48 662

33,27

8 744

9 039

295

4,78%

0,00%

Parker Hannifin

Industrials

7 688

84,39

3 481

3 622

141

1,92%

0,01%

Sotheby's

Consumer discretionary

21 818

32,52

4 571

3 961

-610

2,10%

0,03%

Stanley Black & Decker

Industrials

4 417

72,60

1 775

1 790

16

0,95%

0,00%

Tenaris ADR

Energy

27 697

41,35

6 354

6 393

40

3,38%

0,00%

Varian Medical Systems

Health care

16 183

70,05

6 002

6 328

326

3,35%

0,01%

1) The Industry Classification is based on the Global Industry Classification Standard (GICS) from Morgan Stanley AND Standard & Poor 2) Costprice is based on average

ODIN FUND MANAGEMENT  ANNUAL REPORT 2012

I 43 I

Fund commentary - ODIN Eiendom

A strong year for ODIN Eiendom Tomas Ramsälv Portfolio manager

2012 ended with a rise of 18.6 per cent for ODIN Eiendom. The fund’s benchmark was up 13.4 per cent during the same time period. The occupancy level among the listed real estate companies in the Nordic region was stable at over 90 per cent in 2012 and the second-hand value of the properties increased. This led to an increase in both the net operating income from the properties and the profit for the companies as a whole. This was also a strong year for ODIN Eiendom, which produced a higher return than that of the market for listed real estate companies. The prospect of positive economic developments in all Nordic countries combined with low interest levels, high growth in employment and few new premises means the high occupancy level and attractive rents can be expected to remain in the future. This bodes well for the future results of listed real estate companies in the Nordic region.

I 44 I

20%

Performance 2012

15% 10% 5% 0% -5% -10% Jan.12 jan.12

Apr. 12 apr.12

Index

Jul.12 jul.12

Oct.12 okt.12

ODIN Eiendom

ODIN FUND MANAGEMENT  ANNUAL REPORT 2012

ODIN Eiendom ODIN Eiendom - Annual Report 2012

1) Benchmark Total return Since start 24/08/2000 (p.a.) Last 10 years (p.a.) Last 5 years (p.a.) Last 3 years (p.a.)

430,90% 14,47%

234,26% 10,26%

196,64% 4,21%

16,12% 5,71% 12,02%

13,25% 5,77% 14,60%

2,88% -0,05% -2,58% 5,14%

2012

18,59%

13,44%

2011

-13,55%

-13,89%

0,34%

2010

37,30%

54,33%

-17,03% 19,91%

2009

33,18%

13,27%

2008

-29,52%

-22,43%

-7,09%

2007

-14,92%

-28,36%

13,44%

2006

45,41%

45,25%

0,15%

2005

35,16%

23,21%

11,95%

2004

30,49%

30,99%

-0,50%

2003

55,02%

56,26%

-1,24%

ODIN Eiendom

Carnegie Sweden Real Estate Index measured in NOK The benchmark index is not adjusted for dividend.

Index

This fund and ODIN Forvaltning AS are registered in Norway and regulated by Finanstilsynet (the Financial Supervisory Authority of Norway). Please note that the historical return is not a guarantee of future returns. The future return will among other things depend on market developments, the manager’s skills, the fund’s risk level and the costs of buying units and managing the fund. The return may be negative as a result of share losses. ODIN Forvaltning employees may trade for their own account in several types of financial instruments. This means that ODIN Forvaltning employees may own securities in companies that are referred to in this report as well as units in ODIN’s mutual funds. The employees’ own-account trading is to take place in accordance with ODIN Forvaltning AS’s internal guidelines on employee ownaccount trading, which have been prepared pursuant to the Norwegian Securities Trading Act and the Norwegian Fund and Asset Management Association’s industry standard. ODIN Forvaltning AS may only be held responsible for information in this document that is misleading, inaccurate or inconsistent in relation to relevant information in the prospectus.

ODIN FUND MANAGEMENT  ANNUAL REPORT 2012

I 45 I

ODIN Eiendom - Annual Report 2012 ODIN Eiendom

NOK 1000

1.Interest income 2.Dividend 3.Gain/loss on sale 4.Net change unrealised price gains/losses 5.Other portfolio revenues/costs

119 5,456 2,060 28,511 -255

8

240 5,028 14,592 -46,950 4

NOK 1000

11 11 11

1.Shares 2.Convertible securities 3.Warrants

203,074 0 0

172,848 0 0

0 9 8,137

0 2 6,410

55,893 -15,769

54,669 -12,745

176

148

1. Accrued, not yet received, revenues 2.Other receivables 6.Commission revenue from subscription and redemption 7.Costs of subscribing for and redeeming units 8.Administrative fee 9.Other revenues 10.Other costs

7 0 -2,020 0 -60

5 6 7 8

0 0 -2,034 0 -246 1.Unit equity at nominal value 2.Premium/discount 9,10

11.Tax cost

-85

-609

1.Net amount distributed to unit-holders during the year 2.Allocated for distribution to unit-holders 3.Transferred to/from accrued equity

5,150 0

4,155 0

Equity as at 31/12/2011 Subscriptions in 2012 Redemptions in 2012 Dividends distributed to unit-holders in 2012

179,111,786 26,425,919 -23,866,567 791,281

Equity as at 31/12/2012

211,044,707

1

2

Lower risk

Lower possible return

3

4

5

6

Total liabilities

Amount of shares NAV 31/12

558,931 377.59

546,691 327.63

509,667 386.23

By NAV is meant the fund’s total assets divided by the number of units issued. There are no redemption costs for the unit-holders. No special agreements have been entered into with major unitholders regarding any limitation of the equity fund’s duty to redeem units. The fund has not redeemed any holdings that have affected the value of its units during the year.

7 Higher risk

Volatility (3 years)

15,85

20,02

Higher possible risk

The scale indicates the link between the risk involved in and possible return on an investment in the mutual fund. A low score indicates a low level of risk while a high score indicates a high level of risk. Note that achieving the lowest score does not mean the investment is risk-free. The indicator is based on fluctuations in the mutual fund’s historical year-end prices. The fluctuations are measured by the weekly returns that have been recorded for more than the past five years. Large historical fluctuations mean it is more likely that the investment may fluctuate a lot in the future too. The probability of the investment’s value rising and falling a lot in the future is thus greater if there have been large historical fluctuations. Large fluctuations may also mean there is a greater chance of the price falling to below that paid for the investment and of the return being negative due to share price losses. Past performance is no guarantee of future performance. Historical fluctuations in price will therefore not necessarily provide a correct picture of the fund’s future risk profile. The mutual fund’s score is thus not fixed and will normally change over time.

I 46 I

ODIN FUND MANAGEMENT  ANNUAL REPORT 2012

ODIN Eiendom - Annual Report 2012

ODIN Eiendom

EUR/NOK=

Local currency

NOK 1000

NOK 1000

NOK 1000

7,3794

Kiinteistösijoitus Citycon

Financials

511 295

2,57

10 573

9 697

-876

4,59%

0,16%

Sponda

Financials

359 557

3,59

9 269

9 525

256

4,51%

0,13%

Technopolis

Financials

336 131

3,79

10 024

9 401

-623

4,45%

0,45%

Eiendomsspar (U)

Financials

39 347

152,00

2 383

5 981

3 598

2,83%

0,07%

Northern Logistic Property

Financials

351 990

25,70

7 669

9 046

1 378

4,29%

0,90%

Norwegian Property

Financials

1 701 797

8,50

15 449

14 465

-984

6,85%

0,31%

Olav Thon Eiendomsselskap

Financials

19 401

890,00

14 401

17 267

2 866

8,18%

0,18%

Selvaag Bolig

Financials

337 500

17,90

6 748

6 041

-706

2,86%

0,36%

Balder B

Financials

572 427

36,90

12 725

18 121

5 396

8,59%

0,38%

Castellum

Financials

122 840

92,75

8 685

9 774

1 089

4,63%

0,07%

Corem Property

Financials

722 570

19,90

11 629

12 336

707

5,85%

0,88%

Diös Fastigheter

Financials

591 408

34,80

16 639

17 656

1 018

8,37%

0,79%

Fabege

Financials

95 629

65,85

4 215

5 402

1 187

2,56%

0,06%

Heba Fastigheter B

Financials

143 268

64,00

6 824

7 866

1 043

3,73%

0,39%

Hufvudstaden A

Financials

120 996

82,10

7 109

8 522

1 413

4,04%

0,06%

JM Bygg

Consumer discretionary

60 720

116,50

6 181

6 069

-112

2,88%

0,07%

Klövern

Financials

412 054

25,60

8 708

9 050

341

4,29%

0,22%

Sagax A

Financials

57 333

188,00

7 328

9 247

1 919

4,38%

0,09%

Wallenstam B

Financials

118 639

79,35

4 243

8 076

3 833

3,83%

0,08%

Wihlborgs

Financials

109 998

101,00

7 443

9 531

2 088

4,52%

0,14%

SEK/NOK= 85,7900

1) The Industry Classification is based on the Global Industry Classification Standard (GICS) from Morgan Stanley AND Standard & Poor 2) Costprice is based on average U) Unlisted stocks

ODIN FUND MANAGEMENT  ANNUAL REPORT 2012

I 47 I

Auditor’s Report for 2012 To the Board of Directors of ODIN Forvaltning AS Independent auditor’s report Report on the Financial Statements We have audited the accompanying financial statements of the funds, which comprise the balance sheet as at December 31, 2012, and the income statement, showing an annual result for the year then ended, and a summary of significant accounting policies and other explanatory information. The financial statements are showing the following results: ODIN Norge II ODIN Sverige II ODIN Norden II ODIN Europa II

NOK 9 895 000 ODIN Finland II NOK NOK 106 658 000 ODIN Global II NOK NOK 26 068 000 ODIN Eiendom NOK NOK 15 802 000

5 130 000 22 820 000 33 733 000

The Board of Directors’ Responsibility for the Financial Statements The Board of Directors of the fund manager is responsible for the preparation and fair presentation of these financial statements in accordance with Norwegian accounting act and accounting standards and practices generally accepted in Norway, and for such internal control as The Board of Directors determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with laws, regulations, and auditing standards and practices generally accepted in Norway, including International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.   Opinion In our opinion, the financial statements give a true and fair view of the financial position of the funds as at December 31, 2012, and of its financial performance for the year then ended in accordance with the Norwegian accounting act and accounting standards and practices generally accepted in Norway. Report on Other Legal and Regulatory Requirements Opinion on the Board of Directors’ report Based on our audit of the financial statements as described above, it is our opinion that the information presented in the Board of Directors report concerning the financial statements and the going concern assumption, and the proposal for the allocation of the profit/coverage of loss is consistent with the financial statements and complies with the law and regulations. Opinion on Registration and documentation Based on our audit of the financial statements as described above, and control procedures we have considered necessary in accordance with the International Standard on Assurance Engagements ISAE 3000, “Assurance Engagements Other than Audits or Reviews of Historical Financial Information”, it is our opinion that the company’s management has fulfilled its duty to produce a proper and clearly set out registration and documentation of the company’s accounting information in accordance with the law and bookkeeping standards and practices generally accepted in Norway. Oslo, 8 February 2013 PricewaterhouseCoopers AS Magne Sem State Authorised Public Accountant (Norway) Note: This translation from Norwegian has been prepared for information purposes only.

I 48 I

ODIN FUND MANAGEMENT  ANNUAL REPORT 2012

Notice of election meeting

An election meeting is to be held for the following mutual funds: ODIN Norden, ODIN Norden II, ODIN Finland, ODIN Finland II, ODIN Norge, ODIN Norge II, ODIN Sverige, ODIN Sverige II, ODIN Europa, ODIN Europa II, ODIN Europa SMB, ODIN Global, ODIN Global II, ODIN Emerging Markets, ODIN Maritim, ODIN Offshore, ODIN Eiendom, ODIN Eiendom I, ODIN Konservativ, ODIN Flex, ODIN Horisont, SpareBank 1 Pengemarked, ODIN Pengemarked, ODIN Kort Obligasjon, ODIN Obligasjon and ODIN Rente. Time: 6pm on Tuesday the 9 th of April 2013. Place: Felix Conference center, Bryggetorget 3, 0250 OSLO The following items are on the agenda: 1) Approval of the notice of the meeting 2) The election of two unit-holders to sign the minutes of the meeting 3) The election of unit-holders to the board of ODIN Forvaltning AS 4) Any other business Unit holders who have questions they want discussed at the election meeting, must notify the Board of ODIN Forvaltning AS in writing no less than a week before the election meeting is held. At the election meeting, the voting rights will be adjusted so that unit holders who own equal values receive equal numbers of votes. With the exception of the elections, the election meeting cannot pass decisions that bind the funds or the management company. Oslo, 8 February 2013 The board of ODIN Forvaltning AS

After the election meeting, we have the pleasure of inviting you to an information meeting, at which CIO Jarle Sjo will provide an update of the market situation, and ”ODIN today and Tomorrow”.

We kindly ask those who wish to attend the annual unit-holders meeting on Wednesday the 22th of March 2013 to submit this in writing to: ODIN Forvaltning AS PO Box 1771 Vika NO-0122 Oslo NORWAY

Attn: Customer Service Fax: +47 24 00 48 01 e-mail: [email protected] Please rsvp no later than by 22 March 2013.

ODIN FUND MANAGEMENT  ANNUAL REPORT 2012

I 49 I

ODIN Fund Management AS Fjordalléen 16, N-0250 Oslo, P.O. Box 1771 Vika, N-0122 Oslo Telephone: +47 24 00 48 00 Fax: +47 24 00 48 01 E-mail: [email protected]  www.odinfond.no