Annual Report 2020 Fjord Line AS

Annual report 2020 ⁄⁄ Fjord Line

NAVIGATING THROUGH A PANDEMIC ANNUAL REPORT 2020

01 ⁄⁄ CEO LETTER

Navigating through a pandemic Looking back at 2020, it was in many ways a year of unforeseen significant challenges and changes to our business. The onset of the coronavirus (COVID-19) pandemic caused 2020 to be an unprecedented year.

Throughout 2019 and in the first 10 weeks of 2020, Fjord Line delivered the strongest performance including growth in our history and was on a strong development path, while the rest of the year brought traffic to a near halt caused by the global COVID-19 pandemic. The pandemic impacted all of Fjord Lines businesses and during this challenging year, our focus was within the strict government-imposed travel restrictions to secure a responsible business continuity for our customers, and the health and safety of our employees and customers.

Despite the challenges presented by travel restrictions, which essentially locked down all travel since March 2020, Fjord Line maintained an essential and critical ferry operation - operating in freight-only mode - between Kristiansand in Norway and Hirtshals in Denmark. During the peak summer season, the Group was able to resume close to normal operations on the routes between Norway and Denmark, however with a 30 percent self-imposed capacity reduction to be compliant with guidelines and regulations to prevent the spread of the Corona virus.

The pandemic has emphasised the key role Fjord Line plays in society by providing services between coastal communities and we are proud of the role we play in connecting Norway and Europe, also during the global pandemic. Fjord Line has also taken necessary and critical actions to reduce the spread of the virus in line with the advice from health authorities.

I want to thank Fjord Line’s employees for your courageous response to the global pandemic, and the

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crisis and challenges it created for our company. We have made changes to the way we operate, and our employees have adapted to the changes. They have demonstrated courage and commitment - and always with a strong focus on securing the health and safety of our customers and colleagues. Your ability to continuously being innovative and develop our business in a fast changing and challenging business environment is crucial when we now take Fjord Line successfully to the next level.

On behalf of Fjord Line, I want to extend my gratitude to our stakeholders for your crucial commitment and confidence in Fjord Line – owners, long-term lenders, customers, business partners, and governments – especially through the critical COVID-19 compensation schemes. Our stakeholders continuous support is crucial when steering Fjord Line successfully through the next phases of the global pandemic and to secure the future development of the company.

The year of 2020 has shown that Fjord Line is a viable and resilient ferry company, and an important employer in the Nordic labour market, able to respond to changes in the greater business environment, our customers’ demands and adapt to circumstances that affect our operations.

The global pandemic and the consequences continue to play a significant role for Fjord Line in 2021 and we will continue to take necessary actions to reduce the spread of the virus. Our priority remains the health and safety of our employees, our customers, and the environment.

Annual report 2020 ⁄⁄ Fjord Line

CONTENT 01 CEO LETTER 02 THIS IS FJORD LINE Fjord Line in Brief Our vision and mission Responsible Maritime Travel 03 PREPARING FOR A NEW NORMAL 04

The ambition for Fjord Line is very clear; we are prepared and will be ready to operate and deliver high quality customer services to meet the market demand as ferry travel begins to recover.

Fjord Line was well positioned before the global pandemic and continue to be well positioned for the future especially by: • Strong and committed owners with large ambitions for the future development of Fjord Line.

• Engaged employees focused in delivering strong, high quality, and unique sustainable customer experiences and value creation.

• Market leading position within environmental and sustainable solutions including modern tonnage and strong strategic focus on responsible business operations – ESG (Environmental, Social and Governance).

We want to continue to be a leading contributor towards sustainable and innovative ferry operations to the benefits of our customers, stakeholders and our society.

Welcome onboard!

Thank you for your continued support.

Brian Thorsted Hansen, CEO

A DIFFERENT KIND OF RESPONSIBILITY Material Aspects Environmental Social Governance Metrics Risks and opportunities 05 REPORT FROM THE BOARD OF DIRECTORS 06 CONSOLIDATED FINANCIAL STATEMENTS 07 FJORD LINE AS FINANCIAL STATEMENTS 08 AUDITORS REPORT

02 ⁄⁄ THIS IS FJORD LINE

We aim to become ­ Scandinavia's best, most loved and profitable ferry company

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Annual report 2020 ⁄⁄ Fjord Line

5

02 ⁄⁄ THIS IS FJORD LINE

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Annual report 2020 ⁄⁄ Fjord Line

THIS IS FJORD LINE FJORD LINE IN BRIEF Fjord Line is Norway’s second largest shipping company for international passenger traffic and freight transportation between Norway, Sweden and Denmark. The company was founded in 1993 and is a relatively young ferry company on a significant growth path with a 21% market share (2019).

ferry line - operating in freight-only mode between Kristiansand and Hirtshals. Through this important operation, Fjord Line have kept a vital supply chain and sea bridge between Norway and Continental Europe open. We see this as an important part of our societal responsibility.

The global COVID-19 pandemic affected Fjord Line significantly in 2020. The strict government-imposed travel restrictions throughout Norway, Sweden and Denmark significantly impacted the shipping companies’ operating international passenger traffic. In Fjord Line, our main focus in our operations during the pandemic have been to secure the health and safety of our employees and customers.

In a normal year (2019) our 650 employees transport over 1.4 million passengers and 65.500 freights units annually. In 2020, passenger traffic was reduced to around 500,000 passenger and freight reduced to 50.200 units.

The pandemic impacted all of Fjord Line’s businesses and during this challenging year our main priorities have been – and continue to be – to secure a responsible business continuity for our customers. We will develop our business in order to remain a viable and resilient company.

During these challenging and extraordinary times, Fjord Line maintained an essential and market critical

Fjord Line operates the ferries MV Bergensfjord and MV Stavangerfjord, which sails between Bergen, Stavanger, Hirtshals and Langesund, MV Oslofjord which sails between Sandefjord and Strömstad, and the newly built HSC Fjord FSTR between Kristiansand and Hirtshals.

The Fjord Line Group is headquartered in Egersund.

The company has sales offices in Langesund, Bergen, Stavanger, Kristiansand and Hirtshals in Denmark.

The marketing department is located in Sandefjord.

OUR VISION AND MISSION Fjord Line’s vision is to become Scandinavia’s best, most loved and profitable ferry company. Fjord Line is based on sound business values. Everything we do is with vigour, responsibility, respect, and commitment and we strive to give our customers a real sense of joy, passion, and outstanding service every time.

Fjord Line’s mission is to move people; not just physically, but also emotionally. However, moving people has been difficult in 2020. At the peak of the crisis, 90 percent of our business disappeared. Despite this, Fjord Line has proven its resilience and maintained our commitment to deliver safe and sustainable ferry operations.

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02 ⁄⁄ THIS IS FJORD LINE

Through strong efforts to develop a modern fleet, Fjord Line will continue to evolve to meet the expectations of both customers, stakeholders, and society

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Annual report 2020 ⁄⁄ Fjord Line

RESPONSIBLE MARITIME TRAVEL Fjord Line is committed to use and currently take advantage of new technology to meet requirements for lowering our CO2-emissions. Through strong efforts to develop a modern fleet, Fjord Line will continue to evolve to meet the expectations of both customers, stakeholders, and society.

In 2021, Fjord Line's brand-new catamaran, HSC Fjord FSTR, will start operation between Kristiansand and Hirtshals. The ship replaces HSC Fjord Cat and operates with 32% less GHG emissions per passenger. With its 2 hours and 15 minutes across Skagerak, HSC Fjord FSTR is the fastest alternative at sea between Norway and Continental Europe. The capacity is 1200 passengers and more than 400 vehicles, a doubling in capacity compared to HSC Fjord Cat. Our sister ships, MV Bergensfjord and MV Stavangerfjord, are powered by eco-friendly LNG (Liquid Natural Gas). This innovative technology provides significant environmental benefits. The exhaust fumes from the on-board LNG-engines has virtually no sulphur and soot content and consequently emit no visible smoke. Compared to diesel engines, carbon emissions are 23% lower when using LNG-engines, and nitrogen oxides (NOx) emitted are reduced by as much as 91%. This eco-friendly technology also contributes to significantly less noise than from large diesel-engines. Due to this new and eco-friendly technology, the sister ships received the highest ESI (Environmental Ship Index) in 2015.

This was achieved in competition with approximately 3,200 other ships.

steam-generated energy. Thus, MV Bergensfjord and MV Stavangerfjord cover their electricity needs for cabins and public spaces and could hardly have a smaller carbon footprint!

An important priority for Fjord Line within responsible maritime travel is also to continue to be prepared for the future needs and demands - including to be ahead of future expected emission regulations. This is one of the reasons why, in March 2015, we started using one of the world’s most modern fuel plants in Risavika Port outside Stavanger. The system consists of a 650 m long underground pipeline transporting the eco-friendly LNG fuel from the factory via the terminal in Risavika to our ships.

This process almost eliminates carbon emission from the LNG fuel transportation and also reduces time spent in the harbour by each of our ships. Fjord Line is the first ferry company in Europe to supply its ships with LNG in this way.

During the pandemic, extensive work has been carried out on the sister ships. We have completed an energy saving program that reduces emissions by 5 percent on MV Bergensfjord and MV Stavangerfjord.

We are strongly committed to continue our investment in energy efficiency and eco-friendly services to meet the market demands and secure our market leading position within environmental, sustainable, and high-quality services.

The sister ships produce their own electricity by converting waste heat from the exhaust gas into

ENVIRONMENTAL BENEFITS by choosing to travel with Fjord Line instead of by road

100% less SO2

98%

less PM

91%

less NO2

23%

less CO2

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02 ⁄⁄ THIS IS FJORD LINE

2018

2019

2020

Financials ⁄⁄ EBITDA

-46%

MNOK 400 350

⁄⁄ EBT

335,5

-279%

⁄⁄ REVENUE MNOK 1600

424,9

-55%

1613,0

1529,3

1400

300

1200

250

1000

200

800

729,0

600

150

231,2

100

400

78,8

200

50

14,2

0

-141,1

0

Volumes 2018

2019

2020

1 386 700

1 429 900

484 500

Cars

417 000

436 800

149 400

Freight units

66 200

65 500

50 200

3 330

3 441

1 676

Passengers

Crossings

-66%

-66%

-23%

-51%

100% 75% 50% 25%

Market shares 25%

-1,0%

1,0%

30% 29,5

29,3

20%

30,3

30,9

2,1%

21,0

21,2

23,3

23,9

31,8

30,8

24,4 -3,2% 21,2

15% 10% 5% 0% CARS

PASSENGERS

FREIGHT UNITS

CROSSINGS

The market is defined as all volumes on routes between Norway-Denmark and Norway-Sweden. Source: Shippax

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Annual report 2020 ⁄⁄ Fjord Line

MV Bergensfjord

FJORD LINES'

ROUTES AND WESSELS MV Stavangerfjord

HSC Fjord Cat

Bergen Oslo l sold Wesse ust 2020! g u in A

Sandefjord Stavanger

Langesund

HSC Fjord FSTR

Kristiansand essel New v er 2021! m sum

Strømstad

Hirtshals

MV Oslofjord

2h

BERGEN–STAVANGER

……………… 5h

STAVANGER–HIRTSHALS HIRTSHALS–LANGESUND

………

SANDEFJORD–STRØMSTAD

6h

12h

30min

11h 30min

………

KRISTIANSAND–HIRTSHALS

4h

4h 30min

… …

2h 15min 2h 30min

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02 ⁄⁄ THIS IS FJORD LINE

OUR SHIPS FACTS MV Stavangerfjord/ MV Bergensfjord

INFORMATION

MV Oslofjord

Built SF 2013/ BF2014 Guests

214

Crew Range – fully bunkered

1350 1200

4

–

–

1370

–

–

600 370 410 1400

1740

1818

70–100 70 22 2500 NM

2350 NM

780 NM

Length

170 m

134 m

109 m

Width

28 m

24 m

30,5 m

Height

42 m

41,2 m

29 m

Draught

6,5 m

5,7 m

3,75m

30.000 PS

15.700 PS

51.495 PS

25 knots

18 knots

40,5 knots

Horse power Maximum speed Standard speed Travel time Gross tonnage Currency MMSI number

21,5 knots

16 knots

37 knots

from 4,5–18 hrs

2 hrs 30 min

2 hrs 15 min

25.000

17.851

11.888

DKK NOK DKK 219347000/219348000

219002929

Commander Buffet

362 seats / 620m2

130 seats / 385m2

Oasis Garden Café

139 seats / 178m

314 seats / 590m –

2

220574000 –

2

Grieg Brasserie

62 seats / 100m –

–

Fjord Lounge

189 seats / 390m2 –

–

Pier 42 Sportsbar

104 seats / 105m2 –

–

2

Fjord of Coffee

–

286 seats / 430m2 –

Fjord of Beach Bar

–

42 seats / 100m2 –

Sun Bar

–

286 seats / 465m2 –

Sky Bar

–

120 seats / 400m2 –

Bungalow snacks and drinks

–

202 seats / 360m2 –

Lounge

–

–

184 seats / 420 m2

Bistro

–

–

186 seats / 345 m2

Café

–

–

404 seats / 575 m2

1800m2

280 m2

Taxfree 500m2 Casino Terrace on deck 3 Conference Area

Dog Hotel – cages

Kids Area

Yes Yes – 58 seats / 170m2 –

–

5 rooms / 56–154m2 – 4 medium / 70x100x75 4 large / 100x100x75 4 extra large / 120x100x160

–

4 cages / 1m3 –

Yes Yes

Yes

Photo: Fotografen AS.

Loading meters car deck

12

1200

370 – –

Beds

FACILITIES

2021

1350

Cabins

Cars

RESTAURANTS

1993/2015

1500

Seats Handicap cabins

GENERAL

HSC Fjord FSTR

Annual report 2020 ⁄⁄ Fjord Line

WE

ARE

GREEN

OVERNIGHT CRUISE MV STAVANGERFJORD

DECK 7 – SKY BAR

Deck 7 Deck 6

Deck 10

DECK 9 – SUN DECK & CABINS

DECK 5 – KIDS ZONE, BUNGALOW & TAXFREE SHOPPING

Deck 5

Deck 9

DECK 8 – CABINS

DECK 4 – SUN BAR, OUTSIDE AREA & TAXFREE SHOPPING

Deck 4

Deck 8

Deck 3

Deck 7

Deck 2

Deck 6

Deck P

Deck 5

Deck 1

Deck 4

DECK 10 – OUTSIDE AREA, BAR & CABINS

DECK 7 – RESTAURANTS, CASINO, KIDS ZONE, RECEPTION RECEPTION,&BARS AND ENTERTAINMENT DECK 3 – KIDS ZONE, BAR, CASINO, RESTAURANTS DECK 6 – TAXFREE SHOPPING DECK 5 to 3 – CAR DECK DECK 2 to 1 – CAR DECK

Deck 3 Deck 2 Deck 1

WE

ARE

GREEN

OVERNIGHT CRUISE MV BERGENSFJORD

DECK 3 – RESTAURANT, KIOSK

Deck 3

DECK 2 – TAXFREE SHOPPING, CAFÉ

DECK 10 – OUTSIDE AREA, BAR & CABINS

Deck 2

Deck 10

Deck 1

DECK 1 – CAR DECK DECK 9 – SUN DECK & CABINS

Deck 9

DECK 8 – CABINS

Deck 8

DECK 7 – RESTAURANTS, CASINO, KIDS ZONE, RECEPTION, BARS AND ENTERTAINMENT

Deck 7

DECK 6 – TAXFREE SHOPPING

Deck 6

DECK 5 to 3 – CAR DECK

Deck 5 Deck 4 Deck 3 Deck 2 Deck 1

DAY CRUISE MV OSLOFJORD

DECK 7 – SKY BAR DECK 3 – RESTAURANT, KIOSK DECK 2 – TAXFREE SHOPPING, CAFÉ

Deck 7

DECK 5 – KIDS ZONE, BUNGALOW & TAXFREE SHOPPING DECK 4 – SUN BAR, OUTSIDE AREA & TAXFREE SHOPPING

DECK 1 – CAR DECK DECK 3 – KIDS ZONE, BAR, CASINO, RECEPTION & RESTAURANTS

Deck 6 Deck 3 Deck 5 Deck 2 Deck 4 Deck 1 Deck 3 Deck 2

DECK 2 to 1 – CAR DECK

Deck P Deck 1

DAY CRUISE HSC FJORD FSTR

GREEN

WE

ARE

BRIDGE DECK UPPER DECK DECK 10 – OUTSIDE AREA, BAR & CABINS

MEZZANINE DECK MAIN DECK

DECK 9 – SUN DECK & CABINS DECK 8 – CABINS

Deck 10 Deck 9 Deck 8

DECK 7 – RESTAURANTS, CASINO, KIDS ZONE, RECEPTION, BARS AND ENTERTAINMENT

Deck 7

DECK 6 – TAXFREE SHOPPING

Deck 6

DECK 5 to 3 – CAR DECK

Deck 5 Deck 4 Deck 3 Deck 2 Deck 1

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03 ⁄⁄ PREPARING FOR A NEW NORMAL

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Annual report 2020 ⁄⁄ Fjord Line

PREPARING FOR A NEW NORMAL

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03 ⁄⁄ PREPARING FOR A NEW NORMAL

We aim to give our customers a real sense of joy, passion, and outstanding service – every time

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Annual report 2020 ⁄⁄ Fjord Line

CUSTOMER EXPERIENCES The government-imposed travel restrictions put an abrupt stop to Fjord Line’s passenger traffic and operation. The COVID-19 pandemic required us to make changes. However, we have spent the year purposefully to be best equipped for a reopening of society and our passenger travel services, and to improve the customer experience.

An important priority in 2020 was to serve our customers and stakeholders as well as possible. We had to find and develop completely new ways to communicate and meet our customers, especially through digital channels.

In general, we believe the pandemic has made customers more conscious decision makers. Even more than before, customers now prefer businesses that demonstrate responsible conduct and instil trust through their actions.

The impact of COVID-19 on customer behaviour has been immediate and public safety has become a top priority for companies and costumers alike. We believe that a good customer experience includes a continued focus on individual health and safety requirements.

The key to be preferred – and loved – is the experiences our customers gain through the entire customer journey. The experience – from their impressions of Fjord Line online, booking, through their voyage to their destination, onboard, and even after they have returned home – must be great and unique – and create value for our customers. We work hard to continuously improve our customers’ journey and we aim to give our customers a real sense of joy, passion, and outstanding service - every time.

Our loyal customers choose to travel with us again and again which make us optimistic for the future.

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03 ⁄⁄ PREPARING FOR A NEW NORMAL

BRAND IDENTITY The further development of a strong brand is a central part of our strategy. We aim to be the preferred choice for our customers.

For Fjord Line, a strong brand identity means that we: • Communicate our business personality and shape our customers’ perceptions of who we are • Project the expectations and promises we extend to our customers in terms of quality, service, reliability, and trustworthiness • Create trust and loyalty from those who do business with us • Help the audience differentiate us from our competitors • Positively influence our customers’ purchasing decisions

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We aim to be the preferred choice for our customers.

During the pandemic we have had less physical contact with our customers than before and consequently we have strengthened the digital dialogue with our customers and partners, for instance by involving our customers via social media and newsletters.

Annual report 2020 ⁄⁄ Fjord Line

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03 ⁄⁄ PREPARING FOR A NEW NORMAL

CONNECTING NORWAY AND CONTINENTAL EUROPE Being a link between Norway and Europe has been important throughout Fjord Line's history. We transport all types of cargo daily - from lorries, semi-trailers and trailers to imported cars.

Offering efficient, precise, flexible and tailored high-quality sea transport is an important part of our business. We take care of the paperwork and provide the service that our customers deserve - they are very important to us and to the business community in Norway and Europe.

The importance of freight traffic, when boarders has been closed during the pandemic, has been reinforced.

Fjord Line has been able to offer a reliable freight operation to keep an essential supply line between Norway and Continental Europe open even when the pandemic placed restrictions on passenger traffic.

Trucks with fish have taken the sea route to the Continent, fruit, vegetables, steel and other goods have found their way to Norway through the pandemic with our freight-only mode operations between Kristiansand in Norway and Hirtshals in Denmark.

As a freight shipping company, we have an important social responsibility in doing our best to keep vital goods flowing also during a global pandemic.

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Bergen Oslo Sandefjord Stavanger

Langesund Kristiansand

Strømstad

Hirtshals

Annual report 2020 ⁄⁄ Fjord Line

We are proud of the role we play in connecting Norway and continental Europe.

GOODS

Machine, Vehicles ect.

Other Stone, Gravel, Minerals, Cast ect.

8%

Other

Meat, food, feed ect.

34%

10%

2020

tonns

Fish 18%

Building matreials

4 1

52 722

8

Glass

4 853

1

Paper

22 783

4

Furniture

27 390

4

Building materials

64 532

10

–

0

1 589

0%

Wood

29 653

5%

Fish

109 201

18

Waste

17 145

3

Fruit, Vegables

27 860

4

Animal feed

16 923

3

Flowers, Plants

27 379

4

Meat, food, feed ect.

Steel, Metal ect.

0

Machine, Vehicles ect.

Animals

10%

84 25 572 7 678

Moving goods ect.

18%

%

Concrete, Cement ect

Groupage

623 592

Tonns 2020

555

0

62 440

10

Oli, asphalt ect.

12 639

2

Steel, Metal ect.

112 594

18

623 592

100

TOTAL

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03 ⁄⁄ PREPARING FOR A NEW NORMAL

DEVELOPING OUR PEOPLE, BUSINESS AND PRODUCTS Based on our cargo customers’ and passengers’ needs, we continuously innovate to offer high value products and services.

Having been pioneers within our industry with the use of Liquid Natural Gas (LNG) fuel we see the value our customers place on more sustainable shipping. However, we will not stop at that, and we are currently working on goals and strategies that make sure we operate according to the 1.5-degree goal and IMO’s climate ambitions. This will have implications for our operations and investments and will be appreciated by our customers.

In 2020 we have performed extensive maintenance on our vessels - to improve the customer experience. When ships have been in layup, we have seized the opportunity to upgrade both the interior and the exterior; windows have been replaced, the ships have been painted inside and out, interior on board has been refreshed, cabins have received new furniture and renovated bathrooms, and we have made major alterations to our top deck on both MV Stavangerfjord and MV Bergensfjord. Our guests can now experience our new Skybar with more seating, bar and grill.

We have worked to uphold a good dialogue with our employees, including those laid off or put on furloughs during the year 2020. Through partnerships with trade unions and local educational institutions, we have created nearly 200 course activities. 2020 has been a strong year in terms of competence development, which we are convinced will translate to an even better experience for our customers in the years to come.

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Annual report 2020 ⁄⁄ Fjord Line

474

EMPLOYEES

4

SHIPS

Travelling with Fjord Line should always be safe.

During the short-term reopening of passenger transport in the summer of 2020, Fjord Line had a strong focus on onboard infection control. Vessels and terminals were MyCare-approved by DNV-GL, so that our guests could travel safely with Fjord Line and so that our employees would be safe at work. The approval means that all our routines, both on board and at check-in and disembarkation, have been carefully reviewed and considered as meeting the rigorous standard. In addition to following the guidelines and instructions set by the health authorities, extra cleaning measures were added in all of Fjord Lines customer service points on land and at sea.

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03 ⁄⁄ PREPARING FOR A NEW NORMAL

The state-of-the-art high-tech vessel will operate the route between Hirtshals and Kristiansand

Fjord Line’s brand-new catamaran HSC Fjord FSTR was delivered in February 2021. The stateof-the-art high-tech vessel will operate the route between Kristiansand and Hirtshals and will double the capacity on the fastest sea route between Norway and Denmark with its 2 hours and 15 minutes across the Skagerrak.

The experience on board has also been significantly improved compared to HSC Fjord Cat. Passengers can choose between three different restaurants, make use of a separate children's area and enjoy a larger duty-free shop.

The ship is built with several innovative features that improve both its seaworthiness and the guests' comfort on board. For example, HSC Fjord FSTR has a new hull shape that minimizes fuel consumption and also offers a smoother journey when sailing across the Skagerrak.

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FACTS HSC FJORD FSTR Horsepower: 51.495 PS Knots: 37 Lenght: 109 meter Width: 30,5 meter Max passengers: 1 200 Maximum number of cars: 410 Transit time: 2 hours and 15 minutes

Annual report 2020 ⁄⁄ Fjord Line

DIGITAL MARKETING In Fjord Line we believe that investing in our customer relationships in times of difficulty will be repaid with customer loyalty. Research has shown that customers are more conscious in their decision-making and increasingly pick brands they deem trustworthy.

With the lack of physical meetings we’ve used 2020 to become even better at digital marketing to attract new customers and increase loyalty among existing customers. We have improved our search engine optimization (SEO), search engine marketing (SEM), content marketing, content automation, campaign marketing, data-driven marketing, e-commerce marketing, social media marketing, social media optimization, e-mail direct marketing and display advertising.

The Covid-19 pandemic has also amplified the need for easy access to services and information for our customers, and we have used social media and newsletters to maintain a robust communication line with them and other stakeholders during the pandemic. Making sure that all questions are responded to quickly and unambiguously has been an important priority for us this year.

Fjord Club is our way of appreciating those who like to travel with Fjord Line. The number of members in Fjord Club has increased during the pandemic. Our Fjord Club members are our most loyal customers, and we constantly strive to improve our offerings to these customers with the best products at the best terms. Norwegians are by far the largest group, but other nationalities are growing rapidly. With an increase in digital communication to the international market, the number of members from Continental Europe is expected to grow.

FJORD CLUB MEMBERS ALMOST 500 000 PER 31.12.2020

70%

NORWAY

11%

DENMARK

11%

GERMANY

4%

NETHERLANDS

4%

OTHERS

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04 ⁄⁄ A DIFFERENT KIND OF RESPONSIBILITY

Our single most important contribution to society this year was to take part in stopping the pandemic while continuing the most essential of our activities.

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Annual report 2020 ⁄⁄ Fjord Line

A DIFFERENT KIND OF RESPONSIBILITY

27

04 ⁄⁄ A DIFFERENT KIND OF RESPONSIBILITY

ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE At Fjord Line we are committed to do our part in curbing global temperature increase to 1.5 degrees and to be a partner to society. Greener and responsible shipping has the potential to reduce emissions from road and air-travel, provide secure and inclusive jobs and contribute to the economy for both society and the owners. 2020 has shown that our operations play a key role in keeping society running, too.

Our single most important contribution to society this year was to take part in stopping the pandemic while continuing the most essential of our activities.

Despite strict infection control measures, we were able to operate a transportation route to and from continental Europe through Hirtshals in Denmark and Kristiansand in Norway.

MATERIAL ASPECTS We focus on what matters the most.

Being a provider of sustainable transportation means analyzing our operations to find the sustainability aspects that matters the most to our business and stakeholders. Through stakeholder dialogue we ensure that a diverse set of perspectives and needs are voiced and understood. Fjord Line’s key stakeholders include employees, customers, communities around our harbors and destinations, suppliers, business partners, regulators, lenders, and owners.

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With the reduced activity at sea came the need for furloughs and permanent lay-offs to reduce our cost base and keep the company afloat. As a responsible employer we provided extensive training to our furloughed and laid off staff, nearly 200 different training sessions, in various highly useful skills.

While our ships were sailing a lot less this year, we did not halt our focus on the environment. We took measures to reduce fuel consumption through the continuation of the Group’s energy saving program.

Already being a leader within our industry on LNG in half of our fleet, we are now positioning ourselves for the next step in Fjord Line’s ESG journey.

Material aspect

Description

Climate change

Greenhouse gas emissions Energy efficiency

Air quality

Emissions to air

Discharge to sea

Spills, ballast water, gray and black water.

Resource management

Materials use, waste and recycling

Health, safety and wellbeing

Personnel and customer safety Employee training and development Health and working environment Infection risk / Covid-19 Employee diversity, inclusion, and equality

Shared value

Economic value generation Employment Business ethics

Annual report 2020 ⁄⁄ Fjord Line

ENVIRONMENTAL Fjord Line was an early adopter of Liquid Natural Gas (LNG) technology and a pioneer within green shipping, but we need to push further to reduce our impact even more.

PIONEERS IN SUSTAINABLE FUELS Our fleet has class-leading sustainability profile. MV Bergensfjord and MV Stavangerfjord run on Liquid Natural Gas (LNG) which have 23% lower carbon emissions when compared to diesel engines. Nitrogen oxides (NOx ) emissions from these vessels are as much as 91% lower and emissions from Sulphur (SOx) and soot are virtually eliminated. These ships are loaded with fuel in Stavanger in an environmentally friendly manner. LNG is taken from a 650-meter underground pipe directly from the power plant to the terminal and onto our ship. This method reduces spills and avoids the use of trucks to transport the fuel. This method also means the ships can fuel at very high flowrates reducing the time spent in harbor which allows us to reduce fuel consumption during the voyage.

HSC Fjord FSTR and MV Oslofjord run on Marine Gasoil (MGO) which emits considerably less sulphur emissions than traditional marine fuels such as Heavy Fuel Oil (HFO).

In DNV GL’s report “Assessment of selected alternative fuels and technologies” from 2019 LNG is highlighted as one of the most promising short term fuel solutions for the maritime sector, along with Liquefied Petroleum Gas (LPG), methanol, biofuel and hydrogen. LNG has both less CO2 emissions and less NOx, with no SOx emissions, with very low particle emissions and is the only fuel that is both widely available and sells at an advantageous price point. DNV writes that LNG is “the cleanest fossil fuel available today”.

To be able to meet the goals of the International Maritime Organization’s (IMO) of 50% reduction in GHG emissions compared to 2008 levels we need even greener fuels than LNG. The natural step for Fjord Line is to start exploring next generation fuels – carbon neutral fuels. One of the alternatives we are looking into is biogas. In December 2020 we announced a joint venture to produce liquid biogas (LBG) in Denmark, right next to our harbor in Hirtshals. The facility would be able to serve both trucks and ships with liquid biogas and be a critical enabler for the transition to renewable fuels for the transport sector. For us to be able to meet our high ambitions of being a leader within sustainable shipping this is exactly the type of innovation we like to be part of creating.

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04 ⁄⁄ A DIFFERENT KIND OF RESPONSIBILITY

HSC Fjord FSTR has an innovative hull design that reduces drag and fuel consumption.

ENERGY EFFICIENCY Relying on the right type of fuel is of course the most important factor in reducing emissions of both GHGs and air pollutants. Once the best type of fuel has been chosen, we must also ensure that the consumption is as low as possible That is why we started an energy efficiency program in 2018 that has seen good results. In 2019 MV Bergensfjord was fitted with an AI solution that aids the captain in making the most environmental, economic, and comfortable journey between ports.

The system has helped us initially reduce fuel consumption by 5% on MV Bergensfjord. In late 2019 Fjord Line installed the same system on MV Stavangerfjord and expect to see similar results when normal sailing resumes.

MV Bergensfjord and MV Stavangerfjord are both fitted with on-board power stations running on waste-heat recovery. This provides all common areas and cabins with energy without increasing fuel consumption.

MV Oslofjord relies on land-based power when in harbor in Sandefjord. MV Bergensfjord and MV Stavangerfjord do not need any type of land-based power as they are in continuous operation. HSC Fjord FSTR connects to land-based power in Kristiansand.

When Fjord Line ordered HSC Fjord FSTR it was designed with best-in-class technology, including an innovative hull design that reduces drag and fuel consumption. The capacity for people and cargo of HSC Fjord FSTR is also considerably higher than the vessel it replaces, HSC Fjord Cat. The result is an impressive 32% reduction in emissions per passenger compared to HSC Fjord Cat.

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Fjord Line contributes towards Sustainable Development Goal number 7, “Affordable and Clean Energy” and number 13” Climate action” by using cleaner fuels, investing in new types of fuel, and reducing energy consumption in our operations. Moving towards a world that relies mostly on renewable energy is essential to protect human wellbeing and ensure sustainable lives for all. At Fjord Line we are proud to say we are pioneers in this field.

Fjord Line contributes towards Sustainable Development Goal number 3, “Good Health and Well-Being”, by reducing the amount of air pollutants from our ships.

In 2020, an additional and immediate focus became to help stop the spread of the COVID-19 disease. Good health is fundamental to good lives: our employees, customers, and humans in general. It is in our best interest to do our part to contribute towards the well-being for all.

Annual report 2020 ⁄⁄ Fjord Line

PROTECTING THE OCEANS AND REDUCE WASTE Protecting the oceans is a primary concern for Fjord Line.

All wastewater and sewage is handled according to the most rigorous standards. Fjord Line is complying with the International Convention for the Prevention of Pollution from Ships (MARPOL). With MV Bergensfjord and MV Stavangerfjord we have gone beyond the MARPOL convention and make sure that all wastewater and sewage goes through an approved treatment system before being released. With MV Oslofjord all wastewater and sewage is collected and handled on shore.

We have a continuous focus on reducing the food waste in our onboard restaurants. For example, we have brought down the volume of uneaten food by encouraging our travelers to only help themselves with what they can eat in a nice and friendly manner.

Food waste is being reduced in the galleys as well.

Other waste, such as single use plastics and packaging is also being scrutinized. However, in 2020, single use items were used as part of infection control measures.

We collect, sort, separate and take all solid waste to shore for adequate handling after arrival. In general, we are recycling approximately 20% of all our solid

Fjord Line contributes towards Sustainable Development Goal number 14, “Life Below Water”, by reducing emissions to the ocean, reducing the amount of solid waste we produce, recycle what we can and process what remains on land. Debris and pollutants at and under the ocean’s surface are detrimental to life in the sea.

waste. Solid waste includes everything from steel to packaging and cardboard.

WELCOMING NEW REGULATION Good regulation that ensures equal and predictable business landscape is something we welcome. Fjord Line is monitoring the finalization of the new energy efficiency regulation (EEXI) that will enter into force in 2023. Our goal is of course that all our vessels will be within the requirements. Based on the draft specification and our indicative measurements we are well positioned to handle the new regulations.

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04 ⁄⁄ A DIFFERENT KIND OF RESPONSIBILITY

SOCIAL Our social focus in 2020 has been significantly influenced by Covid-19. The pandemic brough with it three highly important tasks for Fjord Line; to help stop the pandemic, keep vital supply chains open and support our staff through difficult times.

STOPPING THE SPREAD OF THE VIRUS Job number one during the pandemic has been to help stopping the spread of the corona virus through implementing infection control measures according to government regulation, advice, and best practice.

We have had no major outbreaks amongst our passengers, crew, or staff.

Fjord Line’s ships and terminals were MyCare-approved by DNV-GL in 2020. The framework has been developed to “support companies in assessing, managing and mitigating infection risk in their management systems, business processes and operations”.

The framework serves as an independent assurance

that our routines for infection control are solid and provides confidence for customers and other stakeholders that we take infection risk seriously.

To support infection control during the pandemic we deployed COVID-19 hosts onboard our vessels.

They were there to ensure the safety of our passengers and the compliance with strict infection control measures. Our customers gave us positive feedback on their presence onboard. Despite high demand over the summer, we also imposed a 30% capacity reduction to further reduce the risk of an outbreak onboard.

KEEPING VITAL GOODS FLOWING When the governments introduced lockdowns that virtually eliminated passenger transport between Norway and Denmark, we consolidated our operations to one vital supply-line between Hirtshals and Kristiansand / Stavanger to maintain a critical transport corridor.

Annitta, who has been working with procurement at Fjord Line, took a class in “administrative IT”. The course increased her proficiency in Excel to a high level. This will improve her work within Masterdata, and IT systems used within our procurement department.

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Annual report 2020 ⁄⁄ Fjord Line

SUPPORTING OUR CREW AND STAFF Despite our efforts to retain staff as long as possible it unfortunately became necessary to lay off personnel when the revenue base practically disappeared.

In conjunction with this, Fjord Line arranged ca. 200 competency development sessions for our furloughed and laid-off staff. The sessions were carried out in collaboration with unions, local training institutions and regional labor councils.

SAFETY AND SICK LEAVE Fjord Line is running a program called “No-blame open minded safety culture“ and employs a very low threshold for registering accidents. In 2020, 27 work accidents were registered. The majority of accidents were on car deck and in the galley. Of these accidents, zero accidents were considered as serious.

These numbers are significantly lower this year compared to last year’s (43 incidents) and reflect reduced operational activity due to the pandemic.

Morten normally works as a waiter in our onboard restaurants and bars. When the pandemic hit he took on new additional tasks. As one of our many diligent Covid-19 hosts he has made sure that all infection control mechanisms and rules were respected onboard. With a friendly voice (and smile behind the facemask) he has helped our customers maintain proper distancing and made sure they disinfected their hands. In addition, Morten has ensured frequent disinfection in high-traffic areas and spots onboard. But most of all, Morten has answered many questions and provided our guests with the confidence to enjoy their voyage despite the ongoing pandemic.

Sea- and land-based employees regularly conduct safety and emergency drills including lifeboat drills and evacuation exercises. Functional tests of rescue equipment are regularly carried out onboard the ships. We continuously work to reduce the level of work accidents through training and continuous evaluation of our policies and performance.

The absence due to illness in the Group was 3.56 per cent in 2020 split on 5.23 per cent for seagoing employees and 1,29 per cent for shore employees. This equals an increase of 0.3 per cent points compared with 2019 (3.26 per cent). While there is continuous focus on reducing absence rates, overall absence rates are within targets.

Lars Harry has for a long time wanted a driving license for trucks. As a ship assistant that license gives him the possibility to help driving all the various vehicles onboard; both driverless trucks and through truckmasters.

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04 ⁄⁄ A DIFFERENT KIND OF RESPONSIBILITY

GOVERNANCE At Fjord Line, governance of sustainability topics is integrated with overall corporate governance. The Board of Directors has ultimate responsibility for sustainability and monitors ESG, compliance and HSEQ regularly. Group management is responsible for carrying our operations and development in line with the standards set by the Board of Directors. A separate compliance function is responsible for follow up of compliance and ethics. To ensure independence, the Compliance function reports to the CFO with double line reporting directly to Board of Directors. Fjord Line has several mechanisms in place to manage and monitor compliance with external and internal policies and standards.

MANAGEMENT SYSTEMS The company has a groupwide Safety Management System (SMS) in place. The system is developed in accordance with the international “ISM-code”, to ensure safe management and operation of ships and for pollution prevention. In addition, Fjord Line complies with a number of international regulations aimed at ensuring safe and secure maritime passenger transport.

CODE OF CONDUCT Our code of conduct is founded in human rights as well as the value of diversity and inclusion. It sets out the standards defining how we operate every day and everywhere. The code of conduct governs our relationships with clients, suppliers, stakeholders and each other. It requires all employees to adhere to the highest levels of professional conduct and underpins the reputation and trust Fjord Line commands.

Routines for reporting any breach of our codes of conduct are in place and available for all employees.

Whistleblowers are protected through these routines to ensure that there are no hindrances or risks to file a report.

DIVERSITY AND INCLUSION Fjord Line is continuously working to avoid any form of discrimination based on gender, age, ethnicity etc., and has a zero tolerance for harassment of any kind.

As per December 31st, 2020, the Group had 87 shore based and 236 seagoing staff, representing a total of 237 males and 86 females. Of the Group’s top management comprising nine directors, two are women.

RESPONSIBLE CONSTRUCTION AND SCRAPPING OF VESSELS Ethical and sustainable reuse of our vessels is of importance to us. In2020 HSC Fjord Cat was sold to German shipping company FRS for continued use on the route

Fjord Line contributes towards Sustainable Development Goal number 5, “Gender Equality”, by ensuring equal pay for equal work, work actively against any form of discrimination on the basis of gender, work to balance the workforce with regards to gender, encourage women to take leadership positions and include provisions against harassment in our code of conduct.

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Annual report 2020 ⁄⁄ Fjord Line

Sassnitz-Ystad. When we ordered HSC Fjord FSTR we made sure that it was built according to the Hong Kong international convention for the safe and environmentally sound recycling of ships. This ensures that the ship will not pose any unnecessary risk to human health, safety and to the environment when it reaches end of life.

AVOIDING CORRUPTION Fjord Line has working procedures to reduce the risk of corruption. Corruption is a risk especially related to large procurements. We reduce this risk through our procurement policy that calls for tender processes for large purchases and an approval processes that ensures that all such purchases are evaluated objectively and by several people. The whistleblower function is open for reports on suspected corruption related to procurement or otherwise.

MALES

73%

323 EMPLOYEES 237 MALES ⁄⁄ 86 FEMALES

FEMALES

27%

87 SHORE BASED • 236 SEA GOING STAFF

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04 ⁄⁄ A DIFFERENT KIND OF RESPONSIBILITY

METRICS Topic

Metric / KPI

Unit

Number of passengers Number of freight units Total distance traveled by vessels

Number 12m equivalents Nm

GHG emissions

Gross scope 1 emissions GHG per Nm

CO2-equivalents (metric tons) CO2-equivalents (Kg)

Air quality

NOX emissions SOX emissions

Metric tons Metric tons

Ecological impacts

Number of spills Volume of spills

Number Cubic meters

Water management

Solid waste % recycled

Metric tons %

Lost time accidents >24 h (LTA) Sick-leave Number of employees per 31.12.

Diversity (gender distribution)

Number % Number % women / % men

Number of ordinary board meetings Number of port state control deficiencies

Number Number

ACTIVITY General SOCIAL

ENVIRONMENT

SOCIAL Employee health, safety and wellbeing

GOVERNANCE

Oversight and compliance

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Annual report 2020 ⁄⁄ Fjord Line

2020

2019

2018

484 542 50 176 214 626

1 429 947 65 523 358 534

1 386 720 66 166 342 165

71 976 335

119 500 333

116 537 341

318 6

887 14

851 13

0 0

0 0

0 0

356 28%

770 24%

803 20%

10 3,6% 323 27% / 73%

14 3,3% 580 36% / 64%

10 3,3% 655 37% / 63%

7 4

7 13

7 27

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04 ⁄⁄ A DIFFERENT KIND OF RESPONSIBILITY

We have a continuous focus on reducing the food waste in our onboard restaurants.

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Annual report 2020 ⁄⁄ Fjord Line

RISKS AND OPPORTUNITIES Sustainability risks and opportunities Risk

Increased pricing of GHG emissions

Type

Policy

Term

Mitigation

Short

We have invested heavily in a young fleet with industry-leading sustainability profile. Regulation regarding direct pricing of GHG emissions can potentially change. Such regulation could be quota-based (e.g. ETS) or fee-based (e.g. CO2 fee). Fjord Line follows developments in national and international policy discussions closely

High costs to comply with new environmental regulation

Policy

Medium

We may see national or international regulation imposing stricter environmental regulations. Such regulation could include e.g. EU taxonomy and IMO energy efficiency requirement (EEDI and EEXI). With regards to EEXI, based on preliminary specifications, we anticipate that Fjord Line’s fleet is well positioned to comply with such regulation in the short to medium term, without need for costly modifications

Reduced demand for tourism travel services due to shift in consumer mindset

Market

Medium

Increasing awareness of environmental footprint may impact tourism-related travel negatively. Transparency is critical and we aim to provide good transparency of our environmental footprint.

Type

Term

Response

Product & service

Short

Sea transport often provides a relative advantage over road/air transportation in terms of environmental footprint

Operational

Long

Fjord Line has positive experience from LNG. We now invest in renewable fuels (LBG) and evaluate other alternative fuels from a holistic perspective, including performance, availability, and infrastructure.

Short

Increasing customer awareness of environmental footprint may benefit ferry travel at the expense of long distance travel. In addition, the Covid 19-pandemic may permanently impact traveler preferences. Passenger ferries provide good opportunities to maintain social distancing and may be perceived more safe than other modes of transport.

Opportunity

Modal shift from road/air to sea transport

Renewable fuels and infrastructure

Increased demand for ferry travel due to shifting interest from long haul to short distance travel

Market

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05 ⁄⁄ REPORT FROM THE BOARD OF DIRECTORS

REPORT FROM THE BOARD OF DIRECTORS

40

Annual report 2020 ⁄⁄ Fjord Line

FJORD LINE AS GROUP THE GROUP Fjord Line AS is the parent company in the Fjord Line Group. The Group is Norway’s second largest shipping company in international passenger traffic and freight transportation between Norway and EU. The Group has one of the youngest and most modern and eco-friendly fleets in the cruise ferry segment in Europe. In 2020 the fleet consisted of four vessels all flying the Danish flag. Two of the Group’s cruise ferries undertakes voyages using the environmentally friendly fuel LNG (liquid natural gas), while the other two use MGO (marine gasoil). The Group operates three routes between Norway and Denmark, one route between Norway and Sweden and a domestic route between Bergen and Stavanger. Fjord Line is headquartered in Egersund with operative offices in Hirtshals, Bergen, Stavanger, Kristiansand, Langesund, Sandefjord and Strömstad. Average number of employees (FTE) in the Group during 2020 has been 474 (637 in 2019). With regular and daily departures between seven ports in Norway, Denmark and Sweden, the Group recognizes its important role in the transportation of passengers and goods within Scandinavia and between Norway and the European continent. The global Covid-19 pandemic has had material negative effect on the Scandinavian travel industry and Fjord Line’s operations in 2020. Fjord Line transported 484,500 passengers and 50,250 freight units in 2020 – a significant reduction compared to a normal year. The Groups vision is to be the best, most loved and profitable ferry company in Scandinavia.

Fjord Line aim to achieve this by providing the best experience in every step of the customer journey from booking to destination, further strengthen our positioning and brand awareness and finally continue to be in lead within sustainable and cost and energy efficient operations. Everything we do is with vigor, responsibility, respect and commitment.

BUSINESS SEGMENTS The Groups revenues arises from three main business areas. All ticket revenues within the Group are generated in business area Travel and consists of transport-, cruise-, group-, package-, and conference ticket revenue streams. All onboard revenues are

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05 ⁄⁄ REPORT FROM THE BOARD OF DIRECTORS

With Fjord FSTR, Fjord Line will double its capacity on the crossing between Kristiansand and Hirtshals.

generated within business area Onboard Services and includes revenue streams mainly from the retail and food & beverage operations. Business area Freight generates its revenues from sales and transportation of trucks, trailers, articulated vehicles, specialized or out-sized cargo and on-deck shipments, and from forwarding services.

TONNAGE The cruise ferries MV Stavangerfjord (2013) and MV Bergensfjord (2014) operate the routes between Bergen – Stavanger – Hirtshals and Hirtshals – Langesund. The cruise ferries are both equipped with fuel efficient LNG-engines, which reduce CO2 emissions and drastically reduce pollutant emissions compared to traditional marine fuels. In 2020 the Group completed an energy saving program (ESP) on these two vessels helping reduce emissions even further – by 5% compared to prior to the program’s launch. The Group has used the shutdown during the pandemic to perform maintenance on the vessels, related both to machinery and operation, upgrades of cabins, rebuilding of common areas, painting, replacement of electrical parts such as lights and pumps. The maintenance is well visible to Fjord Line’s customers and will improve the customer experience. The day ferry MV Oslofjord (1993/2014) is customized for the route Sandefjord – Strömstad and was put into operation as the company’s first vessel on the route on 20 June 2014. In January 2018 the tax-free shopping area of the vessel was expanded and improved and today MS Oslofjord has one of the largest tax-free shops on a day route worldwide.

The catamaran HSC Fjord Cat (1998) operated the route Kristiansand – Hirtshals in the summer

42

season 2020. The vessel was sold to the German Shipping Group FRS in August 2020, after 13 years of faithful service under the Fjord Line brand. Fjord Cat will be replaced by the newbuilt high-speed catamaran Fjord FSTR, which was delivered in February 2021.

Fjord FSTR will serve increased customer demand for higher capacity and comfort, enable more departures and longer sailing season, and improve environmental efficiency. With Fjord FSTR, Fjord Line will double its capacity on the crossing between Kristiansand and Hirtshals, both in terms of passenger and car capacity as well as increased capability for freight and heavy transport. Representing a new technological standard, Fjord FSTR is equipped with 16 electric vehicle charging stations and is the first passenger ferry in Norway to offer this.

Annual report 2020 ⁄⁄ Fjord Line

HIGHLIGHTS FROM 2020 The global Covid-19 pandemic has had significant impact on Fjord Line’s business operations throughout 2020. In the first months of the year Fjord Line saw the continued effects of the positive and steady underlying operational improvements for the Group from actions taken in 2018 and 2019. After the Covid-19 outbreak in March 2020, the Group has however experienced increasingly adverse effects of the pandemic. The number of travelers has been decreasing in line with government-imposed travel restrictions and border controls. The management team has throughout the year designed and implemented several extensive measures to adjust the cost base in order to protect the Group’s cash-flow and to secure sustainable operations. These actions

consist among others of temporary changes in Fjord Line’s route network and deployment of vessels, as well as layoff of personnel and other robust cost reductions in order to adjust the cost base to the present market demand.

OUR OPERATIONS IN 2020 The first months of 2020 showed continued improvements both on the revenue and cost side, following the strong development from previous years. Bookings for the summer high season were solid and indicated a record high activity level. However, as the pandemic broke out in March, Fjord Line experienced material adverse effects. As of 17 March, The Group had cancelled all ordinary passenger sailings as a direct consequence of the pandemic

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05 ⁄⁄ REPORT FROM THE BOARD OF DIRECTORS

and restrictions imposed by national authorities. To ensure the flow of goods between Norway and EU, the Group established an emergency route, primarily for cargo, with two daily departures in each direction between Kristiansand and Hirtshals. In addition, the Group sailed two weekly round trips to Stavanger to serve the west coast market in Norway and to bunker fuel from the LNG plant in Risavika. During the peak summer season, the Group was able to resume close to normal operations on the routes between Norway and Denmark, however with a 30 percent self-imposed capacity reduction to be compliant with guidelines and regulations to prevent the spread of the Corona virus. As new national travel restrictions were imposed in September 2020, Fjord Line’s routes and sailings were again discontinued at the end of October. As of 31.12.2020 no other routes than the emergency cargo route is in operation. The route between Norway and Sweden has not been operated since the Covid-19 outbreak. All of Fjord Line’s vessels have had longer or shorter periods in hot-lay up during 2020. In 2020 the Group transported 484,500

44

Annual report 2020 ⁄⁄ Fjord Line

passengers, compared to 1.4 million passengers in 2019, a reduction of 66 percent. The number of passenger vehicles decreased to 149,400 from 436,900.

The Group transported 50,200 freight units compared to 65,500 freight units in 2019, a reduction of approx.

23 percent. The freight units’ figure for 2019 represent four ferries in regular operation, while the 2020 figure is largely affected by the pandemic.

SIGNIFICANT REDUCTION IN REVENUES AND ACTIVITY While 2019 entered the books as the record year in line with the positive and steady development of Fjord Line, 2020 has proved to be the most challenging year in the history of the Group. The financial consequences caused by the pandemic have been significant and are evident in the financial reporting for 2020. The Group has experienced a 55 percent revenue reduction to MNOK 729 mill for the year 2020.

In certain periods with very limited travel activity the Group’s revenues have been reduced by as much as 90 percent compared to 2019. Despite extensive cost

474

EMPLOYEES

cut and operational efficiency measures and governmental aid packages, the Group experienced a negative result before tax for MNOK 141 in 2020, compared to a profit of MNOK 79 in 2019.

ROBUST FINANCIAL RESTRUCTURING The Group have secured a robust financial restructuring through negotiations with senior lenders 30.04.2020 and 17.02.2021 that will provide the Group with a robust financial runway. The financial restructuring consists of owner contributions, new bank loans as well as postponement of interests, guarantee premium and instalments. The Group has also renegotiated all financial covenants under the current loan agreements to be compliant with these going forward. Fjord Line has in addition received cash support totaling MNOK 269 for 2020 from the Norwegian government’s Business Compensation Scheme.

OUR TRAVELLERS

484 500

177

PASSENGERS

COACHES

This year in numbers

2020

4

1626TRIPS

SHIPS

21.2% FREIGHT UNIT MARKET SHARE

149 400

50 200

CARS

FREIGHT UNITS

23.3% PASSENGER MARKET SHARE

30.3%

PASSENGER VECICHLE MARKET SHARE

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05 ⁄⁄ REPORT FROM THE BOARD OF DIRECTORS

FINANCIAL PERFORMANCE IN 2020 The Group’s operating income was MNOK 729 in 2020, compared to MNOK 1,613 in 2019. The Group’s operating expenses ex. depreciation were MNOK 497 in 2020, compared to MNOK 1,188 in 2019.

The Group’s operating result (EBIT) in 2020 shows a loss of MNOK 46, compared to a profit of MNOK 190 in 2019.

Further on, the Group’s net financial expenses are MNOK 95 in 2020, compared to corresponding expenses of MNOK 111 in 2019.

Result before tax for the Group was a loss of MNOK 141 in 2020, compared to a profit of MNOK 79 in 2019.

Result after tax was a loss of MNOK 92 in 2020, compared to a profit of MNOK 140 in 2019.

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The parent company Fjord Line AS` result before tax was a loss of MNOK 223 in 2020, compared to a profit of MNOK 131 in 2019. Fjord Line’s loss of MNOK 174 after tax is proposed transferred to uncovered loss.

Subsequently the book equity of the parent company amounts to MNOK 755.

Fjord Line AS has accumulated basis for deferred tax asset of MNOK 1 092, which implies a deferred tax asset (22 per cent) of MNOK 240 at full capitalization.

Based on the positive development of the company pre Covid-19 and the long-term future prospects, the Board of Directors has recognized the full capitalized deferred tax asset in the balance sheet in 2020.

The Board of Directors finds the profit development pre Covid-19 satisfactory, and that the result in 2020

Annual report 2020 ⁄⁄ Fjord Line

The group’s equity is MNOK 1,212 per 31 December 2020, compared to an equity of MNOK 1,189 per 31 December 2019.

The Group’s liquid funds made MNOK 188 per 31 December 2020, including an unused credit facility of MNOK 35.

FINANCIAL AND OPERATIONAL RISKS Exchange rate and interest rates Per December 31.12.2020 the Group has interest bearing debt of MNOK 2,533, including loan in EUR/ DKK, constituting in total MNOK 2,122. The Group is exposed to interest risk and currency risk on these loans. The risk is, however, partly eliminated through the fact that parts of the liabilities are hedged through fixed interest rate agreement, and that parts of Fjord Lines revenues are in EUR/DKK. The Group is to some extent exposed to currency risk, but this risk is partly eliminated since revenues and expenses are denominated in both EUR/DKK, as well as NOK. The Group is also exposed to fluctuations in the exchange rate of USD through purchase of fuel.

Price variations of bunker The Group is exposed to general fluctuations in bunkers- and LNG prices, but a significant part of the risk is eliminated through hedging contracts for LNG and MGO. The Group has per 31.12.2020 entered into hedging contracts with maturity in 2021 for both LNG and MGO. is significantly affected by the ongoing Covid-19 situation.

CASH FLOW AND FINANCIAL STRUCTURE The Group’s liquid funds have increased by MNOK 27 in 2020 compared to an increase of liquid funds of MNOK 41 in 2019. The increase consists of the following main elements: • Cash flow from operational activities: MNOK -15 (MNOK 495 in 2019).

• Cash flow from investing activities: MNOK -50 (MNOK -132 in 2019).

• Cash flow from financing activities: MNOK 92 (MNOK -322 in 2019).

The Group’s total balance sheet value is MNOK 4,035 per 31 December 2020, compared to MNOK 3,816 per 31 December 2019. Fjord Line AS’ total balance sheet is, however, MNOK 3,618 per 31 December 2020 compared to MNOK 3,425 per 31 December 2019. Interest bearing debt made MNOK 2,533 per 31 December 2020 compared to MNOK 2,234 per 31 December 2019.

Covenants Per 31.12.20 the Group had financial debt covenants connected to EBITDA, liquidity and booked and value adjusted equity. Several financial covenants are waived due to the ongoing Covid-19 pandemic. The company’s Board of Directors and management are continuously monitoring the financial debt covenants, and per 31 December 2020 the company is in compliance with all active covenants. Reference is however made to further information given in paragraphs “Robust financial restructuring” above.

Market The ongoing Covid-19 pandemic has significant implications for the ferry business, and the market is heavily affected by government-imposed travel restrictions. The Board of Directors expects overall demand to gradually recover to pre-Covid-19 levels as travel restrictions are lifted. Fjord Line’s customer base comprises a diversified mix of customer segment, which reduces risk related to individual markets.

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05 ⁄⁄ REPORT FROM THE BOARD OF DIRECTORS

SHAREHOLDERS

MAJOR OWNERS PER 31.12.2020

48

The Group’s major owners per 31.12.2020 were as follows: Ferd AS 44.6%, Kontrari AS 35.6 %, Kontrazi AS 16.6 % Other 3.2 %.

SUSTAINABILITY AND CORPORATE RESPONSIBILITY Our code of conduct is founded in human rights as well as the value of diversity and inclusion. We have a zero tolerance of harassment of any kind. Routines for reporting any breach of our codes of conduct are in place and available for all employees. Whistle-blowers are protected through these routines to ensure that there are no hindrances or risks to file a report.

Annual report 2020 ⁄⁄ Fjord Line

The pandemic resulted in travel restrictions and complications in bringing essential goods in and out of the country.

Fjord Line has working procedures to reduce the risk of corruption. Corruption is a risk especially related to large procurements. We reduce this risk through our procurement policy that calls for tender processes for large purchases and an approval processes that ensures that all such purchases are evaluated objectively and by several people is in place. The whistle-blower function is open for reports on suspected corruption.

Fjord Line’s single most important contribution to society this year was to take part in stopping the pandemic while continuing the most essential of the Group’s activities. By working with the government and health authorities, taking measures and with the good help of the staff and customers Fjord Line have been without any major outbreaks on-board or amongst the staff.

The pandemic resulted in travel restrictions and complications in bringing essential goods in and out of the country. Despite strict infection control measures Fjord Line were able to operate a transportation route to and from continental Europe through Hirtshals in Denmark and Kristiansand in Norway.

In an effort to mitigate adverse effects on employees affected by the Covid-19 situation, Fjord Line collaborated with governments in Norway and Denmark, labor organizations, and employee representatives to organize 196 different training sessions for furloughed and permanently laid-off staff. The Group provided training on skills such as project management, truck certificates, waiter/bartender training that will be valuable to the employees in the future.

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05 ⁄⁄ REPORT FROM THE BOARD OF DIRECTORS

Fjord FSTR, will operate with 32% less GHG emissions

EXTERNAL ENVIRONMENT Fjord Line operates a business which causes pollution of the external environment. The company complies with applicable laws and regulations in the area and wishes to minimalize the pollution for instance through measures that reduce the emission of NOx. While Fjord Line’s ferries were sailing a lot less this year, the Group did not halt its focus on the environment. In 2020 the Group completed an energy saving program (ESP) on MV Stavangerfjord and MV Bergensfjord which reduced relative emissions by 5% compared to prior to the program’s launch.

The Group sold HSC Fjord Cat and the new catamaran that replaces it, Fjord FSTR, will operate with 32% less GHG emissions per passenger/freight unit.

HSEQ AND TAKING CARE OF OUR EMPLOYEES 2020 was a special year for all, and the COVID-19 pandemic had significant implications, also for the Fjord Line staff. The pandemic and the government-imposed travel restrictions called for a need for extensive furloughs and permanent layoffs, of the workforce. The Fjord Line crew and staff have shown tremendous dedication and willingness to keep Fjord Line afloat. Fjord Line has provided training and help to the best of its ability and according to the help that has been provided by the Norwegian and Danish government.

The year 2020 has been utilized increase competence and develop the organization. Fjord Line arranged 196 training sessions on highly useful skills for

50

Annual report 2020 ⁄⁄ Fjord Line

our laid off staff, in collaboration with unions, local training institutions and regional labor councils. Before the pandemic hit in March 2020, Fjord Line were able to train 20 of the managers though the internal leadership program “Leading Fjord Line” and 292 individual certificates were renewed. Employee satisfaction in Fjord Line is measured biannually rather than on a yearly basis. By doing so the Group makes sure to have enough time spans between measurements to focus on effective, long term action plans. Initiatives to reduce the level of sick leave and increased engagement are among the continuous focus areas of our employee satisfaction strategy.

Fjord Line is running a “No Blame Open Minded Safety Culture Program” to make the organization resilient and sustainable. The company has therefore focused on vigilance and that every incident must be reported, regardless of severity. In 2020 27 work accidents were registered. The majority of accidents were on car deck and in the kitchen. Of these accidents, 0 accidents were considered as serious.

The number of work accidents is significantly lower this year compared to last year’s (43 incidents), but at the same time the company has had a reduced operation due to the pandemic. Fjord Line continuously work to reduce the level of work accidents through several initiatives. Sea- and land-based employees regularly conduct safety and emergency drills including lifeboat drills and evacuation exercises, and functional tests of rescue equipment are regularly carried out onboard the ships.

A guideline for systematic follow-up on sick leave was introduced in 2017. The absence due to illness

in the Group was 3.56 per cent in 2020 split on 5.23 per cent for seagoing employees and 1,29 per cent for shore employees. This equals an increase in total absence due to illness of 0,3 per cent compared with 2019 (3,26).

While there is continuous focus on reducing absence rates, overall absence rates are considered within targets.

GENDER EQUALITY As per 31.12.2020, the Group had 87 shore-based and 236 seagoing staff, representing a total of 237 males and 86 females. In Fjord Line AS the equivalent number of employees was 41, including 24 men and 17 women.

The company is continuously working to avoid discrimination based on gender, age, ethnicity etc. both with respect to existing and new employments.

Of the Group’s top management comprising 9 employees, 2 employees are women. The Board of Directors in Fjord Line are composed of 5 men and 1 woman. Based on an assessment of number of employees and job category the Board of Directors have not found it necessary to implement special measures with respect to gender equality. The Group will, however, continuously focus on this topic.

EVENTS AFTER THE BALANCE SHEET DAY In February 2021 the Group secured a robust financial restructuring through negotiations with senior lenders and guarantors that will provide the Group with a robust financial runway, continuing the support given by financial partners in April 2020 (reference made to the paragraphs above).

51

05 ⁄⁄ REPORT FROM THE BOARD OF DIRECTORS

As of March 2021, MV Oslofjord is reflagged from the Danish DIS register to the Norwegian NOR register.

vaccine programs and the government-imposed travel restrictions.

The Group`s newbuilt high-speed catamaran Fjord FSTR was delivered in February 2021, providing Fjord Line with increased capacity and passenger comfort on the route between Kristiansand and Hirtshals.

Fjord FSTR entered in 2018 a loan agreement with the Australian export finance body EFA, and the financial liability is financially recognized from date of delivery.

Fjord Line has however strong and committed longterm owners which implies that the management team has good conditions to implement the strategy set by the Board of Directors. Fjord Line is well positioned and has a positive outlook. The Group has had several years of positive development leading up to the Covid-19 outbreak. The Board of Directors is confident that measures taken by the management throughout this challenging year will further improve on this positive trend.

It is the Board of Directors’ opinion that the Group is financially and operationally prepared to resume normal operations once the government-imposed travel restrictions are lifted.

The Group is not involved in any litigations.

OUTLOOK

GOING CONCERN

From March 2020, the Covid-19 situation has affected the Groups business significantly, reference made to the paragraphs above. The further consequences are still not clear due to the uncertainty that still exists with respect to the development of the pandemic,

Based on the information above regarding the events after the balance sheet day and in accordance with the Accounting Act § 3-3a it is confirmed that the financial statements for 2020 have been prepared under the assumption of going concern.

Egersund 28.04.2021

Peter Frølich Chairman of the Board

Heidi Nag Flikka Board Member

52

Kristian Eikre Board Member

Kaj Frederiksen Board Member

Kristian Falnes Board Member

Frode Teigen Board Member

Brian Thorsted Hansen Managing Director

Annual report 2020 ⁄⁄ Fjord Line

Fjord Line is well positioned and has a positive outlook.

53

06 ⁄⁄ CONSOLIDATED FINANCIAL STATEMENT

CONSOLIDATED FINANCIAL STATEMENTS • Income statement • Statement of comprehensive incom • Balance sheet • Cash flow statement • Accounting policies • Notes

54

Annual report 2020 ⁄⁄ Fjord Line

Annual accounts Fjord Line AS - Group Fjord Line AS - Group Consolidated income statment FJORD LINE AS – GROUP (1,000 NOK) Consolidated income statment (1,000 NOK)

Group 2020 Group Simplified IFRS Group 2020 2020 Simplified IFRS Simplified IFRS 675,031 29,807 675,031 23,734 29,807 728,572 23,734 728,572

Group 2019 Group Simplified IFRS Group 2019 2019 Simplified IFRS Simplified IFRS 1,583,417 29,567 1,583,417 0 29,567 1,612,984 0 1,612,984

121,073 309,003 121,073 262,029 309,003 67,308 262,029 14,724 67,308 774,138 14,724 774,138 -45,566

371,196 387,208 371,196 235,241 387,208 429,678 235,241 0 429,678 1,423,323 0 1,423,323 189,661

-45,566

189,661

3 3 3 12 3 3 12 3

2,861 2,011 2,861 0 2,011 -100,357 0 0 -100,357 -95,486 0 -95,486 -141,052

8,159 0 8,159 -720 0 -84,412 -720 -33,847 -84,412 -110,820 -33,847 -110,820 78,841

Ordinary result before tax Tax expense on ordinary result

11

-141,052 -48,991

78,841 -61,241

Tax expense on ordinary result Ordinary result after tax

11

-48,991 -92,061

-61,241 140,082

Ordinary result after tax Result for the year

-92,061 -92,061

140,082 140,082

Result for the year Distribution of result group: Majority's share of result Distribution of result group: Non-controlling interests' share of result Majority's share of result Total Non-controlling interests' share of result Total

-92,061

140,082

-92,061

140,082

-92,061 -92,061

140,082 140,082

-92,061

140,082

Result for the year, cf. above

-92,061

140,082

Result for the year, cf. above Items that may be subsequently reclassified to profit or loss Change in value of financial instruments used as hedges Items that may be subsequently reclassified to profit or loss Currency translation differences Change in value of financial instruments used as hedges Total Currency translation differences Total Comprehensive income for the year, net of tax

-92,061

140,082

-7,822 72,168 -7,822 64,346 72,168 64,346 64,346

-23,138 12,789 -23,138 -10,349 12,789 -10,349 -10,349

Comprehensive income for the year, net of tax Total comprehensive income for the year

64,346 -27,716

-10,349 129,733

Total comprehensive income for the year

-27,716

129,733

CONSOLIDATED INCOME STATEMENT Income/net gains (1,000 NOK)

Sales revenues Income/net gains Other operating income Sales revenues Other gains/losses (net) Other operating income Total Other gains/losses (net) Total Operating expenses: Cost of goods Operating expenses: Wage costs Cost of goods Depreciation of property, plant and equipment and intangible assets Wage costs Other operating expenses Depreciation of property, plant and equipment and intangible assets Write-downs of tangible and intangible assets Other operating expenses Total operating expenses Write-downs of tangible and intangible assets Total operating expenses Operating result Operating result Financial items: Interest income Financial items: Other financial income Interest income Income from investment in associated company Other financial income Interest expenses Income from investment in associated company Other financial expenses Interest expenses Net financial items Other financial expenses Net financial items Ordinary result before tax

Note Note Note

13, 16 13 13, 16 13 13 13

14 1, 2 14 5, 6, 14 1, 2 2 5, 6, 14 2

Consolidated statement of comprehensive income

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (1,000 NOK) statement of comprehensive income Consolidated (1,000 NOK)

(1,000 NOK)

17 17

55

06 ⁄⁄ CONSOLIDATED FINANCIAL STATEMENT

Fjord Line AS - Group FJORD LINE AS – GROUP CONSOLIDATED BALANCE SHEET Consolidated balance sheet (1,000 NOK)

(1,000 NOK)

ASSETS

Assets Fixed assets Intangible assets Deferred tax asset Other intangible asset Total intangible assets Property, plant and equipment Ships Prepayment ships Buildings, plants etc.

Right of use assets Total property, plant and equipment Financial fixed assets Derivatives Investment in associated company Other non current receivables Other investments Total financial fixed assets

Note

Note

11 1

327,236 90,653 417,889

275,430 79,550 354,980

2,851,183 263,467 119,222 33,830 3,267,702

2,879,399 234,714 65,962 30,146 3,210,221

0 0 0 80 80

208 10,036 9,900 80 20,224

3,685,671

3,585,425

5

21,409

33,534

6 7, 16 17

15,573 155,073 4,500 175,146

33,298 37,453 146 70,897

8

152,606

126,013

349,160

230,444

4,034,831

3,815,870

2, 18 2 2 2 2

17 4 4

Total fixed assets Current assets Inventories Receivables and derivatives Trade receivables Other current receivables Derivatives Total receivables and derivatives Bank deposit, cash etc.

Total current assets Total assets

56

Group 2020 Group 2019 Group Group Simplified IFRS Simplified IFRS 31/12/2020 31/12/2019 Simplified IFRS Simplified IFRS

Consolidated balance sheet (1,000 NOK)

Annual report 2020 ⁄⁄ Fjord Line

Consolidated balance sheet (1,000 NOK)

Note

EQUITY AND LIABILITIES EQUITY

Note

EQUITY AND LIABILITIES

Equity

Note

Paid-in equity Share capital EQUITY Own shares Paid-in equity account Share premium Share paid-in capital equity Total Own shares Share premium account interests Other equity controlling Total paid-in Other equity equity

9, 10 9 9 9,910 9 9 99

Total Other equity controlling interests Other equity equity controlling interests Total Total

Group Group Group 2020 Group 2019 31/12/2020 31/12/2019 Simplified Simplified IFRS Simplified IFRSIFRS Simplified IFRS Group Group 31/12/2020 31/12/2019 Simplified544,312 IFRS Simplified IFRS 519,107 -109 -109 203,432 178,227 544,312 519,107 747,634 697,225 -109 -109 203,432 178,227 747,634 697,225 464,197 491,912 464,197

491,912

9

464,197 1,211,831 464,197

491,912 1,189,137 491,912

Non-controlling interests Total equity controlling interests

9

0 1,211,831

0 1,189,137

Total equity Non-controlling interests LIABILITIES Total equity liabilities/non-current provisions Non-current Liabilities Deferred tax LIABILITIES Leasing liability Non-current liabilities/non-current Non-current debt to credit institutionsprovisions etc.

Deferred tax Pension liability (net) Leasing liability Derivatives Non-current debt toliabilities/non-current credit institutions etc. provisions Total non-current Pension liability (net) Derivatives Current liabilities Total non-current liabilities/non-current Current portion of non-current liabilities to provisions credit institutions

9

1,211,831 0

1,189,137 0

9

1,211,831 751 65,232 2,460,158 751 3,283 65,232 60,416 2,460,158 2,589,840 3,283 60,416 2,589,840 7,989

1,189,137 0 46,711 1,941,834 0 2,790 46,711 74,416 1,941,834 2,065,751 2,790 74,416 2,065,751 245,412

Total equity and liabilities Total liabilities

4,034,831 2,823,000

3,815,870 2,626,733

Total equity and liabilities

4,034,831

3,815,870

Current portion of leasing debt Current liabilities Derivatives Currentpayables portion of non-current liabilities to credit institutions Trade Current portion of leasing debt Tax payable Derivatives Public duties owing Trade current payablesliabilities Other Tax payable Total current liabilities Public duties owing Other current liabilities Total liabilities Total current liabilities

9

2, 12 12 14 2,17 12 12 14 17 12 2, 12 17 12 2,1212 17 15 12 15

0 38,418 7,989 32,259 00 38,418 4,391 32,259 150,102 233,1600 4,391 150,102 2,823,000 233,160

0 17,459 245,412 129,497 7140 17,459 6,818 129,497 161,082 714 560,982 6,818 161,082 2,626,733 560,982

Egersund 28.04.2021

Peter Frølich Chairman of the Board

Heidi Nag Flikka Board Member

Kristian Eikre Board Member

Kaj Frederiksen Board Member

Kristian Falnes Board Member

Frode Teigen Board Member

Brian Thorsted Hansen Managing Director

57

06 ⁄⁄ CONSOLIDATED FINANCIAL STATEMENT

FJORD LINE AS – GROUP CASH FLOW STATEMENT (1,000 NOK)

Cash flow statement - group (TNOK)

2020 2020

2019 2019

-45,566 -714 256,230 14,724 -23,734 12,125 -99,894 -97,238 0 -30,459 -14,526

189,661 -1,379 235,241 0 0 -10,702 36,336 44,799 0 690 494,645

103,187 -130,907 -10,271 -12,500 0 -50,491

0 -120,536 -19,567 8,159 0 -131,943

168,500 -96,758 -30,542 50,409 91,610

0 -237,749 -84,412 0 -322,161

26,593

40,541

126,013

85,472

0

0

Cash and cash equivalents at the end of the period

152,606

126,013

Specification of cash reserves at the end of the period Bank deposit and cash

152,606

126,013

Cash flows from operational activities Operating result Taxes paid in the period Depreciation Write-down Gain/loss from sale of property, plant and equipment/intangible assets Change in inventories Change in trade receivables Change in trade payables Change in financial assets at fair value over profit or loss Change in other accruals Net cash flows from operational activities Cash flows from investing activities Proceeds from sale of property, plant and equipment and received grants Purchase/manufacturing of property, plant and equipment/intangible assets Prepayment assets Interest received Sale of subsidiary (less cash in subsidiary) Net cash flows from investing activities Cash flows from financing activities Raising of interest bearing debt Repayment of non-current interest bearing debt Interest paid Cash contribution share issue (net) Net cash flows from financing activities Net change in cash and cash equivalents Cash and cash equivalents at the beginning of the period Currency translation cash and cash equivalents

58

Annual report 2020 ⁄⁄ Fjord Line

59

06 ⁄⁄ CONSOLIDATED FINANCIAL STATEMENT

Accounting policies FJORD LINE AS – GROUP

Below are stated significant Accounting Policies used in the preparation of the consolidated financial statements.

The consolidated financial statements have been prepared in accordance with simplified IFRS (International Financial Reporting Standards).

Consolidation and investment in associated companies The consolidated financial statements comprise the parent company Fjord Line AS and the subsidiaries, Fjord Line GmbH (Germany), Next Green Energy AS, Hirtshals LNG AS, Fjord Line Danmark A/S, Fjord Skibsholding I A/S, Fjord Skibsholding II A/S, Fjord Skibsholding III A/S, Fjord Skibsholding IV A/S and Fjord Skibsholding V A/S. The six last mentioned companies are domiciled in Denmark and are 100% owned subsidiaries.

Subsidiaries are entities where the group has the power to govern the entity’s financial and operational policies (control).

When the group disposes of a subsidiary/ ceases to have control, any retained interest in the entity is remeasured to its fair value at the date when control is lost, with the change in carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset.

Intercompany transactions, balances etc. have been eliminated in the consolidated financial statements.

For consolidation purposes the Danish companies are considered to have functional currency in DKK and German subsidiaries EUR.

60

Annual report 2020 ⁄⁄ Fjord Line

Estimates The preparation of financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the group's accounting policies. Areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are deferred tax assets, residual value of ships, useful life of ships, capitalization and depreciation of periodic maintenance and provision for incurred costs.

Revenue recognition Revenue is measured at the fair value of the consideration received or receivable. Revenue is presented net of returns, trade allowances, rebates and amounts collected on behalf of third parties.

The specific accounting policies for the group’s main revenue generating activities are as follows: Transportation/ticket: Ticket revenue is recognized over time when the actual transport is executed.

The rote and crossing from start point to the end destination is fairly short and within 24 hours.

The portion of the sales income, which relates to future service work is reflected in the balance sheet as unearned income from the sale and is then recognised in line with the service work performed. This prepayment is normally not discounted because of a short period from pre-payment to executing of the transport.

ating expenses. All periods applied for government grant in 2020 is included in the financial statement.

Business combinations The acquisition method is used to account for business combinations.

The consideration transferred for the acquisition comprises the: • fair values of the assets transferred • liabilities incurred to the former owners of the acquired business • equity interests issued by the group • fair value of any asset or liability resulting from a contingent consideration arrangement, and • fair value of any pre-existing equity interest in the subsidiary.

Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions, measured initially at their fair values at the acquisition date. The group recognizes any non-controlling interest in the acquired entity on an acquisition-by-acquisition basis either at fair value or at the non-controlling interest’s proportionate share of the acquired entity’s net identifiable assets.

Classification and valuation of balance sheet items Assets intended for long term ownership or use have been classified as fixed assets. Assets relating to the trading cycle have been classified as current assets. Receivables are classified as current assets if they are to be repaid within one year after the transaction date. Similar criteria apply to liabilities.

First year’s installment has been classified as current liabilities.

Intangible assets

Food and beverage sale: Food and beverage sale are recognized as point in time.

Expenses for intangible assets are reflected in the balance sheet when it is considered likely that the future financial benefits relating to the asset will be received by the company and the acquisition cost of the asset can be reliably measured.

Government grants

Property, plant and equipment

Government grants related to Covid-19 is recorded as reduction of other oper-

Property, plant and equipment are reflected in the balance sheet and

Tax-free sale: Tax-free sale is recognized as point in time.

depreciated over the assets’ expected useful life on a straight-line basis.

Direct maintenance of an asset is expensed under operating expenses as and when it is incurred. Additions or improvements are added to the asset's cost price and depreciated together with the asset.

The group's ships with associated additions etc. are owned by the Danish subsidiaries. The book value of ships is calculated based on acquisition cost, less depreciation and impairment, if any. Facilities under construction are capitalized in line with assumed progress.

Investments/expenses that are not included in the contract, as inspection costs, costs connected to project organisation, legal costs, financing costs and other related costs are considered as part of the acquisition cost and recorded in the balance sheet.

Grants from the NOx-fund related to investments are recorded/accrued in line with the depreciation profile of the assets that the grants relate to. The accrual is classified as reduction of depreciation cost in the income statement.

NOx-grants not recognised over profit or loss are classified as reduction of ship values in the balance sheet.

The book values of the group's ships and other operating assets are individually tested for impairment when events or changes in circumstances indicate that the book value is no longer present. If such indications occur and book value exceeds recoverable amount, then the asset is impaired to recoverable amount.

Periodical maintenance of ships The ships are decomposed into ship/ ship furnishing and periodical maintenance for depreciation purposes. They are depreciated straight-line over a defined useful life. An assumed residual value of the ships at the expiry of the useful life is taken into consideration.

The ships must continuously be presented for control, which implies regular docking and classification.

61

06 ⁄⁄ CONSOLIDATED FINANCIAL STATEMENT

Periodical maintenance is recognised in the balance sheet in connection with docking and depreciated till next assumed docking.

Leases Lease contracts where the group is a lessee are capitalized. Upon commencement of the lease the right-touse asset is recognized at cost being the present value of the lease payments in the contract as defined by IFRS 16 in addition to initial direct costs. The corresponding lease liability is recognized in the balance sheet at present value using the interest rate implicit in the lease, if that rate can be readily determined, or else the lessee’s incremental borrowing rate. The lease liability is subsequently increased by the effective interest in the lease and reduced by payments made. The lease liability is also reassessed subsequently if the payments or the interest rate changes. The change in liability is added to or deducted from the right-ofuse asset.

The right-of-use asset acquired under leases is depreciated over the asset’s useful life or the lease term, if shorter, if the lease does not transfer ownership at the end of the lease term, or there is no purchase option that is in the money. The right-of-use asset is tested for impairment for similar assets owned by the entity.

Inventories Inventories of purchased goods are valued at the lower of acquisition cost according to the FIFO principle and net realisable value. Net realisable value is the estimated selling price in ordinary activities deducted estimated sales expenses.

Capitalized interest rates Interest relating to facilities under construction or other qualifying assets are capitalized as part of the cost of the asset in accordance with IAS 23 Borrowing Cost.

Receivables, financial assets and financial liabilities Financial assets At initial recognition, the group measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly

62

attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed in profit or loss.

Dividends on financial assets at fair value through profit or loss and fair value through other comprehensive income are recognized in profit or loss as part of revenue when the group’s right to receive payments is established.

Interest income from financial assets at fair value through profit or loss is included in the net gains/(losses).

Interest on other financial assets are calculated using the effective interest method and recognized in profit or loss as revenue.

Impairment For accounts receivables, the lifetime credit loss is recognized upon initial recognition of the asset. For other debt instruments, twelve months estimated credit loss is recognized upon initial recognition. When a significant increase in the expected credit loss is observed, lifetime credit losses is estimated and recognized.

Derivatives and hedging activities Derivatives are initially recognized at fair value on the date a derivative contract is entered into and are subsequently remeasured to their fair value at the end of each reporting period. The accounting for subsequent changes in fair value depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged.

The group documents at the inception of the hedging transaction the relationship between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions. The group also documents its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions have been and will continue to be highly effective in offsetting changes in fair values or cash flows of hedged items.

The full fair value of a hedging derivative is classified as a non-current asset or liability when the remaining maturity of the hedged item is more than 12 months; it is classified as a current

asset or liability when the remaining maturity of the hedged item is less than 12 months.

Trading derivatives are classified as a current asset or liability.

Cash flow hedge The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognized in other comprehensive income and accumulated in reserves in equity. The gain or loss relating to the ineffective portion is recognized immediately in profit or loss within other income or other expense.

Amounts accumulated in equity are reclassified to profit or loss through other comprehensive income in the periods when the hedged item affects profit or loss (for instance when the hedged interest rate payment that is hedged takes place). The gain or loss relating to the effective portion of interest rate swaps hedging variable rate borrowings is recognized in profit or loss within ‘finance costs’.

When a hedging instrument expires or is sold or terminated, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in equity at that time remains in equity and is recognized when the forecast transaction is ultimately recognized in profit or loss. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity is immediately reclassified to profit or loss.

Derivatives that do not qualify for hedge accounting Certain derivative instruments may not qualify for hedge accounting. Changes in the fair value of any derivative instrument that does not qualify for hedge accounting are recognized immediately in profit or loss and are included in net other financial income and expenses.

Borrowings Borrowings are initially recognized at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortized cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognized in profit or loss

Annual report 2020 ⁄⁄ Fjord Line

over the period of the borrowings using the effective interest method.

Fees paid on the establishment of loan facilities are recognized as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalized as a prepayment for liquidity services and amortized over the period of the facility to which it relates.

Borrowings are removed from the balance sheet when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in profit or loss as other income or finance costs.

Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting period.

Borrowing costs General and specific borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalized during the period of time that is required to complete and prepare the asset for its intended use or sale. Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale.

the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows: (i) Assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet. (ii) The income statement shall be converted at the exchange rate at the time of the transaction. As an approach to this, average rates are used for the accounting period unless it is large single transactions or the exchange rate have varied so much that the approach does not give a true picture. (iii) All resulting exchange differences are recognised in other comprehensive income and specified separately.

Transactions in foreign currency are translated to the functional currency at the current exchange rate at the transaction date.

Taxes The income tax expense or credit for the period is the tax payable on the current period’s taxable income based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.

Items included in the financial statements of each of the group’s entities are measured using the currency of the primary economic environment in which the entity operates («the functional currency»). The consolidated financial statements are presented in NOK, which is the functional currency of the parent company and the group’s presentation currency.

Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred tax liabilities are not recognized if they arise from the initial recognition of goodwill. Deferred income tax is also not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled.

The results and financial position of all the group entities (none of which has

Deferred tax assets are recognized only if it is probable that future taxable

Other borrowing costs are expensed in the period in which they are incurred.

Foreign currency translation

amounts will be available to utilize those temporary differences and losses.

Current and deferred tax is recognized in profit or loss, except to the extent that it relates to items recognized in other comprehensive income or directly in equity. In this case, the tax is also recognized in other comprehensive income or directly in equity, respectively.

The Danish ship owning companies are subject to the Danish tonnage tax regime.

Pensions A defined contribution plan is a pension plan under which the group pays fixed contributions to an insurance company. The group has no legal or constructive obligations once the contributions have been paid. The contributions are recognised as wage costs. A defined benefit plan is a pension plan that is not a defined contribution plan.

Typically defined benefit plans define an amount of pension benefit that an employee will receive on retirement, usually dependent on one or more factors such as age, years of service and compensation. The liability recognised in the balance sheet in respect of defined benefit plans is the present value of the defined benefit obligation at the balance sheet date.

63

06 ⁄⁄ CONSOLIDATED FINANCIAL STATEMENT

Notes

FJORD LINE AS – GROUP Note 1 Intangible assets - group

Note 1 ⁄⁄ Intangible assets – Group

(Figures in the table in TNOK) (Figures in TNOK)

Acquisition cost 31.12.2019 Completed projects 2020 Addition 2020 Disposal 2020 Acquisition cost 31.12.2020 Accumulated write-down 31.12.2019 Accumulated depreciation 31.12.2019 Book value 31.12.2019 Accumulated write-down 31.12.2020 Accumulated depreciation 31.12.2020 Book value 31.12.2020 Write-down in the year Depreciation intangible assets in the year Total depreciation and write-down 2020

Intangible assets in progress

WEB-project

Other intangible assets

TOTAL (exclusive of deferred tax asset)

15,746 2,942 -10,237 0 8,451

77,498 25,305 1,305 0 104,108

1,903 925 -877 0 1,951

95,146 29,173 -9,809 0 114,510

0 0 15,746 4,824 0 3,627

0 9,136 68,362 0 18,267 85,842

0 669 1,234 0 765 1,186

0 9,805 85,342 4,824 19,032 90,653

4,824 0 4,824

0 9,131 9,131

0 96 96

4,824 9,350 14,174

Completed projects in 2020 are projects relates to development of websites and moving WEB platform, with a depreciatcion period of 5 years.

The remaining projects relates to development of ERP system in general, group booking, development of Carres, on board portal and BI. The depreciation period is 5 years.

Note 2 Property, plant and equipment - group (Figures in the table in TNOK) Figures for 2020 below

64

Spare parts,

Write-down in the year Depreciation intangible assets in the year Total depreciation and write-down 2020

4,824 0 4,824

0 9,131 9,131

0 96 96

4,824 9,350 Annual report 2020 ⁄⁄ Fjord Line 14,174

Completed projects in 2020 are projects relates to development of websites and moving WEB platform, with a depreciatcion period of 5 years.

The remaining projects relates to development of ERP system in general, group booking, development of Carres, on board portal and BI. The depreciation period is 5 years.

Note 2 Property, plant and equipment - group Note 2 ⁄⁄ Property, plant and equipment

– group

(Figures in in TNOK) the table in TNOK) (Figures Figures for 2020 below

Prepaid ships

Buildings, plant etc.

Spare parts, operating movables, reconstruction premises etc.

Acquisition cost 31.12.2019 Addition 2020 Transfer Disposal 2020 Translation differences Acquisition cost 31.12.2020

234,714 28,753 0 0 0 263,467

101,230 58,318 0 -3,139 1,050 157,459

337 0 0 0 0 337

44,975 7,818 0 0 -806 64,152

4,060,082 73,061 0 -67,541 208,662 4,274,264

4,441,338 167,949 0 -70,680 208,906 4,747,514

Accumulated write-down 31.12.2019 Accumulated depreciation 31.12.2019 Book value 31.12.2019 Accumulated write-down 31.12.2020 Accumulated depreciation 31.12.2020 Book value 31.12.2020

0 0 234,714 0 0 263,467

0 35,268 65,962 0 38,574 118,884

0 0 337 0 0 337

0 10,845 33,325 0 18,158 33,830

0 1,181,020 2,879,062 0 1,423,081 2,851,183

0 1,226,771 3,214,567 0 1,479,813 3,267,702

0 0

3,306 0

0 0

7,313 0

242,061 0

252,680 0

Property, plant and equipment (figures in TNOK)

Depreciation property, plant and equipment in the year Write-down property, plant and equipent in the year

Depreciation period (completed operating assets) Depreciation plan

5 - 20 years Linear

Right of use assets

3 - 5 years Linear

Ships, incl. periodical maintenance, Total property, plant and furnishing etc. equipment

See description below Linear

Grant not recognised through profit or loss per 31.12.2020 is TNOK 129.319 (TNOK 134.109 per 31.12.2019).

Grant not recognised through profit or loss is recognised as a reduction of the acquisition cost per 31.12.

The grant is accrued/recognised in line with the depreciation profiles of the related ships and classified as reduction of depreciations.

Depreciation and book value of the ships per 31.12.2020 The Fjord Line group has 3 ships in the business at the reporting date; 1) "MS Oslofjord" (formerly MS Bergensfjord). This ship was under reconstruction in 2014 and has sailed in the route Sandefjord-Strømstad since 20 June 2014 .

2) "MS Stavangerfjord". This ship was delivered in July 2013.

3) "MS Bergensfjord". This ship was delivered in February 2014.

MS Oslofjord: In connection with Fjord Line starting up the sailing of a new route between Sandefjord and Strømstad in June 2014 MS Oslofjord was subject to a comprehensive reconstruction at the yard STX Raumo (Finland) in 2013/2014. Approx. 300 mill NOK was invested in the reconstruction of the ship.

Carrying value for the ship including periodical maintenance is TNOK 402.263.

Both the ship and ship furnishing are depreciated linearly over 15 years, with estimated salvage value 20 MNOK per June 2029.

Ship furnishing is depreciated over 1 - 5 years. Periodical maintenance /docking is depreciated over 1 - 10 years.

MS Stavangerfjord MS Stavangerfjord is depreciated linearly over 35 years, with salvage value 50 MNOK. Remaining depreciation period per 31.12.2020 is 27,5 years.

Carrying value for the ship including periodical maintenance is TNOK 1.123.457 pr 31.12.2020.

Ship furnishing is depreciated over 5 - 20 years. Periodical maintenance/docking is depreciated linearly over 1 - 10 years.

MS Bergensfjord The ship itself is depreciated linearly over 35 years, with salvage value 50 MNOK. Remaining depreciation period per 31.12.2020 is approx. 28 years.

Carrying value for the ship including periodical maintenance is TNOK 1.207.499 pr 31.12.2020.

Periodical maintenance/docking and furnishing are depreciated linearly over 5 - 15 years.

HSC Fjord Cat: Fjord Line entered into an agreement with the German shipping group FRSLine to sell HSC Fjord Cat in 2020.

Last day of operation for HSC Fjord Cat in Fjord Line was August 23rd and handover to new buyers took place August 25th.

Note 3 Financial items - group (Figures in TNOK) Other financial income and other financial expenses comprise the following:

65

Both the ship and ship furnishing are depreciated linearly over 15 years, with estimated salvage value 20 MNOK per June 2029.

Shipfurnishing furnishingis is depreciated - 20 years.

Periodical maintenance/docking is depreciated Ship depreciated overover 1 - 55years.

Periodical maintenance /docking is depreciated over 1 - 10linearly years. over 1 - 10 years.

06 ⁄⁄ CONSOLIDATED FINANCIAL STATEMENT

MSStavangerfjord Bergensfjord MS MS is depreciatedlinearly linearlyover over 35 years, value 50 50 MNOK. Remaining depreciation periodperiod per 31.12.2020 is 27,5 years.

TheStavangerfjord ship itself is depreciated years,with withsalvage salvage value MNOK. Remaining depreciation per 31.12.2020 is approx. 28 years.

Carrying thethe ship including periodical maintenance is TNOK 1.123.457 pr 31.12.2020.

Carryingvalue valueforfor ship including periodical maintenance is TNOK 1.207.499 pr 31.12.2020.

Ship furnishing is depreciated over 5and - 20furnishing years. Periodical maintenance/docking is depreciated linearly over 1 - 10 years.

Periodical maintenance/docking are depreciated linearly over 5 - 15 years.

MS Bergensfjord HSCship Fjord Cat: The itself is depreciated linearly over 35 years, with salvage value 50 MNOK. Remaining depreciation period per 31.12.2020 is approx. 28 years.

Fjord Line entered agreement with the German shipping FRSLine to sell HSC Fjord Cat in 2020.

Carrying value for theinto shipan including periodical maintenance is TNOK group 1.207.499 pr 31.12.2020.

Last day of operation for HSC Fjord Cat in Fjord Line was August 23rd and handover to new buyers took place August 25th.

Periodical maintenance/docking and furnishing are depreciated linearly over 5 - 15 years.

Note 3 Financial items - group Note 3 ⁄⁄ Financial items – group

HSC Fjord Cat: Fjord Lineinentered into an agreement with the German shipping group FRSLine to sell HSC Fjord Cat in 2020.

(Figures TNOK) (Figures TNOK) for HSC Fjord Cat in Fjord Line was August 23rd and handover to new buyers took place August 25th.

Last day ofinoperation

Other financial income and other financial expenses comprise the following: Note 3 Financial items - group

Other financial income

Foreign in exchange (Figures TNOK) gains, intergroup receivables Foreign exchange gains, loan in Euro/DKK

Other and gains other financial expenses comprise the following: Otherfinancial foreign income exchange

Other financial income

Other Total financial income Foreign exchange gains, intergroup receivables Foreign exchange gains, loan in Euro/DKK Other financial expenses Other foreign exchange gains Foreign exchange loss, including loan in Euro/DKK Other financial income Foreign exchange loss, intergroup receivables Total

2020 22 23,831 22,182 6,417 52,452

Other financial financialexpenses expenses Other Total exchange loss, including loan in Euro/DKK Foreign Foreign exchange loss, intergroup receivables Derivatives not included in hedge accounting Other financial expenses Foreign exchange gains/foreign exchange loss intergroup receivables Total

2020 0 25,956 22,664 1,821 50,441

Derivatives not included in hedge accounting

2020 22 23,831 22,182 6,417 52,452 2019

2019 0 17,951 0 0 17,951

2020 0 0 0 25,956 17,951 22,664 1,821 2019 50,441 11,354

2019 11,354 17,667 20,989 1,788 51,798

0 17,951

17,667 20,989 1,788 51,798

Fjord Line AS has non-current interest bearing receivables on the Danish subsidiaries amounting to a total of TNOK 2.005.886 per 31.12.2020 (TNOK 1.897.343 per 31.12.2019) This has been eliminated in the consolidated financial statements.

The receivables are denominated in DKK. Foreign exchange loss on these receivables was TNOK 108.498 in 2020 (Foreign exchange gain TNOK 14.092 in 2019).

Foreign exchange gains/foreign exchange loss intergroup receivables A specific installment plan for the loans thereceivables subsidiaries have to their parent company hastonot been established, however, the subsidiaries will use free for repayment.

Fjord Line AS has non-current interest bearing on the Danish subsidiaries amounting a total of TNOK 2.005.886 per 31.12.2020 (TNOK 1.897.343 per liquidity 31.12.2019) This has been eliminated in the consolidated financial statements.

The receivables are denominated in DKK. Foreign exchange loss on these receivables was TNOK 108.498 in 2020 (Foreign exchange gain TNOK 14.092 in 2019).

Note 4 Investments in associated companies and other - group has not been established, however, the subsidiaries will use free liquidity for repayment.

A specific installment plan for the loans the subsidiaries have toinvestments their parent company

Note 4 ⁄⁄ Investments in associated companies and other investments – group Visit Sørlandet AS

Note 4 Investments associated and othertoinvestments In 2010 Fjord LineinAS acquiredcompanies shares amounting TNOK 50 -ingroup Visit Sørlandet AS. After 2010 there has been neither additions nor disposals.

The investment is recognised in accordance with the cost method. There has not been any write-down of the holding of shares neither in 2020 nor in 2019.

Visit Sørlandet AS In 2010 Fjord Line AS acquired shares amounting to TNOK 50 in Visit Sørlandet AS. After 2010 there has been neither additions nor disposals.

Visit Telemark AS The investment is recognised in accordance with the cost method. There has not been any write-down of the holding of shares neither in 2020 nor in 2019.

Fjord Line AS invested TNOK 30 in Visit Telemark AS in 2016. The investment is recognised in accordance with the cost method. No write-down has been made.

Visit Telemark AS Green LNG Fjord Line AS A/S invested TNOK 30 in Visit Telemark AS in 2016. The investment is recognised in accordance with the cost method. No write-down has been made.

In 2020 Fjord Line AS acquired additional shares in Next Green Energy A/S, total amount invested is TDKK 932.

Green Green LNG LNGA/S A/S is consolidated from the acquisition date in 2020. No write-down has been made.

In 2020 Fjord Line AS acquired additional shares in Next Green Energy A/S, total amount invested is TDKK 932.

Green LNGLNG A/S isA/S consolidated from the acquisition date in 2020. No write-down has been made.

Hirtshals

In 2015 Fjord Line group sold 50% of the shares in Hirtshals LNG A/S to Skangass AS.

Hirtshals LNG A/S Prior to this sale Hirtshals LNG A/S was a 100% owned subsidiary of Fjord Line Danmark A/S. In 2015 Fjord Line group sold 50% of the shares in Hirtshals LNG A/S to Skangass AS. At the date of sale the balance sheet of Hirtshals LNG A/S consisted mainly of an LNG-tank. The compensation was determined based on a Prior to this sale Hirtshals LNG A/S was a 100% owned subsidiary of Fjord Line Danmark A/S. value of the of balance 25 MNOK. At the date of plant sale the sheet of Hirtshals LNG A/S consisted mainly of an LNG-tank. The compensation was determined based on a During Fjord Line group acquired the remaining 50 % of the shares in Hirtshals LNG. Total amount invested is TDKK 18.948. value of 2020 the plant of 25 MNOK. Hirtshals LNG A/S is group consolidated acquisition date in 2020. write-down been made.

During 2020 Fjord Line acquiredfrom the remaining 50 % of the shares No in Hirtshals LNG.has Total amount invested is TDKK 18.948.

Hirtshals LNG A/S is consolidated from acquisition date in 2020. No write-down has been made.

Note 5 Inventories and fuel expenses - group

Note 5 ⁄⁄ Inventories and fuel expenses – group

(Figures in TNOK) (Figures in TNOK)

Fuel Goods for resale Other items, including key-cards etc.

Total inventories at acquisition cost 31.12.

Write-down 31.12.

Total book value of inventories 31.12.

2020 2,365 19,936 1,608 23,909 2,500 21,409

2019 3,136 27,370 3,028 33,534 0 33,534

2020 18,770 -3,197

2019 35,495 -2,198

Write-down of TNOK 2.500 has been made of the inventory per year-end.

Expenses related to fuel are classified as other operating expenses in the income statement.

This amounts to TNOK 139.607 in 2020 (TNOK 170.716 for 2019).

Note 6 Trade receivables - group (Figures in TNOK)

66

Trade receivables at nominal value 31.12.

Provisions for bad debts 31.12.

(Figures in TNOK) Note 5 Inventories (Figures in TNOK) and fuel expenses - group

2020 2019 2,365 3,136 2020 2019 Annual report 2020 ⁄⁄ Fjord Line 19,936 27,370 2,365 3,136 1,608 3,028 2020 2019 19,936 27,370 23,909 33,534 2,365 3,136 1,608 3,028 2,500 19,936 27,3700 23,909 33,534 21,409 33,534 1,608 3,0280 2,500 23,909 21,409 33,534 2,500 0 21,409 33,534

Fuel (Figures in TNOK) Goods Fuel for resale Other including key-cards etc.

Goodsitems, for resale Total at acquisition cost 31.12.

Fuel inventories Other items, including key-cards etc.

Write-down 31.12.at acquisition cost 31.12.

Goodsinventories for resale Total Total of inventories Other book items,value including key-cards 31.12. etc.

Write-down 31.12.

Note 5 Inventories and fuel expenses - group inventories at inventories acquisition 31.12. cost 31.12.

Total book value of Write-down of TNOK 2.500 has been made of the inventory per year-end.

Write-down 31.12.

(Figures in TNOK) Total book value of inventories 31.12.

Write-down of TNOK 2.500 has been made of the inventory per year-end.

Expenses related to fuel are classified as other operating expenses in the income statement.

This amounts TNOK 139.607 in 2020 (TNOK 170.716 forper 2019).

Write-down oftoTNOK 2.500 has been made of the inventory year-end.

Expenses related to fuel are classified as other operating expenses in the income statement.

Fuel

2020 2,365 19,936 1,608 23,909 2,500 21,409

This amounts Goods for resaleto TNOK 139.607 in 2020 (TNOK 170.716 for 2019).

Other items,related including key-cards etc.

Expenses to fuel are classified as other operating expenses in the income statement.

Note amounts 6 Trade to receivables - group Total inventories at acquisition costin31.12.

This TNOK 139.607 2020 (TNOK 170.716 for 2019).

Note 631.12. ⁄⁄ receivables Trade receivables – group Write-down Note 6 Trade - group Total book of inventories 31.12.

(Figures invalue TNOK) (Figures in TNOK) TNOK) Note 6 Trade receivables - group (Figures in

Write-down of MNOK 2,5 has been made of the inventory per year-end.

2020 18,770 2020 -3,197 18,770 15,573 2020 -3,197

Trade receivables (Figures in TNOK)at nominal value 31.12.

Expenses related to fuel are classified as other operating expenses in the income statement.

Provisions for badatdebts 31.12.

Trade receivables nominal value This amounts to TNOK 139.607 in 202031.12.

(TNOK 170.716 for 2019).

Trade receivables 31.12.31.12.

Provisions for bad debts Trade nominal value 31.12.

Tradereceivables receivablesat31.12.

2019 35,495 2019 -2,198 35,495 33,297 2019 -2,198

18,770 15,573 1,000 -3,197 2,497 15,573 1,000 0 2,497 3,497 1,0000

Change provisions for bad debts in the year Provisions forreceivables bad debts Note 6 Trade -31.12. group

Actual bad debts infor thebad yeardebts in the year Trade 31.12.

Changereceivables provisions

Received receivables previously written off (Figures in on TNOK) Actual bad debts in the year

Loss on provisions bad debts for bad Change debts in the year off Received on receivables previously written Actualonbad in the year Loss baddebts debts Trade receivables at nominal value 31.12.

Bad debts arereceivables included inpreviously the item "other operating expenses" in the income statement.

Received on written off Provisions for bad debts 31.12.

Lossdebts on bad Bad aredebts included in the item "other operating expenses" in the income statement.

2,497 3,4972020 18,770 0 -3,197 3,497

Trade receivables 31.12.

15,573

Notedebts 7 Other current receivables - group Bad are included theinitem "other operating expenses" in the income statement.

Change provisions for bad in debts the year Note 7 Other current receivables group Actual bad debts in the year Note 7 ⁄⁄ Other current receivables – group (Figures in TNOK)

1,000 2,497 0 3,497

Received on receivables previously written off Note 7 Other current receivables - group (Figures in TNOK) Loss on bad debts

(Figures in TNOK) Other receivables Refund from the Norwegian government in regard to The Business Scheme* Bad debts areTNOK) included in the item "other operating expenses" in the income Compensation statement.

(Figures in Other receivables Refund from from the public authorities, includinginVAT receivable Refund Norwegian government regard to The Business Compensation Scheme* Prepaidreceivables expenses, insuranceincluding ships VAT receivable Other Refund from publicincl. authorities, Note 7 receivables Other current receivables - group in regard to The Business Compensation Scheme* Other Refund from the Norwegian government Prepaid expenses, incl. insurance ships

2019 3,136 27,370 3,028 33,534 0 33,534

2020 121,442 2020 3,744 121,442 20,799 2020 3,744 9,088 121,442 20,799

35,495 33,297 -2,1980 8560 33,297 0 856 856 0

2019 856 35,495 0 -2,198 856

33,297 0 856 0 856

2019 20190 2,6070 19,829 2019 2,607 15,0170 19,829

Refund from public authorities, including VAT receivable 3,744 2,607 Other receivables 9,088 15,017 155,072 37,453 20,799 19,829 Prepaid expenses, incl. insurance ships Otherreceivables current receivables 31.12.

155,072 37,453 Other 9,088 *The Business Compensation Scheme is part of the Norwegian government's measures to mitigate the financial effects of the coronavirus situation infection Other receivables 2020 and the 15,017 2019 control measures for enterprises with a drop in revenue of at least 30% compared to the same month in the year before.

Fjord Line is eligible for compensation in regard to forskrift 21. desember 2020 Refund from the Norwegian government in regard to The Business Compensation Scheme* 121,442 0 control measures *The Business Compensation Scheme is part of the Norwegian government's measures to mitigate the financial effects of the coronavirus situation and the 37,453 infection for Other current receivables 31.12.

155,072 Refund from public VAT receivable 2,607 nr.

3085 § 4-5.

Receivable isincluding for the September/October, andin November/December ofLine 2020.is eligible for compensation in3,744 enterprises with a authorities, drop in revenue ofapplication at least 30%period compared to the same month the year before. Fjord regard to forskrift 21. desember 2020 (Figures in TNOK) Other current receivables 31.12.

Prepaid expenses, incl. insurance ships 20,799 19,829 nr. 3085 § 4-5. Compensation Receivable is for the application September/October, November/December 2020. effects of the coronavirus situation *The Business Scheme is part of period the Norwegian government'sand measures to mitigate the of financial and the infection control measures for Other receivables 9,088 15,017 enterprises with a drop in -revenue Note 8 Restricted funds group of at least 30% compared to the same month in the year before. Fjord Line is eligible for compensation in regard to forskrift 21. desember 2020 Other current receivables 31.12.

155,072 37,453

nr. 3085 § 4-5. Receivable is for the application period September/October, and November/December of 2020.

Note 8 Restricted funds - group

(Figures in TNOK) *The Business Scheme is part of Norwegian government's measures to mitigate the financial effects of the coronavirus situation and the infection control measures Note 8 ⁄⁄Compensation Restricted funds –the group 2020 2019 in regard to forskrift 21. desember 2020 for enterprises with a funds drop in-revenue is eligible for compensation Note 8 Restricted group of at least 30% compared to the same month in the year before. Fjord Line (Figures in TNOK) Restricted tax Receivable deduction isfunds per 31.12.: period September/October, and November/December of 2020.

2,141 3,481 nr. 3085 § 4-5. for the application 2020 2019 (Figures in TNOK)funds are deposited on separate bank accounts.

The tax deduction (Figures intax TNOK) Restricted deduction funds per 31.12.: The tax deduction funds are deposited on separate bank accounts.

Restricted tax deduction funds per 31.12.: (Figures in TNOK)in equity - group Notetax 9 Changes The deduction funds are deposited on separate bank accounts.

Note 9 Changes in equity group Restricted tax deduction funds-per 31.12.: (Figures in TNOK)

2,141 2020 2,141

Note 8 Restricted funds - group

2020 2,141

The tax deduction funds are deposited on separate bank accounts.

Note 9 Changes in equity - group (Figures in TNOK)

Note 9 ⁄⁄ Changes in equity – group Share capital Note 9 Changes in equity - group (Figures in TNOK)

Own Shares

Share capital

Own Shares

Share519,107 capital 519,107

Own Shares

(Figures (FiguresininTNOK) TNOK)

Equity 01.01.2019

Equity 01.01.2019 Net income 2019 Other comprehensive income 2019 Equity 01.01.2019 Net income 2019

Share capital

519,107

Other comprehensive income 2019 Equity 01.01.2019

Net income 2019 Equitycomprehensive 31.12.2019 income 2019 Other Net income 2019 Equity 31.12.2019 income 2019 Other comprehensive Other comprehensive income 2020 Sale ofcomprehensive own shares income 2020 Equity 31.12.2019 Other Increase of capital Equity Sale of31.12.2019 own shares Other comprehensive income 2020 Increase of capital

Own Shares

178,227 -9

178,227

0

178,227 25,205 178,227

180,166 64,346

311,649

0

25,205

25,205 544,312

25,205 203,432

Equity 31.12.2020

544,312

-9

-9 544,312

-9

180,166

64,346 64,346

140,082

311,649

1,189,137 64,346 50,409 1,189,137

244,512

219,588

0

219,588

0

203,432

244,512

219,588

0

219,588

1,059,403

140,0820 1,189,137 -10,347 140,082 0 1,189,137 -10,347 64,3460

64,346 50,409

244,512

244,512

0

-92,061

203,432 25,205

203,432

0

1,059,403 Total equity 1,059,403 Total equity 140,082 -10,347 1,059,403 140,082 0 -10,347

0

171,567

311,649

25,205

-9

171,567 140,082

178,227

-9

25,205

-10,347 190,513 -10,347 190,513

Total equity

interests Non-controlling 0 interests 171,567 0 Retained Non-controlling 140,082 earnings interests

0

519,107

-9

not recognised in income statement

Total equity

Non-controlling interests Non-controlling

140,082 311,649

178,227

-9

Retained earnings Retained earnings Retained 171,567 earnings

180,166 -10,347 180,166-10,347 64,346

-9

544,312

Other equity, not recognised Other equity, income notinrecognised statement in income Other equity,

account

-9

519,107

2019 3,481

account Share premium notstatement recognised -9 178,227 190,513 account in income Other equity, statement -9 178,227 190,513 Share premium

519,107

Net income 2020 Sale of own shares Other comprehensive income 2020 Increase of capital Equity 31.12.2020 Sale of own shares Increase of capital Equity 31.12.2020

Equity 31.12.2020

Share premium account Share premium

519,107

519,107 25,205

3,481 2019 3,481

-92,061 64,346

50,409 1,211,831

50,409 1,211,831

1,211,831 0

1,211,831

67

06 ⁄⁄ CONSOLIDATED FINANCIAL STATEMENT

Note 10 Share capital and shareholders' information - group

Note 10 ⁄⁄ Share capital and shareholders' information – group

The share capital is NOK 544.311.962,50 per 31.12.2020, and consists of 217.724.785 shares each NOK 2,50. All shares have equal rights.

The major shareholders per 31.12.2020

Owner share 44.6% 35.6% 16.6% 3.2% 100.0%

Ferd AS Kontrari AS Kontrazi AS Others, including own shares *) Total *) Fjord Line AS has a total of 10.764 own shares per 31.12.2020.

The major shareholders per 31.12.2019

Owner share 44.6% 34.8% 17.4% 1.1% 0.8% 1.3% 100.0%

Ferd AS Kontrari AS Kontrazi AS Arne Teigen Moly AS Others, including own shares *) Total *) Fjord Line AS has a total of 10.664 own shares per 31.12.2019.

Note 11 Taxes - group (Figures in TNOK) Calculation of deferred tax/deferred tax asset allocated to the Norwegian activity

68

Temporary differences Fixed assets Receivables OCI hedging account Gain/loss account Inventory Other differences, including accounting accruals Total Carry forward loss Basis for deferred tax (-deferred tax asset) 22% of the basis

31/12/2020 8,961 -3,197 -94,332 6,900 -2,500 -80,707 -164,875 -1,243,185 -1,408,060 -309,773

31/12/2019 4,786 -2,197 -79,314 8,626 0 -81,413 -149,512 -1,022,210 -1,171,722 -257,779

Change -4,175 1,000 15,018 1,725 2,500 -706 15,362 220,975 236,338 51,994

Owner share 44.6% 34.8% 17.4% Annual report 2020 ⁄⁄ Fjord Line 1.1% 0.8% 1.3% 100.0%

Ferd AS Kontrari AS Kontrazi AS Arne Teigen Moly AS Others, including own shares *) Total *) Fjord Line AS has a total of 10.664 own shares per 31.12.2019.

Note 11 ⁄⁄ Taxes Note 11 Taxes - group – group (Figures in in TNOK) TNOK) (Figures

Calculation of deferred tax/deferred tax asset allocated to the Norwegian activity Temporary differences Fixed assets Receivables OCI hedging account Gain/loss account Inventory Other differences, including accounting accruals Total Carry forward loss Basis for deferred tax (-deferred tax asset) 22% of the basis Deferred tax (-deferred tax asset) recognised in the balance sheet Deferred tax asset not recognised in the balance sheet

31/12/2020 8,961 -3,197 -94,332 6,900 -2,500 -80,707 -164,875 -1,243,185 -1,408,060 -309,773 -309,773 0

31/12/2019 4,786 -2,197 -79,314 8,626 0 -81,413 -149,512 -1,022,210 -1,171,722 -257,779 -257,779 0

Change -4,175 1,000 15,018 1,725 2,500 -706 15,362 220,975 236,338 51,994 51,994

Payable tax recognised in the balance sheet per 31.12.2020 connected to the Norwegian activity makes TNOK 0 (TNOK 0 per 31.12.2019).

Foreign subsidiaries The Danish shipowning companies are under Danish law connected to a tonnage tax system and have calculated taxable income based on these conditions.

Further on, the Danish subsidiaries are jointly taxed. Tax 2020 for the Danish subsidiaries is TNOK 0 due to negative taxable income (TNOK 1.003 in 2019).

The Danish subsidiaries received taxable grants in 2015. This was reflected in payable tax recognised in the balance sheet, TNOK 17.480 per 31.12.2015 which was allocated to the Danish subsidiaries.

As the grants are recognised as a reduction of the ships' acquisition cost, the grant is recognised through gains/losses in line with the depreciation of the ships.

The grant is considered not to be comprised by IAS 12. Therefore a deferred tax asset corresponding to payable tax connected to the grant was recognised in the balance sheet upon receipt of the grant in 2015. This deferred tax asset is being reversed over the depreciation period of the ships.

Net book value of deferred tax asset per 31.12.2020 and 31.12.2019 relating to foreign subsidiary is listed below.

The main element of this net amount (TNOK 17.463 per 31.12.2020) is thus connected to the mentioned grants.

Specification of tax expense Change in deferred tax asset connected to the Norwegian activity Payable tax connected to the Norwegian activity (partially owned subsidiary) Payable tax connected to foreign subsidiaries Change in deferred tax asset connected to foreign subsidiaries OCI hedging account Other adjustments, including foreign exchange translation differences Tax expense Specification of payable tax Payable tax connected to the parent company Payable tax connected to partially owned Norwegian subsidiary Payable tax connected to foreign subsidiaries Payable tax recognised in the balance sheet 31.12.

Specification of deferred tax asset Deferred tax asset connected to parent company*) Deferred tax asset connected to partly owned Norwegian subsidiary Deferred tax asset connected to OCI hedging account Deferred tax asset connected to foreign subsidiaries (net) Deferred tax asset recognised in the balance sheet 31.12.

Reconciliation of tax expense for the group 22% of result before tax Change of deferred tax asset not recognised in the balance sheet connected to the Norwegian activity Tax recognized through other comprehensive income 25% (27%) of not taxable income foreign subsidiaries etc.

Impact of changed tax rate in Norway Other permanent differences (net) including different tax rate between the countries Tax expense

2020 -51,994 0 0 -188 3,304 -113 -48,991

2019 -79,779 0 714 755 17,449 -380 -61,241

2020 0 0 0 0

2019 0 0 714 714

2020 289,020 0 20,753 17,463 327,236

2019 240,330 0 17,449 17,651 275,430

2020 -31,031 0 -15,018 0 0 -2,941 -48,990

2019 17,345 -92,405 17,449 0 0 -3,630 -61,241

*) Fjord Line AS has accumulated basis for deferred tax asset of TNOK 1.313.728 per 31.12.2020.

This implies a deferred tax asset (22 %) of TNOK 289.020 at full capitalisation.

The Board of Directors following a concrete assessment of the future prospects of Fjord Line AS (Group), under the basis of the net income from the two years prior to Covid-19, found that it has convincing evidence that future earnings will justify capitalization of the deferred tax asset in full. The argument is sustained by the positive operating results in the recent years. This combined with the current plans in long term business plans indicates that we have convincing evidence that we can at least have equivalent earnings in the years to come post Covid-19 as shown in 2019 and this has been taken into account in the assessment.

Note 12 Liabilities - group (Figures in table in TNOK) Non-current interest bearing debt per 31.12.

2020

2019

69

The Board of Directors following a concrete assessment of the future prospects of Fjord Line AS (Group), under the basis of the net income from the two years The Board of Directors a concrete assessment of that the future Fjord Linecapitalization AS (Group), of under basis of net income fromargument the two years prior to Covid-19, prior to Covid-19, foundfollowing that it has convincing evidence futureprospects earnings of will justify the the deferred taxthe asset in full. The is sustained found it hasoperating convincing evidence thatrecent futureyears. earnings justify capitalization of theplans deferred tax asset in full. The argument is sustained theconvincing positive operating results in the by the that positive results in the Thiswill combined with the current in long term business plans indicates that we by have 06 ⁄⁄ CONSOLIDATED FINANCIAL STATEMENT recent years. combined theequivalent current plans in longinterm business plans post indicates that we convincing thatbeen we can at least equivalent evidence thatThis we can at leastwith have earnings the years to come Covid-19 ashave shown in 2019 evidence and this has taken intohave account in the earnings in the years to come post Covid-19 as shown in 2019 and this has been taken into account in the assessment. assessment.

Note 12 Liabilities - group Note 12 Liabilities - group Note 12 ⁄⁄ Liabilities – group (Figures in table in TNOK) (Figures in table in TNOK) (Figures in table TNOK) Non-current interest bearing debt per 31.12.

Non-current interest bearing debt per 31.12.

Debt to credit institutions etc.

Debt to credit institutions etc.

Debt connected to leasing contracts recognised in the balance sheet Debt connected to leasing contracts recognised in the balance sheet Total non-current interest bearing debt 31.12. excl. of first year's installment Total non-current interest bearing debt 31.12. excl. of first year's installment

Current interest bearing debt per 31.12.

Current interest bearing debt per 31.12.

Debt to credit institutions (overdraft facilities) Debt to credit institutions (overdraft facilities) Current portion of debt to credit institutions Current of leasing debt todebt credit institutions Current portion portion of Current portioninterest of leasing debt debt 31.12.

Total current bearing Total current interest bearing debt 31.12.

Total book value of interest bearing debt 31.12.

Total book value of interest bearing debt 31.12.

2020 2,460,158 65,232 2,525,390

2020 2019 2,460,158 1,941,834 65,232 46,711 2,525,390 1,988,545

2019 1,941,834 46,711 1,988,545

2020

2020 2019

2019

7,989 0 7,989

7,989 245,412 0 7,989 0 245,412

245,412 0 245,412

2,533,379

2,533,379 2,233,957

2,233,957

Fjord Line AS had an unused overdraft facility of MNOK 35 per 31.12.2020 (unused overdraft facility of MNOK 35 MNOK per 31.12.2019).

Fjord Line AS had unusedhas overdraft facility of on MNOK 35 per 31.12.2020 (unused overdraft facility MNOKper 3531.12.2019).

MNOK per 31.12.2019).

Per 31.12.2020 the an company a positive balance the overdraft facility account of 191,8 MNOK (111,6ofMNOK Per the company positive balance on thefacility overdraft of 191,8 MNOK (111,6 MNOK per 31.12.2019).

The31.12.2020 subsidiary Fjord Line DKhas A/Sahas an unused overdraft of 3facility MDKKaccount (3 MDKK per 31.12.2019).

The subsidiary Fjord Line DK A/S has an unused overdraft facility of 3 MDKK (3 MDKK per 31.12.2019).

Interest bearing debt to credit institutions (incl. leasing) - distributed on currency per 31.12.2020 (figures in 1,000) Interest bearing debt to credit institutions (incl. leasing) - distributed on currency per 31.12.2020 (figures in 1,000) Currency Currency NOK NOK DKK DKK Euro Euro TOTAL TOTAL

Nominal currency Nominal currency 299,777 299,777 468,498 468,498 150,366 150,366

Exchange rate 1.000 1.407 10.470

Exchange rate 1.000 1.407 10.470

Book value in NOK 31.12.2020 Book value in NOK 31.12.2020 299,777 299,777 659,223 659,223 1,574,379 1,574,379 2,533,379 incl. first year's installment 2,533,379 incl. first year's installment

Interest bearing debt to credit institutions (incl. leasing) - distributed on currency per 31.12.2019 (figures in 1,000) Interest bearing debt to credit institutions (incl. leasing) - distributed on currency per 31.12.2019 (figures in 1,000) Currency Nominal currency Exchange rate Book value in NOK 31.12.2019 NOK 129,522 1.000 129,522 Currency Nominal currency Exchange rate Book value in NOK 31.12.2019 DKK 423,530 1.320 559,144 DKK 423,530 1.320 559,144 Euro 156,663 9.864 1,545,290 Euro 156,663 9.864 1,545,290 TOTAL first year's installment TOTAL 2,233,956 incl. 2,233,956 first year's incl. installment The Group Group have secured through negotiations withwith senior lenders 30.04.2020 and 17.02.2021 that will the Group with a significant financial The securedaarobust robustfinancial financialrestructuring restructuring through negotiations senior lenders 30.04.2020 and 17.02.2021 thatprovide will provide the Group with a runway until May 2022.

The financial consists ofrestructuring owner contributions, bank loans as well asnew postponement guarantee premium and instalments. The significant financial runway until Mayrestructuring 2022. The financial consists new of owner contributions, bank loansofasinterests, well as postponement of interests, Group haspremium also renegotiated all financial covenants under current loanall agreement be compliant with going forward. guarantee and instalments.

The Group has alsothe renegotiated financialtocovenants under thethese current loan agreement to be compliant with these going forward.

Borrowing in in Euro Euro and and DKK DKK Borrowing Borrowing in in Euro sheet at current exchange raterate per 31.12.2020 and 31.12.2019, cf. thecf.table Borrowing Euro and andDKK DKKisisrecognised recognisedininthe thebalance balance sheet at current exchange per 31.12.2020 and 31.12.2019, the above. table above.

Foreign exchange exchange loss/gain borrowing in Euro andand DKK is 23,8 MNOK. Foreign loss/gaininin2020 2020related relatedtotonon-current non-current borrowing in Euro DKK is 23,8 MNOK. Foreign exchange exchange loss borrowing in Euro andand DKK is 17,9 MNOK. Foreign loss in in2019 2019related relatedtotonon-current non-current borrowing in Euro DKK is 17,9 MNOK. Book value value per asas follows in in NOK (figures in TNOK): Book per 31.12.

31.12. for forthe theEuro-borrowings Euro-borrowingsand andDKK DKKis is follows NOK (figures in TNOK): Principal amount: Principal amount: Amortization effect commission Amortization effect of ofthe theborrowings, borrowings,incl. incl.guarantee guarantee commission Bookvalue value per per 31.12.

31.12.

Book

2020 2,245,565 -11,963 2,233,602

2020 2019 2,245,565 2,118,529 -11,963 -14,095 2,233,602 2,104,434

2019 2,118,529 -14,095 2,104,434

Borrowing in in DKK NOK, incl. bond loan Borrowing Non-currentindebt NOK 31.12.2017 of new non-current loan regarding the rebulding MS Stavangerfjord.

Borrowing DKKin31.12.2020 consistscomprise of a non-current loan to Danica Pension of TNOK 562 840.ofTotal available loan facility is MDKK 400.

The loan bondfacility loan was settledininitsitsentirity entirety 2018 and as current debt. to MDKK 400.

The is issued inin 2018 and thewas debtinin2016 DKKreclassified to Danica Pension amounts 2018 2017 Loan agreement and financial covenants Total amount of bonds: 0 EFRIC) about 74,000financing the purchase of a new catamaran to operate the route In 2018 Fjord Line group entered into a loan agreement with the Australian export finance body EFA(former Own holding Hirtshals.

0 0 KristiansandAmortization effect of the (expenses etc.) also *) during the construction period, but as a result of the 0entered agreement 0with EFA and the contractor of the catamaran Austal-group will Fjord Line group stands as loan the formal borrower Book Line valuenot bond loan 31.12.

0 74,000 Fjord be required to pay interest or instalments in the construction period together with an additional agreement that in the event of a default of debt, will EFA seek full coverage from Austal before they can seek coverage of the debt from Fjord Line group.

This results in Fjord Line not considering itself as the primary responsible of the debt during the construction period and thus derecognize the debt in accordance with IFRS 9.

The expected delivery of the catamaran is Q2 2021. Upon delivery all related financial liabilities will be recognized and Fjord Line will be considered as the primary responsible of the debt.

Installment plan non-current interest-bearing debt to credit institutions/mortgage loan, leasing debt and bond loan (Figures in TNOK) 2020 2021 Annual installments 96,301 11,824 Remaining loan per 31.12.

2,448,894 2,437,070 Book value of mortgaged assets 31.12.2020: Ships 2,851,183 Prepaid ships 263,467 Receivables 15,440 Inventories 21,409 Total 3,151,499

70

2022 316,292 2,120,778

2023 902,510 1,218,268

2024 230,819 987,449

The loan facility is issued in its entirity in 2018 and the debt in DKK to Danica Pension amounts to MDKK 400.

Borrowing in DKK 31.12.2020 consists of a non-current loan to Danica Pension of TNOK 562 840. Total available loan facility is MDKK 400.

The loan facility isand issued in its entirity in 2018 and the debt in DKK to Danica Pension amounts to MDKK 400.

Loan agreement financial covenants

In 2018 Fjord Line group entered into a loan agreement with the Australian export finance body EFA(former EFRIC) about financing the purchase of a new catamaran to operate the route Loan agreement and financial covenants Annual report 2020 ⁄⁄ Fjord Line KristiansandHirtshals.

In 2018 Fjord Linestands groupasentered into borrower a loan agreement withthe theconstruction Australian export EFA(former EFRIC) about financing of a new catamaran to operate the route Fjord Line group the formal also during period,finance but as abody result of the entered agreement with EFA the andpurchase the contractor of the catamaran Austal-group will KristiansandFjord Line notHirtshals. be required to pay interest or instalments in the construction period together with an additional agreement that in the event of a default of debt, will EFA seek full coverage Fjord Line group stands as the formal borrower also during the construction period, but as a result of the entered agreement with EFA and the contractor of the catamaran Austal-group will from Austal before they can seek coverage of the debt from Fjord Line group.

Fjordresults Line not be required to pay interest or instalments in the responsible constructionofperiod together an additionalperiod agreement that in the event of default of debt, willwith EFAIFRS seek 9. full coverage This in Fjord Line not considering itself as the primary the debt duringwith the construction and thus derecognize thea debt in accordance from Austal before theyofcan coverage of the debt fromdelivery Fjord Line group. financial liabilities will be recognized and Fjord Line will be considered as the primary responsible of the debt.

The expected delivery theseek catamaran is Q2 2021.

Upon all related This results in Fjord Line not considering itself as the primary responsible of the debt during the construction period and thus derecognize the debt in accordance with IFRS 9.

The expected delivery of the catamaran is Q2 2021. Upon delivery all related financial liabilities will be recognized and Fjord Line will be considered as the primary responsible of the debt.

Installment plan non-current interest-bearing debt to credit institutions/mortgage loan, leasing debt and bond loan (Figures in TNOK) 2020 2021 Installment plan non-current interest-bearing debt to credit institutions/mortgage loan, leasing debt and bond11,824 loan Annual installments 96,301 (Figures in TNOK) 2020 2021 Remaining loan per 31.12.

2,448,894 2,437,070 Annual installments 96,301 11,824 Remaining per 31.12.assets 31.12.2020: 2,448,894 2,437,070 Book value loan of mortgaged

2022 316,292 2022 2,120,778 316,292 2,120,778

2023 902,510 2023 1,218,268 902,510 1,218,268

2024 230,819 2024 987,449 230,819 987,449

Ships 2,851,183 Book value 31.12.2020: Prepaid shipsof mortgaged assets 263,467 Ships 2,851,183 Receivables 15,440 Prepaid ships 263,467 Inventories 21,409 Receivables 15,440 Total 3,151,499 Inventories 21,409 Total 3,151,499

Note 13 Operating income and other gains/losses - group Note 13 Operating income and other gains/losses group gains/losses – group Note 13TNOK) ⁄⁄ Operating income and -other (Figures in (Figures in Sales revenues (Figures in TNOK) TNOK) Ticket income Sales revenues Sales income etc. onboard Ticket income Cargo income Sales income etc. onboard Other Cargo sales income Total revenues Other Total revenues Othersales operating income Other gains/losses operating income Other (net) Gain on sale of fixed assets* Otherbygains/losses (net) Gain transfer of subsidiary to associated company Gain on sale ofsubsidiary fixed assets* Loss from exit Gain by transfer of subsidiary to associated company in income statement), cf. note170 Unrealized gain derivatives (value change recognised Loss from exit subsidiary Total othergain gains/losses (net) Unrealized derivatives (value change recognised in income statement), cf. note170

2020

2019

2020 280,242 215,300 280,242 171,618 215,300 7,871 171,618 675,031 7,871 675,031 29,807

2019 581,303 765,506 581,303 213,326 765,506 23,282 213,326 1,583,417 23,282 1,583,417 29,567

A A B

29,807

29,567

B

23,734 0 23,734 0 00 0 23,7340

0 0 00 00 0 00

C

23,734 728,572

0 1,612,984

C A+B+C

Total other (net) recognized in the income statement with TNOK 728,57223.734. 1,612,984 *Gain operating on the saleincome of HSCand Fjord Cat gains/losses in 2020 has been

A+B+C

Total operating other gains/losses (net)other gains/losses (net) Total income and

*Gain on the sale of HSC Fjord Cat in 2020 has been recognized in the income statement with TNOK 23.734.

Note 14 Wage costs, number of employees, remunerations, loans to employees etc. - group Note 14 Wage number of employees, remunerations, loans to employees etc. - group (Figures in tablecosts, below in TNOK) (Figures in table below in TNOK) Wage costs Wages, incl. feeding crew, social costs etc.

Wage costs Payroll tax and other public duties related to wages Wages, incl.

Pension costsfeeding etc. crew, social costs etc.

Payroll tax and other public duties related to wages Other remunerations Pension costs etc.

Total Other remunerations Total number of man-labour years in the group during the accounting year 2020 has been 474 (637 in 2019) Average

2020 256,858 2020 17,796 256,858 17,155 17,796 17,194 17,155 309,003 17,194 309,003

2019 320,595 2019 24,456 320,595 16,474 24,456 25,683 16,474 387,209 25,683 387,209

Average numberfor of man-labour years in the during the accounting year 2020 has been 474 (637 in 2019) Remunerations CEO and the Board ofgroup Directors (figures in TNOK) 2020 2019 Wages CEO incl. Bonus 3,200 2,800 Remunerations for CEO 2020 2019 Other remuneration CEO and the Board of Directors (figures in TNOK) 571 290 Wagesof CEO incl. Bonus 3,200 2,800 Board Directors' fee 950 1,288 Otherfigures remuneration 571 290 The above doCEO not include the option program. See below for further information.

Board feehas been provided for CEO or any of the members of the Board of Directors.

950 1,288 No loanoforDirectors' gurarantee The CEO figures do in notthe include the option program.

See below for further information.

The is above included company's pension agreement, cf mentioned below.

No loan or to gurarantee has been provided CEOisorallocated any of the members theliability Board of Directors.

According the agreement, 20% of grossfor salary annually andofthe amounts to per 31.12.2020 TNOK 2.272 (TNOK 1.897 per 31.12.2019).

The CEO is included in the company's pension agreement, cf mentioned below.

According to the agreement, of gross salary is allocated andtothe to per 31.12.2020 TNOK 2.272 (TNOK 1.897 per commencing 31.12.2019).

The chief executive officer is20% entitled to a severance paymentannually equivalent 12 liability months’amounts salary without the right to holiday pay and pension rights, at the time of expiry of notice period, when the resignation is at the request from the company. The Expiry of the notice period was 12.10.2020, the CEO is as The chief executive officerpay is entitled to a severance payment equivalent to 12 months’ salary without the right to holiday pay and pension rights, commencing such entitled to severance until 12.10.2021. at the time of expiry of notice period, when the resignation is at the request from the company. The Expiry of the notice period was 12.10.2020, the CEO is as such entitled to severance pay until 12.10.2021.

Pensions The company has taken on a pension savings agreement on behalf of the former and the present CEO and another two individuals.

Pensions The market value of the contributions/assets was TNOK 3.101 per 31.12.2020 (TNOK 3.101 per 31.12.2019).

The company on a pension savings on behalf former and(TNOK the present CEO another two individuals.

Gross liabilityhas per taken 31.12.2020 is calculated to agreement TNOK 6.383 relatedof tothe these persons 5.891 perand 31.12.2019).

The liability market value the contributions/assets was (TNOK TNOK 3.101 (TNOK per 31.12.2019).

Net is thusofTNOK 3.283 per 31.12.2020 2.790 per per31.12.2020 31.12.2019), and is 3.101 classified as pension liability in the balance sheet.

Gross liability per 31.12.2020 is calculated to TNOK 6.383 related to these persons (TNOK 5.891 per 31.12.2019).

Netaddition liabilitythe is thus TNOK per 31.12.2020 2.790 pension per 31.12.2019), anditsisemployees. classified as pension liability in the balance sheet.

In company has3.283 established a defined(TNOK contribution scheme for

The company pays fixed contributions to an insurance company. The company has no further obligations to pay once the contributions have been paid.

In addition the company has established defined pension scheme for its employees.

The contribution constitutes from 2% to a4% of the contribution employees' salary.

The company pays fixed contributions to an insurance company. The company has no further obligations to pay once the contributions have been paid.

The contribution constitutes from 2% to 4% of the employees' salary.

71

Other operating income Other gains/losses (net) Gain on sale of fixed assets* 06 STATEMENT Gain⁄⁄byCONSOLIDATED transfer of subsidiary toFINANCIAL associated company Loss from exit subsidiary Unrealized gain derivatives (value change recognised in income statement), cf. note170 Total other gains/losses (net) Total operating income and other gains/losses (net)

29,807

29,567

23,734 0 0 0

0 0 0 0

23,734

0

728,572

1,612,984

B

C A+B+C

*Gain on the sale of HSC Fjord Cat in 2020 has been recognized in the income statement with TNOK 23.734.

Note 14 ⁄⁄ Wage costs, number of employees, remunerations, loans to emloyees etc. – group

Note 14 Wage costs, number of employees, remunerations, loans to employees etc. - group (Figures (Figures in in table table below below in in TNOK) TNOK) Wage costs Wages, incl. feeding crew, social costs etc.

Payroll tax and other public duties related to wages Pension costs etc.

Other remunerations Total

2020 256,858 17,796 17,155 17,194 309,003

2019 320,595 24,456 16,474 25,683 387,209

Average number of man-labour years in the group during the accounting year 2020 has been 474 (637 in 2019) Remunerations for CEO and the Board of Directors (figures in TNOK) 2020 2019 Wages CEO incl. Bonus 3,200 2,800 Other remuneration CEO 571 290 Board of Directors' fee 950 1,288 The figures above do not include the option program. See below for further information.

No loan or gurarantee has been provided for CEO or any of the members of the Board of Directors.

The CEO is included in the company's pension agreement, cf mentioned below.

According to the agreement, 20% of gross salary is allocated annually and the liability amounts to per 31.12.2020 TNOK 2.272 (TNOK 1.897 per 31.12.2019).

The chief executive officer is entitled to a severance payment equivalent to 12 months’ salary without the right to holiday pay and pension rights, commencing at the time of expiry of notice period, when the resignation is at the request from the company. The Expiry of the notice period was 12.10.2020, the CEO is as such entitled to severance pay until 12.10.2021.

Pensions The company has taken on a pension savings agreement on behalf of the former and the present CEO and another two individuals.

The market value of the contributions/assets was TNOK 3.101 per 31.12.2020 (TNOK 3.101 per 31.12.2019).

Gross liability per 31.12.2020 is calculated to TNOK 6.383 related to these persons (TNOK 5.891 per 31.12.2019).

Net liability is thus TNOK 3.283 per 31.12.2020 (TNOK 2.790 per 31.12.2019), and is classified as pension liability in the balance sheet.

In addition the company has established a defined contribution pension scheme for its employees.

The company pays fixed contributions to an insurance company. The company has no further obligations to pay once the contributions have been paid.

The contribution constitutes from 2% to 4% of the employees' salary.

Auditor Auditor's fee relates to the following services (exclusive of vat): (Figures in TNOK) Auditor Audit services - group auditor Auditor's fee relates the following services (exclusive of vat): Audit services other to auditors (Figures in TNOK) Accounting and tax related consultancy group auditors

Accounting and tax related consultancy other auditors Audit servicesservices/agreed-upon - group auditor Certification control procedures group auditor Audit servicesservices/agreed-upon other auditors Certification control procedures other auditors Accounting and tax related consultancy group auditors Other services Accounting and tax related consultancy other auditors Total auditor's fee Certification services/agreed-upon control procedures group auditor Certification services/agreed-upon control procedures other auditors Other15 services Note Other current liabilities - group Total auditor's fee

2020 674 746 49 2020 214 674 297 7460 49 186 214 2,165 297 0 186 2,165

2019 633 864 75 2019 436 633 11 864 200 75 193 436 2,412 11 200 193 2,412

2020 29,308 75,106 18,958 2020 26,730 29,308 150,102 75,106 18,958 26,730 150,102

2019 42,193 70,771 18,409 2019 29,708 42,193 161,080 70,771 18,409 29,708 161,080

(Figures in TNOK) Note 15current Other current - group Note 15 ⁄⁄ liabilities Otherliabilities current liabilities – group Other per 31.12: Incurred costs regarding wages/pay etc. (Denmark) (Figures (Figures in in TNOK) table Prepayment fromTNOK) customers Incurred interests and guarantee commission Other current liabilities percosts 31.12: Provision for other incurred Incurred costs regarding etc. (Denmark) Other current liabilitieswages/pay 31.12.

Prepayment from customers Incurred interests and guarantee commission Provision for other incurred Note 16 NOx-grants - groupcosts Other current liabilities 31.12.

The ship "MS Stavangerfjord" was delivered in July 2013, and the ship "MS Bergensfjord" was delivered in January 2014.

Note 16 NOx-grants group Because the ships are -gas powered (LNG), with related low emission, Fjord Line AS was granted a contribution from the NOx-fund.

Per 31.12.2014 contributions of MNOK 147,2 in total were paid to Fjord Line AS connected to these projects.

As a condition for the grant Fjord Line AS has been obliged to use "MS Stavangerfjord" and "MS Bergensfjord" in NOx-liable waters for at least 2 years The Stavangerfjord" was delivered in July 2013, and the ship "MS Bergensfjord" was delivered in January 2014. fromship time"MS of delivery.

Because the ships are gas powered (LNG), with related low emission, Fjord Line AS was granted a contribution from the NOx-fund.

Per 31.12.2014 contributions of MNOK 147,2 in in total were paid to Fjord Line AS connected to these projects.

Fjord Line AS received 0 MNOK in NOx-grants 2020 (0 MNOK in 2019).

As a condition for the grant Fjord Line AS has been obliged to use "MS Stavangerfjord" and "MS Bergensfjord" in NOx-liable waters for at least 2 years from of delivery.MNOK 4,8 of the grants have been recorded (5,1 MNOK in 2019). The amount is classified as reduction of depreciation in the income statement.

In thetime 2020-accounts The recording of the NOx-grants through profit or loss is accrued in line with the depreciation profile of the operating assets that the grants relate to.

Fjord Line AS received 0 MNOK in NOx-grants in 2020 (0 MNOK in 2019).

Below is a list of accounting values (figures in TNOK) In the 2020-accounts MNOK 4,8 of the grants have been recorded (5,1 MNOK in 2019). The amount is classified as reduction of depreciation in the income statement.

The recording the NOx-grants through profit or loss is accrued in line with the depreciation profile of the operating assets that the grants relate to.

0 Grants receivedof2019

72

Total received grant 31.12.2019 Below a list of accounting values in TNOK) Grants is recognised through profit and(figures loss 2019

166,809 -5,181

Other current liabilities per -31.12: Note 15 Other current liabilities group

2020 2019 29,308 42,193 75,106 70,771 18,958 Annual report18,409 2020 ⁄⁄ Fjord Line 26,730 29,708 2020 2019 29,308 42,193 150,102 161,080

Incurred costs regarding wages/pay etc. (Denmark) Prepayment from customers (Figures in TNOK) Incurred interests and guarantee commission Provision forliabilities other incurred costs Other current per 31.12: Incurred regarding wages/pay etc. (Denmark) Other costs current liabilities 31.12.

Prepayment from customers Incurred interests and guarantee commission Provision other incurred- group costs Note 16forNOx-grants Note 16liabilities ⁄⁄ NOx-grants – group Other current 31.12.

Auditor

75,106 18,958 26,730 150,102

70,771 18,409 29,708 161,080

Auditor's fee relates to the following services (exclusive of vat): (Figures in "MS TNOK) The ship Stavangerfjord" was delivered in July 2013, and the ship "MS Bergensfjord" was delivered in January 2014.

Note 16 NOx-grants - group

2019 Because the ships are gas powered (LNG), with related low emission, Fjord Line AS was granted a contribution from the NOx-fund. 2020 Audit services - group auditor of MNOK 147,2 in total were paid to Fjord Line AS connected to these projects.

674 633 Per 31.12.2014 contributions Audit other Asship aservices condition for auditors the grant Fjord LineinAS has beenand obliged use Bergensfjord" "MS Stavangerfjord" and in "MS Bergensfjord" in NOx-liable waters 746 for at least 2 years 864 The "MS Stavangerfjord" was delivered July 2013, the shipto"MS was delivered January 2014.

Accounting and tax consultancy group auditors 49 75 from time of delivery.

Because the ships are related gas powered (LNG), with related low emission, Fjord Line AS was granted a contribution from the NOx-fund.

Accounting andcontributions tax relatedofconsultancy other auditors 214 436 Per 31.12.2014 MNOK 147,2 in total were paid to Fjord Line AS connected to these projects.

Certification services/agreed-upon control procedures auditor 11 AsFjord a condition for the grant Fjord Line AS been obliged togroup use(0 "MS Stavangerfjord" Line AS received 0 MNOK in has NOx-grants in 2020 MNOK in 2019).and "MS Bergensfjord" in NOx-liable waters for at least 2 years297 Certification services/agreed-upon control procedures other auditors 0 200 from time of delivery.

Other services 186 193 In the 2020-accounts MNOK 4,8 of the grants have been recorded (5,1 MNOK in 2019). The amount is classified as reduction of depreciation in the income statement.

Fjord Line AS received 0 MNOK in NOx-grants in 2020 (0 MNOK in 2019).

Total 2,412 The auditor's recording fee of the NOx-grants through profit or loss is accrued in line with the depreciation profile of the operating assets that the2,165 grants relate to.

In the 2020-accounts MNOK 4,8 of the grants have been recorded (5,1 MNOK in 2019). The amount is classified as reduction of depreciation in the income statement.

Below is a list of NOx-grants accountingthrough values profit (figures in TNOK) The recording of the or loss is accrued in line with the depreciation profile of the operating assets that the grants relate to.

Note 15 Other current liabilities - group Grants 2019 values (figures in TNOK) Below is areceived list of accounting (Figures in TNOK) Total received grant 31.12.2019 Grants recognised Grants received 2019 through profit and loss 2019 Other currentgrant liabilities per 31.12: Total received 31.12.2019 Accumulated grants recognised through profit and loss 31.12.2019 .2019 Incurred costs regarding wages/pay (Denmark) Grants recognised through profit and lossetc.

2019 2.2019 Grants received, not recognised through profit and loss 31.12.2019 Prepayment from Accumulated grantscustomers recognised through profit and loss 31.12.2019 Grants received 2020 Grants received, recognised through profit and loss 31.12.2019 Incurred interestsnot and guarantee commission Total received grant 31.12.2020 Grants received 2020incurred costs Provision for other Grants recognised through profit and loss 2020 Total received 31.12.2020 Other currentgrant liabilities 31.12. through profit and loss 31.12.2020 Accumulated grants recognised .2020 Grants recognised through profit and loss 2020 Grants received, not recognised through profit and loss 31.12.2020 2.2020 Accumulated grants recognised through profit and loss 31.12.2020 Grants received, not recognised through profit and loss 31.12.2020

Note 16 NOx-grants - group

0 166,809 -5,181 0 -32,700 166,809 134,109 -5,181 0 -32,700 166,809 134,109 0 -4,790 166,809 -37,490 -4,790 129,319 -37,490

2020 29,308 75,106 18,958 26,730 150,102

2019 42,193 70,771 18,409 29,708 161,080

129,319

hegde accounting linked to these contracts. At the balance sheet date, the net value of future contracts amounts to TNOK - 85.577 (TNOK -70.890 per 2019)

and is classified as long-term debt.

Note 17 ⁄⁄ Derivatives – group The ship "MS Stavangerfjord" was delivered in July 2013, and the ship "MS Bergensfjord" was delivered in January 2014.

Note 17 Derivatives - group

Because ships are gas powered (LNG), with related low emission, Fjord Line AS was granted a contribution from the NOx-fund.

Note 18the Subsequent Event Per 31.12.2014 of MNOK 147,2 in total were paid to Fjord Line AS connected to these projects.

Fjord Line has thecontributions following financial contracts connected to fuel: i) MGO (Marinefor Gas delivery 2020AS - 2021 As a condition theOil), grant FjordinLine has been obliged to use "MS Stavangerfjord" and "MS Bergensfjord" in NOx-liable waters for at least 2 years ii) LNG (the Bergensfjord and Stavangerfjord), delivery in 2020 - 2021 from ofships delivery.

Thetime Group has since March 2020 experienced increasingly adverse effects of the Covid-19 outbreak. The outbreak has developed rapidly, and the situation

affects Fjord Lines business significantly as the number of travelers has been decreasing in line with the respective Governments closing of borders as well as The derivatives are recognised in the in balance sheet at in fair value(0at MNOK the time in of entering into the contracts and then continuously at fair value.

Fjord Line AS received 0 MNOK NOx-grants 2019). implementation of other travel restrictions in order2020 to reduce the spread of the virus. This situation has the highest priority in the Group and the management Derivatives entered prior to 2018 are not included as part of the recognised hedge and the value change is recognised through profit and loss as "other financial expences". team has designed and implemented several extensive measures in order to immediately adjust the cost base in order to protect the Groups cash-flow, by Ineliminating the 2020-accounts MNOK 4,8 of the grants been recorded (5,1has MNOK in 2019). all cash-negative operations this have extraordinary situation brought about. The amount is classified as reduction of depreciation in the income statement.

Items not included in the company's recognised hedge have the following values at the balance sheet date: The recording of the NOx-grants through profit or loss is accrued in line with the depreciation profile of the operating assets that the grants relate to.

Derivatives related to MGO has delivery in the period 2020-2021.

These among of temporary ourper route network and deployment of vessels, as well as layoff of personnel and other robust cost Fair valueactions of theseconsist derivatives per others 31.12.2020 is TNOK 0changes (TNOK in - 146 31.12.2019). reductions to adjustvalues the cost base to present market demand. The Group has established an emergency route, primarily for cargo, to ensure the flow Below is a listinoforder accounting (figures in the TNOK) of derivatives goods between the EU in with daily departures The relatedNorway to LNG and has delivery the two period 2020 -2021. in each direction between Kristiansand and Hirtshals. To ensure the flow of goods between Norway and EU, the Group emergency route, primarily for cargo, 0with two daily departures in each direction between Kristiansand and Hirtshals.

Grants received 2019 Fair value of these derivatives perestablished 31.12.2020 an is TNOK 2 (TNOK -5.209 per 31.12.2019).

In addition, Group sailed two round trips a week to serve the west coast market in Norway and to bunker fuel from the LNG plant in Risavika.

166,809 Total receivedthe grant 31.12.2019 The contract enteredthrough during 2018, are recognised as follows.

-5,181 Grants recognised profit2019 andand loss2020 2019are entirely considered as hedges and The Group have a robust financial through with senior lenders 30.04.2020 and 17.02.2021 that will provide the Group with a Accumulated grantssecured recognised through profitrestructuring and loss 31.12.2019 .2019 negotiations -32,700 robust financial runway.

Thehas financial restructuring consists of owner contributions, The derivatives related to MGO delivery in profit the period 134,109 new bank loans as well as postponement of interests, guarantee premium 2.2019 Grants received, not recognised through and2020-2021. loss 31.12.2019 Fair of these2020 derivatives perhas 31.12.2020 is TNOK -13.257 (TNOK - 10.068 per 31.12.2019) andvalue instalments.

The Group also renegotiated all financial covenants under the 0 current loan agreement to be compliant with these going forward. Fjord Line Grants received has in additiongrant received cash support totaling MNOK 269 for 2020 from the Norwegian government’s Business Compensation Scheme.

166,809 Total received 31.12.2020 The derivatives related to LNG has delivery in the period 2020-2021.

-4,790 Grants recognised through profit and loss 2020 Fair value of these derivatives per 31.12.2020 is TNOK 4.498 (TNOK - 5.499 per Fjord Line is well positioned, and the Board of Directors is confident that31.12.2019) measures taken by the management throughout this challenging year will contribute to Accumulated grants recognised through profit and loss 31.12.2020 -37,490 .2020 the positive underlying development that the Group experienced pre-Covid-19.

Grants received, not recognised through profit and lossrelated 31.12.2020 2.2020 129,319 The group hasof also entered into a interest agreement its external financing. described theGroup accounting principle note, the follows The Board Directors concurs withrate thehedge management team andtohas a positive outlookAsand expectinthe to further improve ongroup the pre Covid-19 results in hegde accounting linked to these contracts. At the balance sheet date, the net value of future contracts amounts to TNOK - 85.577 (TNOK -70.890 per 2019) the years to come. and is classified as long-term debt.

hegde accounting linked to these contracts. At the balance sheet date, the net value of future contracts amounts to TNOK - 85.577 (TNOK -70.890 per 2019) Noteis18 Subsequent Event and classified as long-term debt.

Note 18 Subsequent Event

The Group18 has⁄⁄since March 2020 experienced increasingly adverse effects of the Covid-19 outbreak. The outbreak has developed rapidly, and the situation affects Fjord Lines business Note Subsequent Event significantly as the number of travelers has been decreasing in line with the respective Governments closing of borders as well as implementation of other travel restrictions in order to reduce the spread of the virus. This situation has the highest priority in the Group and the management team has designed and implemented several extensive measures in order to The Group has since March experienced increasingly adversebyeffects of the outbreak.

Thethis outbreak has developed rapidly, the situation immediately adjust the cost base2020 in order to protect the Groups cash-flow, eliminating allCovid-19 cash-negative operations extraordinary situation has broughtand about.

affects Fjord Lines business significantly as the number of travelers has been decreasing in line with the respective Governments closing of borders as well as implementation of other order to spreadand of deployment the virus. This situation hasasthe highest priorityand in other the Group management These actions consist amongtravel othersrestrictions of temporaryinchanges in reduce our routethe network of vessels, as well layoff of personnel robust and cost the reductions in order to adjusthas the designed cost base toand theimplemented present marketseveral demand.extensive The Groupmeasures has established an emergency route, adjust primarily cargo, to ensure thetoflow of goods between Norway and by the EU with team in order to immediately theforcost base in order protect the Groups cash-flow, two daily departures in each direction between Kristiansand and Hirtshals. ensure the flow of goods between Norway and EU, the Group established an emergency route, primarily eliminating all cash-negative operations this extraordinary situationTohas brought about. for cargo, with two daily departures in each direction between Kristiansand and Hirtshals. In addition, the Group sailed two round trips a week to serve the west coast market in

Norwayactions and to bunker from others the LNG in Risavika.

These consistfuel among ofplant temporary changes in our route network and deployment of vessels, as well as layoff of personnel and other robust cost reductions in order to adjust the cost base to the present market demand. The Group has established an emergency route, primarily for cargo, to ensure the flow The Group have secured a robust financial restructuring through negotiations with senior lenders 30.04.2020 and 17.02.2021 that will provide the Group with a robust financial runway. of goods between Norway and the EU with two daily departures in each direction between Kristiansand and Hirtshals. To ensure the flow of goods between The financial restructuring consists of owner contributions, new bank loans as well as postponement of interests, guarantee premium and instalments. The Group has also renegotiated Norway and EU, the Group established an emergency route, primarily for cargo, with two daily departures in each direction between Kristiansand and Hirtshals.

In addition, the Group sailed two round trips a week to serve the west coast market in Norway and to bunker fuel from the LNG plant in Risavika.

The Group have secured a robust financial restructuring through negotiations with senior lenders 30.04.2020 and 17.02.2021 that will provide the Group with a robust financial runway. The financial restructuring consists of owner contributions, new bank loans as well as postponement of interests, guarantee premium and instalments. The Group has also renegotiated all financial covenants under the current loan agreement to be compliant with these going forward. Fjord Line has in addition received cash support totaling MNOK 269 for 2020 from the Norwegian government’s Business Compensation Scheme.

Fjord Line is well positioned, and the Board of Directors is confident that measures taken by the management throughout this challenging year will contribute to the positive underlying development that the Group experienced pre-Covid-19.

The Board of Directors concurs with the management team and has a positive outlook and expect the Group to further improve on the pre Covid-19 results in the years to come.

73

07 ⁄⁄ FJORD LINE AS FINANCIAL STATEMENTS

PARENT COMPANY FINANCIAL STATEMENTS

• Income statement • Balance sheet • Cash flow statement • Accounting policies • Notes

74

Annual report 2020 ⁄⁄ Fjord Line

Annual accounts FJORD LINE AS – PARENT COMPANY

Fjord Line AS - Income statement

Income statement

(1,000 NOK) (1,000 NOK)

Note Note

Operating income: Sales revenues Other operating income Total operating income

Parent company Parent Parent company Parent company company 2020 2019 2020 2019 NGAAP NGAAP NGAAP NGAAP

14 14, 19 14

672,565 34,819 707,384

1,583,416 35,036 1,618,452

17 1, 2 1 3, 6, 7, 17

123,186 80,701 12,827 14,724 659,036 890,473

371,196 98,906 9,966 0 996,704 1,476,773

-183,089

141,679

107,742 -22,590 -97,039 -27,537 -39,425

105,421 -22,077 -83,765 -9,907 -10,329

-222,514

131,351

-48,690

-62,330

Ordinary result after tax

-173,824

193,681

Result for the year

-173,824

193,681

Allocation of the result Transferred to other equity/uncovered loss Total

-173,824 -173,824

193,681 193,681

Operating expenses: Cost of goods Wage costs Depreciation of property, plant and equipment and intangible assets Write-downs of tangible and intangible assets Other operating expenses Total operating expenses Operating result Financial items: Interest income Intergroup guarantee expense Interest expenses Other financial expenses Net financial items

11, 18 18 16, 18 9, 16

Ordinary result before tax Tax expense on ordinary result

15

75

07 ⁄⁄ FJORD LINE AS FINANCIAL STATEMENTS

Balance sheet FJORD LINE AS – PARENT COMPANY per 31 December 2020

(1,000 NOK) Fjord Line AS - Balance sheet per 31 December

(1,000 NOK) ASSETS

Assets

Fixed assets Intangible assets WEB-project, concept development etc.

Deferred tax asset Total intangible assets

Note

Note

31/12/2019 NGAAP

79,550 240,330 319,880

835 17,448 112 18,396

835 9,561 180 10,576

992,441 2,024,844 80 3,017,364

992,441 1,925,653 80 2,918,174

3,425,723

3,248,630

6

20,697

32,696

Receivables Trade receivables Intergroup balances Other current receivables Total receivables

7 11 8

15,440 7,970 145,738 169,148

33,095 1,828 24,866 59,789

Bank deposit, cash etc.

10

2,709

83,425

192,555

175,910

3,618,277

3,424,540

Financial fixed assets Investment in subsidiary Financial receivables Other investments, incl. shares in associate Total financial fixed assets

2 2 2

4 11, 18 5

Total fixed assets Current assests Inventory

Total current assets Total assets

76

31/12/2020 NGAAP

100,942 289,020 389,962

Property, plant and equipment Land plots Buildings and plants Movables, equipment, improvements ships etc.

Total property, plant and equipment

1 15

Parent company Parent company 2020 2019 Parent company Parent company NGAAP NGAAP

Fjord Line - Balance sheet per 31 December (1,000 NOK) Fjord Line - Balance sheet per 31 December

(1,000 NOK) EQUITY AND LIABILITIES

Note

Equity

Note

EQUITY AND LIABILITIES

Note

EQUITY Paid-in equity Share capital EQUITY Own shares Paid-in equity premium account Share capital Totalshares paid-in equity Own Share premium account Retained earnings Total paid-in equity Other equity/Uncovered loss Total retained earnings Retained earnings Other equity/Uncovered loss equity earnings Total retained

12, 13 12 12,1213 12 12 12 12 12 12

LIABILITIES Total equity Liabilities Non-current liabilities/non-current provisions Non-current debt to credit institutions etc.

LIABILITIES Received, notliabilities/non-current recognised contributionprovisions Non-current Financial leasing Non-current debt to credit institutions etc.

Pension liability Received, not recognised contribution Total non-current Financial leasing liabilities/non-current provisions Pension liability Current liabilities liabilities/non-current provisions Total non-current Current debt to credit institutions Trade payables Current liabilities Tax payable Current debt to credit institutions Public duties owing Trade payables Intergroup Tax payablebalances Other current liabilities Public duties owing Total current liabilities Intergroup balances Other current liabilities Total liabilities current liabilities

Annual report 2020 ⁄⁄ Fjord Line

Parent companyParent Parent company Parent company company 2020 2019 31/12/2020 31/12/2019 NGAAP NGAAP NGAAP NGAAP Parent company Parent company 31/12/2020 31/12/2019 NGAAP NGAAP 544,312 519,107 -109 -109 203,432 178,227 544,312 519,107 747,634 697,225 -109 -109 203,432 178,227 747,634 697,225 7,089 180,913 7,089 180,913 7,089 180,913 754,724 878,138 7,089 180,913

12

754,724

878,138

16 19 16 17 19 16 17

2,432,052 83,064 11,074 2,432,052 3,283 83,064 2,529,473 11,074 3,283 2,529,473 71,705 21,059 0 71,705 4,391 21,059 134,8640 102,062 4,391 334,081 134,864 102,062 2,863,554 334,081

2,171,206 87,359 4,032 2,171,206 2,790 87,359 2,265,387 4,032 2,790 2,265,387 0 158,870 0 6,818 158,870 69,9280 45,399 6,818 281,015 69,928 45,399 2,546,402 281,015

equity and liabilities Total liabilities

3,618,277 2,863,554

3,424,540 2,546,402

Total equity and liabilities Egersund 28.04.2021

3,618,277

3,424,540

16 15 16 11, 1516 16 11, 16 16

Egersund 28.04.2021 Peter Frølich Chairman of the Board Peter Frølich Chairman of the Board

Kaj Frederiksen Board Member Kaj Frederiksen Board Member

Egersund Frode Teigen28.04.2021 Board Member Frode Teigen Board Member

Kristian Falnes Board Member Kristian Falnes Board Member

Kristian Eikre Board Member Peter Frølich Kristian Eikre Chairman of the Board Board Member Brian Thorsted Hansen Managing Director Brian Thorsted Hansen Managing Director Heidi Nag Flikka Board Member

Kristian Eikre Board Member

Kaj Frederiksen Board Member

Kristian Falnes Board Member

Heidi Nag Flikka Board Member Frode Teigen Heidi Nag Flikka Board Member Board Member

Brian Thorsted Hansen Managing Director

77

07 ⁄⁄ FJORD LINE AS FINANCIAL STATEMENTS

The catamaran HSC Fjord Cat (1998) was sold to the German Shipping Group FRS in August 2020, after 13 years of faithful service under the Fjord Line brand.

78

Annual report 2020 ⁄⁄ Fjord Line

Cash flow statement FJORD LINE AS – PARENT COMPANY per 31 December 2020 (1,000 NOK)

Cash flow statement - parent company (TNOK)

2020 2020

2019 2019

-222,514 0 12,827 14,724 11,999 17,655 -137,811 0 180,228 -122,892

131,351 0 9,966 0 -3,294 10,484 76,733 0 -13,165 212,074

Cash flows from investing activities Proceeds from sale of property, plant and equipment Purchase/manufacturing of property, plant and equipment/intangible assets Loan to subsidiary Investment in subsidiary Net cash flows from investing activities

0 -46,530 -21,987 0 -68,517

0 -23,593 62,053 0 38,460

Cash flows from financing activities Raising of interest bearing debt (net) Change in current debt to credit institutions Payment of interest bearing debt Cash contribution share issue (net) Net cash flows from financing activities

157,042 0 -96,758 50,409 110,693

0 0 -237,749 0 -237,749

Net change in cash and cash equivalents

-80,716

12,785

Cash and cash equivalents at the beginning of the period Cash and cash equivalents at the end of the period

83,425 2,709

70,640 83,425

Specification of cash reserves at the end of the period Bank deposit and cash

2,709

83,425

Cash flows from operational activities Result before tax expense Taxes paid in the period Depreciation Write-downs Change in inventories Change in trade receivables Change in trade payables Gain/loss from sale of operating assets/intangible assets Change in other accurals, incl. net agio and non-current balances Net cash flows from operational activities

79

07 ⁄⁄ FJORD LINE AS FINANCIAL STATEMENTS

Accounting policies FJORD LINE AS – PARENT COMPANY

The financial statements have been prepared in accordance with the Accounting Act and generally accepted accounting principles in Norway.

Sales revenues Sale of goods is recognised in the income statement at the time of delivery. Time of delivery means the time of transfer of risk and control connected to the delivered goods. Services, including sale of travels and freight, are recognised as executed.

The portion of the sales income, which relates to future service work is reflected in the balance sheet as unearned income from the sale and is then recognised in line with the service work performed.

Classification and valuation of balance sheet items Assets intended for long term ownership or use have been classified as fixed assets.

Assets relating to the trading cycle have been classified as current assets. Receivables are classified as current assets if they are to be repaid within one year after the transaction date. Similar criteria apply to liabilities.

Current assets are valued at the lower of acquisition cost and net realizable value.

Current liabilities are reflected in the balance sheet at nominal value on the establishment date. Fixed assets are valued at acquisition cost. Property, plant and equipment whose value will deteriorate are depreciated on a straight line basis over the asset's estimated useful life. The fixed assets are subject to impairment to net realizable value if a value reduction occurs which is not believed to be temporary. The impairment is reversed to the extent that the reason for the impairment is no longer present. Non-current liabilities are reflected in the balance sheet at nominal value at the establishment date.

Intangible assets Expenses for intangible assets are reflected in the balance sheet when it is considered likely that the future financial benefits relating to the asset will be received by the company and the acquisition cost of the asset can be reliably measured.

80

Annual report 2020 ⁄⁄ Fjord Line

Property, plant and equipment

Inventories

Property, plant and equipment are reflected in the balance sheet and depreciated over the assets’ expected useful life on a straight-line basis provided they have an expected useful life of more than 3 years and a cost price exceeding NOK 15,000. Direct maintenance of an asset is recognised under operating expenses as and when it is incurred. Additions or improvements are added to the asset's cost price and depreciated together with the asset. The split between maintenance and additions/improvements are determined based on the asset’s condition at the acquisition date.

Inventories of purchased goods are valued at the lower of acquisition cost according to the FIFO principle and fair value. A write-down is made for any foreseeable obsoleteness.

Leasing A leasing agreement is classified as financial or operational lease in accordance with the contents of the individual agreement. The agreement is classified as financial lease if the major part of financial risk and control connected to the underlying lease object has been transferred to the lessee. Other leasing agreements are classified as operational.

Operational assets in leasing agreements assessed as financial lease are activated in the balance sheet at the value of the compensation in the leasing agreement and depreciated as property, plant and equipment. The principal portion of the leasing liability is recorded as non-current liabilities. The liability is reduced with lease paid less deduction for calculated interest expense. The lease payments are treated as an operating expense which is distributed over the total leasing period for agreements that are classified as operational.

Subsidiaries, associated companies and joint ventures Subsidiaries, associated companies and joint ventures are assessed in accordance with the cost method in the company accounts. The investment is valued at acquisition cost for the shares, unless impairment has been necessary.

Dividend from the subsidiaries is recognised as income to the extent accumulated dividend exceeds accumulated result in the owner period.

Trade receivables Trade receivables and other receivables are reflected in the balance sheet at nominal value after deduction of provision for bad debts. Provision for bad debts is made based on individual assessment of each receivable.

Current investments Current investments (including shares and derivatives valued as current assets) are considered to be trading portfolio and are valued at fair value at the balance sheet date. Unrealized gain/loss is recognised in the income statement under financial items. Dividend and other contributions are recognised as other financial income.

Hedging Derivatives valued as hedging are recognised in the balance sheet at acquisition cost. This corresponds to fair value at the time of entering into the derivative contracts. The derivatives are recognised through profit or loss when delivered and classified in the income statement on the same line as the underling hedging object.

values at the end of the accounting year and carry forward loss for tax purposes. Deferred tax asset is recognised in the balance sheet to the extent that carry forward loss for tax purposes and other positions are expected to be used against future earnings. Further information is disclosed in notes.

NOx-fund grants Grants from the NOx-fund related to investments are recognised in the income statement/accrued in line with the depreciation profile of the operating assets that the grants relate to. Grants not recognised in the income statement have been recognised as non-current liabilities/allocation. Further information about accounting treatment and numerical effects is disclosed in notes to the financial statements.

Government grants Government grants related to Covid-19 is recorded as reduction of other operating expenses. All periods applied for government grant in 2020 is included in the financial statement.

Pensions

Further information is disclosed in notes to the financial statement.

A defined contribution plan is a pension plan under which the group pays fixed contributions to an insurance company. The group has no legal or constructive obligations once the contributions have been paid. The contributions are recognised as wage costs.

A defined benefit plan is a pension plan that is not a defined contribution plan.

Typically defined benefit plans define an amount of pension benefit that an employee will receive on retirement, usually dependent on one or more factors such as age, years of service and compensation. The liability recognised in the balance sheet in respect of defined benefit plans is the present value of the defined benefit obligation at the balance sheet date.

Tax

Cash flow statement

The tax expense in the income statement comprises both payable taxes for the period and changes in deferred tax/ deferred tax asset. Maximum deferred tax asset is calculated based on 23% of total basis for the temporary differences existing between accounting and tax

The cash flow statements are reported gross from investing and financing activities, whereas the accounting result is reconciled against net cash flow from operational activities. Cash and cash equivalents include cash and bank deposits.

Monetary items in foreign currency Monetary items in foreign exchange are valued at the exchange rate at the end of the accounting year. Hedge accounting is not used. Transactions in foreign currency are converted into the functional currency (NOK) at the current exchange rate at the transaction date.

81

07 ⁄⁄ FJORD LINE AS FINANCIAL STATEMENTS

Notes

FJORD LINE AS – PARENT COMPANY Note 1 ⁄⁄ Intangible assets – parent company Note 1 Intangible assets - parent company (Figures in (Figures in TNOK) TNOK)assets - parent company Note 1 Intangible

(Figures in TNOK)

Acquisition cost 31.12.2019 Additions 2020 Completed 2020 Acquisitionprojects cost 31.12.2019 Disposal Additions2020 2020 Acquisition cost 31.12.2020 Completed projects 2020

Intangible assets in development

WEB-projects etc.

Financial Leasing

Other intangible Total intangible assets assets

Intangible assets 15,746 in development 2,942 -10,237 15,746

WEB-projects 77,498 etc.

25,305 1,305 77,498

Financial 4,346 Leasing 7,818 0 4,346

Other intangible Total intangible 1,903 99,492 assets assets 925 36,991 -877 -9,809 1,903 99,492 0 925 36,991 1,951 126,674 -877 -9,809

8,4510 0 15,7460 4,824 0 0 15,746 3,627 4,824

104,1080 9,136 68,3620 9,1360 18,267 68,362 85,842 0

12,1640 362 3,9840

0 1,951 669 1,2340

1,876 0 10,289 1,514 1,5140

765 0 1,186 96 96 0

2,942 8,451 -10,237

Disposal 2020 Accumulatedcost write-down 31.12.2019 Acquisition 31.12.2020 Accumulated depreciation 31.12.2019 Book value 31.12.2019 Accumulated write-down 31.12.2019 Accumulated Accumulated write-down depreciation31.12.2020 31.12.2019 Accumulated depreciation 31.12.2020 Book value 31.12.2019 Book value 31.12.2020 Accumulated write-down 31.12.2020

Accumulated depreciation 31.12.2020 Write-down in the year Book value 31.12.2020 Depreciation in the year Total depreciation and write-down 2020 Write-down in the year

25,305 104,108 1,305

0 4,824 3,627 0 4,824 4,824

18,267 0 85,842 9,131 9,1310

7,818 12,164 0

362 1,876 3,984 10,289

Depreciation in the year 0 9,131 1,514 Completed projects in 2020 are projects relates to development of websites and moving WEB platform, years.

Total depreciation and write-down 2020 4,824 with a depreciatcion 9,131 period of 51,514

669 765 1,234 1,186

96 96

0 0 126,674 10,168 89,3260 4,824 10,168 20,908 89,326 100,942 4,824

20,908 4,824 100,942 10,863 15,687 4,824 10,863 15,687

The remaining projects relates development system inofgeneral, group booking,WEB development Carres, on board portal andofBI. Completed projects in 2020 aretoprojects relatesof toERP development websites and moving platform,ofwith a depreciatcion period 5 years.

The depreciation period is 5 years.

The remaining projects relates to development of ERP system in general, group booking, development of Carres, on board portal and BI. The depreciation period is 5 years.

Note 2 Property, plant and equipment - parent company (Figures in TNOK)plant and equipment - parent company Note 2 Property, Note 2 ⁄⁄ Property, plant and equipment – parent company (Figures in TNOK) TNOK) (Figures in Property, plant and equipment (figures in TNOK)

Land plots

Terminal, buildings

Acquisition cost 31.12.2019 Property, plant and equipment (figures in TNOK) Addition 2020 Disposal 2020 Acquisition cost 31.12.2019 Acquisition cost 31.12.2020 Addition 2020

835 Land plots 0 0 835 835 0

Terminal, 11,573 buildings 8,011 0 11,573 19,584 8,011

Disposal 2020 Accumulated write-down 31.12.2019 Acquisition cost 31.12.2020 Accumulated depreciation 31.12.2019 Book value 31.12.2019 Accumulated write-down 31.12.2019 Accumulated Accumulated write-down depreciation31.12.2020 31.12.2019 Accumulated depreciation 31.12.2020 Book value 31.12.2019 Book value 31.12.2020 Accumulated write-down 31.12.2020

Accumulated depreciation 31.12.2020 Depreciation in the year Book value 31.12.2020 Write-down in the year

Depreciation in the year Depreciation (completed operating assets) Write-down inperiod the year Depreciation plan

0 0 835 0 835 0 00 8350 835 0

0 0 19,584 8,805 2,768 0

Equipment, machinery onshore etc.

Equipment,

Means of transport

-2,244 12,5370 3,972 6,7040

0 3370 157 1800

machinery 12,920 onshore etc.

1,861 -2,244 12,920 12,537 1,861

Means of 337 transport 0 0 337 3370

3,972 5,310 6,704 7,227

157 224 180 113

8,805 9,363 2,768 10,221

0 8350 0

9,363 558 10,221 0

5,310 1,338 7,227 0

224 67 113 0

0 N/A0 Does not depreciate

558 5 - 10 years0 Linear

1,338 3 - 5 years0 Linear

67 5 years0 Linear

5 - 10 years Linear

3 - 5 years Linear

5 years Linear

Depreciation period (completed operating assets) N/A Depreciation plan Does not depreciate Note 3 Leasing expenses and transactions with related parties - parent company

Expensed lease expenses of operating not recognised in theparties balance sheet for 2020 and 2019 (operational lease) Note 3 Leasing andassets transactions with related - parent company (Figures in TNOK)

82

Expensed lease of operating assets not recognised in the balance sheet for 2020 and 2019 (operational lease) Operating assets (Figures in TNOK) Lease of premises and similar *) Lease of ships, including crew Operating assets Other leasing cost and similar *) Lease of premises Lease of ships, including crew

Total property, plant and Totalequipment property, plant and 25,665 equipment 9,872 -2,244 25,665 33,294 9,872 -2,244 0 33,294 13,064 10,4870 0 13,064 14,898 10,487 18,3960 14,898 1,964 18,396 0 1,964 0

Expensed lease Expensed lease 2020 2019 Expensed19,550 lease Expensed16,959 lease 583,135 552,169 2020 2019 24,872 24,547 19,550 16,959 583,135 552,169

337 25,665 0 9,872 Annual0 report 2020-2,244 ⁄⁄ Fjord Line 337 33,294

Acquisition cost 31.12.2019 Addition 2020 Disposal 2020 Acquisition cost 31.12.2020

835 0 0 835

11,573 8,011 0 19,584

12,920 1,861 -2,244 12,537

Accumulated write-down 31.12.2019 Accumulated depreciation 31.12.2019 Book value 31.12.2019 Accumulated write-down 31.12.2020 Accumulated depreciation 31.12.2020 Book value 31.12.2020

0 0 835 0 0 835

0 8,805 2,768

0 3,972 6,704

0 157 180

9,363 10,221

5,310 7,227

224 113

0 13,064 10,487 0 14,898 18,396

0 0

558 0

1,338 0

67 0

1,964 0

N/A Does not depreciate

5 - 10 years Linear

3 - 5 years Linear

5 years Linear

Depreciation in the year Write-down in the year Depreciation period (completed operating assets) Depreciation plan

Note 3 Leasing expenses expenses and transactions related parties with - parent companyparties – parent company Note 3 ⁄⁄ Leasing andwith transactions related Expensed lease of operating operating assets assets not not recognised recognised in in the the balance balance sheet sheet for for 2020 2020 and and 2019 2019 (operational (operational lease) lease) Expensed lease of (Figures in TNOK) (Figures in TNOK)

Expensed lease Expensed lease 2020 2019 19,550 16,959 583,135 552,169 24,872 24,547

Operating assets Lease of premises and similar *) Lease of ships, including crew Other leasing cost *) Leasing expenses and similar: For 2020 leasing expenses of TNOK 1.821 to company controlled by owners.

(TNOK 1.578 in 2019). The leasing conditions are market conditions.

Note 4 Investments in subsidiaries - parent company Note 4 ⁄⁄ Investments in subsidiaries – parent company (FiguresininTNOK) TNOK) (Figures

Note 4 Investments in subsidiaries - parent company The investments in subsidiaries are accounted for in accordance with the cost method.

(Figures in TNOK) Accounting values are presented below (figures in TNOK).

The investments in subsidiaries are accounted for in accordance with the cost method.

Owner Accounting values are presented below (figures in TNOK).

Time of share/voting acquisition Business address share Subsidiary Owner Danmark 100% Fjord Line Danmark A/S 2006 Time of share/voting Danmark 100% Fjord Skibsholding I A/S 2007 acquisition Business address share Subsidiary Danmark 100% Fjord Skibsholding II A/S 2008 Danmark 100% Fjord Line Danmark A/S 2006 Danmark 100% Fjord Skibsholding III A/S 2010 Danmark 100% Fjord Skibsholding I A/S 2007 Danmark 100% Fjord Skibsholding IV A/S 2010 Danmark 100% Fjord Skibsholding II A/S 2008 Danmark 100% Fjord Skibsholding V A/S 2017 Danmark 100% Fjord Skibsholding III A/S 2010 Tyskland 100% Fjord Line GmbH 2008 Danmark 100% Fjord Skibsholding IV A/S 2010 TOTAL Danmark 100% Fjord Skibsholding V A/S 2017 Tyskland 100% Fjord Line GmbH 2008 Fjord Line GmbH was discontinued in 2019 TOTAL

Cost price 31.12.2020 13,753 Cost price 268,986 31.12.2020 150,362 13,753 310,368 268,986 332,843 150,362 642 310,368 201 332,843 1,077,155 642 201 1,077,155

Book value 31.12.2020 13,753 Book value 224,987 31.12.2020 109,849 13,753 310,368 224,987 332,842 109,849 642 310,368 0 332,842 992,441 642 0 992,441

Book value 31.12.2019 13,753 Book value 224,987 31.12.2019 109,849 13,753 310,368 224,987 332,842 109,849 642 310,368 0 332,842 992,441 642 0 992,441

Income from investment in subsidiaries and write-down 2020 Fjord Line GmbH was discontinued in 2019 No dividend has been approved from Fjord Line AS' subsidiaries in 2020.

Income from investment in subsidiaries and write-down 2020 Income from investment in subsidiaries and write-down 2019 No dividend has been approved from Fjord Line AS' subsidiaries in 2020.

No dividend has been approved from Fjord Line AS' subsidiaries in 2019.

Income from investment in subsidiaries and write-down 2019 Background for difference between cost price and carrying value of the shares in FSH I and FSH II: No dividend has been approved from Fjord Line AS' subsidiaries in 2019.

In 2008 the shares in FSH II were written down by TNOK 20 291.

In 2009 the shares in FSH I were written down by TNOK 39 246 and the shares in FSH II were written down by TNOK 8 000 Background for difference between cost price and carrying value of the shares in FSH I and FSH II: In 2009 also TNOK 4.754 in dividend from FSH I and TNOK 12 222 in dividend from fra FSH II were recognised as reduction of In 2008 the shares in FSH II were written down by TNOK 20 291. carrying value of shares.

In 2009 the shares in FSH I were written down by TNOK 39 246 and the shares in FSH II were written down by TNOK 8 000 In 2009 also TNOK 4.754 in dividend from FSH I and TNOK 12 222 in dividend from fra FSH II were recognised as reduction of carrying value of shares.

Note 5 Investments in other shares/parts -parent company InNote 2010 Fjord Line AS acquired shares amounting to TNOK 50 in Visit Sørlandet AS. After 2010 there has been neither additions nor disposals.

5 ⁄⁄ Investments in other shares/parts Note 5 Investments in other shares/parts -parent company – parent company The investment is recognised in accordance with the cost method. There has been no write-down in 2020 or 2019.

In 2010 Fjord Line AS acquired shares amounting to TNOK 50 in Visit Sørlandet AS. After 2010 there has been neither additions nor disposals.

In addition Fjord Line AS invested TNOK 30 in Visit Telemark AS in 2016. The investment is recognised in accordance with the cost method. Nor has The investment is recognised in accordance with the cost method. There has been no write-down in 2020 or 2019. write-down been made on this investment.

In addition Fjord Line AS invested TNOK 30 in Visit Telemark AS in 2016. The investment is recognised in accordance with the cost method. Nor has write-down been made on this investment.

Note 6 Inventories and fuel expenses - parent company (Figures in TNOK) Note 6 Inventories and fuel expenses - parent company Inventories (Figures in TNOK) Fuel Goods for resale Inventories Other items, including key-cards etc.

Fuel Total inventories at acquisition cost 31.12.

Goods for resale Write-down 31.12.

2020 2,365 19,936 2020 896 2,365 23,197 19,936 2,500

2019 3,136 27,370 2019 2,190 3,136 32,696 27,370 0

83

In 2009 also 4.754 in dividend from FSH I and TNOK 12 222 in dividend from fra FSH II were recognised as reduction of carrying valueTNOK of shares. carrying value of shares.

07 LINE AS FINANCIAL STATEMENTS Note⁄⁄5FJORD Investments in other shares/parts -parent company

Note 5 Investments in other shares/parts -parent company In 2010 Fjord Line AS acquired shares amounting to TNOK 50 in Visit Sørlandet AS. After 2010 there has been neither additions nor disposals.

In Fjord Line AS acquired shares amounting to cost TNOK 50 in Visit After 2010 in there has The2010 investment is recognised in accordance with the method.

ThereSørlandet has been AS. no write-down 2020 orbeen 2019.neither additions nor disposals.

The investment is recognised in accordance with the cost method. There has been no write-down in 2020 or 2019.

In addition Fjord Line AS invested TNOK 30 in Visit Telemark AS in 2016. The investment is recognised in accordance with the cost method. Nor has In addition Fjord Line AS TNOK 30 in Visit Telemark AS in 2016. The investment is recognised in accordance with the cost method. Nor has write-down been made on invested this investment. write-down been made on this investment.

Note 6 Inventories and fuel expenses - parent company– parent company Note 6 ⁄⁄ Inventories and fuel expenses Note 6 Inventories and fuel expenses - parent company (Figures in in TNOK) TNOK) (Figures (Figures in TNOK) Inventories Inventories Fuel Fuel for resale Goods Goodsitems, for resale Other including key-cards etc.

Other inventories items, including key-cards etc.

Total at acquisition cost 31.12.

Total inventories Write-down 31.12.at acquisition cost 31.12.

Write-down 31.12.of inventories 31.12.

Total book value Total book value of inventories 31.12.

2020 2020 2,365 2,365 19,936 19,936 896 896 23,197 23,197 2,500 2,500 20,697 20,697

2019 2019 3,136 3,136 27,370 27,370 2,190 2,190 32,696 32,696 0 32,6960 32,696

Write-down of TNOK 2.500 has been made of the inventory by year end.

Write-down of TNOK 2.500 has been made of the inventory by year end.

Expenses related to fuel are classified as other operating expenses in the income statement.

Expenses related to fueltoare classified as other operating expenses For 2020 this amounts TNOK 139.607 (TNOK 170.716 in 2019)in the income statement.

For 2020 this amounts to TNOK 139.607 (TNOK 170.716 in 2019) Fjord Line has the following financial contracts related to fuel: Fjord Line has theGas following financial i) MGO (Marine Oil), delivery in contracts 2021. related to fuel: i) (Marine Oil), delivery 2021. ii) MGO LNG (The shipsGas Bergensfjord andinStavangerfjord), delivery in 2021. ii) (The ships Stavangerfjord), delivery in 2021. gain/loss is not recognised in the balance sheet.

TheLNG derivatives are Bergensfjord considered asand hedging in the accounts, and unrealized The considered as hedging the accounts, unrealized gain/loss is not recognised in the balance sheet.

Gainderivatives and/or lossare related to the contracts areinrecognised overand profit or loss at delivery/realization.

Gain and/or loss related to the contracts are recognised over profit or loss at delivery/realization.

Note 7 Trade receivables and bad debts - parent company Note 7 Trade receivables and bad debts - parent company Note in 7 ⁄⁄ Trade receivables and bad debts – parent company (Figures TNOK) (Figures in TNOK)

(Figures in TNOK)

Trade receivables at nominal value 31.12.

Trade receivables nominal value 31.12.

Provisions for badatdebts 31.12.

Provisions bad receivables debts 31.12. 31.12.

Book valuefor trade Book value trade receivables 31.12.

Change in provisions for bad debts in the year Changebad in provisions foryear bad debts in the year Actual debts in the Actual badondebts in the year Received receivables previously written off Received on receivables previously written off Expensed loss on bad debts Expensed loss on bad debts Bad debts are included in the item "other operating expenses" in the income statement.

Bad debts are included in the item "other operating expenses" in the income statement.

2020 2020 26,608 26,608 -3,197 -3,197 23,411 23,411 1,000 1,000 2,497 2,497 0 0 3,497 3,497

2019 2019 37,120 37,120 -2,197 -2,197 34,923 34,923 0 8560 8560 0 856 856

2020 2,114 22,126 121,498 145,738

2019 2,603 22,263 0 24,866

Note 8 Other receivables - parent company Note 8 ⁄⁄ Other receivables – parent company (Figures in in TNOK) TNOK) (Figures Other receivables Refund from public authorities, including vat owing.* Prepaid expenses etc.

Refund from the Norwegian government in regard to The Business Compensation Scheme** Other receivables 31.12.

*) Per 31.12.2020 the company has recognised TNOK 1.679 in the balance sheet relating to VAT due to the company in Norway (TNOK 1.922 per 31.12.2019). **) The Business Compensation Scheme is part of the Norwegian government's measures to mitigate the financial effects of the coronavirus situation and the infection control measures for enterprises with a drop in revenue of at least 30% compared to the same month in the year before. Fjord Line is eligible for compensation in regard to forskrift 21. desember 2020 nr. 3085 § 4-5. Receivable is for the application period September/October, and November/December of 2020.

Note 9 Other financial income and other financial expenses - parent company (Figures in TNOK) Other financial income and other financial expenses comprise the following:

84

Other financial income Foreign exchange gain, intergroup loan, cf. note 11 Foreign exchange gain related to non-current foreign exchange loan Other foreign exchange gain Other financial income Total

2020 0 0 19,666 79 19,745

2019 17,951 0 6,447 125 24,524

Other financial expenses Foreign exchange loss, intergroup receivables, cf. note 11

2020 23,697

2019 11,354

Note Other receivables - parent company Other8 receivables 2020 2019 Refund from public authorities, including vat owing.* 2,114 2,603 (Figures in TNOK)etc.

Prepaid expenses 22,126 22,263 Note 8 Other receivables company Refund from the Norwegian- parent government in regard to The Business Compensation Scheme** 121,498 Annual0 report 2020 ⁄⁄ Fjord Line Other receivables 31.12.

2020 2019 145,738 24,866 (Figures in TNOK) Refund from public authorities, including vat owing.* 2,114 2,603 Prepaid expenses etc.

22,126 22,263 *) Per 31.12.2020 the company has recognised TNOK 1.679 in the balance sheet relating to VAT due to the company in Norway (TNOK 1.922 Other receivables 2020 20190 Refund from the Norwegian government in regard to The Business Compensation Scheme** 121,498 per 31.12.2019).

Refund from public authorities, including owing.* 2,114of the coronavirus 2,603situation and the Other 31.12.

145,738 24,866 **) Thereceivables Business Compensation Scheme isvat part of the Norwegian government's measures to mitigate the financial effects Prepaid etc. infectionexpenses control measures for enterprises with a drop in revenue of at least 30% compared to the same month in the22,126 year before. Fjord22,263 Line is eligible for Refund from the Norwegian government in regard to The Compensation Scheme** 121,498 0 *) Per 31.12.2020 the company has 21. recognised TNOK 1.679 in the balance sheet relating toapplication VAT due toperiod the company in Norway (TNOK 1.922 compensation in regard to forskrift desember 2020 nr. Business 3085 § 4-5.

Receivable is for the September/October, and November/December of 2020.

Other receivables 31.12.

145,738 24,866 per 31.12.2019). **) The Business Compensation Scheme is part of the Norwegian government's measures to mitigate the financial effects of the coronavirus situation and the Note 9control ⁄⁄ Other financial income and other expenses parent company *) Per931.12.2020 the company has 1.679 infinancial the sheet relating to– due tomonth the company in Norway (TNOK 1.922 infection measures for enterprises aTNOK drop expenses in revenue ofbalance at least 30% compared toVAT the same in the year before. Fjord Line is eligible for Note Other financial income andrecognised otherwith financial - parent company per 31.12.2019). compensation in regard to forskrift 21. desember 2020 nr. 3085 § 4-5. Receivable is for the application period September/October, and November/December of 2020. **) The Business (Figures in (Figures in TNOK) TNOK)Compensation Scheme is part of the Norwegian government's measures to mitigate the financial effects of the coronavirus situation and the infection control measures for enterprises with a drop in revenue of at least 30% compared to the same month in the year before. Fjord Line is eligible for compensation regard and to forskrift 21.other desember 2020 nr. 3085the 4-5.

Receivable Note 9financial Other in financial income financial expenses -§parent companyis for the application period September/October, and November/December of 2020.

Other income otherand financial expenses comprise following: (Figuresfinancial in TNOK) Other income 2020 2019 Note 9 Other financial income and other financial Foreign exchange gain, intergroup loan, cf. note 11 expenses - parent company 0 17,951 Other financial income and other financial expenses following: Foreign exchange gain related to non-current foreigncomprise exchangethe loan 0 0 (Figures in TNOK) Other foreign exchange gain 19,666 6,447 Other financialincome income 2020 2019 Other financial 79 125 Other income other financial Foreign exchange gain, and intergroup loan, cf.expenses note 11 comprise the following: 0 17,951 Total financial 19,745 24,524 Foreign exchange gain related to non-current foreign exchange loan 0 0 Other financial income 2020 2019 Other foreign exchange gain 19,666 6,447 expenses Foreign exchange gain, intergroup receivables, loan, cf. notecf.11note 11 17,951 Other financial income 790 125 loss, intergroup 23,697 11,354 Foreign to non-current foreign exchange loan 0 0 Total exchange gain 19,745 24,524 loss, related including loan in Euro and DKK 22,664 17,667 Other foreign 19,666 6,447 financialexchange expensesgain 921 5,410 Other 79 125 Otherfinancial financialincome expenses 2020 2019 Total 47,282 34,431 Total 19,745 24,524 Foreign exchange loss, intergroup receivables, cf. note 11 23,697 11,354 Foreign exchange loss, including non-current loan in Euro and DKK 22,664 17,667 Other financial expenses 2020 2019 Other10 financial expenses 921 5,410 Note Restricted funds - parent company Foreign 23,697 11,354 Total exchange loss, intergroup receivables, cf. note 11 47,282 34,431 Foreign exchange 22,664 17,667 (Figures in TNOK)loss, including non-current loan in Euro and DKK Other financial expenses 921 5,410 2020 2019 Note 10tax⁄⁄deduction Restricted funds – parent company Total 47,282 34,431 Note 10 Restricted funds - parent company Restricted funds per 31.12.: 2,141 3,481 The tax deduction funds are deposited on separate bank accounts.

(Figures (Figures in in TNOK) TNOK) Note 10 Restricted funds - parent company 2020 2019 Restricted tax deduction funds per- 31.12.: 2,141 3,481 Note 11 Intercompany balance parent company (Figures in TNOK)funds are deposited on separate bank accounts.

The tax deduction 2020 2019 (Figures in TNOK) Restricted tax deduction funds per 31.12.: 2,141 3,481 The tax funds are deposited on separate bank accounts.

Note 11- deduction Intercompany balance - parent company Assets current items: 2020 2019 Receivables on subsidiary related to operation etc.*) 7,970 1,828 (Figures Total in TNOK) 7,970 1,828 Note 11 11 Intercompany balance - parent company Note ⁄⁄ Intercompany balance – parent company Assets - current items: 2020 2019 Liabilities - current items: (Figures in TNOK) Receivables on subsidiary related to operation etc.*) 7,970 1,828 Net debtin toTNOK) subsidiary related to operation 115,906 51,518 (Figures Total 7,970 1,828 115,906 51,518 Assets - current items: 2020 2019 Receivables subsidiary related to operation 7,970 1,828 Liabilities current items: Net current- on intercompany balance per 31.12etc.*) for Fjord Line AS -107,936 -49,691 Total 7,970 1,828 Net debt to subsidiary related to operation 115,906 51,518 Total 115,906 51,518 Liabilities - current items: Assets - non-current items Net toAS subsidiary relatedbalance toreceivables operation 115,9061.897.343 per 51,518 current intercompany per 31.12 Fjordsubsidiaries Line AS of in total TNOK 2.005.886 per 31.12.2020 -107,936 -49,691 Fjorddebt Line has non-current on thefor Danish (TNOK 31.12.2019).

Total 115,906 51,518 The amount is classified as financial fixed assets. The loans are in DKK and are subject to interest calculation (cf. note 18).

Foreign exchange gain on these loans was TNOK 108.498 in 2020 (foreign exchange loss of TNOK 14.092 in 2019), cf. note 9.

Net current intercompany 31.12 for Line but AS the subsidiaries will use free liquidity for repayment.

-107,936 -49,691 Assets - non-current items No specific installment plan balance has been per determined forFjord the loans, Fjord Line AS has non-current receivables on the Danish subsidiaries of in total TNOK 2.005.886 per 31.12.2020 (TNOK 1.897.343 per 31.12.2019).

The amount is classified as financial fixed assets. The loans are in DKK and are subject to interest calculation (cf. note 18).

Assets - exchange non-current Foreign gainitems on these loans was TNOK 108.498 in 2020 (foreign exchange loss of TNOK 14.092 in 2019), cf. note 9. *) Allocation for dividends in the subsidiaries Fjord Line AS has non-current onhad theper Danish subsidiaries inin total TNOK per 31.12.2020 (TNOK No installment beenFSH determined for 31.12.2020 the loans, but theofsubsidiaries will 2.005.886 use free liquidity repayment.

Thespecific subsidiaries FSH I, plan FSHhas IIIreceivables and IV allocated total TNOK 0 in dividend forfor Fjord Line AS, 1.897.343 cf note 4. per 31.12.2019).

The amount is classified as financial fixed assets. The loans are in DKK and are subject to interest calculation (cf. note 18).

Foreign exchange gain on these loans was TNOK 108.498 in 2020 (foreign exchange loss of TNOK 14.092 in 2019), cf. note 9.

No specific installment plan has been determined for the loans, but the subsidiaries will use free liquidity for repayment. *) Allocation for dividends in the subsidiaries The subsidiaries FSH I, FSH III and FSH IV had per 31.12.2020 allocated in total TNOK 0 in dividend for Fjord Line AS, cf note 4. *) Allocation for dividends in the subsidiaries The subsidiaries FSH I, FSH III and FSH IV had per 31.12.2020 allocated in total TNOK 0 in dividend for Fjord Line AS, cf note 4.

85

07 ⁄⁄ FJORD LINE AS FINANCIAL STATEMENTS

Note 12 Equity - parent company Note 12 Equity - parent company (Figures in TNOK)

Note 12 ⁄⁄ Equity for 2020 – parent company

(Figures in TNOK) Note 12 Equity - parent company (Figures in TNOK)

(Figures in TNOK) Changes in equity for 2020

Share capital

Own shares

Share premium account Share premium

Other equity/uncovered Other loss equity/uncovered

Share capital Own shares account loss Changes in equity for 2020 Other Equity 31.12.2019 519,107 -109 178,227 180,913 Share premium equity/uncovered Purchase of own shares 0 0 Equity 31.12.2019 519,107 -1090 178,2270 Share capital Own shares account loss 180,913 Changes in equity for 2020 Increase of 25,205 25,205 00 Purchase ofcapital own shares 0 00 0 Net income 2020 0 0 -173,824 Increase of capital 25,2050 25,205 0 Equity 31.12.2019 519,107 -1090 178,227 180,913 Equity 31.12.2020 544,3120 -109 203,432 7,089 Net income 00 00 -173,824 Purchase of 2020 own shares 0 0 Equity 544,312 -1090 203,432 7,089 Increase31.12.2020 of capital 25,205 25,205 0 *) Net income 2020 contains a negative tax expense of TNOK 48.690 as a result of the changes in deferred tax asset.

Net income 2020 0 0 0 -173,824 *) Net income 2020 contains a negative tax expense of TNOK 48.690 as a result of the changes 544,312 in deferred tax asset. -109 Equity 31.12.2020 203,432 7,089 Other Share premium equity/uncovered Other *) Net income 2020 contains a negative tax expense of TNOK 48.690 as a result of the changes in deferred tax asset. account loss Share capital Own shares Changes in equity for 2019 Share premium equity/uncovered account loss Share capital Own shares Changes in equity for 2019 Other Equity 31.12.2018 519,107 -9 178,227 -12,768 Share premium equity/uncovered Purchase of own shares 0 -100 0 0 Equity 31.12.2018 519,107 -9 178,227 account loss -12,768 Share capital Own shares Changes in equity for 2019 Net income 0 00 193,6810 Purchase of 2019 own shares 00 -100 Equity 31.12.2019 519,1070 -109 178,227 180,913 Net income 2019 193,681 Equity 31.12.2018 519,107 -90 178,2270 -12,768 Equity 31.12.2019 519,107 -109 178,227 180,913 Purchase of own shares 0 -100 0 0 *) Net income 2019 contains a negative tax expense of TNOK 62.330 as a result of the changes in deferred tax asset.

Net income 2019 0 0 0 193,681 *) Net income 2019 contains a negative tax expense of TNOK 62.330 as a result of the changes 519,107 in deferred tax asset. -109 Equity 31.12.2019 178,227 180,913

Total Total 878,138 878,1380 Total 50,409 0 -173,824 50,409 878,138 754,723 -173,824 0 754,723 50,409 -173,824 754,723 Total Total 684,557 -100 684,557 Total 193,681 -100 878,138 193,681 684,557 878,138 -100 193,681 878,138

Note 13 Share capital and shareholders' information - parent company *) Net income 2019 contains a negative tax expense of TNOK 62.330 as a result of the changes in deferred tax asset.

Note 13 Share capital and shareholders' information - parent company Note 13 ⁄⁄ Share capital and shareholders' information – parent company The share capital is NOK 544.311.962,50 per 31.12.2020, and consists of 217.724.785 shares each NOK 2,50. All shares have equal rights.

The share capital is NOK 544.311.962,50 31.12.2020,- parent and consists of 217.724.785 shares each NOK 2,50. All shares have equal rights.

Note 13 Share capital and shareholders'per information company The major shareholders per 31.12.2020 Owner share The share majorcapital shareholders per 31.12.2020 per 31.12.2020, and consists of 217.724.785 shares each NOK 2,50. All shares have equal The is NOK 544.311.962,50 rights.

Ferd AS % Owner44.6 share Kontrari 35.6 Ferd AS ASshareholders per 31.12.2020 44.6 % % The major Kontrazi AS 16.6 % % Kontrari AS Owner35.6 share Others, including own shares*) 3.2 % % Kontrazi AS 16.6 Ferd AS 44.6 % Total 100.0 Others, including own shares*) 3.2 % % Kontrari AS 35.6 % Total AS 100.0 Kontrazi 16.6 % % *) Fjord Line AS has a total of 10.674 own shares per 31.12.2020.

Others, including own shares*) 3.2 % *) Fjord Line AS has a total of 10.674 own shares per 31.12.2020.

Total 100.0 % The major shareholders per 31.12.2019 *) Fjord Line AS has a total of 10.674 own shares per 31.12.2020.

The major shareholders per 31.12.2019 Ferd AS Kontrari Ferd major AS ASshareholders per 31.12.2019 The Kontrazi AS Kontrari AS Arne Teigen Kontrazi Ferd AS AS Moly AS Arne Teigen Kontrari AS Others, own shares*) Moly ASincluding Kontrazi AS Total Others, including own shares*) Arne Teigen Total AS Moly *) Fjord Line AS has a total of 10.664 own shares per 31.12.2019.

Others, including own shares*) *) Fjord Line AS has a total of 10.664 own shares per 31.12.2019.

Total Note 14 Operating income - parent company *) Fjord Line AS has a total of 10.664 own shares per 31.12.2019.

(Figures in TNOK) income - parent company Note 14 Operating (Figures Note in 14TNOK) ⁄⁄ Operating income – parent company Operating income distributed on income area Note 14 Operating income - parent company Ticket income Operating income distributed on income area (Figures inTNOK) TNOK) (Figures in Sales income Ticket incomeetc. onboard - see also note 19 Cargo incomeetc. onboard - see also note 19 Sales income Operating income distributed on income area Recognised/accrued grant from the NOx-fund- see also note 19 Cargo income Ticket income Other Recognised/accrued grant from Sales income etc. onboard - see the alsoNOx-fundnote 19 see also note 19 Total Other Cargo income Total Recognised/accrued grant from the NOx-fund- see also note 19 Other Total

86

Owner share % Owner44.6 share 34.8 44.6 % % 17.4 % % Owner34.8 share 1.1 % % 17.4 44.6 % 0.8 % % 1.1 34.8 % 1.3 % 0.8 % 17.4 % 100.0 1.3 % % 1.1 % 100.0 0.8 % % 1.3 % 100.0 %

2020 280,242 2020 213,702 280,242 171,618 213,702 2020 4,217 171,618 280,242 37,605 4,217 213,702 707,384 37,605 171,618 707,384 4,217 37,605 707,384

2019 581,303 2019 762,446 581,303 213,326 762,446 2019 5,469 213,326 581,303 55,908 5,469 762,446 1,618,452 55,908 213,326 1,618,452 5,469 55,908 1,618,452

Annual report 2020 ⁄⁄ Fjord Line

Note 15 Taxes - parent – company Note 15 ⁄⁄ Taxes parent company (Figures in TNOK)

(Figures in TNOK)

Specification of deferred tax asset Temporary differences Fixed assets Receivables Gain/loss account Inventory Pension liabilities Other differences including accounting accruals Total Carry-forward loss Basis for deferred tax (-deferred tax asset) 22% of basis Deferred tax (deferred tax asset) recognised in the balance sheet

31/12/2019 4,786 -2,197 8,626 0 -2,790 -78,624 -70,199 -1,022,210 -1,092,409 -240,330 -240,330

31/12/2020 8,961 -3,197 6,900 -2,500 -3,283 -76,461 -69,580 -1,244,148 -1,313,728 -289,020 -289,020

Change -4,175 1,000 1,725 2,500 493 -2,163 -620 221,939 221,319 48,690 48,690

Per 31.12.2020 Fjord Line AS has accumulated basis for deferred tax asset of TNOK 1,313,728.

This implies deferred tax asset (22%) of TNOK 289,020 when recognised in total in the balance sheet.

The Board of Directors following a concrete assessment of the future prospects of Fjord Line AS, under the basis of the net income from the two years prior to Covid-19, found that it has convincing evidence that future earnings will justify capitalization of the deferred tax asset in full. The argument is sustained by the positive operating results in the recent years. This combined with the current plans in long term business plans indicates that we have convincing evidence that we can at least have equivalent earnings in the years to come post Covid-19 as shown in 2019 and this has been taken into account in the assessment.

Specification of taxable result and tax expense: Taxable result Result before tax Dividends from subsidiaries, not taxable Write-down of shares Other permanent differences Employee options recognised as expense Change in temporary differences Issue expenses, offset against eqiuity Application of carry forward loss Taxable result

2020 -222,514 0 0 1,195 0 -620 0 0 -221,939

2019 131,351 0 0 5,345 0 -8,438 0 -128,258 0

Reconciliation of tax expense 22% of financial result 22% of permanent differences Impact of change tax rate Change of deferred tax asset not recognised in the balance sheet Tax expense

2020 -48,953 263 0 0 -48,690

2019 28,897 1,176 0 -92,403 -62,330

Specification of tax expense Change in deferred tax asset Payable tax Tax expense

2020 -48,690 0 -48,690

2019 -62,330 0 -62,330

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07 ⁄⁄ FJORD LINE AS FINANCIAL STATEMENTS

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Annual report 2020 ⁄⁄ Fjord Line

Note 16 Liabilities - parent company Note 16 ⁄⁄ Liabilities – parent company (The figures in table the table is in TNOK) (Figures in the belowbelow is in TNOK) Non-current interest bearing debt per 31.12.

Debt to credit institutions etc.

Bond loan Total non-current interest bearing debt 31.12.

2020 2,443,126

2019 2,171,206

2,443,126

2,171,206

2020 71,705 0 71,705

2019 0 0 0

2,514,831

2,171,206

Current interest bearing debt per 31.12.

Debt to credit institutions (overdraft facilities) Other current interst bearing debt, including debt to owners of the parent company Total current interest bearing debt 31.12.

Total book value of interest bearing debt 31.12.

Fjord Line AS had an unused overdraft facility of MNOK 35 per 31.12.2020 (35 MNOK per 31.12.2019).

Per 31.12.2020 the company has a negative balance on the overdraft facility account of -36,7 MNOK (positive balance of 111,6 MNOK per 31.12.2019).

Non-current interest bearing debt (incl. leasing) - distributed on currency per 31.12.2020 (figures in 1.000) Currency Nominal currency NOK 275,093 Euro 150,366 DKK 421,899 Total non-current interest bearing debt 31.12.

Exchange rate 1.000 10.470 1.407

Book value in NOK 31.12.2020 275,093 1,574,379 593,653 2,443,126

Non-current interest bearing debt (incl. leasing) - distributed on currency per 31.12.2019 (figures in 1.000) Currency Nominal currency NOK 101,867 Euro 156,663 DKK 400,000 Total non-current interest bearing debt 31.12.

Exchange rate 1.000 9.864 1.320

Book value in NOK 31.12.2019 101,867 1,545,291 528,080 2,171,206

Borrowing in Euro and Danish kroner Borrowing in Euro and DKK is recognised in the balance sheet at current exchange rate per 31.12.2020 and 31.12.2019, cf. the table above.

Foreign exchange loss/gain in 2020 related to non-current borrowing in Euro and DKK is 124,5 MNOK. Foreign exchange loss in 2019 related to non-current borrowing in Euro and DKK is 17,9 MNOK. Book value per 31.12. for the Euro-borrowings and Danish kroner-borrowings as follows in NOK (figures in TNOK): Principal amount: Amortization effect of the borrowings, incl. guarantee commission Book value per 31.12.

2020 2,168,033 -11,963 2,156,069

2019 2,073,371 -14,096 2,059,275

2021 314,468 2,107,584

2022 900,686 1,206,898

2023 228,995 977,903

2020 75,106 18,958 26,955 121,020

2019 69,585 18,409 27,332 115,327

Installment plan non-current interest-bearing debt to credit institutions (mortgage loan) Annual installments* Remaining loan per 31.12.

Other current liabilities per 31.12 (figures in TNOK): Prepayment from customers Incurred interests and guarantee commission Provision for other incurred costs etc.

Other current liabilities 31.12.

2019 96,301 2,432,052

2020 10,000 2,422,052

Derecognition of financial obligations Fjord Line AS has entered into a loan agreement with the Australian export finance body EFIC about financing the purchase of a new catamaran to operate the route Kristiansand Hirtshals. Fjord Line AS stands as the formal borrower also during the construction period, but as a result of the entered agreement with EFIC and the contractor of the catamaran Austal-group will Fjord Line not be required to pay interest or instalments in the construction period together with a additional agreement that in the event of a default of debt, will EFIC seek full coverage from Austal before they kan seek coverage of the debt from Fjord Line AS. This results in Fjord Line considering the significant risk of the debt as transfered to another party and thus settled in accordance with NRS 18. The expected delivery of the catamaran is Q2 2021. Upon delivery all related financial liabilities will be recognized and Fjord Line will be considered as the primary responsible of the debt.

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07 ⁄⁄ FJORD LINE AS FINANCIAL STATEMENTS

Note 17 Wage costs, number of employees, remunerations, pension etc. - parent company Note 17 ⁄⁄ Wage costs, number og employees, rumunerations, pensions etc. – parent company (Figures in in the table below in isTNOK) (Figures table below in TNOK) Wage costs Wages, incl. feeding crew etc.

Payroll tax Pension costs Other remunerations Total

2020 66,112 9,818 1,438 3,333 80,701

2019 78,546 13,194 1,589 5,577 98,906

2020 3,200 571 950

2019 2,800 290 1,288

Average number of man-labour years during the accounting year has been 72,47 in 2020 (117,54 in 2019).

Remunerations for CEO and the Board of Directors (figures in TNOK) Wages CEO incl bonus Other remuneration CEO Board of Directors' fee The figures above do not include the option program. See below for further information.

No loan or guarantee have been provided for CEO or any of the members of the Board of Directors.

The CEO is included in the company's pension agreement, cf mentioned below. According to the agreement, 20 % of gross salary is allocated annually and the liability amounts to per 31.12.2020 TNOK 2.272 (TNOK 1.897 as at 31.12.19).

The chief executive officer is entitled to a severance payment equivalent to 12 months’ salary without the right to holiday pay and pension rights, commencing at the time of expiry of notice period, when the resignation is at the request from the company. The Expiry of the notice period was 12.10.2020, the CEO is as such entitled to severance pay until 12.10.2021.

Pensions The company has taken on a pension savings agreement on behalf of the former and the present CEO and another two individuals.

The market value of the contributions/assets was TNOK 3.101 per 31.12.2020 (TNOK 3.101 per 31.12.2019).

Gross liability per 31.12.2020 is calculated to TNOK 6.384 related to these persons (TNOK 5.891 per 31.12.2019).

Net liability is thus TNOK 3.283 per 31.12.2020 (TNOK 2.790 per 31.12.2019), and is classified as pension liability in the balance sheet.

In addition the company has established a defined contribution pension scheme for its employees.

The company pays fixed contributions to an insurance company. The company has no further obligations to pay once the contributions have been paid.

The contribution constitutes from 2% to 4% of the employees' salary.

Auditor Expensed fee to auditor relates to the following services (exclusive of vat), figures in TNOK:

2020 674 297 49 186 1,205

Audit services Certification services/Agreed-upon control procedures Accounting and tax related/duty related technical assistance Other services Total auditor's fee Note 18 Interest income/interest expenses and intergroup guarantee commission - parent company (Figures in TNOK) Interest income comprises:

Interest income on loan to subsidiary (intergroup interests) External interest income Total

2020 103,570 4,172 107,742

2019 97,713 7,708 105,421

2020 976 94,741 1,321 97,039

2019 912 82,734 119 83,765

Interest expenses comprises: Interest expenses on loan to subsidiary (intergroup interests) External interest expenses Other Interest expense Total

Non-current intergroup loans are subject to interest calculation in accordance with market conditions. Further information about intergroup loans/balances is disclosed in note 11.

In 2020 Fjord Line AS has expensed an intergroup guarantee cost of TNOK 22.590 (TNOK 22.077 in 2019).

Fjord Line AS has entered into several contracts on loan financing of the group's ships. The shipowning subsidiaries Fjord Skibsholding I, Fjord Skibsholding II, Fjord Skibsholding III, Fjord Skibsholding IV and Fjord Skibsholding V have on their part provided security for Fjord Line AS' liabilities related to the loan contracts.

As a compensation the shipowning subsidiaries have received guarantee commission based on market conditions.

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2019 633 11 75 193 912

Audit services Certification services/Agreed-upon control procedures Accounting and tax related/duty related technical assistance Other services Total auditor's fee

674 297 49 186 Annual report 2020 ⁄⁄ Fjord Line 1,205

633 11 75 193 912

Note 18 Interest income/interest expenses and intergroup guarantee commission - parent company

Note 18 ⁄⁄ Interest income/interest expenses and intergroup guarantee commission – parent company

(Figures in TNOK)

(Figures in the table below is in TNOK)

Interest income comprises:

Interest income on loan to subsidiary (intergroup interests) External interest income Total

2020 103,570 4,172 107,742

2019 97,713 7,708 105,421

2020 976 94,741 1,321 97,039

2019 912 82,734 119 83,765

Interest expenses comprises: Interest expenses on loan to subsidiary (intergroup interests) External interest expenses Other Interest expense Total

Non-current intergroup loans are subject to interest calculation in accordance with market conditions. Further information about intergroup loans/balances is disclosed in note 11.

In 2020 Fjord Line AS has expensed an intergroup guarantee cost of TNOK 22.590 (TNOK 22.077 in 2019).

Fjord Line AS has entered into several contracts on loan financing of the group's ships. The shipowning subsidiaries Fjord Skibsholding I, Fjord Skibsholding II, Fjord Skibsholding III, Fjord Skibsholding IV and Fjord Skibsholding V have on their part provided security for Fjord Line AS' liabilities related to the loan contracts.

As a compensation the shipowning subsidiaries have received guarantee commission based on market conditions.

Note 19 NOx-grant - parent company Note 19 ⁄⁄ NOx-grant – parent company Note 19 NOx-grant - parent company The ship "MS Stavangerfjord" was delivered in July 2013, and the ship "MS Bergensfjord" was delivered in January 2014.

The ship "MS Stavangerfjord" was delivered in July 2013, and the ship "MS Bergensfjord" was delivered in January 2014.

Because the ships are gas powered (LNG), with related low emission, Fjord Line AS was granted a contribution from the NOx-fund.

Because the ships are gas powered (LNG), with related low emission, Fjord Line AS was granted a contribution from the NOx-fund.

Per 31.12.2014 contributions of MNOK 147.2 in total had been paid to Fjord Line AS connected to these projects.

Per 31.12.2014 contributions of MNOK 147.2 in total had been paid to Fjord Line AS connected to these projects.

As a condition for the grant Fjord Line AS was obliged to use "MS Stavangerfjord" and "MS Bergensfjord" in NOx-liable waters for at least 2 years As a condition for the grant Fjord Line AS was obliged to use "MS Stavangerfjord" and "MS Bergensfjord" in NOx-liable waters for at least 2 years from time of delivery. from time of delivery.

In 2020 Fjord Line AS received 0 MNOK in NOx-grants (0 MNOK in 2019).

In 2020 Fjord Line AS received 0 MNOK in NOx-grants (0 MNOK in 2019).

In the 2020 accounts MNOK 4,2 of the grants was recognised as income (5,5 MNOK in 2019). The amount was classified as other operating income In the 2020 accounts MNOK 4,2 of the grants was recognised as income (5,5 MNOK in 2019). The amount was classified as other operating income in the income statement. The grants are subject to accrual in line with the depreciation profile of the operating assets to which in the income statement. The grants are subject to accrual in line with the depreciation profile of the operating assets to which the grants relate. the grants relate.

Below is a summary of accounting values (figures in TNOK) Below is a summary of accounting values (figures in TNOK) Total received grants 31.12.2019 Total received grants 31.12.2019 Grants recognised as income 2019 Grants recognised as income 2019 Accumulated grants recognised as income 31.12.2019 Accumulated grants recognised as income 31.12.2019 Grants received, not recognised in the income statement 31.12.2019 Grants received, not recognised in the income statement 31.12.2019 Grants received 2020 Grants received 2020 Total received grants 31.12.2020 Total received grants 31.12.2020 Grants recognised as income 2020 Grants recognised as income 2020 Accumulated grants recognised as income 31.12.2020 Accumulated grants recognised as income 31.12.2020 Grants received, not recognised in the income statement 31.12.2020 Grants received, not recognised in the income statement 31.12.2020

166,809 166,809 -5,469 -5,469 -79,448 -79,448 87,361 87,361 0 0 166,809 166,809 -4,217 -4,217 -83,665 -83,665 83,144 83,144

Note 20 Subsequent Event - parent company Note 20 ⁄⁄ Subsequent Event – parent company Note 20 Subsequent Event - parent company The Group has since March 2020 experienced increasingly adverse effects of the Covid-19 outbreak. The outbreak has developed rapidly, and the situation affects Fjord Lines The Group has since March 2020 experienced increasingly adverse effects of the Covid-19 outbreak. The outbreak has developed rapidly, and the situation affects Fjord Lines business significantly as the number of travelers has been decreasing in line with the respective Governments closing of borders as well as implementation of other travel restrictions business significantly as the number of travelers has been decreasing in line with the respective Governments closing of borders as well as implementation of other travel restrictions in order to reduce the spread of the virus. This situation has the highest priority in the Group and the management team has designed and implemented several extensive measures in in order to reduce the spread of the virus. This situation has the highest priority in the Group and the management team has designed and implemented several extensive measures in order to immediately adjust the cost base in order to protect the Groups cash-flow, by eliminating all cash-negative operations this extraordinary situation has brought about. order to immediately adjust the cost base in order to protect the Groups cash-flow, by eliminating all cash-negative operations this extraordinary situation has brought about.

These actions consist among others of temporary changes in our route network and deployment of vessels, as well as layoff of personnel and other robust cost reductions in order to These actions consist among others of temporary changes in our route network and deployment of vessels, as well as layoff of personnel and other robust cost reductions in order to adjust the cost base to the present market demand. The Group has established an emergency route, primarily for cargo, to ensure the flow of goods between Norway and the EU with adjust the cost base to the present market demand. The Group has established an emergency route, primarily for cargo, to ensure the flow of goods between Norway and the EU with two daily departures in each direction between Kristiansand and Hirtshals. To ensure the flow of goods between Norway and EU, the Group established an emergency route, two daily departures in each direction between Kristiansand and Hirtshals. To ensure the flow of goods between Norway and EU, the Group established an emergency route, primarily for cargo, with two daily departures in each direction between Kristiansand and Hirtshals. In addition, the Group sailed two round trips a week to serve the west coast primarily for cargo, with two daily departures in each direction between Kristiansand and Hirtshals. In addition, the Group sailed two round trips a week to serve the west coast market in Norway and to bunker fuel from the LNG plant in Risavika. market in Norway and to bunker fuel from the LNG plant in Risavika.

The Group have secured a robust financial restructuring through negotiations with senior lenders 30.04.2020 and 17.02.2021 that will provide the Group with a robust financial The Group have secured a robust financial restructuring through negotiations with senior lenders 30.04.2020 and 17.02.2021 that will provide the Group with a robust financial runway. The financial restructuring consists of owner contributions, new bank loans as well as postponement of interests, guarantee premium and instalments. The Group has also runway. The financial restructuring consists of owner contributions, new bank loans as well as postponement of interests, guarantee premium and instalments. The Group has also renegotiated all financial covenants under the current loan agreement to be compliant with these going forward. Fjord Line has in addition received cash support totaling MNOK 269 renegotiated all financial covenants under the current loan agreement to be compliant with these going forward. Fjord Line has in addition received cash support totaling MNOK 269 for 2020 from the Norwegian government’s Business Compensation Scheme. for 2020 from the Norwegian government’s Business Compensation Scheme.

Fjord Line is well positioned, and the Board of Directors is confident that measures taken by the management throughout this challenging year will contribute to the positive Fjord Line is well positioned, and the Board of Directors is confident that measures taken by the management throughout this challenging year will contribute to the positive underlying development that the Group experienced pre-Covid-19. underlying development that the Group experienced pre-Covid-19.

The Board of Directors concurs with the management team and has a positive outlook and expect the Group to further improve on the pre Covid-19 results in the years to come.

The Board of Directors concurs with the management team and has a positive outlook and expect the Group to further improve on the pre Covid-19 results in the years to come.

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AUDITORS REPORT

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We move people – sustainably

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02 ⁄⁄ THIS IS FJORD LINE

Annual report 2020 ⁄⁄ Layout: Fjord Line ⁄⁄ Printed editions: 300 ex ⁄⁄ Printed by: BK Grafisk AS Foto: Fjord Line, Kenneth Hansen, Morten Wanvik, Jon-Inge Nordnes, Erik Ask, Thomas Østberg Jacobsen, Geir Einarsen, Getty images.no

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