ANNUAL REPORT 2013

PROBLEMThe company has a socially beneficial objective and

carries out research and development assignments for both private and public sector organisations.

To achieve this we need to recruit the best people.

SOLUTIONWe meet the public through a playful and trustworthy

communication work and this way we are able to create good awareness of our business.

CMR.NO

PROBLEM

In cooperation with Statoil and the University of Bergen, CMR has developed methodology and software that geologists can use to quickly draft 3-dimensional illustrations and models of geological structures.

The available geological data is often poor when an oil company shall decide whether to commence exploration in a new area. The experts' assessments and understanding of the geology are vital. There may be a range of inter-

pretations, generally sketches on paper are used to express the different scenarios. This can make it difficult to ensure that all relevant viewpoints and information are considered before the decision.

In recent years a research group from CMR Computing together with the

Institute for Informatics, and the Institute for Geoscience at the University of Bergen have collaborated in the Geoillustrator project to develop data-assisted methods for rapid and intuitive sketching of geological models. Statoil

has supported the work with professional expertise and financial resources. In addition, the project has received funding from the Research Council of Norway's PETROMAKS programme.

"The Geoillustrator project leads this research area," says project manager Tor Langeland.

A key element of the background to the Geoillustrator project was the research work undertaken at "Technische Universität Wien (TU WIEN)" within the area of illustrative visualization of medical data. Christopher Giertsen at CMR was the first to think: why not use this for geology? He contacted the visual-isation group at TU WIEN, and the cooperation commenced. Daniel Patel, Research Scientist at CMR, went to Vienna to start on his PhD in

In the early stages of the exploration of oil and gas fields, experts will typically have several alternative interpretations of the geology in and around the reservoir. These interpretations are mental models and there is currently a lack of good tools to transfer these mental models to 3D models.

SOLUTION

"We have tried to understand how geologists and geophysicists think and how these thoughts can be expressed using illustrators' communication techniques."

Daniel Patel, researcher at CMR Computing.

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illustrative visualization of seismic data.

Parallel to this, an interdisciplinary research project was discussed with Statoil and the Geoillustrator project was initiated in 2009. The vision for the project was to establish a leading international research group with focus on data-assisted generation of geoscientific illustrations.

The project had a high degree of interdisci-plinary work and included two PhD students in informatics and visualisation and two in

geoscience, as well as several Master level students.

"We spent a lot of time with dialogue and communication," says Tor Langeland. “Various professional groups have different starting points and assumptions, and it takes time to understand these differences. This has been an exciting aspect of the project," he says. “Interdisciplinary projects are always challenging, but we have had positive feed-back that Geoillustrator has been noticed as a successful project in this respect too.”

Geoillustrator was concluded in 2014. Via the project, methods have been developed for rapid and intuitive sketching of geological models. The methods have been tested and verified via several prototypes. In the future, we wish to convert competence and methods developed in this project to a software prod-uct that can drastically improve oil companies' work processes.

All illustrations are produced with software developed in the project.

“A gEOLOgisT wiLL sEE sEvERAL diffERENT wAys ThAT A LANdscAPE cOULd hAvE bEEN cREATEd. cOmmUNicATiNg This TO OThERs is NOT As EAsy. ThE ExPERTs ThAT sUccEEd ThE mOsT ARE ThOsE whO ARE bEsT AT dRAwiNg. ThE gEOiLLUsTRATOR PROjEcT is dEsigNEd TO ENAbLE ALL gEOLOgisTs TO cOmmUNicATE ThEiR idEAs PREcisELy ANd EffEcTivELy, ANd iN A qUALiTy ThAT cAN bE UsEd fOR iNTERPRETATiONs, REPORTs ANd sciENTific ARTicLEs."

Jens Grimsgaard heads the Basin Evolution department at Statoil's research centre in Bergen.

PROBLEM

Before 2018, Norwegian research environments will contribute to develope the expertise and technology needed to commence the large-scale storage of CO2 on the Norwegian continental shelf.

SOLUTIONFigures from the International Energy Agency (IEA) show that the Earth is warming by close to 3.6 degrees and that CO2 is the gas that contributes most to the greenhouse effect. A special characteristic of Norwegian CO2 emissions is a high ratio of emissions from oil and gas activities and energy-intensive industries.

The capture, transport and storage of CO2 (CCS) is an important measure to prevent temperatures from rising, yet the development of CCS projects is very sluggish. Currently, there is no market for CO2 capture and storage.The North Sea can be used to store large amounts of CO2 and 25% of the total CO2 storage capacity in Europe is estimated to be found here. Storing CO2 in reservoirs under the seabed will be very effective and far less controversial than onshore storage in Europe.

CO2 is also an important resource that can be used to increase oil extraction, yet the lack of CO2 means that this is not currently taking place on the Norwegian continental shelf. Large-scale storage of CO2 from all over Europe on

the Norwegian continental shelf would make it possible to sell CO2 in order to increase oil extraction.

Arvid Nøttvedt believes that the number of storage projects should be reduced drastically, while a few projects should be scaled up instead.

"Thousands of small projects would not be profitable, and the industry would not support them. It's better to gather large volumes in a few projects," he says.

Together with Sintef researcher Grethe Tangen, he is the main author of the report "Large Scale Storage of CO2 on the Norwegian shelf" (CO2 central storage). In the report, the research environments working with CO2 storage have agreed on the following vision:

"The Norwegian research environments will contribute to develope the expertise and technology needed to commence the large-scale storage of CO2 on the Norwegian continental shelf before 2018."

Combustion of oil and gas produced in Norway accounts for 500 million tonnes of CO2 emissions on an annual basis. The Norwegian debate on carbon capture and the storage of CO2 must be based on how Norway can best contribute to meet the climate challenge.

"We must begin to discuss how Norway can plan for the large-scale storage of CO2 on the Norwegian continental shelf. This is the absolutely most important measure Norway can take."

Arvid Nøttvedt, CEO of CMR.

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The report was published in 2013 by the two research centres for environmentally friendly energy: FME BIGCCS and FME SUCCESS, CMR is the host institution for FME SUCCESS.

In autumn 2013, Gassnova granted NOK 1.8 million for a preliminary project to run until spring 2014 in preparation for this initiative. SUCCESS and BIGCCS lead the preliminary project, with a number of research players as partners.

"At Gassnova's request, the Norwegian research environment has assessed the possibility of establishing a central CO2 storage facility on the Norwegian shelf, and drawn the conclusion that this is technically feasible. This is a formidable task, but it is possible," Arvid Nøttvedt emphasises.

"However, this requires our politicians to change focus. They should not concentrate on small domestic demonstration projects for capture technology as Norway's sole

contribution to reduce climate change. These are interesting projects in terms of developing Norwegian carbon capture technology, but they contribute very little in reducing Norway's overall CO2 footprint.”

“We are talking about a real win-win-win situation here: we have CO2 storage capacity, we have CO2 storage expertise, and we need CO2 as a resource. It can't get any better than that," says Arvid Nøttvedt.

“ThE NORwEgiAN dEbATE ON cARbON cAPTURE ANd sTORAgE mUsT bE bAsEd ON NORwAy's cAPAciTy TO sTORE cO2 ON A scALE ThAT cAN mAkE A diffERENcE iN gLObAL TERms, As wELL As ThE cOmmERciAL OPPORTUNiTiEs fROm ThE LARgE-scALE sTORAgE Of cO2 ON ThE NORwEgiAN cONTiNENTAL shELf."

NS 2018 Large-scale storage of CO2 – a basis for value creation related for CO2 storage operators and CO2-EOR

Tubes: CO2 - storage CO2 - EOR

CO2 point sources in northern Europe

Grethe Tangen, senior researcher in formation physics at SINTEF Petroleum Research.

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PROBLEM

GexCon provides consulting services to help find good explosion safety solutions for both offshore and land-based facilities. This includes risk assessments and safety analyses, but often also testing of equipment (ATEX certification).

"A lot of attention is paid to the consequences of gas explosions, but very little to prevention."

Kees van Wingerden is technical director at Gexcon.

An important explosion safety measure is to develop and dimension equipment to withstand a given explosion load.

"One example of prevention is passive fire protection, which means providing equipment with the ability to resist the forces of an explo-sion in order to protect equipment from the consequences of a subsequent fire which often follows an explosion incident," says technical director Kees van Wingerden of GexCon.

Together with his colleagues at GexCon, he studies such parameters as how explosions develop in obstructed environments, for exam-ple a petrochemical facility. The objective is to reduce the probability of an

explosion occurring, and to reduce the conse-quences if an explosion should occur.

At Sotra, a few miles from its offices at Fantoftin Bergen, GexCon has built up its own test centre to test equipment intended for in high-explosion-risk areas, as well as equipment protection and mitigation equipment.

"In addition, a lot of research has taken place here over the years, to build up the foundationand validate GexCon's CFD simulation tool forgas dispersion and explosions, FLACS," says Brian Wilkins, who heads the test department,GexCon Laboratories. The aim is to understandthe phenomena related to explosions. By under-standing these phenomena, oil platforms and

Gas explosions can lead to extensive damage and have major peripheral effects. The largest insurance payments made globally are related to gas explosions at petrochemical facilities.

SOLUTION

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process plants, for example, can be designed to be as safe as is practically possible.

The large-scale test site in Sund was started up in the early 1980s, and the aim was to shut it down at the end of the 1980s. But then came the Piper Alpha explosion in the British sector of the North Sea in 1988. 167 people lost their lives when the oil platform exploded.

"After that disaster, offshore safety was

taken even more seriously, and a lot of research took place," says Brian Wilkins. The test centre at Sotra had come to stay, and in recent years it has been expanded, to meet the increased demand.

"At the start, there were four people, with activity for around three to four months in the course of the year at the test site. Now, the Department has a staff of ten, with six to seven involved in activities at the test site,

and activity more or less all year round", says Wilkins.

GexCon's largest customers are the large oilcompanies, as well as suppliers to the off-shore sector, public authorities and other types of industrial companies. Last years’ revenue totalled NOK 12.6 million, more than twice the revenue in 2011.

Pol Hoorelbeke,Deputy Senior Vice President HSETotal Refining & Chemicals

“wORkiNg wiTh gExcON is ALwAys ExciTiNg bEcAUsE ThEiR OUTsTANdiNg wORLd cLAss ExPERTisE iN ExPLOsiON mOdELiNg is dELivEREd As A REAL PARTNER. gExcON hAs bEEN iNsTRUmENTAL iN ThE dEvELOPmENT Of TOTAL’s sysTEm vEmis which is A miTigATiNg sysTEm fOR ThE cONsEqUENcEs Of vAPOR cLOUd ExPLOsiONs bAsEd ON fLAmE iNhibiTiON wiTh sOLid PARTicLEs.POL hOORELbEkEdEPUTy sENiOR vicE PREsidENT hsETOTAL REfiNiNg & chEmicALs.

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PROBLEM

CMR offers competence development within the volume and quality measurement of oil and gas, providing a theoretical understanding of impacts that affect measurements. CMR develops new measuring equipment and new measurement methods, as well as best practice standards and documents.

En route from reservoir to consumption, the oil and gas produced from the Norwegian continental shelf is measured for production volume, transported volume and sales volume. The amount of gas leading to CO2 emissions is also measured. The measurements form the basis for the oil companies' revenue, and for the Norwegian State's collection of company tax, production tax and CO2 tax.

For many years, CMR Instrumentation has undertaken tasks related to oil and gas meas-urement, fiscal measurement and multi-phase measurement, and in recent years has also been a popular course and competence developer both in Norway and abroad.

The course activities commenced in autumn 2010, when CMR Instrumentation initiated a course in uncertainty analysis.

"Uncertainty analysis is a key theme to document measurement accuracy," says CMR researcher Kjell-Eivind Frøysa.

Six months later, CMR Instrumentation estab-lished a second course, within multi-phase measurement. These two courses have been held two to three times a year. In addition, course number three, called fiscal gas meas-urement, was established. This was held for the first time in November 2013. Specially adapted courses are also developed and held as required.

Petroleum resources are an important source of income for many countries. Technical errors in the measurement of the volumes and quality of oil and gas can result in significant economic uncertainties.

SOLUTION

"Fiscal measurements are a 'cash cow' for countries with petroleum resources. It is therefore important that measurement errors are held within acceptable limits, so as to ensure revenues and maintain Norway's economic prosperity,"

Kjell-Eivind Frøysa, senior researcher, CMR Instrumentation.

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Based on the course portfolio and the competence provided, CMR Instrumentation was engaged to contribute to the "Oil for Development" assistance programme. The programme's objective is "economically, environmentally and socially responsible management of petroleum resources which safeguards the needs of future generations". The assignment includes courses and advi-sory services within fiscal measurement in third-world countries. In this work, CMR has a number of partners.

"During the past year we have been to Ghana and held courses for the authorities and industry, as part of the work of establishing national regulations for the extraction of oil and gas in that country," says Frøysa. At the end of May 2013, CMR Instrumentation also had a visit from East Timor, for the same type of assignment as in Ghana. The framework agreement with the Norwegian Petroleum Directorate commenced in 2014 and runs for three years. "Initially, it is relevant to work with Ghana, South Sudan, Uganda and

Mozambique," says Kjell-Eivind Frøysa.

2014 will therefore be an exciting year for CMR Instrumentation, with more and more new assignments, both nationally and internationally.

“The value obtained from exported petroleum products is around NOk 500 billion per year. Accurate metering is necessary in order to be able to divide oil and gas fairly between the various partners in the different fields, determine taxes and duties for the Norwegian public, and ensure that buyers and sellers are able to agree upon the quantities sold. many marginal and complex developments are making it increasingly difficult to measure quantities accurately. it is critical that technology is developed for accurate metering under demanding conditions, such as multi-phase flow of oil, water and gas. it is also highly important that the parties understand the risks that they are exposed to in the event of uncertain measurements, and that a thorough understanding of metering is used as the basis for the cost-effective design of metering systems. Technological development is necessary in order to be able to take accurate measurements using reasonable and simple metering systems.

Dag Hendrik Flølo, Leading Engineer Fiscal MeteringTPD TEX FOT PT PSCMStatoil ASA

PROBLEM

CMR's research includes solutions to produce hydrogen to fuel cars, buses and boats from offshore wind in the North Sea.

Prototech- a company in the CMR Group cele-brated its 25th anniversary in 2013 and is more enthusiastic than ever about opportunities for sustainable energy solutions. The company works to develop the solutions of tomorrow, with particular focus on developing fuel cells for various application areas.

Now Prototech wants to take the fuel cell technology a step further.

"Offshore wind power in combination with elec-trolysis from water can be Norway's next energy boom. Based on the technology in our fuel cells, we are working with electrolysis methods that can increase this output significantly. Today, Norway has 300 TWh available from identified offshore wind resources. There is currently no

need for these resources as energy to produce electricity in Norway, but they could be used for other purposes," says Laukhammer.

If just half of these wind resources were to be used, Norway could become a major hydrogen supplier. 150 TWh corresponds to hydrogen for around 1.5 million passenger vehicles per year. Hydrogen produced by electrolysis is a 100 per cent renewable and therefore very prized fuel. An infrastructure for the production and filling of hydrogen would enable everyone to choose the type of fuel they preferred for their vehicles. The first hydrogen vehicles will be on their way into the market as from 2015.

"One advantage of hydrogen production from offshore wind is that the technology is already

Around ten tonnes of greenhouse gases per person in Norway are discharged to the atmosphere per year. The government requires concrete measures to reduce these emissions before 2020.

Is it possible to create a society without polluting emissions, while also ensuring profitability and jobs? Today, there is no domestic market for renewable energy in Norway.

SOLUTION

"Low energy prices and billion-kroner investments have braked plans for Norwegian offshore wind energy, even though it should be possible for us to harness the storms out in the North Sea to produce useful energy. If just half of these wind resources were used, Norway could become a major hydrogen supplier."

Vegard Laukhammer, sales and market manager of Prototech, a subsidiary of CMR, and leads the renewable energy activities In the CMR Group.

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available. Facilities for large-scale hydrogen produc-tion can be built today," says Laukhammer.

The technology to be used is currently being tested at the HyNor filling station at Lillestrøm, and in time will be ready for large-scale testing.

"However, we already have good electrolysis solu-tions that function so well that hydrogen production can already be started up on the basis of current

technology. Prototech will be an important contributor to building up this expertise. Sale of hydrogen is based on an infinite resource and could generate revenue for Norway far into the future," concludes Laukhammer.

“wEsTERN NORwAy cOULd bE A REAL gOLdmiNE. wE hAvE wORLd-cLAss cLimATE REsEARch ANd A sUPPLiER iNdUsTRy. whAT is NEEdEd is mONEy fOR fAciLiTiEs TO TEsT This TEchNOLOgy."

Terje Breivik, deputy leader of The Liberal Party and member of The Storting, the Norwegian Parliament.

Illustration: Ingis

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Christian Michelsen Research AS is a technical-industrial research institute. The University of Bergen (UiB) is the company’s largest owner, and the company has a particular responsibility for business-oriented research and innovation at the interface between university and industry. The Board of Directors sees this as a good platform for further growth. Christian Michelsen Research AS is organised as a group of companies (CMR), and is founded on the vision “Research for industrial development.” The company has a socially beneficial objective and carries out research and development assign-ments for both private and public sector organisations. Through its ability to develop ideas and research results into commercial products and industrial solutions, the company creates value for society and clients both in Norway and abroad.

In the organisation’s 22nd year of operation, Christian Michelsen Research AS and the CMR Group had a turnover of NOK 145.8 million and NOK 284.5 million respectively, and a profit after tax of NOK 10.8 million and NOK 14.8 million respectively.

Wide-ranging operationsThe majority of CMR’s contract work is within the oil and gas, renewable energy, energy technology, cosmonautics, fisheries, environment and safety and emergency preparedness sectors. The group operates globally, but most of its turnover comes from the delivery of research and industrial projects in Norway and Europe. The main operations are based in Bergen.

Parent company Christian Michelsen Research AS undertakes research within industrial instrumentation, computer technol-ogy/visualisation and renewable/environmentally-friendly energy systems. Through subsidiaries GexCon AS and

Prototech AS, the group works with explosion simulation, risk analyses, fuel cell technology, mechanical construction and design, product development and production.

The underlying operations must be healthy and yield a positive result, but successful technological development is of a higher priority than maximising profits. Quality and good working environmentCMR aims to be an attractive and recognised research group, with high quality, diversity and equality. In 2013, group employees published 69 items in international journals (29 with peer reviews) and held 50 presentations at various academic conferences. Increasing the number of publications is an important objective for CMR going forward.

Through the SolWay quality system, CMR seeks to focus on quality in all areas, and works systematically with improvement measures.

At the end of 2013, the CMR Group had 175 employees. 21% of the company’s employees are women. 38 employees are from countries outside Norway, from 20 different nations. The group had a staff turnover rate of 8.8%. In 2013, 30% of the company’s management employees were women. There are 53 employees with doctoral degrees within the group, and the working environment is generally good.

Through systematic communication, CMR aims to be visible, both locally and nationally. The company con-tinually works with building good working relationships, and feedback indicates that the company’s clients are generally satisfied.

BOARD OF DIRECTOR’S REPORTFOR 2013

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19About the company In 2013, research and development was carried out within all CMR’s business areas. Assignments from industry comprised 72% of the total contract volume, compared with 70% in 2012. The foreign contract volume was 32% in 2013, compared with 27% in 2012. The global economic downturn had little effect on CMR’s operations in 2013.

Strategic collaboration with universities and colleges is critical for CMR’s continued development and academic quality. The University of Bergen (UiB) is the most important partner within the higher education sector.

CMR had five additional academic posts from the University of Bergen in 2013 (four in 2012). CMR had three additional posts at UiB (two in 2012). Collaboration between UiB, UNI Research and CMR was further strengthened in 2013, through work within established centre structures and through collabora-tion on new research outlines and applications.

CMR also collaborates with other regional and national centres of expertise and industrial market participants, with NCE Subsea, and with the UPTIME centre for maritime and offshore operations and maintenance. Christian Michelsen Research ASThroughout 2013, parent company Christian Michelsen

Research AS has further developed the collaboration with UiB and UNI Research, through six different research outlines oriented towards the announce-ment of new centres for research-driven innovation. Christian Michelsen Research AS had a turnover of NOK 145.8 million in 2013, with an ordinary profit before tax of NOK 10.8 million.

In 2013, Christian Michelsen Research AS received NOK 6.6 million as a basic funding allocation from NFR. The basic allocation provides funding for the research institute sector, and is important for the execution of long-term and strategic competence-building technology projects and network activities at the institutes. The Norwegian research institute sector receives low levels of funding compared with other equivalent European environments. The Board of Directors believes that it is necessary to increase Norwegian funding to a level closer to that provided to other European institutes.

Prototech ASSubsidiary Prototech AS consolidated its activities throughout 2013. Prototech AS had a turnover of NOK 51.5 million, with an ordinary profit before tax on the balance sheet.

GexCon ASSubsidiary GexCon AS has significantly strengthened its international position in 2013, and has now estab-lished companies in England, Italy, the USA, Australia and Indonesia. In 2013, GexCon AS had a turnover of NOK 69.8 million with an ordinary profit before tax of

NOK 7.6 million, and the GexCon Group had a turnover of NOK 102.9 million with an ordinary profit before tax of NOK 13.2 million.

Tecom ASSubsidiary Tecom AS manages commercialisation and IPR within the group. Tecom AS had a turnover of NOK 0.2 million in 2013, with an ordinary profit before tax of NOK -0.1 million.

InnovationCMR has a strong focus on innovation, and in 2013 helped to further develop the companies ZEG Power AS and Michelsen Medical AS. The company XSENS AS was also established.

HSESix incidents and seven near-incidents were reported in CMR in 2013. Two incidents resulted in the need for simple medical treatment, and two resulted in short sick leave absences (half to one day). The group’s activities have not led to accidents that have resulted in damage to the external environment. The group’s activities are not subject to licence terms or a need for a discharge permit, but the group has guidelines and established practices to prevent damage to the external environment. The Board of Directors will continue to focus on long-term HSE work. Sick leave in 2012 was 2.6%, which is below the industry average. The group will work actively to maintain a low level of sick leave going forward.

The Board of Directors is keen to ensure that the company’s activities are carried out in accordance with high ethical standards, and CMR has prepared dedicated ethical guidelines.

EqualityCMR works actively and in a targeted and systematic manner to ensure equality within the organisation. Professional qualifications are prioritised when recruiting staff both internally and externally. The under-represented gender will be encouraged to apply to a greater extent, and the company will thereby seek to increase the number of women in the job categories where this is particularly low.

Measures to prevent discrimination, etc.The group also works actively and systematically to promote the objectives of the Anti-discrimination Act within the organisation. The purpose of the Act is to promote equality, ensure equal opportunities and rights, and prevent discrimination on the basis of func-tional ability, ethnicity, national origin, descent, skin colour, language, religion and beliefs. The measures relate to recruitment, salary and working conditions, promotion, development opportunities and protection against harassment.

Ownership and organisationAs at 31.12.2013, Christian Michelsen Research AS had the following shareholders: University of Bergen 50%, UNI Research AS 35%, Statoil New Energy AS 5%, Sparebanken Vest 5% and Seabed Geosolutions R&D AS 5%. In accordance with the shareholder agreement and articles of association, CMR is not permitted to disburse dividends.

Future developmentCMR had an overall growth in staffing and increase in capacity in 2013. The business prospects for CMR going forward are relatively good, and preparations are being made for a further increase in capacity in 2014. With regard to our owners, clients and surrounding industry, it is important to attain greater and broader competence within all the group’s core areas. It is particularly important to strengthen competence and the organisation within environmentally-friendly energy and energy technology.

CMR works actively with other relevant centres of expertise in Bergen in order to increase the interaction by facilitating research collaboration in selected fields.

Healthy financial positionIn its 22nd year of operation, the CMR group had a turnover of NOK 284.5 million, an increase of 18.6% compared with the previous year. The operating result was NOK 7.3 million, and the annual profit after tax was NOK 14.8 million.

The cash flow from operational activities within the group was NOK 3.8 million. Current assets totalled NOK 230.9 million as at 31.12.2013, of which NOK 135.6 million was in cash and securities. The group’s liquidity is considered to be good. Equity within the CMR group constitutes NOK 146.3 million, which corresponds to an equity ratio of 53.3%.

Christian Michelsen Research AS received notification of a possible tax liability in 2009. The company argues that acquisition is not the organisation’s purpose, and that the institution is therefore tax-free. Refer to note 13 for further details.

The Board of Directors believes that the annual financial statements provide a true and correct picture of the CMR Group. The group has a healthy economic and financial position. In accordance with Section 3-3a of the Accounting Act, the conditions for going concern are present, and this has been taken into account in the preparation of the annual financial statements.

Financial riskCredit risk relating to clients’ economic ability to fulfil their obligations has historically been low, and continues to be considered low at the end of 2013. The CMR Group is exposed to exchange rate fluctuations. At the end of 2013, the CMR Group had NOK 93.6 million invested in securities funds. The management strategy features a low risk profile, with the majority invested in short-term interest-bearing securities with low risk, and a minor share in equity funds.

Profit/loss for the year and allocationThe Board of Directors suggests that the profit for the year be transferred to other retained earnings.

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Bergen, 03 April 2014

Anne Marit Blokhusdeputy chairman

Ørjan Knudsen

Hans Petter Sejrup

Arvid NøttvedtPresident and cEO

Ingolf Søreidechairman

Gro Hatleskog

Arne Rokkan

Anne Ansnes Hageberg

Signy Midtbø Riisnes

Geir Omdal

21

The consolidated (group) accounts include the mother company Christian Michelsen Research AS (CMR) and the subsidiares GexCon AS, Prototech AS and Tecom AS. The subsidiares are owned 100% by Christian Michelsen Research AS.

The CMR-group also include the subsidiares Michelsen Medical AS, XSENS AS, GexCon UK Ltd, GexCon US Inc , GexCon Australia Pty Ltd, GexCon Italy s.r.l. and GexCon Indonesia PT. The subsidiares are owned 100% by the CMR-group, except Michelsen Medical AS and XSENS AS which is owned 52,2% and 95%. The consolidated (group) accounts also include GexCon Aberdeen Ltd (owned 77,5 % by GexCon UK Ltd), Proces Ltd (owned 100 % by GexCon Aberdeen Ltd) and Proces SDN.BHD (owned 100 % by Proces Ltd).

ACCOUNTS 2013

72% Private

24% The Research Council of Norway

1% EU/ESA

CMR GroupOperating income

300

250

200

150

100

50

0

Mill. NOK

CMR GroupFunding 3% Government

2003 2004 200 5 2006 2007 2008 200 9 2010 2011 2012 2013

96 105111 118

138150

170

213231 240

285

Group Group CMR CMR 2013 2012 2013 2012

284 529 239 902 Operating income 145 852 140 060 277 256 244 822 Operating expenses 145 157 146 780 7 273 -4 920 Operating result 695 -6 720

10 294 459 Financial income and expenses 10 108 4 751 17 567 -4 461 Operating result before tax 10 803 -1 969 2 807 -2 458 Tax expenses 0 0

14 760 -2 003 Annual Results 10 803 - 1 969

Group Group CMR CMR 2013 2012 2013 2012

13 994 15 855 Intangible fixed assets 0 0 28 277 30 377 Tangible fixed assets 21 864 24 259 808 1 922 Financial fixed assets 40 278 29 005 43 079 48 154 Total fixed assets 62 142 53 264

398 482 Inventories 186 219 94 899 85 304 Debtors 44 438 46 531 93 612 93 597 Unquoted security funds 93 612 93 598 42 029 34 187 Cash and bank deposit 10 319 11 243 230 938 213 570 Total current assets 148 555 151 591

274 017 261 724 Total assets 210 697 204 855

28 000 28 000 Paid-in capital 28 000 28 000 118 256 104 397 Retained earnings 105 101 94 298 146 256 132 397 Total equity 133 101 122 298

33 053 34 054 Provisions 23 921 24 045 17 408 19 819 Other long-term liabilities 17 408 17 408 77 300 75 454 Current liabilities 36 267 41 104 127 761 129 327 Total liabilities 77 596 82 557

274 017 261 724 TOTAL EquITy AND LIABILITIES 210 697 204 855

INCOME STATEMENT

BALANCE

Currency in kNOK

23

• Antarctica (*)• Australia• Austria• Belgium• Bouvet Island (*)• Brazil• Brunei• Bulgaria• Canada• Chile• China, Peoples Republic of• Colombia• Czech Republic

• Denmark• Dubai• Egypt• Finland• France• Germany• Ghana• Hong Kong• Hungary• Iceland• India• Indonesia• Ireland• Israel

• Italy• Japan• Luxembourg• Malaysia• Malta• Mexico• Mozambique• Netherlands• Norway• Pakistan• Poland• Portugal• Quatar• Romania

• Russia• Saudi Arabia• Singapore• South Africa• South Korea• South Sudan• Southern Ocean around Antarctica (*)• Spain• Svalbard (*)• Sweden• Switzerland• Taiwan• Tanzania

• The Atlantic Ocean (*)• The Barents Sea (*)• The Faroe Islands (*)• The North Sea (*)• Tunisia• Turkey• U.A.E.• Uganda• United Kingdom• USA• Venezuela

(*) indicates areas that are not sovereign states

GLOBAL SOLUTIONS

List of countries of where the CMR Group has customers:

CMR AIMS TO BE AN ATTRACTIVE AND RECOGNISED RESEARCH GROuP, WITH HIGH quALITy, DIVERSITy AND EquALITy. IN 2013, GROuP EMPLOyEES PuBLISHED 69 ITEMS IN INTERNATIONAL JOuRNALS (29 WITH PEER REVIEWS) AND HELD 59 PRESENTATIONS AT VARIOuS ACADEMIC CONFERENCES. AT THE END OF 2013, THE CMR GROuP HAD 175 EMPLOyEES. 21% OF THE COMPANy’S EMPLOyEES ARE WOMEN. 38 EMPLOyEES ARE FROM COuNTRIES OuTSIDE NORWAy, FROM 20 DIFFERENT NATIONS.

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Visiting Address CMR, Fantoftvegen 38, Bergen, Norway

Postal Address CMR, P.O. Box 6031 PostterminalenNO- 5892 Bergen - Norway

Telephone + 47 55 57 40 40Contact information@cmr.no

www.cmr.no The CMR group

Credits/ Editor: Gunn Janne Myrseth og Per-Gunnar Lunde, CMRText: Astrid Tomassen - Design/Concept: COX AS