Our global position yields results

Our global position

yields results

FINANCIAL REVIEW 2008

Yara (Yara InternationalASA);

global fertilizer company no 1; contrib

uting to world wh

eat yields

Wh eat (

triticum aestivum); global g

rainno 2;

the cereal with

nd area u worldwide

is used in industrial production, to a lesser degree as livestock feed. A great part of the wheat production is used for milling flour, utilized mainly for baking bread.

WHEAT is a success story. Wheat yields have improved radically as a result of scientific research and technological innovation. The

nder cultivation Green Revolution of the 1960s introduced

high-yielding crop varieties and increased the use of mineral fertilizers – greatly increasing output.

Global yield 2008: 677,000,000 tons Major producers: China, USA, India Major exporters: USA, EU, Canada Source: FAD

GLOBAL N FERTILIZER CONSUMPTION Consumption and projections, million ton, 1962–2011 110 100 90 80 70 60 50 40 30 20 10 0 1962 1970 1980 1990 2000 2011 Source: EFMA

GLOBAL N/P/K FERTILIZER CONSUMPTION Million ton, 2006–2012 (projection)

200 Nitrogen (N) Phosphate (P2O5) Potassium (K2O) 160 120 80 40 0 2006/07* 2012/13** Source: IFA

GLOBAL FERTILIZER DEMAND

increases with growing populations and growing food consumption: Over the past four to five decades, world consumption of nitrogen fertilizers have increased about ten fold, and a continued growth is expected if the world’s farming community is to meet the growing demand for food.

YARA ANNUAL REPORTS 2008

YARA’S ANNUAL REPORT 2008 is structured into three documents that can be read independently, or as complementary information on the company; an Annual Review, a Financial Review, and a Citizenship Review. All reports are found on Yara’s web site, together with key corporate information: www.yara.com/2008

3 GLOBAL GRAINS

THREE GRAINS dominate world cereal production, and play a particularly crucial role in feeding the world, used as food for human consumption or as feedstock in meat production: maize, wheat and rice together represent ca 87 percent of world cereal yield – and about 45 percent of total human calorie consumption.

MAIZE (zea mays); cereal plant, grown in most parts of the world, best suited for temperate and tropical zones. Global acreage: Ca 158,000,000 hectares

WHEAT (triticum aestivum, t. durum); cereal plant, grown in most parts of the world, best suited for temperate zones.

Global acreage: Ca 217,000,000 hectares

RICE (oryza sativa); cereal plant, grown mainly in Asia and Africa, best suited for tropical and temperate zones. Global acreage: Ca 157,000,000 hectares

NORTH AMERICA: Through the acquisition of Saskferco and investments in Agrico Canada and a new storage facility in California in 2008, Yara has strengthened its platform for growth in North America.

LATIN AMERICA: The acquisition of Fertibras in Brazil in 2006 exemplifies Yara’s growth strategy in high-growth fertilizer markets with large underdeveloped agricultural areas.

2008

_{GLOBAL PRESENCE}

Yara delivers mineral fertilizers

and industrial products to

markets all over the world,

employing its global network.

YARA PLANTS JOINT VENTURE PLANTS SALES OFFICES SALES

AFRICA: The continent is heading towards an African green revolution, in which Yara is a partner. In 2008, about eight percent of Yara’s fertilizer sales went to Africa. The joint venture Lifeco, Libya, increases Yara’s production in competi tive gas areas.

KEY FIGURES 2008

NET INCOME NOK billion, 2004–2008

+36%

NET INCOME: Yara s net

9

income after minority interests ended at NOK 8,228 million

6

in 2008, a 36 percent increase from 2007 and Yara s best

3

result so far.

0

2004 2005 2006 2007 2008

FERTILIZER SALES: Fertilizer sales volumes increased from 2007 into the third quarter of 2008, until the global economic slow-down in the fourth quarter resulted in an overall decrease of four percent from 2007 to 2008. Deliveries in Europe increased by six percent due to the acquisition of Kemira GrowHow in 2007.

INDUSTRIAL SALES: Total sales of industrial products increased by 19 percent from 2007 to 2008, mainly driven by sales of environmental applications and technical ammonium nitrates (TAN). The sales of both product groups grew throughout 2008.

percent share and is the exclusive marketer of ammonia from the Burrup plant, which produces about four percent of the world’s tradable ammonia.

24.4

PRODUCT SALES: Yara sold 24.4 million tons of fertilizer and industrial products on a global basis in 2008, with fertilizers accounting for 20.5 million tons. 20,540 3,898 F e rt ili z e r p ro d u cts (exc l.ga ses) Indu stria l prod ucts SALES By product group, kt, 2008

MIDDLE EAST: The Qafco 5 expansion project in Qatar will strengthen Yara’s production base in a region with access to low-cost natural gas.

;7HD?D=IF;HI>7H; NOK, 2004–2008

KEY FACTS

28.27

EARNINGS per share reached an all time

20 high of NOK 28.27 in 2008, up from 10 NOK 20.60 in 2007. 0 2004 2005 2006 2007 2008

perregion,ktnutrients,(N/P/K),2008

70,000 60,000 50,000 40,000 30,000 20,000 10,000 0

Western Eastern North Latin Africa South East

Europe Europe America America Asia Asia

Source: FAO

the farming community and industrial customers. In 2008, Yara had

about 8,000 employees worldwide, and sales of NOK 88,775 million.

MARKET: Yara

is

the number one global supplier of mineral ferti­

lizers and agronomic solutions, with an unrivalled market coverage

selling to more than 120 countries. Yara is the leading producer of

ammonia, nitrates, NPK, specialty fertilizers and nitrogen applications.

STRATEGY: Yara

is

positioned to deliver on its overall goals through

a consistent growth strategy. Yara’s strategy is founded on a flexible

business model with scale advantages and unique global presence,

employing its industry expertise and exercising financial discipline.

» For a full presentation of Yara’s growth strategy and business model, see pages 23-25.

GLOBAL FERTILIZER USE varies

greatly from one region to another, tending to reflect economic growth: less developed economies have a low application level – and low yields – calling for increased use of fertilizer, whereas demand in developed regions is linked more to application competence rather than sheer volumes.

CONTENT

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2008 2007 Financial performance Revenueand otherincome Operatingincome EBITDA1) Netincome2) NOKmillion NOKmillion NOKmillion NOKmillion 88,775 12,281 17,917 8,228 57,486 4,987 8,441 6,037 Investments3) Debt/equityratio4) Cash flow fromoperations NOKmillion % NOKmillion 16,040 82 3,986 7,797 42 4,305 CROGI 5)

Earningspershare6)

% NOK 22.8 28.27 16.1 20.60

Shareholders’ equity SharepriceonOSE

NOKmillion NOK31 December 30,267 148.75 21,201 251.50 Social performance Employees LTI rate7) Numberatyearend Permillionhours worked 7,971 1.2 8,173 1.4 Environmental performance GHG emissions8) Energyuse Millionton Petajoule 13.5 200.7 16.4 191.3 Notes

1)_{EBITDA: Earnings before Interest, Tax,} Depreciationand Amortization. 2)_{Reported netincomeafter minority interest.}

3)_{Investmentinproperty,plantand equipment,} long-term securities,intangibles, long-term advancesand investmentsinnon-consolidated investees.

4)_{Netinterest-bearing debt divided by sharehol­} ders’ equity plus minority interest.

5)_{CROGI: Cash Returnon Gross Investment} (12 month rolling average).

6)_{Yaracurrently hasnoshare-based compensa­} tionprogram thatresultsina dilutiveeffecton earningspershare.

7)_{Losttimeinjuries for Yaraemployeesand} contractors.

8)_{Emissionin CO}

2 equivalents,excl. former Kemira GrowHow and Saskfercosites.

22.8

%

CROGI: Yara recorded a cash return on gross investment (CROGI) of 22.8 percent in 2008, up from 16.1 percent in 2007.

HISTORY

DEVELOPMENT: On March 25, 2004,

Hydro Agri demerged from Norsk Hydro and listed as Yara International ASA – further developing a once Norwegian and Scandinavian, then European chemical company into the global no 1 fertilizer supplier.

» Yara’s presence 2008 is shown on the map in front.

CONTINUED GROWTH: Yara consistently followed its growth strategy in 2008, with total investments of NOK 16,040 million, prima rily reflecting the acquisition of Saskferco, in Canada.

SCANDINAVIAN: Norsk Hydro was founded on

December 2, 1905, harnessing hydroelectricity to produce the world’s first nitrogen fertilizer, calcium nitrate – first at a test plant, then with regular pro­ duction at Notodden, Norway from 1907. A new plant opened at Rjukan 1911, another at Notodden

1928, in Porsgrunn 1929 and in Glomfjord 1949; all in Norway.

Hydro established its first sales office abroad in Co­ penhagen 1919, in Stockholm 1945, and an agency in San Francisco 1949. The first major growth initiative abroad, utilizing low-cost gas resources, was the establishment of the Qatar Fertiliser Company (Qafco) joint venture, 1969.

Building on the production of fertilizer, industrial products were developed in the 1930s, including heavy water 1934 and CO2 1935, at Rjukan.

EUROPEAN: Hydro strengthened its overseas representation in the 1970s, laying the foundation for today’s global network, with a sales partnership in Thailand 1982, and sales offices in Rio 1977, an African office in Harare 1985; also entering China with the Chiwan terminal 1982.

Hydro developed into a European company during the 1970s and 80s, with several acquisitions, incl. NSM, Netherlands 1979; Supra, Sweden 1981; Fions, UK 1982; Ruhr Stickstoff, Germany 1984; Windmill/ Hamm Chemie, Netherlands/Germany, and Cofaz, France, both 1986 – establishing itself as Europe’s no. 1 fertilizer supplier.

Building on the emerging position in the nitrogen-based chemical industry, Hydro diversified into industrial chemicals. CO₂ plants were acquired: Norway 1972; Sweden 1976; Denmark 1978.

MAIN EVENTS 2008

consistent growth, and implementation of Yara’s strategy. Resilience in a year of considerable turmoil, demonstrated the value of the company’s flexible business model.

GLOBAL: Hydro expanded its operation globally in the 1990s, developing into the only truly global player in the fertilizer industry, acquiring DMW Rostock, Germany, and HAT/Tringen, Trinidad, both 1991; Enichem Agricoltura, Italy 1996; Adubos Trevo, Brazil 2000 – and shares in Kynoch Fertilizers, South Africa 1999, plus expanding in Qatar.

Yara International ASA established and listed on March 25, 2004, implementing major growth acqui­ sitions such as Fertibras, Brazil and Olmeca, Mexico, both 2006; Kemira GrowHow, Finland 2007; Saskferco, Canada 2008 – as well as shares in Rossosh, Russia and Burrup, Australia, both 2005, and Lifeco, Libya 2009, and others.

Building on its industrial and agronomic expertise, Yara developed a number of industrial applications, and its breakthrough catalyst technology 2005.

February: Yara signed an agreement with Deep­ ak Fertilisers and Petrochemicals Ltd of India, in­ tending to establish a technical ammonium nitrate and specialty fertilizer JV company. Yara invested in a new fertilizer storage facility at the Port of Stockton, California. Yara reported strong financial results for Q4 2007.

April: Yara sold 50 percent of its shares in China Blue Chemical Ltd, and its indirect holding in Socie­ dad Quimica y Minera de Chile, S.A. – and reached an agreement with the Brenntag Group to sell cer­ tain chemical supply activities at its Köping and Tertre sites.

May: Yara’s AGM approved of a dividend of NOK 4.00 per share. Yara signed a MoU with Burrup Holdings Pty Ltd, Australia to establish a JV compa­ ny to build a technical ammonium nitrate plant. Yara purchased 25 percent of Agrico Canada Ltd, a leading supplier of fertilizer products and services in North America. Trygve Faksvaag was appointed Yara Chief Legal Counsel.

June: Yara Sluiskil BV entered contracts to design and build a new world-scale urea plant at its Sluiskil production site, the Netherlands. Yara entered into a long term partnership with Ensus Group to build a new world-scale liquid carbon dioxide facility in the UK and signed a JV agreement with Sinochem Ferti­ lizers for marketing of environmental solutions.

July: Yara entered into an agreement to acquire Canadian nitrogen producer Saskferco, strengthening production and marketing position in North America. The transaction was closed in October. Yara and the National Oil Corporation of Libya/Libyan Investment Authority completed major agreements to establish a JV fertilizer company. An agreement was entered to increase ownership in Burrup Holdings Ltd, Aus­ tralia with five percent. Egil Hogna was appointed new Yara Chief Financial Officer. Yara reported its strongest quarterly results so far.

August: Yara hosted the 3rd African Green Revolu­ tion Conference in Oslo, and the Yara Foundation awarded the 2008 Yara Prize to Florence Wambugu, Kenya, and Victor Mfinanga, Tanzania.

October: Yara decided to temporarily stop produc­ tion of urea and ammonia at its site in Ferrara, Italy, due to prevailing market conditions. Jørgen Ole Haslestad took over as President and CEO, replacing Thorleif Enger who reached his retirement age. Yara reported strong financial results for Q3, with higher prices compensating for lower volumes.

November: Yara temporarily stopped production at its site in Le Havre, France, and reduced produc­ tion at Sluiskil, the Netherlands, related to the pre­ vailing situation in the international ammonia and urea markets.

December: Yara temporarily halted production at its JV GrowHow UK Ltd, ammonia plants in Ince and Billingham, UK, and at its site in Ravenna, Italy, due to the market situation. Yara announced the permanent closure of its NPK plant in Kedainai, Lithuania and investments to increase capacity at the Siilinjärvi mine in Finland.

CANADA: In July 2008, Yara entered into an agreement to acquire Saskferco, a leading nitrogen fertilizer producer at Belle Plaine; obtaining the approval from Canadian authorities in September. The acquisition strengthened Yara’s position in North America, adding to its global capactiy.

Positioned

to handle

volatility

Yara is in a position to take advantage of volatile and fluctuating

markets. Remaining loyal to our long-term perspectives,

ambitions and goals, we are determined to pursue future

business opportunities.

Takingoverasthe CEOinOctober2008,the financial crisishitus. However, I joined the

managementofacompany well positioned tohandlethe volatilityofthe financial marketand

the fluctuationsofthefertilizermarket; withtheabilitytoexploitothermarkets.

OVERVIEW: 2008putourindustrial platformand businessmodel totoughtests,challenging

ourabilitytohandle demand volatility. Westood thetest, demonstratingthe flexiblestrengths ofourbusinessmodel,takingactiontomitigatetheeffectsoftheslow-downtowardstheend of

theyearbyreducingthird-partysourcingand curtailingproduction.

Yara’sperformanceoverthepast fiveyearshasbeennotable, with2008clearlythebestsofar.

Oursolid underlyingimprovementyearbyyearcontinued,and werecorded ourbestyear with

regard torevenues,netincome,and acashreturnongrossinvestmentsof22.8percent, which

is well aboveourstated long-termgoal.

Wecontinued to deliveronourstrategy,seekinginitiativesand seizingopportunitiesinkey markets. OuracquisitionofSaskfercoin Canadaalreadyshowspositiveresults; in2009our new joint ventureLifecoinLibya will add toourglobal strength.

OUTLOOK: Joining Yaraafteryearsin leadershippositions withinglobal industry, I appreciate

the valueofourstrongindustrial platformand flexiblebusinessmodel,ourmarketpresence and financial discipline; ourambitions. I alsorecognizethe valueofa dynamicorganization and aninnovativeculture, whichitisimperativetonurtureand develop.

JØRGEN OLE HASLESTAD is

the President and CEO since October 2008, previously a member of the Board, 2004–2008.

Haslestad has extensive corporate experience, spending his entire career in major global businesses, across Asia, America, and Europe. Until becoming CEO of Yara Inter­ national ASA, he spent 14 years with Siemens, most recently as Divisional CEO of Industry Solutions. Haslestad holds a M.Sc. degree in mechanical engineering – and still has his native farm in Norway.

Jørgen Ole Has

“Yara’s performance over the past five

years has been notable, with 2008

clearly the best so far.”

JØRGENOLE HASLESTAD

President and CEO

ParticipatingattheWorld Economic Forumin Davosinearly2009, I noticed agloomymood.

Still,inthe workingsession Yarahosted,onagricultural growthinitiativesinAfrica,optimism

reigned. Weall need food,and agricultural outputhastobeincreased – requiringimproved agri­ cultural productivity,based onmineral fertilizersand agronomicexpertise. Yaraprovidesboth. The long-term fundamentalsforfertilizer demand remainstrong. Withclimatechangeand stricterregulations, demand forenvironmental solutions will alsogrow.

Mineral fertilizers lieattheheartofourbusiness,and itismyambitiontostrengthenourposi­ tioninseveral markets. Environmental solutionsrepresentagreatopportunity, which Yarais readytotakeadvantageof. Constantlyanticipatingchange – continuously developingbusiness.

INDUSTRY

SHAPER

Yara aims for an industry shaper position – setting standards and driving the industry. Several aspects related to this ambition are high on the agenda of Yara’s management, including:

“PERFECT OPERATIONS is a main priority in strengthening our position and developing our company. Continu­ ous productivity improvements are a key to sustainable, profitable growth and value creation.”

“PERFORMANCE CULTURE is a driving force in reaching our goals and realizing our ambition. In developing the company, corporate values, ethical standards, conduct and compliance are all essential.”

“KNOWLEDGE GROWS is more than a slogan; with Yara it is the core of who we are and what we do. With over a century of experience, we use our expertise to add value and share knowledge.”

Jø

JørgenOlee Hasllestad

President and CEO » More on: www.yara.com/2008

-Unique

global presence

FERTILIZER SALES 2008

YARA 2008

120

GLOBALLY, Yara sold a total of 20.5 million tons of

šOWhW^Wij^[iYWb[WdZÆ[n_X_b_jojeX[Wh[b_WXb[ikffb_[h mineral fertilizers in 2008, to over 120 countries. (See map at front of the report.)

CAPABILITY TO DELIVER

Mineral fertilizer is a major article of global trade, crucial to meet increasing food demands of a growing and more affluent population across the world.

Yara is the world s leading supplier of crop nutrients and application knowledge, with a strong capability to deliver through its global scale and local flexibility.

Africa FERTILIZER SALES Byregion,percent,2008 55% 18% 10% 9% 9% Asi a E u ro p e La tin A m e ri ca N o rt h A me rica

Yara markets, sells and distributes mineral fertilizers

globally, through a network unique to the industry.

Fertilizer trade is a global business, with transactions both in raw materials and finished products; national and multinational companies sharing the market.

Yara distributes a wide range of fertilizer products through its unrivalled global distribution network, securing unique market coverage and customer closeness.

America represents a main growth area for Yara s business, with major production in Brazil, Canada, and Trinidad and sales to both North and Latin America.

Report of the BoD 2008

Consistent

strategy yielding

results

In 2008, Yara achieved its best results so far.

During the market slowdown caused by the

global financial crisis at the end of the year,

Yara benefited from its unique, flexible busi­

ness model and is well positioned for both a

recovery in demand and pursuit of further

growth initiatives.

Yarahas delivered strongresultssinceits listingontheOsloStock Exchange in2004, having implemented several projects toboost

growthand takenanactiveroleintherestructuringofthefertilizer industry. During2008, Yara delivered onitsindustryshaper vision and growthambitions withseveral importantinitiatives,the largest of which wastheacquisitionofthe Canadian-based companySask­ ferco.

Yaramanaged tomitigatetheeffectsofthe financial crisistowardsthe end of2008,benefitingfromits flexiblebusinessmodel. Althoughpro­ duction was temporarily curtailed, inventories were deliberately

increased toprepareforafertilizermarketrecoveryin2009. TheBoard

of Directors considers the long-term fundamentals for fertilizer

demand toremainstrongand that Yarais well positioned to deliverin 2009and beyond.

STRATEGY AND EXECUTION

Yaraisachemical companythatprimarilyfocusesontheproduction,

distributionand saleofnitrogenchemicals. Themainapplicationis

fertilizers, whileindustrial usesarealsoanimportantsegment. Yara usesitsscaleand flexibilitytoensurereliablesuppliesofmineral ferti­ lizerand related industrial productstocustomers worldwide. Yarabenefitsfromscale,asthe world’s largestproducerofammonia, nitrateand complex fertilizer, withmorethanone quarterofglobal

ammoniatrade. Historically,thebackboneof Yara’sproductionsys­

temhasbeen located inEurope. However,itsnew growthisshifting

towardsregions withmorecompetitivegasresources.

Yara has developed an unrivalled global presencein the fertilizer industry. Its global distribution and marketing network includes charted shippingcapacityand morethan200terminals, warehouses,

blendingplantsand baggingfacilities. Local salesand marketingunits provide customerservicesas well asagronomical support,sharing knowledgeand working withfarmers worldwidetoincreaseyieldsand

improvecrop qualityand nutritional value.

Yara’sbusinessmodel hasbuilt-in flexibility,toenable quickresponses to changingmarket conditions. The majorityof Yara’soperational

cashcostis variable, drivenbyraw materials,energy,freightand thir

d-partyfertilizersourcing. Purchasesand plantscanbehalted atshort noticeinresponseto deliveryslowdowns. Increased energycostsin

Europecanbemitigated by lowercostimported ammonia,giventhat

mostof Yara’sEuropeanproductionfacilitieshaveaccessto deep-sea import/exportterminalsforammoniaand Yaraistheglobal leaderin trade and shippingofammonia. Yara controls the world’s largest storage capacityforfertilizer, giving itthecapacity tobuild up inventory beforepeakseasons,handle volatilityin deliveriesand takeadvantage ofgeographical arbitrageopportunities.

Yarahassetaconsiderableincreaseofitsglobal marketshareasa long

-termobjective,reflectinganoptimal utilizationofitsmarketingand distributionsystem. Toreachthisobjective will requireproductivity gainsintheexistingbusiness,as well asorganicgrowthand further stepgrowthinitiatives. Suchinitiatives will focusonincreasing Yara’s productionin low-costregions,expandingmarketpresenceinhigh -growthmarketsand participatinginconsolidationinmaturemarkets. Forall growthcategories,scale,synergyand timing will beimportant

factors,along withcapital discipline.

Yaracontinued to deliveronitsgrowthambition during2008,through

several importantinitiatives.

On 1 October2008, Yaraacquired Saskfercoatanenterprise valueof CAD 1.6billion. TheSaskfercoplantinBelle Plaine, Canadaisoneof

the world’smostefficientatproducingnitrogenfertilizer. Uponcom­

pletionofitscapacityexpansionprojectinmid 2009,theplant will haveanannual capacityof725,000tonsammonia, 1,115,000tonsurea

and 230,000tons UAN. Theplantbenefitsfromthefavourable devel­ opmentinNorthAmericangaspricesand is well located toservethe

hugeMid-Westnitrogenfertilizermarket.

In2008, Yara decided toimprovephosphaterocksourcingforitsNPK

productionbyincreasingproductioninSiilinjärvi, Finland; investing

EUR 60millioninmodificationsofrockupgradingequipment.

In2008, Yaracontracted forconstructionanew world-scaleureaplant toreplaceold assetsatitsSluiskil productionsiteintheNetherlands

foratotal investmentcostofEUR 400million. Theplant will produce 1.3milliontonsureafrom2011,and takesadvantageofureaupgrading marginsonexcessammoniacapacityinSluiskil. Thenew plant will alsoimprovethesite’senergyefficiency,environmental performance and maintenancecosts.

In2009, Yara’sproductionincompetitivegasareasisincreased with Lifeco,a 50/50joint ventureinLibyaestablished 9 February2009. Yara contributed USD 225 millionincashtomatchtheLibyancontribution ofexistingplantassetstotallinganannual capacityof900,000tons ureaand 700,000tonsammonia. Theattractive valuationreflectsthe premiumthatourLibyanpartnersplaced onaccessto Yara’smarket­ ingnetworkthrougha long-term marketingagreement and Yara’s operational and projectmanagementexpertise.

MARKET CONDITIONS

Yara’s long-term market prospects are attractive. Increased agri­

cultural productivityand new environmental solutionsare demanded ina world withpopulationgrowth,changing dietarypatternsand eco­ logical pressure,including waterscarcityand land shortage. 2008 wasayearofcontrastinthefertilizerindustry. Global fertilizer

marketscontinued to be strongly demand-driven until August, as the supply-demand balancefor grains appeared stretched, fuelling fertilizerimport demand particularlyinAsia. Concernsaboutgrain

[1] NET INCOME AFTER MINORITY SHARE

NOKbillion,2004–2008 10 8 6 4 2 0 2004 2005 2006 2007 2008

supply duetoadverse weatherresulted infurthercroppriceincreases torecord levelsin June2008. Fertilizermarketstightened further during

Julyand August,asincreased exporttaxeson Chinese production after 1 Mayrestricted global exportsupply.

Marketsentimentturned sharplyinSeptember,asthe financial crisis reached the widereconomy. Globally,fertilizer demand wasslow dur­

ingfourth quarter. Grainpricesand otheragricultural commodity

prices declined fromAugust, drivenbythe financial crisisand the strong2008global graincrop.

Deliveries weresharplyreduced inregions wherethemainfertilizer

applicationoccurs duringthe latterpartoftheyear. Brazilianferti­

lizer deliveries were down41 percent duringthe quarter,and total

Brazilian deliveries downninepercentcompared with2007. Amid

decliningfertilizerprices,a difficult financingenvironmentand general

uncertainty,buyersinthe northern hemispherechosetopostpone purchases. Europeanand USnitrogen deliveries were down 15 percent inthesecond halfof2008,compared tothepreviousyear. Slow demand

led tosignificantcapacitycurtailmentstowardstheend of2008.

Nitrogenchemicalssalestotheprocessindustry declined duetothe economicslow-down. However, deliveriesforenvironmental applica­ tionscontinued togrow.

FINANCIAL PERFORMANCE AND OPERATIONS

Netincome afterminorityinterest was NOK 8,228million(NOK

28.27pershare)in2008[1],upfromNOK6,037million(NOK20.60

per share) in2007. Yara’s after-tax measure forreturn on capital,

CROGI (Cash ReturnOn Gross Investment), wasat22.8percent[2]

compared toatargetofminimumtenpercentaverageoverthebusi­ nesscycle. Operatingincome wasNOK 12,281 million,upfromNOK

4,987millionin2007. EBITDAincreased toNOK 17,917million[3],

fromNOK8,441 millionin2007. Yara’srevenueand otherincome was NOK88.8billionin2008,upfrom 57.5 billionin2007. [2] CROGI Percent,2004–2008 25 20 15 10 5 0 2004 2005 2006 2007 2008

Yara’s2008results wereimproved considerablyfrom lastyear, dueto

higherfertilizerprices. Asfertilizerprices decreased fromSeptember third-partysourced inventorypositions were written downbyNOK

2.1 billiontoreflectmarketprices. Fertilizer volumes decreased by fourpercentcompared to2007, duetotheslow-downinthefourth

quarter. Oil and gascostsinEuropeincreased significantly duetoan

increaseinoil-linked and hubgasprices.

DespitemajorproductioncurtailmentsinNovemberand December,

ammoniaproductionincreased 11 percentand finished fertilizerpro­

duction increased 26 percent from 2007, primarily reflecting the

Kemira GrowHow acquisition.

Yarais well ontracktoreachtargeted synergiesfromtheKemira Grow-How acquisition,and cash flow fromtheacquired activitiesincreased substantially duetoimproved marginsonphosphates,NPKand nitrates. Netcashfromoperatingactivitiesin2008 wasNOK3,986million, reflectingstrongearningsand dividendsofNOK 1,223millionfrom

non-consolidated investees,partlyoffsetbyincreased netoperating

capital duetohigherpricesand deliberatelyincreased inventories. Net cashfromoperatingactivitiesin2007 wasNOK4,305 million. Net cashused ininvestingactivitiesfor2008 wasNOK 12,786million, includingtheSaskfercoacquisition.

Yaramaintained itsstrong financial position during2008. The debt/ equityratioincreased from0.42to0.82[4] duetosignificantinvest­

ments,themajorbeingtheSaskfercoacquisition,highernetoperating

capital and anincreased NOK/USD exchangerate,asa largepartof

Yara’s loansare USD denominated. Yara’snetinterest-bearing debtat

theend oftheyear wasNOK24,794million whiletotal assetsequaled NOK80,887million. Total majorityshareholders’ equityasof31 Decem­

ber2008amounted toNOK30,103million. Attheend oftheyear, Yara

had NOK3,195 millionincashand cashequivalentsand NOK 10,659 millioninun-drawncommitted bankfacilities. Weconsiderthecom­ pany’scashpositionand financial strengthtobesatisfactory.

[3] EBITDA NOKbillion,2004–2008 20 15 10 5 0 2004 2005 2006 2007 2008

Yaraachievesaknowledgemargininthemarketbased onitsinsightin

local markets,closecustomerrelations,agronomiccompetenceand

abilityto developnew productofferingsfromitsexistingproduction

base. Tosupportthisknowledgemarginand toseizeopportunities

fromsomeoftoday’spressingglobal challenges, Yara’sresearchand

developmenttargets both agronomical activities and product and

processimprovements. Several ofthe latterhave led tocommercializa­

tionofenvironmental solutions,suchasanN2Ocatalystand NOx

abatementtechnologies. In 2008, Yara’sresearchand development

costs wereNOK 126million,compared withNOK94millionin2007.

IntheopinionoftheBoard of Directors,theconsolidated financial

statementsprovideatrueand fair view ofthegroup’s financial per­

formance during2008and financial positionat31 December2008.

Accordingtosection3-3oftheNorwegianAccountingAct, wecon­

firmthattheconsolidated financial statementsand the financial state­

mentsoftheparentcompanyhavebeenprepared based onthegoing

concernassumptionand thatitisappropriatetousethisassumption.

RISK MANAGEMENT

Yara’stotal riskexposureisanalyzed and evaluated atcorporate level.

Riskevaluationsareintegrated inall businessactivitiesbothatcorpo­

rateand businessunit level,increasing Yara’sabilitytotakeadvantage

ofbusinessopportunities. Yara’smostsignificantmarketriskisrelated

tothemarginbetweennitrogenfertilizerpricesand natural gasprices.

Although there is a positive long-term correlation between these

prices,marginsareinfluenced bythesupply/demand balanceforfood

relativetoenergy.

Yarahasa well-established systemforcreditand currencyriskman­

agement with defined limitsforexposure,bothatcustomerand at

country level. Yara’sgeographically diversified portfolioreducesthe

company’soverall creditand currencyrisk. Asthefertilizerbusinessis

essentiallya US dollarbusiness, withbothrevenuesand raw material

costspriced in USD, Yaraseekstomaintainits debtprimarilyin USD,

therebyreducingitsoverall USD currencyexposure. Yarahasacon­

[4] DEBT/EQUITY RATIO Percent,2004–2008 100 80 60 40 20 0 2004 2005 2006 2007 2008

servative financingstrategyand aimstohold themajorityofitsnet

interest-bearing debtin long-termbonds with fixed interestrates.

CORPORATE CITIZENSHIP

Withitsuniqueglobal presence, Yarais well positioned toinfluencekey

global issues. Thecompanyhasadopted acorporatecitizenshipapproach

based ontheroleitplays – and canplay – insociety,contributingto

solvingmajorglobal challengessuchasclimatechange,food security,

and healthconcernsthroughitscorebusinessand corporatecompe­

tence. For Yara,corporatecitizenshipisanintegral partofitsoverall

strategic directionand a driverforpursuingbusinessopportunities.

TheBoard of Directorsemphasizes Yara’ssignificant contributions

towardsan African Green Revolutionand the business initiatives

launched topromoteimproved productivityinAfricanagriculturein

2008. Yarahasgained aninternational positioninglobal food supply

issues,participatinginseveral majorhigh-level eventsconnected to

thefood crisisin2008,includingatthe United Nations. Itisalsonote­

worthy,that Yara – throughitsuniquecatalysttechnologyand indus­

trial solutions – contributestoreduced emissionsofgreenhousegases

and otherharmful gases. Thisareaoffersconsiderablebusinessoppor­

tunities,asthemarketforenvironmental solutionsgrew in2008and

isexpected tocontinue doingsointhefuture, drivenbymorestrin­

gentpolitical measurestocurbglobal warming.

Yaraparticipatesinthe UN Global Compactinitiativeand theimple­

mentationofitstenprinciplesthroughouttheorganization.

Forfurther detailson Corporate Citizenship,theBoard referstothe

separate Citizenship Review for2008, whichisguided bythe Global

Reporting Initiative G3guidelines.

HEALTH, ENVIRONMENT AND SAFETY

Astrongtrackrecord places Yaraamongthe industry leaders with

respecttohealth,environmental and safetyperformance. Yarabelieves

everyaccidentispreventable. Thisisthebasisforafocused safetypro­

[5] LTI RATE

Numberof lost-timeinjuriespermillionhours worked,2004–2008

1.5 1.2 0.9 0.6 0.3 0.0 2004 2005 2006 2007 2008

gram withinthecompany. Similarly,environmental challenges,par­

ticularlythoserelatingtoclimategasemissions,areakeyelementof

Yara’sactivitiesinthe field ofhealth,environmentand safety.

In2008, Yaraachieved anLTI rate(lost-timeinjuriespermillionhours

worked) of 1.2 foremployeesand contractorscombined [5], down

from 1.4in2007. Incomparison,theaverageLTI rateforotherferti­

lizerproducersinEurope wasfourtimeshigher. The TRI rate(total

recordableinjuriespermillionhours worked)for Yara wasat3.5,up

from2.9in2007. The TRI rateincludes lost-timeinjuries,restricted

workcases wheretheperson wasallowed tocarryoutothertaskthan

thenormal duties,and medical treatmentcases. Absence duetosick­

nessat Yara’sproductionplants was3.8percentin2008,upfrom3.7

percentin2007. The2008resultsincludeforthe firsttimetheper­

formanceofformerKemira GrowHow.

Strivingtoreachits zeroaccidenttarget, Yaracontinued theimple­

mentationofitsBBS(behavior-based safety)programin2008. This

will befurtherrolled outin2009/10intherecentlyacquired Kemira

GrowHow and Saskfercoplants. Also,anew safetycampaigncalled

ThinkAhead was developed and prepared for launchin2009.

Yara did notexperienceanyfatal accidentsin2008. However,several

accidents did occur, emphasizing the need for strong management

commitmentand employeeinvolvementinpreventiveactions. Themost

seriousaccidentin2008occurred in Yara Porsgrunnin December, when

abuffertank withfertilizersolutionexploded. Fourpeople weretreated

forminorinjuriesfromglasssplinters. Theplant wasoutofoperationfor

overamonthand therepairscostapproximatelyNOK60million.

Onclimatechange, Yara’sgoal istoreduceitscarbonfootprintby25

percentfrom2004to2009,intermsoftotal greenhousegasemissions

fromtheproductionsitesthatbelonged to Yarain2004. Thistarget was

alreadyachieved in2008: theemissionsin2008 were30percentbelow

2004 levels. Thishasbeenachieved withtheinstallationof Yara’stech­

nologyforreducingnitrousoxide(N2O)fromnitricacid plants. At

year-end,thetechnology wasinstalled in 12of Yara’snitricacid plants.

In2008, Yarahad directemissionsof 13milliontonsof CO2equiva­

lents, downfrom 16.4in2007,excludingtheKemira GrowHow and

Saskfercoplants. Withall plants included,emissions in2008 were

approximately 17milliontons CO2equivalents. Yara’stotal energycon­

sumptionincreased by4.9percentfrom2007to2008; energyefficiency

wasimproved by 13percent.

While Yara’sproductionemitsgreenhousegases,theoverall impactofthe

productionand useofmineral fertilizerontheenvironmentisapositive

contributionbythe fixingof CO2inbiomassand land preservation.

Yara’soperationsaresubject tomany environmental requirements

underthe lawsand regulationsofthe variousjurisdictionsin which

Yaraconductsitsbusiness. Such lawsand regulationsgovern,among

ous wastemanagement,transportationofhazardousmaterialsand

remediationofpastactivities. In2008,nomaterial legal claim was

madeagainst Yarainrespectofhealth,environmental orsafetymat­

tersorinrelationtooperational permits.

Yarahasanumberoffacilitiesthathavebeenoperated foraperiod of

years. Subsurfaceimpacttosoil and groundwaterand othercondi­

tionsarecommontosuchsitesand mayrequireremediationorgive

riseto liabilitiesunderthe lawsofthe variousjurisdictionsin which

thefacilitiesare located. Yarahasattempted toidentifysuchimpacts

wheretheyareapparentand hasinitiated remediationorcontainment

proceduresincoordination withtheappropriateauthorities.

PEOPLE DEVELOPMENT

Attheend of2008, Yarahad 7,971 employees,anetreductionof202

employeesfrom2007, despitethecompany’scontinued global growth. The

reductionmainlyreflectssynergiesrealized throughtheacquisitionof

Kemira GrowHow. Themainadditionto Yara’sglobal workforcecamein

Canada,throughtheacquisitionofSaskferco, with 160new employees.

Theincreased diversityof Yara’s workforce, withno dominantcompany

locationand theNorwegiancontingentonlyaccountingforapproxi­

matelytenpercent,putsequal opportunitieshighontheagendathrough­

outthecompany. Tocreatecareeropportunitiesformanytalents within

the organization,thecompany offersinternational assignments toa

numberofspecialistsand leaders. At theend of2008, 113 of Yara’s

employees, drawnfrom20countries, werestationed oninternational

assignmentcontractsat31 differenthost locationsaround the world.

2008 also saw the firstclass of graduates from Yara’s Leadership

Assessment and Development Program (LEAD), which was first

launched in2006and hasprovided greatinsightin Yara’sglobal talent

pool. Ofthe first40graduates,23percent were women,20 different

nationalities wererepresented,and twothirds were workingoutside

theirhomecountry. Anotherinitiative, YaraEssentials, was launched

in 2008 as atool to support networking and knowledge transfer

between leadersand specialist withintheglobal organization. Yara’s

inductionand trainingprogram, The YaraWorld,alsoproved itssuc­

cess in2008. Development will continuein 2009, along with the

strengtheningofthecompany’se-learningservicesforemployees.

Yara’sindustryhastraditionallybeenmale-dominated. Attheend of

2008,81 percentofthe global workforce weremenand 19percent

women, withasimilar distributionatthemanagerial grade level,80

percentbeingmen; 20percent women. Amongsenior leaders,theper­

centageof womenis lower,constitutingeightpercentofthecompany’s

top 138global positions. Yara’sambitionistoincreasetheproportion

of womeninmanagementpositionsand focusongender diversityin

keyhumanresourceprocesses likerecruitment,talentmanagement,

employee development and succession planning. In addition, the

companysupportsand developsfemale leadersthroughinternal and

external networking,coachingand mentoring.

BOARD OF DIRECTORS AND EXECUTIVE MANAGEMENT

Yara’s fiveshareholder-elected membersoftheBoard of Directors were

re-elected fortwoyearsin2008. Uponhisappointmentas President

and CEO, JørgenOle Haslestad resigned fromtheBoard on 1 October

2008. The Board decided that Haslestad’s replacement should be

elected atthenextordinaryAnnual General Meeting,in2009. The

fourshareholder-elected membersall haveextensive linemanagement

experience from international industrial companies. The three

employee-elected Board members wereelected in January2008and

havebeen Yaraemployeesforbetweentwenty-eightand thirty-five

years. TwoofthesevenBoard membersare women,bothelected by

theshareholders. TheBoard held twelvemeetingsin2008.

Yarahas decided nottoconstituteacorporateassembly. Consequently,

theBoard of Directorsisresponsible directlytothe General Meetingand

theshareholders. A Compensation Committee wasestablished inApril

2004and anAudit Committee wasestablished in December2006.

TheBoard of Directors wishestoexpressitsgratitudeto ThorleifEnger

whoretired fromhispositionas Presidentand CEOinSeptember

2008,uponreachinghis desired retirementageafter35 years with

Yaraand Hydro. Mr. Engerplayed acrucial roleinthe developmentof

Yara,contributingstronglytotheturnaround process leadingupto

thecompany’ssuccesssincethe listingonOsloStockExchangein

2004. Tosucceed him,theBoard welcomes JørgenOle Haslestad asthe

new Presidentand CEO. Withextensiveexperiencefrominternational

industry,hispriorbackground onthe YaraBoard – and beingafarmer

himself – werestconfidentthatMr. Haslestad will contributetothe

continued growthand successof Yara.

CORPORATE GOVERNANCE

Yarabelievesgood corporategovernance drivessustainablebusiness

conductand long-term valuecreation. Yaraaimstoexercisecorporate

governanceinamannerrepresentativeofanambitiousand responsible

multinational company,and hasestablished practicesadapted tothe

specific challengesfacing it as the world’s largest global fertilizer

company. TheBoard of Directors will comply with theNorwegian

Code of Practiceforcorporate governance. This Code has stricter

requirementsthan whatismandated by law.

YARA INTERNATIONAL ASA

Theparentcompany, Yara International ASA,isprimarilyaholding

company, with financial activitiesand onlynon-material operations.

Yara International ASAhad netincomeofNOK206millionin2008

afteracurrency lossofapproximatelyNOK3.2billionrelated to USD

denominated loans.

DIVIDEND AND BUY-BACKS

Yaraexpectstoreturn40–45 percentofnetincometoitsshareholders,

measured asthesumof dividendsand sharebuy-backs,averaged over

thebusinesscycle. As longas Yaracanmaintainprofitabilityattheattrac­

Yara’sgrowth will notbe desirable. Yara’s dividend policyistopayout

minimum30percentofnetincomeasanaverageoverthebusinesscycle.

Yarabelievesit will bebeneficial forshareholdersforthe Companyto

striveforagradual increaseand predictabilityintheabsolute dividend

level overtime,independentofthebusinesscycle. Consequently, Yara

expectstopayoutsomewhatmorethan30percentofnetincomeinyears

with weaker-than-averagecash flow fromoperations – and lessthan30

percentinyears withstronger-than-averagecash flow fromoperations.

Currentequityand creditmarkets, withmorerestricted accessto long

-term financing,may limit Yara’sgrowthopportunitiesintheshort

term. Thissupportsamoreconservativeshort-term dividend policy.

TheBoard proposesa dividend ofNOK4.50pershare,totalingapay­

mentofNOK 1,304million. Combined withthepositiveresultin Yara

International ASA,thisresultsinan decreaseofequityofNOK 1,099

million. Distributableequityintheparentcompanyasof31 December

2008 wasNOK282millionafterproposed dividend.

Yara will usesharebuy-backprograms whencertainconditionsare

met. Sharebuy-backsaremore flexiblethan dividends. Formostshare­

holders, buy-backs alsoprovide tax advantages compared to divi­

dends. In2008, Yaraboughtback 1,750,000sharesforatotal ofNOK

422million.

Intotal Yarapaid outNOK 1,588millionsin2008in dividendsand

sharebuy-backs,representing26percentofconsolidated netincome

in2007. Theproposed 2008 dividend represents 16percentofconsoli­

dated netincome.

OUTLOOK

Theglobal financial turmoil isimpactingeconomicgrowth. Noindustry

canexpecttobeunaffected bythesharpeconomicslow-down,butfood

demand is lessincome-elasticthanmostconsumerand investment

goods,and world populationgrowthiscontinuing.

However,thefertilizerindustryhassinceSeptember2008experienced an

unprecedented slow-downin deliveriesand declineininternational ferti­

lizerprices. Global fertilizer deliveriesare laggingsignificantlybehind

lastseason,and the lower deliverieshavetriggered substantial production

curtailments. A large dropin Chinesefertilizerexports, whicharecon­

strained byhighexporttaxes,hasfurtherreduced supplies.

Current grain, fertilizer and fuel prices promise historicallyhigh

farmermarginsformajorcropsand regions,supportingstrongnitro­

genfertilizer demand forthecurrentseason. Thesupplycurtailments

will resultinatightmarketinthespring,iffarmerschooseoptimal

applicationratesbased onstrongfarmeconomics. Ifthey donot,food

production will benegativelyaffected,tighteninggrainmarketsand

requiringarecoveryinfertilizer demand nextseason.

Yaraisprepared,possessingtheoperational and financial flexibility

tomeetapotential scenario wherefarmers, duetouncertainty,risk

aversionor lackof financing,reducefertilizerapplicationthisseason.

Applyingits flexiblebusinessmodel, Yaraisminimizingthird party

sourcingand isabletocutproduction whenevernecessary. Themajor­

ityof Yara’s operational costsare variable, reducing the financial

consequencesofsuchcurtailments. Yara’spositionisalsoimproved by

asubstantial reductioninitsexpected Europeanenergycostscom­

pared to lastyearbased onforward energyprices. During2008, Yara

increased theproportionofitsEuropeanenergycosts linked tospot

pricing, toapproximately75 percent, whichresulted insignificant

savingsasenergyprices declined.

The necessary level of investments tomaintaincurrent capacityand

implementbasicproductivityinvestmentsisestimated tobeNOK 1,500–

1,700millionperyear. Yara’stotal investmentsin2009 will besignifi­

cantlyhigher duetotheestablishmentoftheLifecojoint ventureinLibya,

theon-goingexpansionofureaproductionintheNetherlands,upgrading

ofphosphateminingcapacityin Finland and theexpansionintheplantin

Canada. Yara’s financial solidityisexpected toremainstrong.

Goingforward, Yara will benefitfromtheSaskfercoacquisition,effec­

tive 1 October 2008,and theLifeco 50/50joint ventureestablished

9 February2009. Theseinitiativesincreasetheshareof Yara’senergy

consumptionoutsideEuropefrom30to38percent.

The Board of Directors of Yara International ASA Oslo, 31 March 2009

Øivind Lund Elisabeth Harstad Lone FønssSchrøder

Arthur FrankBakke FrankAndersen Svein Flatebø

Chairperson Board member

Leiv L. Nergaard

Board member Board member

Board member Board member Board member

JørgenOle Haslestad

Board of

Directors

Øivind Lund Elisabeth Harstad

Board Chairperson since 2004 Member of the Board since 2006

Chairperson of the Compensation Committee Dr. Lund has Member of the Compensation Committee Ms. broad international industrial experience, having held the position Harstad is Senior VP and Managing Director of DNV of President and Country Manager of ABB Holding AS, Turkey Research & Innovation, Norway, responsible for strate­ 2003–06; Senior VP and Group Function Manager, ABB Asea gic research and innovations activities since 2006; Brown Boveri Ltd, Switzerland. 2001–03; President of ABB AS, previously responsible for the DNV business area Norway 1998–2001. Previously, he held senior management posi- Technology Services, 2002–06; at DNV Consulting tions with ABB National Transformer AS, Norway; ABB Trans­ 2001; planning, development and marketing in DNV’s formers AB, Sweden; Tanelec Ltd., Tanzania, and National Industri oil, gas and process industry segment, 1999–2000; AS, Norway. He holds a M.Sc. and a PhD degree in Electrical senior positions in environment and safety at several Engineering from the Norwegian Institute of Technology (NTH) DNV units, 1993–98. She holds a M.Sc. degree in and a degree in Industrial Economy from BI Norwegian School of engineering from the Norwegian Institute of Tech-Management. Dr Lund is board chair at Maracc ASA. nology (NTH). Ms. Harstad is a board member of

the KAPNORD and TGS-NOPEC.

ELISABETH HARSTAD LONE FØNSS SCHRØDER

Lone Fønss Schrøder

Member of the Board since 2004

Member of the Audit Committee Ms. Schrøder is CEO and President of Wallenius Lines AB. Sweden since 2005, previously holding several senior management responsibilities with A.P. Møller-Maersk A/S, Denmark, 1982–2003. She holds a law degree from the University of Copenhagen and a Master of Economics degree from Copenhagen Business School. Ms. Schrøder is a board member of a number of companies, incl. Aker ASA (Deputy Chairman), Vattenfall AB, NKT A/S, DSB, Bioneer A/S and Elite Miljø A/S.

Leiv L. Nergaard

Member of the Board since 2004

Chairperson of the Audit Committee Mr. Nergaard is a partner in the consulting company Norscan Partners AS, Norway, previously holding a number of senior manage­ ment positions with Hydro since 1969, incl. advisor to the Hydro corporate management, 2003–06; CEO of Hydro, Germany 2002–03; CFO of Hydro, 1991–2002. He holds a degree in Business Economics from the Norwegian School of Economics and Business Administration (NHH). Mr. Nergaard is Chair of the Board of Storebrand ASA and of The Norwegian Industry and Commerce Securities Market Committee. He is a Board member of Endeavour International Corporation and Norwegian-German Chamber of Commerce, as well as Chair of the Board of several smaller companies.

LEIV L. NERGAARD ARTHUR FRANK BAKKE

Arthur Frank Bakke

Member of the Board since 2004 Member of the Audit Committee Mr. Bakke has been a Yara (Hydro) employee since 1972, becoming a local union representa­ tive at Herøya plant in Porsgrunn in 1985. Mr. Bakke is head of the Yara European Work Council, which represents Yara employees through­ out Europe.

Svein Flatebø

Member of the Board since 2007 Mr. Flatebø has been a Yara (Hydro) employee since 1981, presently with Corporate Com­ munication, previously holding various leading positions incl. within strategy planning, global planning and optimization, R&D and purchasing. He holds a M.Sc. degree in Chemical Engineering from the Norwegian Institute of Technology (NTH). Mr. Flatebø has been a board member of The Norwegian Society of Chartered Scientific and Academic Professionals (Tekna) in Yara since 2006; Chairperson of Yara Tekna since 2007.

FRANK ANDERSEN SVEIN FLATEBØ

Frank Andersen

Member of the Board since 2004 Mr. Andersen has been a Yara (Hydro) employee since 1977, actively engaged in union matters at the Glom­ fjord plant since 1980, and served as deputy leader of the local union chapter at Glomfjord, 1994–2002, after which he was elected union leader. Mr. Andersen is a member of the local Council on Industrial Policy.

Executive

Management

Jørgen Ole Haslestad Ed Cavazuti

President and CEO Mr. Haslestad has served as President and CEO Head of Downstream segment Mr. Cavazuti has served since October 2008. Previously he held several senior management as Senior VP and Head of Downstream since October positions with Siemens AG, 1994–2008, most recently as CEO of the 2006. His previous positions with the company are: Presi­ Group’s Industry Solutions Division, Germany; before joining Siemens dent of Yara Asia, 2004–06; President of Norsk Hydro serving as Managing Director as well as Overseas Director of Kongsberg North America, 1998–2004, VP Marketing International of Offshore AS, Norway, 1986–94; Overseas Manager of the oil division, Norsk Hydro, 1989–98; before that as VP Finance at Norsk Kongsberg Vaapenfabrikk AA, Norway, 1980–86. He holds a M.Sc. Hydro’s US operations. He started his career at Arthur degree in Mechanical Engineering from the Norwegian Institute of Andersen in 1975. Mr. Cavazuti holds a Masters degree in Technology (NTH). Mr. Haslestad is a board member of Tandberg ASA Business Administration from New York University and is and served as a board member of Yara, 2004–08. a Certified Public Accountant.

Egil Hogna

Chief Financial Officer Mr. Hogna has served as Chief Financial Officer since August 2008. His previous positions with the company are: Manager of Business Unit Mediterranean Europe, 2007–08; Senior VP Business Intelligence 2006–07; head of IR team, 2004-2006; VP of Hydro Aluminum Metal Products responsible for Supply Chain & Performance Management, 2001–03; Corporate Controller Hydro Agri 1999– 2001. Before joining Norsk Hydro, Mr. Hogna was a consultant with McKinsey, 1994–99. He holds a M.Sc. in Industrial Management from the Norwegian Institute of Tech­ nology (NTH) and an MBA from INSEAD.

TOR HOLBA

HEAD OF

UPSTREAMSEGMENT

Tor Holba

Head of Upstream segment Mr. Holba has served as Senior VP and Head of Upstream since October 2006. His previous positions with the company are: Senior VP, Downstream, 2003–06. Before that he held numerous positions in Hydro from 1981, incl. as Senior VP of Global Supply Chain Management, 2001–03; President of Trevo, 2000–01; head of Business Unit Latin America, 1998–2000; President of Hydro Agri Mexico 1993–97; Regional Marketing Director for Asia and Managing Director of Hydro (Far East) Ltd., 1991–93. Mr. Holba holds a M.Sc. in Mechanical Engineering from the Norwegian Institute of Technology (NTH).

EGIL HOGNA

CHIEF FINANCIAL

OFFICER JØRGEN OLE HASLESTAD

PRESIDENT AND CEO ED CAVAZUTI HEAD OF

Anne Grethe Dalane Trygve Faksvaag

Chief Personnel Officer Ms. Dalane has served as Senior Chief Legal Counsel Mr. Faksvaag has served as VP and Chief Personnel Officer since September 2003. Her Senior VP and Chief Legal Counsel since May 2008. previous positions with the company include: VP Human His previous positions with the company include: Resources, of Hydro Oil and Energy, 2001–03; VP Corporate Managing Director of Yara Switzerland Ltd., 2006–08; Strategy, 2000–01; VP Finance, of Hydro Oil and Gas, 1996–99. VP and general counsel of Yara North America, Inc, She joined Hydro/Yara in 1984. Ms. Dalane graduated from 2004–06; legal counsel and vice president of Norsk the Norwegian School of Economics and Business Adminis- Hydro Americas, Inc., 2001–03. Mr. Faksvaag joined tration (NHH) and is also a Certified Financial Analyst. Hydro/Yara 1996 from the Norwegian law firm

Wikborg, Rein & Co.

Terje Bakken

Head of Industrial segment Mr. Bakken has served as Senior VP and Head of Industrial since September 2004. His previous positions with the company are: Head of Business Unit Ammonia Trade and Shipping, 2000–04; Managing Director of Hydro Asia Trade, 1996–2000; Managing Director of Norsk Hydro (Far East) Ltd., 1994–96; before that serving in different sales and marketing positions in the agricultural area at Hydro headquarters. He worked at Sintef, Trondheim before joining Norsk Hydro in 1988. Mr. Bakken holds a Master of Business Administration degree from Bath University, School of Management.

TERJE BAKKEN HALLGEIR STORVIK ANNE GRETHE DALANE ARNE CARTRIDGE

HEAD OF HEAD OF CHIEF PERSONNEL CHIEF MARKETING &

INDUSTRIALSEGMENT STRATEGY,SUPPLY & TRADE OFFICER COMMUNICATION

OFFICER

Hallgeir Storvik Arne Cartridge

Head of Strategy, Supply & Trade Mr. Storvik has served as Chief Marketing & Communication Officer Mr. Cartridge Senior VP and Head of Strategy, Supply & Trade since October has served as Senior VP and Chief Marketing & Communica­ 2008, when he assumed responsibility for the Corporate Strategy tion Officer since January 2004. Previously, he held the posi­ function, in addition to the Supply & Trade area. His previous tions of Head of Public Relations and Public Affairs with positions with the company include: Senior VP, Supply and Trade Telenor, Norway, 1996–2003; as Managing Director of the com­ since 2006; CFO of Hydro Agri, 2000–04, and of Yara 2004–06, munication company Gazette, Norway, 1993–96; as marketing also acting as CFO of Hydro Agri International, 1995–99. He was manager and director of communications of Digital Equipment employed by Hydro in 1984 and was responsible for the strategy Corp, 1986–93; public relations consultant; and journalist at that led Hydro Agri to undertake a major turnaround from 1999 Publicity AS and Informativ AS, 1985–86. Mr. Cartridge holds to 2000. Mr. Storvik graduated from the Norwegian School of a B.Sc. degree in International Politics and Middle Eastern Economics and Business Administration (NHH). history from the University of Bergen.

TRYGVE FAKSVAAG

CHIEF LEGAL

Corporate

governance

Yara believes good corporate governance

promotes sustainable business conduct and

long-term value creation.

Yaraaimstoexercisecorporategovernanceinamannerrepresenta­

tiveofanambitiousand responsiblemultinational company. Asthe

supremegoverningbody,theBoard of Directorsof Yara International

ASAhas decided tocomply withtheNorwegian Codeof Practicefor

corporategovernance. This Codeimposesstricterrequirementsthan

whatismandated by law. Themainarticlesofthe Codeand Yara’s

compliancearepresented below (Code’sarticle 1).

Yara’s Codeof Conduct, whichissupported bytheBoard of Directors,

aimstoensurethatall Yaraemployeesactinaconsistentmannerin

line with qualitystandardsand businessneeds.

BUSINESS SCOPE

Thescopeof Yara’sbusiness(Code’sarticle2)is defined initsArticles

ofAssociation,published infull onthecompany’s website,and pre­

sented inthe ReportoftheBoard of Directors. Yarais listed onthe

OsloStock Exchangeand is subject toNorwegiansecurities legis­

lation. Financial reportingis doneinaccordance with International

Financial ReportingStandards(IFRS).

ANNUAL GENERAL MEETING

The Company’sshareholdersareprimarilyrepresented atthecompa­

ny’sAnnual General Meeting(Code’sarticle6). Inaccordance with

Norwegiancorporate law,shareholdersregistered intheNorwegian

Central Securities Depository(Verdipapirsentralen)can voteinperson

orbyproxy. Noticeofthemeetingand relevant documentsaremade

availableon Yara’s websiteno laterthanthree weeksinadvanceofthe

meeting. Furthermore,the documentsaresent to all shareholders

individually,ortotheir depositorybanks,aminimumoftwo weeksin

advanceofthemeeting.

THE ANNUAL GENERAL MEETING OF SHAREHOLDERS

– electstheNomination Committeeand shareholders’ representatives

totheBoard of Directors;

– electstheexternal auditorbased ontheBoard of Directors’ proposal,

and approvestheremunerationtobepaid totheexternal auditorof

theparentcompany;

– approvestheremunerationtotheBoard of Directors,the financial

statementsand anyproposed dividend payment.

The ChairpersonoftheBoard and the CEOarepresentattheAnnual

General Meeting, normallyalong with theBoard of Directors,the

Nomination Committeeand the CompanyAuditor. Anindependent,

qualified person chairs the meeting. The protocol of the Annual

General Meetingispublished on Yara’s website.

Accordingtoanagreementbetween Yaraand theemployees,thecom­

pany does nothavea CorporateAssembly(Code’sarticle 8). Yara

believesthissupportsamore directcommunicationbetweenshare­

holdersand management,increasesaccountabilityand improvesthe

speed and qualityof decision-makinginthecompany.

NOMINATION COMMITTEE

Yara’sArticlesofAssociationstatethatthecompanyshall haveaNomi­

nation Committee(Code’sarticle7)consistingoffourmemberselected

bytheAnnual General Meeting. TheNomination Committeenomi­

natesshareholder’scandidatestotheBoard of Directors,presentingrel­

evantinformationaboutthecandidatesas well asanevaluationofinde­

pendence,and proposestheremunerationofthe DirectorstotheAnnual

General Meeting. Membersofthecommitteeareelected fortwoyearsat

atime. All fourmembersareindependentoftheBoard and theManage­

ment. In2008,theNomination Committeehad 11 meetings.

BOARD OF DIRECTORS

AccordingtoNorwegiancorporate law,the(non-executive)Board of

Directorsassumestheoverall responsibilityforthecompany,ensures

thatappropriatesteeringand control systemsareinplaceand super­

vises day-to-daymanagementascarried outbythe Presidentand CEO.

The Board’s work followsan annual plan,and it conducts aself

-evaluationeveryyearofits workand procedures, whichispresented to

theNomination Committee. In2008,theBoard held 12meetings.

TheBoard of Directors(Code’sarticle8,9and 11)consistsofsevenmem­

bersafter JørgenOle Haslestad resigned 1 October2008,uponhisappoint­

mentas the Presidentand CEO. TheBoard decided that Haslestad’s

replacementshould beelected at thenext ordinary Annual General

Meeting. Theboard membersareelected foraperiod oftwoyears. Twoout

offourshareholder-elected Directorsare women. TheBoard decided not

toelecta deputychairperson. Inthecaseofthe Chairperson’sabsence,the

Board electsaBoard membertochairthemeeting. All shareholder-elected

membersareindependentoftheManagementand themainshareholders.

Neitherthe Presidentand CEO,noranyothermemberoftheExecutive