Annual Report 2018

REVENUE INCREASED with 13% to NOK 1,529 million – boosted by higher efficiency and an increase in average rates

GROWTH of 8% to 1,386,800 – in the number of passengers in 2018

ENVIRONMENTAL BENEFIT CO2 and NOx ⁄⁄ 60% and 81% – by choosing to travel with Fjord Line instead of by road Highlights ⁄⁄ Fjord Line Annual Report 2018 2018 a new all-time high – AND GROWTH SET TO CONTINUE IN 2019

On top of many consecutive years of strong expansion, Fjord customers so that there is the wish to travel with us Line continued to develop during 2018 and this growth in both again and again and happily share heartfelt Fjord Line revenues and earnings is set to continue in 2019. The drivers stories with family and friends. of this positive development are many but I wish to highlight the continued professionalisation and industrialisation of As our strategy proclaims, «We aim to become the company, leading to a tighter execution of processes Scandinavia’s most loved and profitable ferry and services paired with continued market success giving company» further growth in market shares as one of the most important factors. The planet we inhabit is fragile and we do realise our market puts pressure on the whole industry to reduce the This gave a jump in revenues of 13% between environmental footprint we’re leaving from our the years, from NOK 1.359 million to NOK everyday business. We believe that we are 1.529 million and EBITDA continued to already at the forefront in our industry, grow to NOK 336 million. being early adopters of LNG as our main fuel and on a daily basis endeavour to reduce Our customer base is growing both within the strain we put on the envi­ron­ment the private passenger segment and freight around us in all ways, shapes and forms. services as mentioned, resulting in further A good example is our investment­ in a increases in market shares in both areas. new vessel coming into service 2020 that Our investments in capacity expansion in the once again underlines this effort by reducing last few years together with the investment the CO2 emissions by more than 30% per in a completely new ferry for our service on passen­ger compared to present tonnage. Kristiansand – Hirtshals - ready to set sail in 2020 - are Therefore, I believe 2019 is set to be another inte­ important enablers to safeguard continued growth for the resting year in which Fjord Line will see continued success on company. the market, continued growth in customer appeal resulting From 2019 we’re now basing all our efforts on our brand in further growth in revenues and earnings. With this, I feel new Strategy Plan, “New Heights”. It’s a three-year plan it’s opportune to thank all my colleagues in the business designed to get us through a new period of profitable who work daily to realise this proposition, taking care of the expansion, provide further consolidation and leaving us even environment, our customers and our assets and not least, more agile and attractive for our customers. maintaining the very good work climate we experience in the The management team and all of Fjord Line continue to company. work ferociously to operationalise the strategies to reach I am proud to be working in the dynamic and inspiring those higher targets. The digital agenda continues to be the company that Fjord Line has become and knowing that we most important task and the company is just wrapping up have a bright future. a period with an intense focus on IT-system changes, developing services and adopting new ways of working to become more efficient and customer centric. We maintain a strong and lasting commitment to creating values for our stakeholders and are always looking for new business opportunities. Supported by new technology and new business models, we are Rickard Ternblom diligently pushing ahead to create enthusiastic and loyal CEO

PASSENGERS CARS 13% REVENUE UP 8% UP 8% GROWTH

2 Fjord Line Annual Report 2018 ⁄⁄ Highlights

2015 2016 2017 2018 Financials

⁄⁄ EBITDA ⁄⁄ REVENUE

MNOK 9.1% MNOK 13.0% 400 1600 1529,3 1359,0 350 335,5 1400 304,4 1169,4 300 1200 250 1000 902,2 201,5 200 800 150 600 100 400 50 36,2 200 0 0 2015 2016 2017 2018 2015 2016 2017 2018

Market shares

⁄⁄ PASSENGERS ⁄⁄ CARS 6.6% 5.7% 30% 30% 25% 25% 20% 20% 15% 15% 10% 10% 5% 5% 0% 0% 2015 2016 2017 2018 2015 2016 2017 2018

2015 2016 2017 2018 Change

Passengers 18% 19.2% 19.7% 21.0% 6.6%

Cars 25.7% 2 7.4% 2 7.9 % 29.5% 5.7%

Freight units 22.7% 22.9% 23.9% 23.9% 0.0%

Crossings 31.6% 31.0% 30.0% 30.9% 3.0%

Volumes

Volumes total 2017 2018 Change Per crossing 2017 2018 Change

Passengers 1 278 842 1 386 700 8.0% Passengers 401 416 4.0%

Cars 385 831 417 000 8.0% Cars 121 125 4.0%

Freight units 65 900 66 900 2.0% Freight units 21 20 2.0%

Crossings 3 189 3 330 4.0%

The market is defined as all volumes on routes between Norway-Denmark and Norway-Sweden. Source: Shippax 3 Notes ⁄⁄ Fjord Line Annual Report 2018

«We aim to become Scandinavia’s most loved and profitable ferry company.»

4 Photo: Tegneren.no Photo: Fjord Line Annual Report 2018 ⁄⁄ Environment

Responsible maritime shipping – FOR A MORE SUSTAINABLE WORLD

In 2013, Fjord Line launched the world’s first cruise ferries that undertake voyages using only environmentally friendly natural gas. This means that we are currently offering ferry travel with nearly half the CO₂ emissions than the industry average. Our ambition is to take a leading role in the transition to a low carbon society.

In 2018, the IPCC presented a special report on the effects freight transportation, both domestically and abroad - by road, of climate change from a global temperature rise of air, rail and sea. For the environment and the climate, the 1.5 degrees. A multitude of measures will need to be taken transportation choices we make go a long way. The bulk of but the overall message is clear: In order for the world to be transportation currently takes place on the roads, which is habitable in the future, a comprehensive and focused effort the transportation method that accounts for the majority of is needed from governments, companies and individuals. CO2 emissions into the atmosphere. In Norway, road traffic At Fjord Line, we know how we impact the environment. accounts for 17% of the total greenhouse gas emissions. We are continually working on reducing our environmental We can look at the corresponding data on an international impact and for a long time, have taken focused steps scale. In the EU, road transport accounts for nearly 75% of towards becoming a more environmentally friendly company. greenhouse gas emissions. Overall, we will contribute positively to a more sustainable Maritime transport is a good and effective alternative. society. Transportation by sea produces less greenhouse gas emissions and consumes less energy than transporting FROM THE ROAD TO THE SEA ROUTE the same amount of goods by other methods. The population of Norway is growing and we are travelling more and more. This has contributed to greater awareness ENVIRONMENTAL BENEFIT and social debate amongst other things on how this impacts In 2018, Fjord Line transported 1,386,800 passengers, the environment. We see it in how ‘flight shaming’ and 417,000 cars, 1,022 buses and 66,950 freight units across other concepts associated with environmental pessimism 3,334 trips. If this transportation was to have taken place charac­terised­ debates throughout 2018. Population growth on the roads instead of by sea, there would have been combined with high economic activity also means a lot of 60% more CO2 emissions and 81% more NOx emissions.

B !

E T T N T E E R M F N O IRO R THE ENV 1 386 800 60% PASSENGERS 1 022 less CO2 BUSES 2018 3,334 TRIPS 81% less NOx 417 000 66 950 CARS FREIGHT UNITS

5 Environment ⁄⁄ Fjord Line Annual Report 2018

LARGE SCALE RESTRUCTURING sions over a long period of time. In parallel, our NOx emissions Today, there is a national policy objective to move the have also been significantly reduced. We see the results of transportation of goods from land to sea. Doing so will our efforts when we compare ourselves to the transportation have positive effects on a number of factors - alternatives. A standard passenger trip between

especially the environment. Amongst other Stavanger and Oslo by air emits 63 kilos of CO2 while things, the National Transportation Plan for that same journey on a Fjord Line ship emits 17 kilos

2018-2029 states that «The government’s aim of CO2.

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T E is to facilitate the develop­ment of competitive, T N The development of a more modern fleet will have T E E M effective, safe and environmentally friendly R N a lasting and positive impact on the environment. F O OR IR maritime transport, with efficient ports and THE ENV transport corridors, as well as solid FIRST IN THE WORLD ON LIQUID preparation against NATURAL GAS acute pollution.» «For the last six years, The achievement of more sustainable At the same time, the political development by Fjord Line over the parties have stated on their Fjord Line has made great past seven years is largely due to political platform that they will our willingness to invest in new produce an “action plan for strides in becoming a more technology. green shipping with the goal of environmentally conscious In 2012, we made the choice halving emissions from domestic to focus on liquid natural gas as the maritime transport and fishing and responsible energy source for our sister ships, MS by 2030”. The desire to focus on Stavangerfjord and MS Bergensfjord. making shipping even company.» The two ships are the world’s first and more environmentally friendly sends largest cruise ferries that sail solely on a signal regarding its importance and its environmentally friendly natural gas. Not central role in a future in which the climate only is this technology innovative, it also has and the environment must come first. significant environmental benefits. We are also seeing the same developments beyond The engine exhaust on board the ships is completely free our borders. With the environmental perspective in mind, the of sulphur and soot and therefore doesn’t emit any visible International Maritime Organization (IMO) and the Maritime smoke. By converting waste heat from the exhaust gases Safety Committee (MSC) have set ambitious goals that are into steam-generated energy, the sister ships produce their intended to further the objectives of the Paris Agreement. own electricity. At the same time, the CO2emissions are In 2018, the IMO set the goal of all ships cutting their CO2 up to 25 per cent lower than their diesel counterparts. NOx emissions by at least 40% by 2030. emissions have also been reduced by a full 92%. Looking Seafaring transport must and will play a central role in at the global and local long-term picture, this means the restructuring that is needed to achieve climate goals. significant and positive effects on the climate and the environment. A MODERN AND ENVIRONMENTALLY FRIENDLY It’s not just us at Fjord Line who think this is a step in FERRY FLEET the right direction. In 2015, we received the highest score on One basic premise at Fjord Line is that we have to create the international Environmental Ship Index, beating over value in a sustainable way and take responsibility for how we 3,200 other ships. impact society around us. This means making the environ­ This is something we are very proud of. ment the focus of everything we do. As Norway’s second largest ferry company operating in international passenger ONE STEP AHEAD FOR THE ENVIRONMENT and goods traffic between Norway, Sweden and Denmark, For us, it’s important to not only operate in accordance with we aim to take a leading role in the transition to a low current laws and regulations but also to be always thinking carbon society. one step ahead. Among other things, this includes getting Over the last six years, we have invested heavily in a ahead of future national and international emission modern and technologically advanced fleet. In 2013, MS regulations. Stavangerfjord made its maiden voyage to Hirtshals and In March 2015, we began using one of the world’s most one year later, MS Bergensfjord did the same. These ships modern fuel plants in Risavika Port just outside of Stavanger. are sustainable, built with the latest technology and based This is a new liquid natural gas-filling plant with zero risk on the principle of minimising both the potential local and of pollution. The facility ensures our ships receive larger global environmental footprints. Today, a passenger trip from amounts of fuel in less time and uses a method of bunkering Langesund to Hirtshals aboard one of our ships produces with no spills. Fjord Line is the first ferry company in Europe 42% less CO2 emissions than the industry average. to fuel its ships with natural gas using this method. Our company has considerably reduced our CO2 emis­ We want to set an example by using environmentally

6 Fjord LineFjord Annual Line AnnualReport Report2018 ⁄⁄ 2018Environment ⁄⁄ Notes

friendly technology that minimises emissions. We do not speed catamaran that will operate between Kristiansand dump wastewater into the ocean, we do not use toxic paints and Hirtshals. The new ship produces 32% less CO2 and we work to intentionally minimise the use of water and emissions per passenger kilometre than current ships. chemicals at our company. That’s a lot! In addition, we’ve started work on the future of waste In addition, we have set ambitious and specific management on all our ships. We keep our amount of goals for 2017 on how we will take further steps towards waste at an absolute minimum and facilitate a high becoming a positive contributor to a more sustainable degree of recycling and reuse. This means that at Fjord transport industry. Line all metal, glass, paper, cartons, aluminium cans, At Fjord Line, we know we have a direct impact on the plastics, oil waste, bio-waste, hazardous waste, energy climate and the environment. We are also acutely aware waste, wood waste and electronics are recycled. of the responsibility that we have to be part of the solution Our experience tells us that long-lasting and and not part of the problem. For the last six years, we have positive environmental effects are created when we let made great strides in becoming a more environmentally sustainability guide everything we do. For both the big conscious and responsible company. Over the coming things and the little things. decades, we will introduce more measures to contribute to a more environmentally friendly transport industry. THIS IS JUST THE BEGINNING We are constantly working on finding measures that reduce our energy consumption and are good for the – WE ARE LOOKING environment. Despite having taken significant steps in FORWARD TO CONTINUING recent years, we believe we should never stop evolving. That is why, in 2020, we will be launching a new high- GREAT WORK!

7 Notes ⁄⁄ Fjord Line Annual Report 2018

Employees

Throughout 2018 we continued working on our training programme, Fjord Line Academy.

In the past, the Academy was focused on various courses SATISFACTION & ENGAGEMENT related to management training and service, alongside We were able to get a good idea of how happy Fjord Line mandatory safety and hygiene certification courses. employees are and to learn their thoughts on the Group from But we took a different approach in 2018. the employee survey in 2018. We are pleased to report We expanded and developed our strategy solid progress on a number of points. Furthermore, for building skills by utilising a completely we are recording either the status quo or impro­ new and forward-thinking tool: ve­ments on all parameters compared to the a digital learning platform. 2017 results. Employees can easily build But even with such good results, skills here on their own. With Fjord Line will always strive for further this tool, each individual gains improvement. more flexibility and becomes equipped to serve several FLEXIBLE VESSELS – FLEXIBLE different functions on board. We ORGANISATION anticipate this new tool as being In 2018, the company took its first major highly profitable and hope for its step towards what we have chosen to immediate implementation. call “flexible ships/flexible organisation” We also endeavour to conduct to strengthen individual skills/flexibility. We training programmes on planned rest believe that increased skills, greater responsibility days for our ships. For example, this autumn and a higher degree of self-governance are crucial to we ran a major Marine Evacuation System (MES) succeeding in the achievement of such goals. In the employee exercise ashore on board MS Bergens­fjord. A total of 160 survey mentioned earlier, our employees expressed their crew members participated. While the training programme desire for a greater degree of autonomy within their areas was under way, we had the opportunity to install new retail of work. This tells us that company strategy goes hand in outlets on board, making them ready for rollout as soon as hand well with what employees want. This is an excellent MS Bergensfjord and MS Stavangerfjord were docked at the springboard for success. end of the year. The success for Fjord Line with the flexible ship/flexible The company receives compensation for any lost wages organisation strategy will simultaneously lead to success when an employee participates in and completes vocational in both minimising and also providing the opportunity training. to vary the number of crew members. This is all without compromising our on board service.

8 Fjord Line Annual Report 2018 ⁄⁄ Notes

PRIDE IN BEING AN EMPLOYEE OF FJORD LINE ...... 4.3

HIGHLIGHTS LOYALTY ...... 4.5 measured on a scale from 1-5 WILLINGNESS TO BE AN AMBASSADOR ...... 4.3

Source: 2018 Employee Survey.

99 Notes ⁄⁄ Fjord Line Annual Report 2018

Customer experience – ON BOARD 2018

During 2018, Fjord Line When the ship returned to its daily route between Sandefjord and Strömstad in February 2018, it did so with a completely continued working on new and exciting shopping experience on decks 4 and 5!

developing and improving THE WORLD’S LARGEST TAX-FREE SHOP ON BOARD A DAY-TRIP FERRY! on-board aspects. Most The new tax-free shop on MS Oslofjord boasts 1,800 square metres of shopping. Included in the experience is a delicious of the work was done food market with a rich selection of frozen and refrigerated on MS Oslofjord. goods, a «We Proudly Serve» café (in collaboration with Starbucks) and its own departments for perfume, cosmetics, beverages, clothes, sweets, toys, and much more. Worth noting is that when the tax-free shop was on the drawing board and then later came to life, Fjord Line actively 10 Fjord Line Annual Report 2018 ⁄⁄ Customer experiences

«The world’s largest Tax-Free Shop on board a day trip ferry!»

used information from the customer surveys that we’ve been regularly carrying out since the company started on the route in June 2014. We can therefore say that this tax-free shop is one that is based on the wishes of our passengers and their responses to the shopping experience in 2018 were very positive.

NEW CABINS ON THE SISTER SHIPS At the end of 2017/beginning of 2018, the Deck 10 projects were also completed as projects on the sister ships, MS Stavangerfjord and MS Bergensfjord, which operate daily on the Bergen-Stavanger-Hirtshals and Langesund-Hirtshals routes. Over 60 new cabins were built on each ship, many with upgraded classes and 11 Notes ⁄⁄ Fjord Line Annual Report 2018

FUTURE CUSTOMER EXPERIENCE – NEW CATAMARAN 2020

12 Fjord Line Annual Report 2018 ⁄⁄ Customer experiences

stunning panoramic views. At the same time, the buffet added for a new clothing and accessories store with a wide restaurants on the ships were expanded by 125 tables, selection of clothes for children and adults, as well as the in the form of winter gardens with gorgeous ocean views. addition of an Italian restaurant in a separate section in These investments were made on the basis of the strong the on-board buffet restaurant section. faith of Fjord Line in the market in Western Norway and a growing interest in Denmark as a holiday destination. CONSTRUCTION OF A NEW CATAMARAN In 2018, we started construction on a new Fjord Line TAX-FREE PROJECT AND NEW FASHION BOUTIQUE catamaran that will run between Kristiansand and Hirtshals. Following this, Fjord Line also launched a new tax-free Our plan is to have the catamaran fully operational by the project aboard MS Stavangerfjord and MS Bergensfjord 2020 summer season and with almost double the capacity at the end of 2018. Drawing inspiration from the work on compared to HSC Fjord Cat, which currently operates on MS Oslofjord, the aim was to create a separate space for a the route. The 2 hour and 15 minute travel time will remain food market as part of the shopping experience. Plans were unchanged.

«Bigger, better, bolder – still the fastest crossing with a car to Denmark!»

13 Photo: Tegneren.no Photo: Notes ⁄⁄ Fjord Line Annual Report 2018

Annual Report 2018 FJORD LINE AS GROUP

THE GROUP but also from ancillary revenues and services. Finally, Fjord Line AS («Fjord Line») is the parent company in the business area Freight generates its revenues from sales Fjord Line Group («Group»). The Group is headquartered of transportation of trucks, trailers, articulated vehicles, in Egersund with operative offices in Bergen, Stavanger, specialized or out-sized cargo and on-deck shipments Kristiansand, Langesund, Sandefjord, Strömstad and but also from forwarding services. Hirtshals and with sales offices in Germany, Netherland, Poland and Lithuania. As per December 31st 2018, the TONNAGE Group had 670 FTEs whereof 217 were shore based and The cruise ferries MS Stavangerfjord (2013) and MS 453 were seagoing. Bergensfjord (2014) operate the routes between Bergen The Group has one of the youngest and most modern – Stavanger – Hirtshals and Hirtshals – Langesund. The fleets in the cruise ferry segment in Europe with an av- cruise ferries are nearly identical, and are both equipped erage age of 13,5 years. The fleet consists of four vessels with fuel efficient «single fuel» LNG-engines, which and is highly cost efficient and all vessels fly the Danish results in a close to complete elimination of pollutant flag. Our vessels operate three routes between Norway emissions. The market demand on the route Bergen – and Denmark, one route between Norway and Sweden Stavanger – Hirtshals is high and increasing, especially and since January 1st the Group also operate a domestic during peak season, school holidays and weekends. To route between Bergen and Stavanger. meet this demand Fjord Line increased the cabin capac- The Group revenues arises from three main business ity of MS Stavangerfjord and MS Bergensfjord with 64 areas. All ticket revenues within the Group are generated cabins per ship corresponding to an increase of 21% in in business area Travel and consists of transport-, cruise-, cabin capacity. group-, package-, and conference ticket revenue streams. The modern day-ferry MS Oslofjord (1993) was sub- All onboard revenues are generated within business area ject to a substantial conversion in 2014. MS Oslofjord is Onboard Services and includes revenue streams predom- customized for the route Sandefjord – Strömstad and inantly from the retail and food & beverage operations was put into operation as the company’s first vessel on

14 Fjord Line Annual Report 2018 the route on 20 June 2014. In January 2018 the tax-free addition of 64 new cabins and 114 further seats in our shopping area of the ship were increased and improved F&B-operation, proved valuable leading to record volumes and today MS Oslofjord has one of the largest tax-free during July on our Bergen-Hirtshals route. This experience shops on a day route worldwide. underpins the Groups view of the great underlying poten- The high-speed catamaran HSC Fjord Cat (1998) op- tial in market demand from Western Norway. erates the route Kristiansand – Hirtshals in the summer The Group carried 1,386,700 passengers in 2018 season. The vessel, which is one of the world’s fastest car compared to 1,278,900 in 2017 which constitutes an carrying passenger vessels offers the fastest ferry cross- increase of 8,4%. The passenger numbers were negatively ing between Norway and Denmark in just 2 hours and 15 influenced by the six week docking of MS Bergensfjord, minutes. otherwise positively influenced by an uninterrupted sailing After several years of solid growth on the route Kris- season on Kristiansand-Hirtshals and generally strong tiansand – Hirtshals, Fjord Line has decided to invest in a volume development on all routes. In fact, the Group set new catamaran with higher capacity and comfort, more new all-time-highs on four of five routes in 2018. departures and longer season. The new vessel also marks Furthermore, the Group carried 417,000 passenger an increased focus on freight. vehicles and 66,900 freight units compared to 386,900 The Australian yard Austal Ships Pty Ltd got the assign- passenger vehicles and 65,900 in 2017, an increase with ment to build the vessel which will represent a new tech- +7.8% and +1.5% respectively. nological standard and lower environmental footprint on The Group’s passenger market share continued to grow this route from launching season 2020. during 2018 and reached 21%, up from 19.7% in 2017 of the The new vessel has a capacity of 1,200 passengers and market between Norway-Denmark and Norway-Sweden. more than 400 cars – almost a double of capacity. The For passenger vehicles the market share reached 29.5% capacity of the on board shops will also be doubled and (27.9% in 2017) and for freight the share was stable on provide the passengers with a wider selection. The guests 23.9% (23.9%). will be able to choose from three different and exciting During 2018 extensive resources has been invested in food concepts on board. digitalization of internal and external processes, seeing both first stages of a new e-commerce solution being OPERATIONS IN 2018 implemented and a brand new ERP-system becoming op- The Group continued to grow its revenues significantly erative just to mention two of the initiatives. The ERP-sys- between the years driven by both higher production and tem, named VEGA internally, brings about fully integrated generally higher average rates. Except for an exstensive solutions from A-Z covering accounting, procurement, docking of MS Bergensfjord during six weeks in January supply chain, POS, reporting and BI to mention some of and February to increase cabin- and restaurant capacity, the areas covered. The Group belives that the investment good regularity on all routes was achieved. in this state-of-the-art system will bring about significant Compared with 2017 total revenues grew with a healthy synegies in the years to come an lead to more efficient 13% to MNOK 1,529.3 which again is a record for the Group. operations. All business areas in the company contributed to this The growth phase the Group has experienced recent growth where both volumes and average rates increased years has put strains on the organization and as very across the board. Passenger operations on Sandefjord- often experienced, costs grows in parity with revenues. Strömstad developed especially strong following a The Group Management team has identified challenges refurbishment of the retail unit onboard thus creating the cost-wise, and thus towards the end of the year a cost- world’s largest tax free shop afloat on a day ferry (1,200 race program Project Falcon was established to pin-point sqm). The maket received this novelty very well and de- specific areas where savings are to be made without spite head-to-head competition on this route, the Group hampering commerciality or customer satisfaction. The was able to note record trading levels for this operation. program will become effective in financial year 2019 and After a troublesome season in 2017 it was pleasing render significantly lower operational costs in the Group to record a sailing season without incidents on the route both in the upcoming financial year as well as onwards. Kristiansand-Hirtshals where all planned sailings were To further strengthen commercial capabilities, a new role serviced. Following the extensive docking program for our was added to the Management Team in the capacity of sister vessels MS Stavangerfjord and MS Bergensfjord, a Retail Director with the sole focus on maximizing retail the capacity increase carried through onboard through revenues as well as retail contributions in the Group.

«A passenger crossing with one of our vessels

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T E 2 T N on Langesund-Hirtshals, emits 42 percent less CO T E E M R N F O OR IR THE ENV than the trade average.»

15 Notes ⁄⁄ Fjord Line Annual Report 2018

16 Fjord Line Annual Report 2018

THE FINANCIAL STATEMENTS

ACCOUNTING PRINCIPLES CASH FLOWS Fjord Line AS is a Norwegian private limited company and The Group’s liquid funds have been decreased by MNOK the parent company of the Group. The financial state- 64.7 in 2018 compared to an increase of liquid funds of ments of the parent company is presented in accordance MNOK 27.9 in 2017. with NGAAP. The consolidated financial statements are The decrease consists of the following main elements: presented in accordance with simplified IFRS (Interna- • Cash flow from operational activities: MNOK 268.9 tional Financial Reporting Standards). (MNOK 319.3 per 31 December 2017). • Cash flow from investing activities: MNOK -312.6 RESULT FOR THE GROUP AND THE PARENT COMPANY (MNOK -339.7 per 31 December 2017). The Group’s operating income was MNOK 1,529.3 in 2018, • Cash flow from financing activities: MNOK -21.1 compared to MNOK 1,359.0 in 2017. The Group’s operating (MNOK 48.3 per 31 December 2017). expenses ex. depreciation were MNOK 1,193.8 in 2018, compared to MNOK 1,051.6 in 2017. BALANCE SHEET AND FINANCING The Group’s EBITDA shows a profit of MNOK 335.5 in The Group’s total balance sheet value is MNOK 3,813.3 2018, compared to a profit of MNOK 307.4 in 2017. Oper- per 31 December 2018, compared to MNOK 3,683.3 per ating result (EBIT) in 2018 shows a profit of MNOK 123.9, 31 December 2017. Fjord Line AS’ total balance sheet is, compared to a profit of MNOK 122.7 in 2017. however, MNOK 3,404.7 per 31 December 2018 compared Further on, the Group’s net financial expenses are to MNOK 3,240.2 per 31 December 2017. Interest bearing MNOK 109.7 in 2018, compared to corresponding expens- debt made MNOK 2,429.2 per 31 December 2018 com- es of MNOK 118.2 in 2017. Included is a foreign exchange pared to MNOK 2,362.6 per 31 December 2017. loss of MNOK 108.8 related to borrowing in EUR/DKK The group’s equity is MNOK 1,059.4 per 31 Decem- compared to corresponding foreign exchange loss in ber 2018, compared to an equity of MNOK 1,037.1 per 31 2017 of MNOK 171.5. MNOK 108.2 of this loss has a counter December 2017. Two independent valuations provided for entry through foreign exchange gain on intergroup loans the fleet promise that there are substantial added values in DKK to subsidiaries. In total net disagio of MNOK 8.2 in the ships compared to carrying values. These added was recognised in 2018, compared to a net disagio of values are not reflected in the accounting figures, but are MNOK 33.2 in 2017. central in the understanding of the Group’s real equity Result before tax for the Group was a profit of MNOK per 31 December 2018. The ships are valued in EURO, 14.2 in 2018, compared to a profit of MNOK 4.5 in 2017. and according to the brokerage the total real value of the Result after tax was a profit of MNOK 67.9 i 2018, ships per 31 December 2018 is MNOK 689.8 higher than compared to a profit of MNOK 78.2 in 2017. the carrying value. The parent company Fjord Line AS` result before tax The Group’s boand loan of MNOK 300 were repaid in was a profit of MNOK 53.8 in 2018, compared to a profit of Febuary 2018. In 2017 Fjord Line signed a credit agree- MNOK 23.9 in 2017. Fjord Line’s profit of MNOK 106.8 after ment with Danica Pension Livsforsikringselskap of MDKK tax is proposed transferred to other equity. Subsequently 400 terminating in June 2023. The facility will cover the book equity of the parent company amounts re-financing of bond loan and secure the Group’s growth to MNOK 684.6. strategy. Fjord Line has accumulated basis for deferred tax The Group’s liquid funds made MNOK 123.5 per asset of MNOK 1,218.0, which implies a deferred tax asset 31 December 2018, including an unused credit facility (22 per cent) of MNOK 268.0 at full capitalization. For of MNOK 38.8. prudential reasons the Board of Directors has recognised deferred tax asset of MNOK 178.0 in the balance sheet which presents an increase from 2017 with MNOK 53.0. The revaluation of the deferred tax asset is based on an updated review of the future prospects of Fjord Line, supported by the last two years financial results and the positive trend we see in 2019. The increased capacity of MS Stavangerfjord and MS Bergensfjord will further enhance the financial results of 2019 and onwards. The Board of Directors is of the opinion that the ac- counting figures for 2018 have to be assessed in view of the circumstances described under «Operations 2018». The Board of Directors finds the profit development satis- factory and expects further improvement in 2019.

17 Fjord Line Annual Report 2018

17,4% 44,6% Kontrazi AS Ferd AS

34,8% Kontrari AS

OWNERSHIP The Group’s major owners per 31.12.2018 were as follows: Ferd AS 44.6%, Kontrari AS 34.8 %, Kontrazi AS 17.4 %

FINANCIAL RISK Exchange rate and interest rates Per December 31.12.2018 the Group has interest bearing debt of MNOK 2,429.2, including loan in EUR/DKK, constituting in total MNOK 2,316.9. 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. At the end of the year the interest bearing debt of Fjord Line AS amounts to MNOK 2,409.0. 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 COVENANTS is also exposed to fluctuations in the exchange rate of USD Per 31.12.2018 the Group had financial debt cove- through purchase of fuel. The Group is exposed to general nants connected to EBITDA, liquidity and booked fluctuations in bunkers- and LNG prices, but a significant and value adjusted equity. The company’s Board part of the risk is eliminated through hedging contracts for of Directors and management are continuously LNG and MGO. monitoring the financial debt covenants, and per In 2018 the Group entered into interest swap agreements 31 December 18 the company is in compliance with to reduce the financial risk. all covenants. The Group is also compliant as per 31 March 2019. PRICE VARIATIONS OF BUNKER The Group has per 31.12.2018 entered into hedging contracts MARKET for approximately 50 per cent of the LNG consumption in the Market risk is considered to be limited for the com- period 2019-2021, and approximately 60 per cent of the MGO pany, as the target group comprises a large number consumption for the period 2019-2021. of and various types of customers. The Group’s In 2019 additional volumes of LNG and MGO have been main objective is to secure profitability and to main- secured in hedging contracts. tain cost efficient operations. Fjord Line is working

18 Fjord Line Annual Report 2018 ⁄⁄ Notes

«In 2017, Fjord Line implemented a policy for systematic follow-up and reduction of sick-leave given to all leaders.»

purposefully to improve profitability and has strong focus GOING CONCERN on obtaining competitive frame conditions. In accordance with the Accounting Act § 3-3a it is con- firmed that the financial statements for 2018 have been OUTLOOK 2019 prepared under the assumption of going concern. Fjord Line has strong and committed long-term owners which implies that the Management team has good GENDER EQUALITY conditions to implement the strategy set by the Board In 2018 the Group had on average 768 man-labour years, of Directors. Through increased customer insights, including 459 men and 309 women. In Fjord Line the strategic investments and continued optimization of number of man-labour years was 154 on average, operations, the Group expects to have a positive financial including 69 men and 85 women. Number of employees development in the next coming years. in Fjord Line was 180, including 83 men and 97 women. The Board of Directors concurs with the Management The company is continuously working to avoid dis- team view and expects the financial results for the Group crimination based on gender, age, ethnicity etc. both to improve further in 2019 and are optimistic about the in regard to existing and new employments. future of the Group. Of the Group’s top management comprising ten The group is not involved in any litigations. employees, three employees are women. The Board of

19 Notes ⁄⁄ Fjord Line Annual Report 2018

«We move people»

20 Fjord Line Annual Report 2018

Directors in Fjord Line are composed of five men. Based culture». This is the reason why all, also minor incidents, on an assessment of number of employees and job cat- are reported. egory the Board of Directors have not found it necessary Sea- and land-based employees regularly conduct to implement special measures with regard to gender safety and emergency drills including lifeboat drills and equality, the Group will, however, continuously focus on evacuation exercises, and functional tests of rescue this issue. equipment are regularly carried out onboard the ships.

EMPLOYEES AND HSEQ FJORD LINE ACADEMY The working environment in the Group is considered Fjord Line Academy was established in 2016. The to be good, but we have still implemented initiatives to purpose of the Academy is competence development reduce the level of sick leave. The absence due to illness and systematic planning of mandatory courses for in the Group was 3.25 per cent in 2018 split on 4.5 per employees. In 2018, the Group among others educated cent for seagoing employees and 2.0 per cent for shore 20 managers in our internal course for management employees. This firms development Leading Fjord Line. an increase of 0.15 per cent compared with 2017. Fjord Line implemented in 2017 a guidance for systematic EXTERNAL ENVIRONMENT follow-up and reduction of sick leave given to all lead- Fjord Line is focusing attention on and endeavors that ers. We have in 2018 experienced good effect with this the Group at any time shall be operated in accordance initiative which has contributed to keep the sick leave on with applicable national and international regulations. a low level. The company operates a business which basically In 2018, 31 (34 in 2017) work accidents were registered causes pollution of the external environment. There have where of none was classified as serious accidents.10 been no uncontrolled emissions to air or sea in 2018. The accidents involved more than 24 hours of absence. Of company complies with applicable laws and regulations these accidents 10 accidents caused absence more in the area and wishes to minimalize the pollution for than 24 hours. We continuously work to reduce the level instance through measures that reduce the emission of of work accidents through several initiatives. In 2018 in NOx. Pollutant emissions to air and water are minimal general, there has been few and minor incidents. MS from the two newest cruise ferries and considerably Bergensfjord was hit by another ship in Hirtshals harbor lower than allowed by current regulations. The two “Kimberly C” - with limited damage to MS Bergensfjord. newest cruise ferries stand out as the most environmen- All incidents, including deviation from the company’s tally friendly of their kind and the ships have received safety system, are being reported based on «No blame several international environmental awards.

Egersund, 26 April 2019

Peter Frølich Frode Teigen Chairman of the Board Board Member

Kristian Falnes Kaj Fredriksen Board Member Board Member

Kristian Eikre Rickard Ternblom Board Member CEO

21 Notes ⁄⁄ Fjord Line Annual Report 2018

22 Fjord Line Annual Report 2018 ⁄⁄ Annual accounts Annual accounts Fjord Line AS - Group FJORD LINE AS –F GROUPjord Line AS - Group CCONSOLIDATEDonsolidated income st INCOMEatment STATEMENT C(1,o0n0s0o lNidOaKte) d income statment ((1,0001,000 NNOK)OK) Note Group Group 20Group18 2018 2Group017 2017 NNoteote GSimplifiedroup IFRS GSimplifiedroup IFRS Simplif2ie0d1 8IFRS Simplif2ie0d1 7IFRS Income/net gains Simplified IFRS Simplified IFRS ISalesncom revenuese/net gains 14, 17 1 505 870 1 328 524 SalesOther revenuesoperating income 14,14 17 1 50525 870427 1 32823 508524 Other operatinggains/losses income (net) 14,14 19 25-1 427975 236 508995 OtherTotal gains/losses (net) 14,14 19 1 52-19 397522 1 3569 995027 Total 14 1 529 322 1 359 027 Operating expenses: OCostper aofti ngoodsg expenses: 357 284 276 066 CostWage of costs goods 15 357370 284 051 352276 005066 WageDepreciation costs of property, plant and equipment and intangible assets 1, 2,15 18 370211 051571 352184 005 679 DepreciationOther operating of property,expenses plant and equipment and intangible assets 3,1, 6, 2, 7, 18 15 466211 474 571 423184 544 679 OtherTotal o operatingperating e expensesxpenses 3, 6, 7, 15 1 446605 347480 1 423236 544294 Total operating expenses 1 405 380 1 236 294 Operating result 123 942 122 733 Operating result 123 942 122 733 Financial items: FInterestinancia incomel items: 3 737 1 370 InterestOther financial income income 4 1183 086737 1381 370 519 OtherIncome financial from investment income in associated company 45 118-507 086 138-713 519 IncomeInterest fromexpenses investment in associated company 135 -104-507 743 -85-713 666 InterestOther financial expenses expenses 134 -104-126 743 281 -171-85 749666 OtherNet fin financialancial ite expensesms 4 --126109 7 28108 --171118 274939 Net financial items -109 708 -118 239 Ordinary result before tax 14 233 4 495 Ordinary result before tax 14 233 4 495 Tax expense on ordinary result 12 -53 647 -73 718 Tax expense on ordinary result 12 -53 647 -73 718 Ordinary result after tax 67 881 78 213 Ordinary result after tax 67 881 78 213 Result for the year 67 881 78 213 Result for the year 67 881 78 213 Distribution of result group: DMajority'sistributio sharen of re ofsu resultlt group: 67 881 78 213 Majority'sNon-controlling share interests'of result share of result 67 8810 78 2130 Non-controllingTotal interests' share of result 67 8801 78 2103 Total 67 881 78 213 Consolidated statement of comprehensive income C(CONSOLIDATED1,o0n0s0o lNidOaKte) d statemen tSTATEMENT of comprehensiv e income (OF1,00 0COMPREHENSIVE NOK) INCOM Result for the year, cf. above 67 881 78 213 Result for the year, cf. above 67 881 78 213 Items that may be subsequently reclassified to profit or loss IChangetems th inat valuemay b ofe sfinancialubseque instrumentsntly reclassi fusedied t oas p rhedgesofit or loss -64 027 ChangeCurrency in translation value of financial differences instruments used as hedges -6418 424027 109 186 CurrencyTotal translation differences -4185 424603 109109 186186 Total -45 603 109 186 Comprehensive income for the year, net of tax -45 603 109 186 Comprehensive income for the year, net of tax -45 603 109 186 Total comprehensive income for the year 22 278 187 399 Total comprehensive income for the year 22 278 187 399

23 Annual accounts ⁄⁄ Fjord Line Annual Report 2018

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

AAssetsSSETS Note GroupGrou p2018 GroupGroup 2017 Note Simplified31.12.201 8IFRS Simplified31.12.2017 IFRS Simplified IFRS Simplified IFRS Fixed assets Intangible assets Deferred tax asset 12 195 473 143 125 Other intangible assets 1 70 557 18 900 Total intangible assets 266 030 162 025

Property, plant and equipment Ships 2, 18 3 066 789 3 089 256 Prepayment ships 2 183 636 Buildings, plants etc. 2 51 857 130 952 Other property, plant and equipment 2 247 23 395 Total property, plant and equipment 2 3 302 529 3 243 603

Financial fixed assets Derivatives 19 9 133 7 516 Investment in associated company 5 10 886 12 245 Other investments 5 80 80 Total financial fixed assets 20 099 19 841

Total fixed assets 3 588 659 3 425 468

Current assets Inventories 6 22 833 26 016

Receivables and derivatives Trade receivables 7 43 676 39 788 Other current receivables 8, 17 60 808 31 371 Derivatives 19 12 582 10 400 Total receivables and derivatives 117 066 81 559

Bank deposit, cash etc. 9 84 725 150 212

Total current assets 224 625 257 788

Total assets 3 813 283 3 683 256

24 Fjord Line Annual Report 2018 ⁄⁄ Annual accounts

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

EQUITY AND LIABILITIES Note Group Group Equity and Liabilities Group 2018 Group 2017 Note Simplified31.12.201 8IFRS Simplified31.12.2017 IFRS Simplified IFRS Simplified IFRS EQUITY Paid-in equity Share capital 10, 11 519 107 519 107 Own shares 10 -9 -10 Share premium account 10 178 227 178 227 Total paid-in equity 10 697 325 697 324

Other equity controlling interests Other equity 10 362 078 339 800 Total 362 078 339 800

Total equity controlling interests 1 059 403 1 037 125

Non-controlling interests 10 0 0

Total equity 10 1 059 403 1 037 125

LIABILITIES Non-current liabilities/non-current provisions Leasing debt 2, 13 1 015 1 577 Bond debt 13 0 0 Non-current debt to credit institutions etc. 13 2 204 939 2 123 612 Refund previous advance payment 17 0 0 Pension liability (net) 15 3 486 3 048 Derivatives 19 63 526 0 Total non-current liabilities/non-current provisions 2 272 966 2 128 237

Current liabilities Current portion of non-current liabilities to credit institutions 13 223 253 238 947 Current portion of leasing debt 2, 13 0 964 Derivatives 19 4 316 0 Trade payables 93 221 115 819 Refund previous advance payment 17 6 296 Tax payable 12 1 579 412 Public duties owing 7 173 8 119 Other current liabilities 16 151 373 147 337 Total current liabilities 480 915 517 894

Total liabilities 2 753 881 2 646 131

Total equity and liabilities 3 813 283 3 683 256

Egersund, 26 April 2019

Peter Frølich Kristian Eikre Frode Teigen Chairman of the Board Board Member Board Member

Kristian Falnes Kaj Frederiksen Rickard Ternblom Board Member Board Member CEO 25 Notes ⁄⁄ Fjord Line Annual Report 2018

26 Fjord Line Annual Report 2018 ⁄⁄ Annual accounts

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

CaCsahs fhClo fawlos hwst fasloteawmt esemtanetten -mt g -er ognurto p-u gproup (TN(TONKO()TKN) OK) 20128018 2018 20127017 2017 CaCsha sflho Cwfloasws fhrso ffmlroow omsp eofrrpoaemtrioa ontipaoeln araaclt taiiovcnitaiveli staiecstivities OperatingOperatingOperating result result result 123123 942 942123 942 122122 733 733122 733 TaxesTaxes paidTaxes paid in the in paid the period in period the period -412-412 -412 -4 -4121 121-4 121 DepreciationDepreciationDepreciation 211211 533 533211 533 184184 979 979184 979 Write-downWrite-downWrite-down 0 0 0 0 0 0 Gain/lossGain/lossGain/loss from from sale salefrom of property,of sale property, of property, plant plant and plantand equipment/intangible equipment/intangible and equipment/intangible assets assets assets 0 0 0 0 0 0 ChangeChange Changein inventories in inventories in inventories 3 1833 1833 183 1 6441 6441 644 ChangeChange Changein trade in trade receivablesin tradereceivables receivables -33-33 426 426-33 426 -11 -11954 954-11 954 ChangeChange Changein trade in trade payablesin tradepayables payables -38-38 582 582-38 582 3434 716 71634 716 ChangeChange Changein financial in financial in financial assets assets at assets fairat fair value at value fair over valueover profit profit over or profitlossor loss or loss 0 0 0 -6 995-6 995-6 995 ChangeChange Changein other in other accrualsin otheraccruals accruals 2 6862 6862 686 -1 679-1 679-1 679 NeNt ceat schaN sfelhot wfcloasws fhrso ffmlroow omsp eofrrpoaemtrioa ontipaoeln araaclt taiiovcnitaiveli staiecstivities 2682 6982 4922648 924 3193 3192 323319 323

CaCsha sflho Cwfloasws fhrso ffmlroow imnsv ifenrsovtemins gtini navgce tasivtciintigvei staiecstivities ProceedsProceedsProceeds from from sale salefrom of property,of sale property, of property, plant plant and plantand equipment equipment and equipment and and received received and received grants grants grants 0 0 0 0 0 0 Purchase/manufacturingPurchase/manufacturingPurchase/manufacturing of property,of property, of property, plant plant and plantand equipment/intangible equipment/intangible and equipment/intangible assets assets assets -130-130 066 066-130 066 -341-341 055 055-341 055 PrepaymentPrepaymentPrepayment assets assets assets -183-183 636 636-183 636 InterestInterest Interestreceived received received 1 1381 138 1 138 1 3701 3701 370 SaleSale of subsidiaryofSale subsidiary of subsidiary (less (less cash cash(less in subsidiary) incash subsidiary) in subsidiary) 0 0 0 0 0 0 NeNt ceat schaN sfelhot wfcloasws fhrso ffmlroow imnsv ifenrsovtemins gtini navgce tasivtciintigvei staiecstivities -31-23 5126 45-63412 564 -33-39 3698 -5638359 685

CaCsha sflho Cwfloasws fhrso ffmlroow fmisn afirnocaminn cgfii naagcn taicvciintigvei staiecstivities RaisingRaising ofRaising interestof interest of interestbearing bearing debtbearing debt debt 138138 621 621138 621 279279 689 689279 689 RepaymentRepaymentRepayment of non-currentof non-current of non-current interest interest interestbearing bearing debtbearing debt debt -74-74 000 000-74 000 -145-145 753 753-145 753 InterestInterest Interestpaid paid paid -85-85 721 721-85 721 -85-85 666 666-85 666 CashCash contribution Cashcontribution contribution share share issue share issue (net) issue(net) (net) 0 0 0 0 0 0 NeNt ceat schaN sfelhot wfcloasws fhrso ffmlroow fmisn afirnocaminn cgfii naagcn taicvciintigvei staiecstivities -21- 12010 10-021 100 484 287 027408 270

NeNt ceht acnhNgaeent gicneh c ainan scghae sa ihnn dac nacdsah sc ha nsehdq ueciqavusahilve aenlqtesunitvsalents -64- 6744 074-604 740 27 2970 890287 908

CashCash and Cashand cash cash and equivalents equivalentscash equivalents at theat the beginning at beginning the beginning of theof the period of period the period 150150 212 212150 212 121121 921 921121 921

CurrencyCurrencyCurrency translation translation translation cash cash and andcash cash cash and equivalents equivalentscash equivalents 383383 383

CaCsha sahn Cda nacdsah sc ha nsehdq ueciqavusahilve aenlqtesun iatvsta talehtne tt hesen a det nothdf e toh efe nt hpdee o rpfio etdhrieo dperiod 858 457 247825 472 15015 2012 21250 212

SpeScpieficciSafitpcioeancti ioofinfc caoatfi sochna sroehfs rceearsvseehrs vr east e tahrtve te hesen a det nothdf e toh efe nt hpdee o rpfio etdhrieo dperiod BankBank deposit Bankdeposit anddeposit and cash cash and cash 8585 472 47285 472 150150 212 212150 212

27 Notes ⁄⁄ Fjord Line Annual Report 2018

28 Fjord Line Annual Report 2018 ⁄⁄ Notes

Accounting policies FJORD LINE AS GROUP

Below are stated significant Accounting Policies used process of applying the group’s accounting policies. in the preparation of the consolidated financial state- Areas involving a higher degree of judgment or com- ments. The consolidated financial statements have plexity, or areas where assumptions and estimates are been prepared in accordance with simplified IFRS significant to the consolidated financial statements (International Financial Reporting Standards). From are deferred tax assets, residual value of ships, useful the accounting year 2015 the group has prepared the life of ships, capitalization and depreciation of periodic financial statements in accordance with simplified maintenance and provision for incurred costs. IFRS. SALES REVENUES CONSOLIDATION AND INVESTMENT IFRS 15 income replaces IAS 18 operating revenues IN ASSOCIATED COMPANIES from the financial year 2018. IFRS 15 has established The consolidated financial statements comprise the a new framework for recognition and measurement of parent company Fjord Line AS and the subsidiaries, income in which to carry out a five-step assessment Fjord Line GmbH (Germany),Fjord Line Danmark A/S, of whether revenue must be recognized at a given time Fjord Skibsholding I A/S, Fjord Skibsholding II A/S, or over time. The 5 steps include identifying a contract, Fjord Skibsholding III A/S,Fjord Skibsholding IV A/Sand identifying delivery obligations, determine the trans- Fjord Skibsholding V A/S. The fivelast mentioned com- action price, distribute the transaction price on the panies aredomiciled in Denmark and are 100% owned various deliveryobligations and accruing income as subsidiaries. Subsidiaries are entities where the group you meet the delivery obligations. For Fjord Line, reve- has the power to govern the entity’s financial andoper- nue is all in all mainly related to ticket sales, on-board ational policies (control). services and cargo revenues, which are mainly earned When the group disposes of a subsidiary/ceases during the crossing, so that there are no significan- to have control, any retained interest in the entity is tchanges in recognition under IFRS 15 compared with remeasured to its fair value at the date when control IAS 18. is lost, with the change in carrying amount recognised in profit or loss. The fair value is the initial carrying CLASSIFICATION AND VALUATION amount for the purposes of subsequently accounting OF BALANCE SHEET ITEMS for the retained interest as an associate, joint venture Assets intended for long term ownership or use have or financial asset. been classified as fixed assets. Assets relating to the Hirtshals LNG is a partially owned subsidiary 50% trading cycle have been classifiedas current assets. owned by Fjord Line Danmark A/S. This is considered Receivables are classified as current assets if they are as an associated company in the consolidated finan- to be repaid within one year after the transaction date. cial statements and treated in accordance with the Similar criteria apply to liabilities. First year’s install- equity method. ment has been classified as current liabilities. Intercompany transactions, balances etc. have been eliminated in the consolidated financial state- INTANGIBLE ASSETS ments. Expenses for intangible assets are reflected in the For consolidation purposes the Danish companies balance sheet when it is considered likely that the are estimated to have functional currency in DKK future financial benefits relating to the asset will be and German EUR. received by the company and the acquisition cost of the asset can be reliably measured. ESTIMATES The preparation of financial statements requires the PROPERTY, PLANT AND EQUIPMENT use of certain critical accounting estimates. It also Property, plant and equipment are reflected in the requires management to exercise its judgment in the balance sheet and depreciated over the assets’

29 Notes ⁄⁄ Fjord Line Annual Report 2018 expected useful life on a straight-line basis. Direct rent liabilitiesexcept for the part due in less than 12 maintenance of an asset is expensed under operat- months, it is shown as current liabilities. The liability is ing expenses as and when it is incurred. Additions or reduced with lease paid less deduction for calculated improvements are added to the asset’s cost price and interest expense. The lease payments are treated as depreciated together with the asset. an operating expense which is distributed over the The group’s ships with associated additions etc. total leasing period for agreements that are classified are owned by the Danish subsidiaries. The book value as operational. of ships is calculated based on acquisition cost, less depreciation and impairment, if any. Facilities under INVENTORIES construction are capitalized in line with assumed Inventories of purchasedgoods are valued at the lower progress. of acquisition cost according to the FIFO- Investments/expenses that are not included in the principleand netrealisablevalue. Netrealisable value contract, as inspection costs, costs connected to is the estimatedselling price in ordinary activities project organisation,legal costs, financing costs and deducted estimated sales expenses. other related costs are considered as part of the acquisition cost and recorded in the balance sheet. CAPITALIZED INTEREST Grants from the NOx-fund related to investments are Interest relating to facilitiesunder construction or oth- recorded/accrued in line with the depreciation profile erqualifyingassetsarecapitalizedas part of the cost- of the assets that the grants relate to. The accrual ofthe assetin accordance with IAS23 Borrowing Cost. is classified as reduction of depreciation cost in the income statement. NOx-grants not recognised over FINANCIAL INSTRUMENTS profit or loss are classified as reduction of ship values IFRS 9 Financial Instruments replaces IAS39 Financial in the balance sheet. Instruments-Recognition and Measurement. The book values of the group’s ships and other The standard is implemented in2018. Amendments operating assets areindividually tested for impairment toIFRS 9 mainly apply to three separateareas: when events or changes in circumstances indicate classification andmeasurement, impairmentand- that the book value is no longer present. If such in- hedging. Under IFRS 9, financial assets aremeasured dications occur and book value exceeds recoverable using three differentmethods: fair value over profit, fair amount, then the asset is impaired to recoverable value through comprehensive incomeand at amortized amount. cost. The assetsare classifiedin the different the cate- gories based on the company’s businessmodel andthe PERIODICAL MAINTENANCE OF SHIPS terms of the cash flows fromthe contracts. IFRS 9 has The ships are decomposed into ship/ship furnishing not had any significant impacton the measurement and periodical maintenance for depreciation purpos- andrecognition of financial assets. es They are depreciated straight-line over a defined Essentially, the rules coincide withIAS 39 regarding- useful life.An assumed residual value of the ships at financial liabilities. the expiry of the useful life is taken into consideration. The standardintroduces a newmodel for impair- The ships must continuously be presented for control, mentassessmentbased onexpected creditloss which implies regular docking and classification. Peri- (compared to accruedcredit losses underIAS 39). odical maintenance is recognised in the balance sheet Theimpairmentmodel in IFRS 9 entails a new in connection with docking and depreciated till next model based onchanges in these financial assets’ assumed docking. credit risk. Eitherthe company will record a provisionfor expected creditlosses for the next LEASING 12 months over the assets that have fixed or A leasing agreement is classified as financial or determinable paymentsand which arenot traded operational lease in accordance with the contents of inanactivemarket. the individual agreement. The agreement is classified Alternatively, the company will allocate for the as financial lease if the major part offinancial risk and expected credit loss over the asset’s life. Thiswill be control connected to the underlying lease object has done once there has been a significant increase in been transferred to the lessee. Other leasing agree- credit risk, in other words, where credit risk on the ments are classified as operational. Operational assets balance sheet date is higher thanthe credit risk at in leasing agreements assessed as financial lease initial recognition. are activated in the balance sheet at the value of the If a loss event has occurred, the fall in value will compensation in the leasing agreement and depreci- bemeasured int he same way as in the above ated as property, plant and equipment. The principal paragraph, that is, on an amount corresponding to portion of the leasing liability is recorded as non-cur- expected credit loss for the life of the claim. Since the

30 Fjord Line Annual Report 2018 ⁄⁄ Notes company has historically had limited credit losses, approach to this,average ratesare usedfor the it has not led to significantchanges in the financial accounting period unless it is large single transactions statement. or the exchange rate have varied so much that the Hedge accountingunder IFRS9 entails a number approach does not give a true picture. of changes. Hedge accountingmust be in accordance (iii) All resulting exchange differences are withthe group’s risk management model. The security recognised in other comprehensive income and efficiency requirement for a hedge being 80–125% specified separately. effective is replaced by anoverall assessment of Transactions in foreign currency are translated whether the security relationship is effective. to the functional currency at the current exchange rate The company has from 1. January 2018 began to at the transaction date. apply hedge accounting for hedging of bunkers and interest rate for long-term debt that is made using TAXES derivatives so that value adjustments on the hedging The tax expense in the income statement comp- instruments are entered inthe comprehensive income. rises both payable taxes for the period and changes Loans and receivables are financial assets that are in deferred tax/deferred tax asset. Deferred tax/ not derivatives and current assets, unless they mature deferred tax asset is calculated at relevant tax rate. more than 12 months after the balance sheet date. Deferred tax asset is calculated based on the Accounts receivable and other receivables are recog- temporary differences existing between accounting nized at fair value when they are received occurs. and tax values at the end of the accounting year and Receivables aremeasured at amortized cost carry forward losses for tax purposes at year-end and assessedfor impairmenton an ongoing basis. which based on best estimate are expected to be Dividend receivedandother contributions are used against future earnings. The Danish ship recognisedas other financial income. owning companies are subject to the Danish tonnage Financial assets at fair value over lossare financial tax regime. assetsheld for trading purposes. Financialassets areclassified in this category if OPTIONS FOR EMPLOYEES they primarilyhavebeen acquired with the purpose When granting options to the employees a valuation of providinggainsfrom short term price fluctuations. of the options is performed at grant date. Calculated Derivatives are classified as held for trading purposes amount is expensed as wages over the term, set off unless theyare part of a hedging. Assets in this cate- against equity. gory are classifiedas current assets if they are expect- ed to be realized within 12 months, otherwise they are PENSIONS classified as non-current assets. A defined contribution plan is a pension plan under Gains or losses from change in fair value of deri- which the group pays fixed contributions to an insur- vatives that are not part of hedge accounting are ance company. The group has no legal or constructive included in the income statement under «Other gains/ obligations once the contributions have been paid. losses(net)» in the period that they occur. The contributions are recognised as wage costs. A defined benefit plan is a pension plan that is not FOREIGN CURRENCY TRANSLATION a defined contribution plan. Typically defined benefit Items included in the financial statements of each of plans define an amount of pension benefit that an the group’s entities are measured using the currency employee will receive on retirement, usually dependent of the primary economic environment in which the on one or more factors such as age, years of service entityoperates («the functional currency»). The and compensation. The liability recognised in the consolidated financial statements arepresented in balance sheet in respect of defined benefit plans is the NOK, which is the functional currency of the parent present value of the defined benefit obligation at the company and the group’s presentation currency. balance sheet date. The results and financial position of all the group entities (none of which has the currency of a hyper- NEW STANDARDS IFRS 16 inflationary economy) that have a functional currency IFRS 16Lease Agreements, effective January1, 2019 different from the presentation currency are IFRS 16 willcause some leases to end upin the translated into the presentation currency as follows: balance sheet. Fjord Line is stillundergoing an (i) Assets and liabilities for each balance sheet assessment of which assetsthis will apply and how presented are translated at the closing rate at the date significantit will be for thebalancesheetand this of that balance sheet. process is not completed, but Fjord Linedoes not (ii) The income statement shall be converted at the expect anymaterialeffects of this standard. exchange rate at the time of thetransaction. As an

31 Notes ⁄⁄ Fjord Line Annual Report 2018

! B

T E T N T E E M R N F O OR IR THE ENV

«By sea to Denmark – the best altenative for the whole family!»

During late summer of 2018, we invited the Bækkevold family from Vestfold, Norway onboard and set sail for Denmark. The mission was to collect travel stories and content from Denmark to be used during autumn 2018 but not the least for next years peak-season marketing. The trips went to Skallerup Seaside Resort, to Aalborg, Legoland and Lalandia.

The result was heaps of good raw material that we, soon one year later, still are utilizing on our marketing. We are of that opinion that the use of «real» people and not mannequins, lends an extra dimension of quality and genuine to our different travel offers.

Therefore, in 2019 we are continuing this effort of producing heartfelt travel stories with a genuine family playing the leading role – the family that was so happy to buy our Fjord Line vehicle «MS Sommerlykke».

32 Fjord Line Annual Report 2018 ⁄⁄ Notes

Notes FJORD LINE AS GROUP

Note 1 ⁄⁄ Intangible assets – Group

Note 1 IntangibleNote assets 1 Intangible- group assets - group

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

TOTAL TOTAL Concept ConceptOther (exclusiveOther of (exclusive of Intangible assets Intangible assets development anddevelopment intangible and deferredintangible tax deferred tax in progress WEB-projectin progress marketWEB-project projects market projectsassets assetsasset) asset)

Acquisition cost 31.12.2017Acquisition cost 31.12.2017 0 39 4720 39 472902 1 903902 142 903 276 42 276 Completed projectsCompleted 2018 projects 2018 0 00 0 0 00 0 0 0 Addition 2018 Addition 2018 33 810 336 810472 6 472 0 00 40 2820 40 282 Disposal 2018 Disposal 2018 0 00 0 0 00 0 0 0 Acquisition cost 31.12.2018Acquisition cost 31.12.2018 33 810 3345 810944 45 944902 1 903902 182 903 559 82 559

Accumulated write-downAccumulated 31.12.2017 write-down 31.12.2017 0 00 0 0 00 0 0 0 Accumulated depreciationAccumulated 31.12.2017 depreciation 31.12.2017 0 4 4980 4 498792 1 196792 1 1966 486 6 486 Book value 31.12.2017Book value 31.12.2017 0 34 9740 34 974109 707109 35707 791 35 791 Accumulated write-downAccumulated 31.12.2018 write-down 31.12.2018 0 00 0 0 00 0 0 0 Accumulated depreciationAccumulated 31.12.2018 depreciation 31.12.2018 0 9 7030 9 703889 1 408889 112 408 000 12 000 Book value 31.12.2018Book value 31.12.2018 33 810 3336 810241 36 24112 49512 70495 557 70 557

Depreciation intangibleDepreciation assets in intangible the year assets in the year 0 5 2060 5 20697 21197 2115 514 5 514 Write-down intangibleWrite-down assets in intangible the year assets in the year 0 00 0 0 00 0 0 0 Total depreciationTotal and depreciation write-down 2018and write-down 2018 0 5 2060 5 20697 21197 2115 514 5 514

Intangible assets costIntangible relates assetsmainly cost to therelates development mainly to ofthe our development new ERP systemt of our newDynanmics ERP systemt 365, phase Dynanmics two. Termination 365, phase two.31.03.2019. Termination 31.03.2019.

The new WEB-projectsThe new in 2018WEB-projects are New front-endin 2018 are booking New front-end system. The booking system system. is developed The system to give is developedour customers to give a simplified our customers and user a simplified friendly digitaland user friendly digital bookingsolution. Thebookingsolution. system was launched The system in 2018. was launched Another innew 2018. Web Another project isnew the Web new projectERP system is the Dynamicsnew ERP system365. The Dynamics system was365. put The in systemto use inwas 2018 put in to use in 2018 and includes phaseand 1 in includes the project. phase Phase 1 in the2 of project. the ERP Phase system 2 of was the inERP 2018 system under was development in 2018 under and isdevelopment included as anda intangible is included asset. as aThe intangible deprecation asset. period The deprecation period here is 10 years. Thehere remaining is 10 years. WEB The projects remaining refer WEB to development projects refer costs to development related to development costs related of to WEB-pages development and of WEB-platform WEB-pages and including WEB-platform new graphic including new graphic profile and link toprofile the booking and link system. to the The booking deprecation system. period The deprecation here is 3-5 periodyears. here is 3-5 years.

Other intangible assetsOther comprise intangible among assets othercomprise things among development other things of keycard development system of that keycard is installed system onboard that is installedthe ships onboardMS Bergensfjord the ships MSand BergensfjordMS Stavangerfjord. and MS Stavangerfjord. Depreciation periodDepreciation is 5-10 years. period is 5-10 years.

33 Notes ⁄⁄ Fjord Line Annual Report 2018

Note 2 ⁄⁄ Property, plant and equipment – Group

NoteNote 2 Property, 2 Property, plant plant and and equipmentNote equipment 2 Property, - group - group plant and equipment - group Note 2 Property, plant and equipment - group (Figures(Figures in the in tablethe table in TNOK) in TNOK)(Figures in the table in TNOK) (Figures in the table in TNOK) FiguresFigures for for2018 2018 below below Figures for 2018 below Figures for 2018 below SpareSpare parts, parts, Spare parts, operatingoperating Spareoperating parts,Ships,Ships, incl. incl. TotalTotal Ships, incl. Total movables,movables, operatingmovables,periodical periodical property,property, Ships,periodical incl. property,Total Buildings,Buildings, plant plant reconstructionreconstructionBuildings, plantShips Ships inreconstruction inmovables, maintenance,maintenance, Ships plant inplant andmaintenance, and periodical property,plant and Property,Property, plant plant and and equipment equipmentProperty, (figures (figures plant in TNOK) inand TNOK) equipment (figures in TNOK) PrepaidPrepaid ships ships etc.Prepaidetc. shipspremisespremisesBuildings, etc. etc. plantetc.progress progressreconstructionpremisesfurnishingfurnishing etc. etc. etc.Shipsprogress equipment inequipment furnishingmaintenance, etc. equipmentplant and Property, plant and equipment (figures in TNOK) Prepaid ships etc. premises etc. progress furnishing etc. equipment AcquisitionAcquisition cost cost 31.12.2017 31.12.2017Acquisition cost 31.12.2017 0 0 79 76379 763 0 0 079 76380 15880 158 3 70803 708205 20580 1583 8683 868126 1263 708 205 3 868 126 AdditionAddition 2018 2018 AcquisitionAddition 2018 cost 31.12.2017 183 183636 636 1 9671 967183 6360 337337791 763967137 137022 022 3370123 123102 10213780 158022446 446064 0643 708123 205102 3 868446 126064 DisposalDisposal 2018 2018 AdditionDisposal 2018 0 0 0 0183 6360 0 01 9670 0 0 337-300 -30651 651137 022-300 -30651 651 123-30 102651 446-30 064651 TranslationTranslation differences differences DisposalTranslation 2018 differences 0 0 -318-318 00 0 0 -3180 0 0 0018 87018 870 0018 55218 552 -3018 651870 -3018 651552 AcquisitionAcquisition cost cost 31.12.2018 31.12.2018TranslationAcquisition differences cost 31.12.2018 183 183636 636 81 41281 412183 6360 33733781-318 412217 217180 180 3373 08193 819525 525217 1804 03024 302090 0903 81918 870525 4 30218 552090 Acquisition cost 31.12.2018 183 636 81 412 337 217 180 3 819 525 4 302 090 AccumulatedAccumulated write-down write-down 31.12.2017 Accumulated31.12.2017 write-down 31.12.2017 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 AccumulatedAccumulated depreciation depreciation 31.12.2017Accumulated Accumulated31.12.2017 write-downdepreciation 31.12.201731.12.2017 0 0 33 84633 846 00 0 033 8460 0 0 08780 878831 831 09120 912677 677 878 8310 912 6770 BookBook value value 31.12.2017 31.12.2017 AccumulatedBook value 31.12.2017depreciation 31.12.2017 0 0 45 91745 917 00 0 33045 84691780 15880 158 2 082902 829374 37480 1582 09552 955449 4492 878829 831374 2 912955 677449 AccumulatedAccumulated write-down write-down 31.12.2018 Book31.12.2018Accumulated value 31.12.2017 write-down 31.12.2018 0 0 0 0 00 0 450 9170 0 0 00 0 080 1580 0 02 829 3740 2 955 4490 AccumulatedAccumulated depreciation depreciation 31.12.2018Accumulated Accumulated31.12.2018 write-downdepreciation 31.12.2018 31.12.2018 0 0 29 55529 555 00 90 9029 5550 0 0 900969 969916 916 09990 999561 561 969 9160 999 5610 BookBook value value 31.12.2018 31.12.2018 AccumulatedBook value 31.12.2018depreciation 31.12.2018 183 183636 636 51 85751 857183 6360 2472472951 555857217 217180 180 247290 8492 849609 609217 1803 03023 302529 5292 969849 916609 3 999302 561529 Book value 31.12.2018 183 636 51 857 247 217 180 2 849 609 3 302 529 DepreciationDepreciation property, property, plant plant andDepreciation andequipment equipment property,in the in yearthe plant year and equipment in the year 0 0 5 8065 806 0 90 905 806 0 0 90200 200161 161 2060 206057 057 200 161 206 057 Write-downWrite-down property, property, plant plant andDepreciationWrite-down andequipent equipent in property, the in yearthe year plant and equipentequipment in inthe the year year 0 0 0 0 00 0 05 8060 0 0 900 0 0 00 0 0 200 1610 206 0570 Write-down property, plant and equipent in the year 0 0 0 0 0 0 See Seedescription description See description DepreciationDepreciation period period (completed (completedDepreciation operating operating assets) period assets) (completed operating assets) 5 - 105 - years10 years 3 - 53 years- 5 years5 - 10 years 3 - 5 yearsbelowbelow See descriptionbelow DepreciationDepreciation plan plan DepreciationDepreciation periodplan (completed operating assets) LinearLinear LinearLinear5 - Linear10 years 3 -Linear 5 yearsLinearLinear belowLinear Depreciation plan Linear Linear Linear

GrantGrant not notrecognised recognised through through profitGrant profit ornot loss orrecognised lossper per31.12.2018 31.12.2018through is profit TNOK is TNOK or 139loss 139290per 29031.12.2018(TNOK (TNOK 147 is 147757 TNOK 757per per31.12.2017).139 31.12.2017). 290 (TNOK 147 757 per 31.12.2017). TheThe grants grants are mainlyare mainly connected connectedGrantThe to grants thenot to shipstherecognised are ships MSmainly MSStavangerfjord through connectedStavangerfjord profit to and orthe andloss MSships MSperBergensfjord. MS 31.12.2018Bergensfjord. Stavangerfjord is TNOK and 139MS 290Bergensfjord. (TNOK 147 757 per 31.12.2017). GrantGrant not notrecognised recognised through through TheprofitGrant profitgrants ornot loss or recognisedare lossis mainly recognised is recognised throughconnected as aprofit asreduction to a reductionthe or shipsloss of is the MS ofrecognised acquisitionthe Stavangerfjord acquisition as costa reduction cost perand per31.12. MS of31.12. Bergensfjord. the acquisition cost per 31.12. TheThe grant grant is accrued/recognised is accrued/recognisedGrantThe in grantline notin line withrecognised is accrued/recognisedwith the deprectiationthe through deprectiation profit profiles in line profilesor loss withof the isof the recognised relatedthe deprectiation related ships as ships aand reduction profiles andclassified classified of of the asthe reductionrelated asacquisition reduction ships of depreciations.cost andof depreciations. perclassified 31.12. as reduction of depreciations. The grant is accrued/recognised in line with the deprectiation profiles of the related ships and classified as reduction of depreciations.

Depreciation and book value of the ships per 31.12.2018 The Fjord Line group has 4 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) "HSC Fjord Cat" 3) "MS Stavangerfjord". This ship was delivered in July 2013. 4) "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 454 541.

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.

HSC Fjord Cat: The ship itself is depreciated linearly over 15 years. Remaining depreciation period per 31.12.2018 is 4 years. Carrying value for the ship including periodical maintenance is TNOK 92 097 pr 31.12.2018.

Ship furnishing is depreciated over 3 years. Periodical maintenance/docking is depreciated linearly over 1 - 20 years.

MS Stavangerfjord MS Stavangerfjord is depreciated linearly over 35 years, with salvage value 50 MNOK. Remaining depreciation period per 31.12.2018 is 29,5 years. Carrying value for the ship including periodical maintenance is TNOK 1 142 484 pr 31.12.2018.

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 31.12.2018 is approx. 30 years. Carrying value for the ship including periodical maintenance is TNOK 1 222 489 pr 31.12.2018.

34Periodical maintenance/docking and furnishing are depreciated linearly over 5 - 15 years.

Impairment test related to ships In the case of the 4 ships stated above, impairment tests have been carried out, and the conclusion was that it was not necessary to write down any of the ships. This is further substantiated by collected tariffs, which also show that there is no need for any write-downs.

Note 3 Leasing expenses and transactions with related parties - group

Expensed lease of operating assets not recognised in the balance sheet (operational lease)

(Figures in TNOK)

Expensed lease Expensed lease Operating assets/lease 2018 2017 Lease machinery and operating movables 21 030 19 077 lease premises and similar *) 17 268 17 103

*) Leasing cost premises etc.: For 2018 leasing cost of TNOK 1.661 has been expensed to company controlled by owners (TNOK 2.008 in 2017). The leasing conditions are market conditions.

Note 4 Financial items - group

(Figures in TNOK)

Other financial income and other financial expenses comprise the following:

Other financial income 2017 2017 Foreign exchange gains, intergroup receivables 108 245 131 768 Other foreign exchange gains 9 776 6 673 Other financial income 65 78 Total 118 086 138 519

Other financial expenses 2017 2017 Foreign exchange loss, including loan in Euro/DKK 108 767 171 545 Other financial expenses 17 514 204 Total 126 281 171 749

Foreign exchange gains/foreigh exchange loss intergroup receivables Fjord Line AS has non-current interest bearing receivables on the Danish subsidiaries amounting to a total of TNOK 1.976.823 per 31.12.2018 (TNOK 1.788.977 per 31.12.2017) This has been eliminated in the consolidated financial statements. The receivables are denominated in DKK. Foreign exchange gain on these receivables was TNOK 108 245 in 2018 (Foreign exchange loss TNOK 131.768 in 2017). A specific installment plan for the loans the subsidiaries have to their parent company has not been established, however, the subsidiaries will use free liquidity for repayment. Installment payments have been made both in 2017 and 2018. Depreciation and book value of the ships per 31.12.2018 The Fjord Line group has 4 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) "HSC Fjord Cat" 3) "MS Stavangerfjord". This ship was delivered in July 2013. Depreciation 4) "MS Bergensfjord". and book valueThis ship of the was ships delivered per 31.12.2018 in February 2014. The Fjord Line group has 4 ships in the business at the reporting date; 1)MS "MS Oslofjord: Oslofjord" (formerly MS Bergensfjord). This ship was under reconstruction in 2014 and has sailed in the route Sandefjord-Strømstad since 20 June 2014 . 2)In "HSCconnection Fjord with Cat" Fjord Line starting up the sailing of a new route between Sandefjord and Strømstad in June 2014 MS Oslofjord was subject to a Depreciation and book3)Depreciation "MS value Stavangerfjord". of andthe shipsbook pervalueThis 31.12.2018 ship of the was ships delivered per 31.12.2018 in July 2013. The Fjord Line groupcomprehensiveThe has Fjord 4 ships Line in reconstructiongroup the business has 4 ships atat thethe in reportingyardthe business STX date; Raumo at the (Finland)reporting indate; 2013/2014. Approx. 300 mill NOK was invested in the reconstruction of the ship. 4) "MS Bergensfjord". This ship was delivered in February 2014. 1) "MS Oslofjord" Carrying (formerly1) "MS Oslofjord"value MS Bergensfjord).for the (formerly ship including ThisMS Bergensfjord). ship periodical was under maintenance This reconstruction ship was is TNOKunder in 2014 reconstruction454 and 541. has sailed in 2014in the and route has Sandefjord-Strømstad sailed in the Fjordroute Sandefjord-Strømstad Line since Annual 20 June Report 2014 since. 2018 20 ⁄⁄ JuneNotes 2014 . 2) "HSC Fjord Cat" 2) "HSC Fjord Cat" MS Oslofjord: 3) "MS Stavangerfjord".Both 3) "MS the This Stavangerfjord".ship ship and was ship delivered furnishing This inship Julyare was depreciated2013. delivered linearly in July 2013.over 15 years, with estimated salvage value 20 MNOK per June 2029. 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 4) "MS Bergensfjord".Ship 4) "MS Thisfurnishing Bergensfjord". ship was is depreciateddelivered This inship over February was 1 - delivered5 years.2014. Periodical in February maintenance 2014. /docking is depreciated over 1 - 10 years. 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 454 541. MS Oslofjord: DepreciationMS Oslofjord: and book value of the ships per 31.12.2018 In connection withThe FjordIn connectionFjord Line Line starting groupwith Fjorduphas the 4 shipsLine sailing instarting the of businessa new up the route at sailing the between reporting of a Sandefjordnew date; route between and Strømstad Sandefjord in June and 2014 Strømstad MS Oslofjord in June 2014was subjectMS Oslofjord to a was subject to a Both the ship and ship furnishing are depreciated linearly over 15 years, with estimated salvage value 20 MNOK per June 2029. comprehensive reconstruction 1)HSCcomprehensive "MS Fjord Oslofjord" at Cat: the reconstruction yard(formerly STX MSRaumo at Bergensfjord). the (Finland) yard STX Thisin Raumo 2013/2014. ship was (Finland) under Approx. reconstruction in 2013/2014. 300 mill in NOK 2014Approx. wasand has300invested sailed mill inNOKin the routewasreconstruction invested Sandefjord-Strømstad in of the the reconstruction ship. since 20 Juneof the 2014 ship. . Ship furnishing is depreciated over 1 - 5 years. Periodical maintenance /docking is depreciated over 1 - 10 years. Carrying value for 2)theTheCarrying "HSC ship ship Fjordincluding itselfvalue Cat" isfor depreciated periodical the ship including maintenancelinearly overperiodical is 15 TNOK years. maintenance 454Remaining 541. is TNOKdepreciation 454 541. period per 31.12.2018 is 4 years. 3)Carrying "MS Stavangerfjord". value for the shipThis includingship was delivered periodical in Julymaintenance 2013. is TNOK 92 097 pr 31.12.2018. 4) "MS Bergensfjord". This ship was delivered in February 2014. Both the ship and shipBoth furnishing the ship andare depreciatedship furnishing linearly are depreciated over 15 years, linearly with overestimated 15 years, salvage with value estimated 20 MNOK salvage per value June 20 2029. MNOK per June 2029. Ship furnishing is depreciatedShip furnishing over 1is -depreciated 5 years. Periodical over 31 years.- maintenance5 years. Periodical Periodical /docking maintenance/docking maintenance is depreciated /docking over is depreciated 1is -depreciated 10 years. linearly over over 1 - 101 - years. 20 years. MSHSC Oslofjord: Fjord Cat: InThe connection ship itself with is depreciatedFjord Line starting linearly up over the sailing15 years. of a Remainingnew route between depreciation Sandefjord period and per Strømstad 31.12.2018 in June is 42014 years. MS Oslofjord was subject to a comprehensiveCarrying value reconstruction for the ship includingat the yard periodicalSTX Raumo maintenance (Finland) in is 2013/2014. TNOK 92 Approx.097 pr 31.12.2018.300 mill NOK was invested in the reconstruction of the ship. Carrying value for the ship including periodical maintenance is TNOK 454 541. HSC Fjord Cat: MSHSC Stavangerfjord Fjord Cat: Ship furnishing is depreciated over 3 years. Periodical maintenance/docking is depreciated linearly over 1 - 20 years. The ship itself is depreciatedBothMSThe theStavangerfjordship ship itselflinearly and is ship depreciated over isfurnishing depreciated 15 years. linearly are Remaining depreciatedlinearly over over15 depreciationlinearly years. 35 years, overRemaining 15withperiod years, salvage depreciationper with 31.12.2018 valueestimated 50period MNOK.salvageis 4 peryears. value 31.12.2018Remaining 20 MNOK depreciationis 4 per years. June 2029. period per 31.12.2018 is 29,5 years. Carrying value for ShiptheCarrying shipfurnishing including value is fordepreciated periodical the ship overincluding maintenance 1 - 5 years. periodical is Periodical TNOK maintenance 92 maintenance 097 pr is 31.12.2018. TNOK /docking 192 142is 097 depreciated 484 pr 31.12.2018.pr 31.12.2018. over 1 - 10 years.

Ship furnishing is depreciatedShip furnishing over 3is years.depreciated Periodical over maintenance/docking53 -years. 20 years. Periodical Periodical maintenance/docking is depreciatedmaintenance/docking linearly is depreciated over is depreciated 1 - 20 linearlyyears. linearly over over1 - 20 1 -years. 10 years. MS Stavangerfjord HSCMS StavangerfjordFjord Cat: is depreciated linearly over 35 years, with salvage value 50 MNOK. Remaining depreciation period per 31.12.2018 is 29,5 years. TheCarrying ship itself value is fordepreciated the ship linearly including over periodical 15 years. Remainingmaintenance depreciation is TNOK period 1 142 per484 31.12.2018 pr 31.12.2018. is 4 years. Carrying value for the ship including periodical maintenance is TNOK 92 097 pr 31.12.2018. MS Stavangerfjord MS BergensfjordStavangerfjord ShipThe furnishingship itself isis depreciateddepreciated linearlyover 5 - over20 years. 35 years, Periodical with salvage maintenance/docking value 50 MNOK. is depreciated Remaining linearlydepreciation over period1 - 10 years.per 31.12.2018 is approx. 30 years. MS StavangerfjordShip MSis depreciated furnishingStavangerfjord islinearly depreciated is depreciated over over 35 years, 3 years.linearly with Periodical oversalvage 35 maintenance/docking years,value 50with MNOK. salvage Remaining is value depreciated 50 MNOK. depreciation linearly Remaining over period 1 - 20 depreciationper years. 31.12.2018 period is 29,5 per years.31.12.2018 is 29,5 years. Carrying value for theCarrying ship including value for periodical the ship including maintenance periodical is TNOK maintenance 1 142 484 is pr TNOK 31.12.2018. 1 222142 489484 pr 31.12.2018. Periodical maintenance/docking and furnishing are depreciated linearly over 5 - 15 years. Ship furnishing is depreciatedMSShip Bergensfjord furnishing over 5is -depreciated 20 years. Periodical over 5 - 20 maintenance/docking years. Periodical maintenance/docking is depreciated linearly is depreciated over 1 - 10 linearlyyears. over 1 - 10 years. MSThe Stavangerfjord ship itself is depreciated linearly over 35 years, with salvage value 50 MNOK. Remaining depreciation period per 31.12.2018 is approx. 30 years. MS Stavangerfjord is depreciated linearly over 35 years, with salvage value 50 MNOK. Remaining depreciation period per 31.12.2018 is 29,5 years. Carrying value value for for the the ship ship including including periodical periodical maintenance maintenance is TNOK is TNOK 1 142 1484 222 pr 48931.12.2018. pr 31.12.2018. Impairment test related to ships MS Bergensfjord PeriodicalMS Bergensfjord maintenance/docking and furnishing are depreciated linearly over 5 - 15 years. The ship itself is depreciatedShipInThe the furnishingship case itselflinearly of isthe is depreciated depreciated4over ships 35 stated years, over linearly above,5 with - 20 overyears.salvage impairment 35 Periodical years,value tests 50with maintenance/docking MNOK. have salvage been Remaining value carried 50 is out,MNOK. depreciationdepreciated and theRemaining conclusionlinearly period over depreciationper was 31.12.20181 - that10 years. it period was is notapprox. per necessary 31.12.2018 30 years. to write is approx. down 30any years. of the ships. Carrying value for theThisCarrying ship is further including value substantiatedfor periodical the ship including bymaintenance collected periodical tariffs, is TNOK maintenancewhich 1 222 also 489 show is pr TNOK 31.12.2018.that there 1 222 is 489no need pr 31.12.2018. for any write-downs.

Periodical maintenance/dockingPeriodical maintenance/docking and furnishing are depreciatedand furnishing linearly are depreciated over 5 - 15 linearlyyears. over 5 - 15 years. MSImpairmentNote Bergensfjord 3 Leasing test expensesrelated to and ships transactions with related parties - group TheIn the ship case itself of isthe depreciated 4 ships stated linearly above, over impairment35 years, with tests salvage have value been 50 carried MNOK. out, Remaining and the conclusiondepreciation was period that per it was31.12.2018 not necessary is approx. to 30write years. down any of the ships. Carrying value for the ship including periodical maintenance is TNOK 1 222 489 pr 31.12.2018. ThisExpensed is further lease substantiated of operating by assetscollected not tariffs, recognised which in also the show balance that sheetthere is(operational no need for lease)any write-downs. Impairment test relatedPeriodicalImpairmentNote to maintenance/dockingships 3 ⁄⁄testLeasing related to expenses shipsand furnishing and are depreciatedtransactions linearly withover 5 -related 15 years. parties – Group (Figures in TNOK) In the case of the 4Note Inships the 3 statedcaseLeasing of above, the expenses 4 impairmentships andstated transactions testsabove, have impairment been with carried related tests out, have parties and been the - carriedgroupconclusion out, wasand thatthe conclusionit was not necessarywas that it to was write not down necessary any ofto thewrite ships. down any of the ships. This is further substantiatedThis is further by collected substantiated tariffs, bywhich collected also show tariffs, that which there also is no show need that for thereany write-downs. is no need for any write-downs. Expensed lease Expensed lease ImpairmentExpensedOperating lease testassets/lease relatedof operating to ships assets not recognised in the balance sheet (operational lease) 2018 2017 Note 3 Leasing expensesInLeaseNote the case 3 machineryand Leasing of transactionsthe 4 expenses shipsand operating stated with and above, related transactionsmovables impairment parties with tests- group relatedhave been parties carried - out,group and the conclusion was that it was not necessary 21to write030 down any of 19the 077ships. This(Figureslease is premisesfurther in TNOK) substantiated and similar by *) collected tariffs, which also show that there is no need for any write-downs. 17 268 17 103 Expensed lease of operatingExpensed assetslease of not operating recognised assets in thenot balancerecognised sheet in (operationalthe balance sheetlease) (operational lease) *) Leasing cost premises etc.: For 2018 leasing cost of TNOK 1.661 has been expensed to company controlledExpensed by owners lease (TNOKExpensed 2.008 inlease 2017). Note 3 Leasing expenses and transactions with related parties - group (Figures in TNOK)OperatingThe(Figures leasing in assets/lease TNOK)conditions are market conditions. 2018 2017 Lease machinery and operating movables 21 030 19 077 Expensed lease of operating assets not recognised in the balance sheet (operational lease) lease premises and similar *) 17 268 17 103 Expensed lease ExpensedExpensed lease lease Expensed lease (FiguresNote 4 inFinancial TNOK) items - group Operating assets/lease*)Operating Leasing cost assets/lease premises etc.: For 2018 leasing cost of TNOK 1.661 has been expensed to company2018 controlled by owners20182017 (TNOK 2.008 in 20172017). Lease machinery andTheLease operating leasing machinery conditions movables and operatingare market movables conditions. 21 030 2119 030 077 19 077 lease premises and similar(Figureslease premises *) in TNOK) and similar *) 17Expensed 268 lease 17Expensed17 268 103 lease 17 103 Operating assets/lease 2018 2017 *) Leasing cost premisesLeaseOther*) Leasing machinery etc.:financial Forcost 2018 andincomepremises operating leasing and etc.: othercostmovables For of financial 2018 TNOK leasing expenses1.661 cost has ofcomprise been TNOK expensed the1.661 following: tohas company been expensed controlled to company by owners controlled (TNOK21 030 2.008by owners in 2017). (TNOK19 077 2.008 in 2017). leaseNote premises4 Financial and similar items *) - group 17 268 17 103 The leasing conditionsThe are leasing market conditions conditions. are market conditions. Other financial income 2017 2017 *)(FiguresForeign LeasingNote inexchange cost TNOK)4 ⁄⁄premises Financial gains, etc.: intergroup For items 2018 leasingreceivables – Group cost of TNOK 1.661 has been expensed to company controlled by owners (TNOK 2.008 in 2017). 108 245 131 768 The leasing conditions are market conditions. Note 4 Financial itemsOtherNote 4-foreign groupFinancial exchange items gains- group 9 776 6 673 OtherOther financial financial income income and other financial expenses comprise the following: 65 78 Total 118 086 138 519 (Figures in TNOK)NoteOther(Figures 4 Financialfinancial in TNOK) itemsincome - group 2017 2017 Foreign exchange gains, intergroup receivables 108 245 131 768 Other financial income(FiguresOther and financial financialin other TNOK) financial income expenses expensesand other comprise financial theexpenses following: comprise the following: 2017 2017 OtherForeign foreign exchange exchange loss, includinggains loan in Euro/DKK 1089 776 767 1716 673 545 OtherOther financialfinancial financial income income expenses and other financial expenses comprise the following: 17 51465 20478 Other financial incomeTotalOther financial income 2017 118 2017086 138 2017519 Foreign exchange gains,TotalForeign intergroup exchange receivables gains, intergroup receivables 108 245 126108131 281245768 171131 749768 Other foreign exchangeOtherOther gainsfinancial foreign exchangeincome gains 9 776 2017 96 7766732017 6 673 ForeignOther financial exchange gains,expenses intergroup receivables 108 245 2017131 768 2017 Other financial incomeOther financial income 65 6578 78 OtherForeign foreign exchange exchange loss, gainsincluding loan in Euro/DKK 9 776 108 7676 673 171 545 Total ForeignTotal exchange gains/foreigh exchange loss intergroup receivables 118 086 118138 086519 138 519 OtherFjord financial financialLine AS income expenseshas non-current interest bearing receivables on the Danish subsidiaries amounting to a total of TNOK 1.976.823 per 31.12.2018 65(TNOK 171.788.977 514 78 per 31.12.2017)204 Total 118 086 126 281138 519 171 749 Other financial expensesThisOther has financial been eliminated expenses in the consolidated financial statements. 2017 2017 2017 Foreign exchange loss,OtherTheForeign includingreceivables financial exchange loan expenses are loss,in denominated Euro/DKK including inloan DKK. in Euro/DKK Foreign exchange gain on these receivables was TNOK 108 245 in 2018 (Foreign exchange108 loss 767 TNOK2017 131.768108171 in767545 2017).2017 171 545 Other financial expensesForeignAOther specific financialexchange installment expensesloss, including plan for loan the inloans Euro/DKK the subsidiaries have to their parent company has not been established, however, the subsidiaries17 514will108 use 767 free liquidity17 514204171 for 545 repayment. 204 Foreign exchange gains/foreigh exchange loss intergroup receivables Total OtherInstallmentTotal financial payments expenses have been made both in 2017 and 2018. 126 28117 514 126171 281749 204 171 749 TotalFjord Line AS has non-current interest bearing receivables on the Danish subsidiaries amounting to a total of TNOK 1.976.823 per 31.12.2018126 281(TNOK 1.788.977171 749 per 31.12.2017) This has been eliminated in the consolidated financial statements. The receivables are denominated in DKK. Foreign exchange gain on these receivables was TNOK 108 245 in 2018 (Foreign exchange loss TNOK 131.768 in 2017). Foreign exchangeA gains/foreighForeign specific exchange installment exchange gains/foreigh plan loss for intergroup the loansexchange the receivables subsidiaries loss intergroup have toreceivables their parent company has not been established, however, the subsidiaries will use free liquidity for repayment. Fjord Line AS has Foreignnon-currentFjord Line exchange ASinterest has gains/foreigh non-current bearing receivables exchange interest bearingonloss the intergroup Danish receivables subsidiaries receivables on the Danishamounting subsidiaries to a total amounting of TNOK to1.976.823 a total of per TNOK 31.12.2018 1.976.823 (TNOK per 31.12.2018 1.788.977 per(TNOK 31.12.2017) 1.788.977 per 31.12.2017) FjordInstallment Line AS payments has non-current have been interest made bearing both inreceivables 2017 and on 2018. the Danish subsidiaries amounting to a total of TNOK 1.976.823 per 31.12.2018 (TNOK 1.788.977 per 31.12.2017) This has been eliminatedThisThis has has in been thebeen consolidatedeliminated eliminated in thefinancialin theconsolidated consolidated statements. financial financial statements. statements. The receivables areThe Thedenominated receivables receivables inare areDKK. denominated denominated Foreign in exchangeDKK. in DKK. Foreign gain Foreign exchangeon these exchange gainreceivables on gain these on was receivables these TNOK receivables was108 TNOK 245 was in 108 2018TNOK 245 (Foreign in 108 2018 245 (Foreignexchange in 2018 exchange loss(Foreign TNOK loss exchange TNOK131.768 131.768 loss in 2017).TNOK in 2017). 131.768 in 2017). A specific installmentAA specific specificplan for installment installment the loans plan the plan forsubsidiaries forthe loansthe loans thehave subsidiaries the to subsidiariestheir parent have to havecompany their to parent their has companyparent not been company has established, not been has notestablished, however, been established, however,the subsidiaries the however, subsidiaries will the use subsidiarieswill free use liquidity free liquiditywill for use repayment. forfree repayment. liquidity for repayment. Installment paymentsInstallmentInstallment have been payments payments made bothhave have beenin 2017been made andmade both 2018. both in 2017 in 2017and 2018. and 2018.

35 Notes ⁄⁄ Fjord Line Annual Report 2018

Note 5 ⁄⁄Investments in associated companies and other investments – Group Note 5 Investments in associated companiesNote and 5 Investments other investments in associated - group companiesNote 5 Investmentsand other investments in associated - group companies and other investments - group

Visit Sørlandet AS Visit Sørlandet AS Visit Sørlandet AS In 2010 Fjord Line AS acquired shares amountingIn 2010 toFjord TNOK Line 50 AS in acquiredVisit Sørlandet shares InAS.amounting 2010 After Fjord 2010 to TNOKLine there AS 50has acquired in been Visit neither sharesSørlandet additionsamounting AS. Afternor to disposals. TNOK2010 there 50 in has Visit been Sørlandet neither additionsAS. After nor 2010 disposals. there has been neither additions nor disposals. The investment is recognised in accordanceThe with investment the cost method. is recognised There hasin accordance not beenThe any investmentwith write-down the cost is method.recognised of the holdingThere in accordance has of notshares been withneither any the write-down in cost 2018 method. nor of in theThere 2017. holding has not of beenshares any neither write-down in 2018 of nor the in holding 2017. of shares neither in 2018 nor in 2017.

Visit Telemark AS Note Visit5Note Investments Telemark5 Investments in AS associated in associated companies companies andVisit other and Telemark otherinvestments investments AS - group - group Fjord Line AS invested TNOK 30 in Visit TelemarkFjord Line AS AS in invested 2016. The TNOK investment 30 in Visit Fjordis recognised Telemark Line AS inAS invested accordance in 2016. TNOK The with investment30 the in cost Visit method. Telemarkis recognised No ASwrite-down inin accordance2016. hasThe been investmentwith made. the cost is method.recognised No in write-down accordance has with been the made.cost method. No write-down has been made. Visit SørlandetVisit Sørlandet AS AS Green LNG A/S - associated company In 2010GreenIn Fjord2010 LNG FjordLine A/S AS Line -acquired associated AS acquired shares company sharesamounting amountingGreen to TNOK LNG to TNOK 50 A/S in -Visit50 associated in SørlandetVisit Sørlandet company AS. After AS. 2010After there2010 hasthere been has neither been neither additions additions nor disposals. nor disposals. In 2017 Fjord Line AS invested in Green LNG A/S, total amount invested was TNOK 250. The investmentInThe 2017 investment Fjord is recognised Line is recognised AS investedin accordance in inaccordance Green with LNG Inthe with 2017 costA/S, the Fjordmethod. totalcost Linemethod.amount There AS investedThereinvestedhas not has been wasin not Green TNOKany been write-down LNG any 250. write-downA/S, totalof the amount ofholding the holdinginvested of shares of was sharesneither TNOK neither in 250. 2018 in nor2018 in nor2017. in 2017. The investment is recognised in accordanceThe with investment the cost method. is recognised No write-down in accordance hasThe been investmentwith made. the cost is method.recognised No in write-down accordance has with been the made.cost method. No write-down has been made. Visit TelemarkVisit Telemark AS AS Hirtshals LNG A/S - associated company Fjord HirtshalsFjordLine AS Line investedLNG AS investedA/S TNOK - associated TNOK 30 in Visit30 company in TelemarkVisit HirtshalsTelemark AS in LNGAS2016. in A/S 2016.The - investmentassociated The investment iscompany recognised is recognised in accordance in accordance with the with cost the method. cost method. No write-down No write-down has been has made. been made. In 2015 Fjord Line group sold 50% of the Inshares 2015 in FjordHirtshals Line LNG group A/S sold to 50%Skangass ofIn the 2015AS. shares Fjord in Hirtshals Line group LNG sold A/S 50% to Skangass of the shares AS. in Hirtshals LNG A/S to Skangass AS. Prior to this sale Hirtshals LNG A/S was a 100% owned subsidiary of Fjord Line Danmark A/S. GreenPriorGreen LNG to A/S LNGthis -sale A/Sassociated Hirtshals - associated company LNG company A/S was a 100%Prior toowned this sale subsidiary Hirtshals of LNGFjord A/S Line was Danmark a 100% A/S. owned subsidiary of Fjord Line Danmark A/S. 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 In 2017AtIn Fjordthe2017 date FjordLine of ASsale Line investedthe AS balance invested in Green sheet in GreenofLNG Hirtshals A/S,LNGAt the total A/S,LNG date amount total A/Sof sale amountconsisted invested the balance invested mainly was sheetTNOK wasof anof TNOK 250.LNG-tank.Hirtshals 250. LNG The A/Scompensation consisted mainlywas determined of an LNG-tank. based on The a compensation was determined based on a value of the plant of 25 MNOK. The investmentvalueThe investment of the is plantrecognised is ofrecognised 25 inMNOK. accordance in accordance with valuethe with cost ofthe method.the cost plant method. No of 25write-down NoMNOK. write-down has been has made. been made. For 2018 the income statement and the balance sheet figures are related to the investment HirtshalsForHirtshals 2018LNG the A/SLNG income - A/Sassociated -statement associated company and company the balanceFor 2018sheet thefigures income are statementrelated to andthe investmentthe balance sheet figures are related to the investment in Hirtshals LNG A/S (assocoated company) as follows: In 2015inIn Hirtshals 2015Fjord FjordLine LNG group Line A/S groupsold (assocoated 50% sold of 50% thecompany) ofshares thein shares inas Hirtshals Hirtshalsfollows: in Hirtshals LNG LNG A/S A/SLNG (assocoated to A/S Skangass to Skangass company) AS. AS. as follows: Prior toPrior this to sale this Hirtshals sale Hirtshals LNG A/SLNG was A/S a was100% a 100%owned owned subsidiary subsidiary of Fjord of FjordLine Danmark Line Danmark A/S. A/S. Book value 31.12.2017: 12 245 TNOK At theBookAt date the ofvalue date sale 31.12.2017:of the sale balance the balance sheet ofsheet Hirtshals of Hirtshals LNGBook A/SLNGvalue consisted A/S31.12.2017: consisted mainly mainly of an 12LNG-tank.of 245an LNG-tank.TNOK The compensation The compensation was determined was determined12 245basedTNOK basedon a on a Share of result 2018 (50%) -507 TNOK value Shareofvalue the ofplant resultthe ofplant 201825 MNOK.of (50%)25 MNOK. Share of result 2018 (50%) -507 TNOK -507 TNOK Foreign exchange translation differences Foreign exchange translation differences-772ForeignTNOK exchange translation differences-772 TNOK -772 TNOK Book value 31.12.2018 10 966 TNOK For 2018BookFor the2018 value income the 31.12.2018 income statement statement and the and balance the balance sheetBook figuressheet value figures are31.12.2018 related are related to the toinvestment the10 investment966 TNOK 10 966 TNOK in Hirtshalsin Hirtshals LNG A/SLNG (assocoated A/S (assocoated company) company) as follows: as follows: The share of result stated above is classifiedThe as incomeshare of from result investment stated above associated is classified Thecompany share as income inof theresult fromincome stated investment statement above is associated classifiedfor 2018. company as income in from the income investment statement associated for 2018. company in the income statement for 2018. Book valueBook 31.12.2017:value 31.12.2017: 12 24512TNOK 245 TNOK 50% share of booked equity in Hirtshals LNG A/S per 31.12.2018: 11 394 TNOK Share50% Shareof result share of result2018 of booked (50%)2018 (50%)equity in Hirtshals LNG50% A/S share per of 31.12.2018: booked equity in-507 HirtshalsTNOK-507 LNGTNOK A/S per 31.12.2018: 11 394 TNOK 11 394 TNOK Added values assigned to the investment -428 TNOK ForeignAddedForeign exchange values exchange translation assigned translation to differences the investmentdifferences Added values assigned to the investment-772 TNOK-772 TNOK -428 TNOK -428 TNOK Book value of investment in associated company 31.12.2018 10 966 TNOK Book BookBookvalue valuevalue31.12.2018 of31.12.2018 investment in associated companyBook value 31.12.2018 of investment 10in associated96610TNOK 966 TNOKcompany 31.12.2018 10 966 TNOK 10 966 TNOK

The shareThe ofshare result of resultstated statedabove aboveis classified is classified as income as income from investmentfrom investment associated associated company company in the inincome the income statement statement for 2018. for 2018.

50% share50% ofshare booked of booked equity equity in Hirtshals in Hirtshals LNG A/SLNG per A/S 31.12.2018: per 31.12.2018: 11 39411TNOK 394 TNOK AddedAdded values values assigned assigned to the toinvestment the investment -428 TNOK-428 TNOK Book Bookvalue valueof investment of investment in associated in associated company company 31.12.2018 31.12.2018 10 96610TNOK 966 TNOK Note 6 Inventories and fuel expenses - groupNote 6 Inventories and fuel expenses Note- group 6 Inventories and fuel expenses - group

(Figures in TNOK) (Figures in TNOK) (Figures in TNOK)

2018 2017 2018 2017 2018 2017 Fuel Fuel Fuel 3 384 3 214 3 384 3 214 3 384 3 214 Note 6 ⁄⁄ Inventories and fuel expenses – Group Goods for resale *) 16 263 19 423 Note Goods6Note Inventories 6 for Inventories resale and *) fuel and expenses fuel expenses - group - groupGoods for resale *) 16 263 19 423 16 263 19 423 Other items, including key-cards etc. Other items, including key-cards etc. Other items, including key-cards etc. 3 186 3 380 3 186 3 380 3 186 3 380 Total inventories at acquisition cost 31.12. 22 833 26 017 (FiguresTotal(Figures in TNOK)inventories in TNOK) at acquisition cost 31.12.Total inventories at acquisition cost 31.12. 22 833 26 017 22 833 26 017 Write-down 31.12. Write-down 31.12. Write-down 31.12. 0 0 0 0 0 0 Total book value of inventories 31.12. 22 833 26 017 Total book value of inventories 31.12. Total book value of inventories 31.12. 2018222018 833 2017262017 017 22 833 26 017 Fuel Fuel 3 384 3 384 3 214 3 214 No write-down has been made of the inventory per year-end. GoodsNoGoods for write-down resale for resale*) has *) been made of the inventoryNo write-down per year-end. has been made of the inventory per year-end. 16 26316 263 19 42319 423 Other Otheritems, items,including including key-cards key-cards etc. etc. 3 186 3 186 3 380 3 380 Expenses related to fuel are classified as other operating expenses in the income statement. TotalExpenses Totalinventories inventories related at acquisition to at fuel acquisition are costclassified 31.12. cost as 31.12. otherExpenses operating related expenses to fuel in are the classified income statement.as other operating expenses in the income statement. 22 83322 833 26 01726 017 This amounts to TNOK 165.314 in 2018 (TNOK 153.199 for 2017). Write-downThisWrite-down amounts 31.12. 31.12. to TNOK 165.314 in 2018 (TNOKThis amounts 153.199 to for TNOK 2017). 165.314 in 2018 (TNOK 153.199 for 2017). 0 0 0 0 Total Totalbook valuebook valueof inventories of inventories 31.12. 31.12. 22 83322 833 26 01726 017 Note 7 Trade receivables - group No write-downNoteNo write-down 7 Trade has beenreceivables has made been ofmade - thegroup ofinventory the inventory perNote year-end. per7 Trade year-end. receivables - group (Figures in TNOK) Expenses(FiguresExpenses related in related TNOK)to fuel to are fuel classified are classified as other as operatingother(Figures operating expenses in TNOK) expenses in the inincome the income statement. statement. This amountsThis amounts to TNOK to TNOK 165.314 165.314 in 2018 in (TNOK2018 (TNOK 153.199 153.199 for 2017). for 2017). 2018 2017 2018 2017 2018 2017 Trade receivables at nominal value 31.12. Trade receivables at nominal value 31.12.Trade receivables at nominal value 31.12. 45 873 41 986 45 873 41 986 45 873 41 986 Provisions for bad debts 31.12. -2 197 -2 198 Note Provisions7Note Trade 7 Trade receivables for badreceivables debts - group 31.12. - group Provisions for bad debts 31.12. -2 197 -2 198 -2 197 -2 198 Trade receivables 31.12. Trade receivables 31.12. Trade receivables 31.12. 43 676 39 788 43 676 39 788 43 676 39 788 (Figures(Figures in TNOK) in TNOK) Change provisions for bad debts in the yearChange provisions for bad debts in the Changeyear provisions for bad debts in the year 0 1 497 0 1 497 0 1 497 Actual bad debts in the year 639 211 Actual bad debts in the year Actual bad debts in the year 2018 2018639 2017 2017211 639 211 Received on receivables previously written off 0 0 TradeReceived Tradereceivables receivables on atreceivables nominal at nominal valuepreviously 31.12.value written31.12. Receivedoff on receivables previously written off 45 87345 8730 41 98641 9860 0 0 Loss on bad debts 639 1 708 ProvisionsLossProvisions onfor badbad for debts bad 31.12.debts 31.12. Loss on bad debts -2 197-2 639197 -2 198-21 708198 639 1 708 TradeTrade receivables receivables 31.12. 31.12. 43 67643 676 39 78839 788 Bad debts are included in the item "other operatingBad debts expenses" are included in the in theincome item statement. "otherBad operating debts are expenses" included inin thethe itemincome "other statement. operating expenses" in the income statement. ChangeChange provisions provisions for bad for debts bad indebts the inyear the year 0 0 1 497 1 497 ActualActual bad debts bad indebts the inyear the year 639 639 211 211 ReceivedReceived on receivables on receivables previously previously written written off off 0 0 0 0 Loss onLoss bad on debts bad debts 639 639 1 708 1 708

Bad debtsBad aredebts included are included in the initem the "otheritem "other operating operating expenses" expenses" in the inincome the income statement. statement.

36 Note 5 InvestmentsNote 5 Investments in associated in associated companies companies and other and investments other investments - group - group

Visit SørlandetVisit Sørlandet AS AS In 2010In Fjord 2010 Line Fjord AS Line acquired AS acquired shares amounting shares amounting to TNOK to 50TNOK in Visit 50 inSørlandet Visit Sørlandet AS. After AS. 2010 After there 2010 has there been has neither been additionsneither additions nor disposals. nor disposals. The investmentThe investment is recognised is recognised in accordance in accordance with the with cost themethod. cost method. There has There not hasbeen not any been write-down any write-down of the holding of the holdingof shares of neither shares inneither 2018 innor 2018 in 2017. nor in 2017.

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

Green LNGGreen A/S LNG - associated A/S - associated company company In 2017In Fjord 2017 Line Fjord AS Line invested AS invested in Green in LNG Green A/S, LNG total A/S, amount total amountinvested invested was TNOK was 250.TNOK 250. The investmentThe investment is recognised is recognised in accordance in accordance with the with cost themethod. cost method. No write-down No write-down has been has made. been made.

HirtshalsHirtshals LNG A/S LNG - associated A/S - associated company company In 2015In Fjord 2015 Line Fjord group Line sold group 50% sold of 50%the shares of the in shares Hirtshals in Hirtshals LNG A/S LNG to SkangassA/S to Skangass AS. AS. Prior toPrior this sale to this Hirtshals sale Hirtshals LNG A/S LNG was A/S a 100% was aowned 100% subsidiaryowned subsidiary of Fjord of Line Fjord Danmark Line Danmark A/S. A/S. At the dateAt the of saledate theof salebalance the balancesheet of sheet Hirtshals of Hirtshals LNG A/S LNG consisted A/S consisted mainly ofmainly an LNG-tank. of an LNG-tank. The compensation The compensation was determined was determined based on based a on a value ofvalue the plant of the of plant 25 MNOK. of 25 MNOK.

For 2018For the 2018 income the incomestatement statement and the andbalance the balancesheet figures sheet arefigures related are torelated the investment to the investment in Hirtshalsin Hirtshals LNG A/S LNG (assocoated A/S (assocoated company) company) as follows: as follows:

Book valueBook 31.12.2017: value 31.12.2017: 12 245 12TNOK 245 TNOK Share ofShare result of 2018 result (50%) 2018 (50%) -507 TNOK-507 TNOK ForeignForeign exchange exchange translation translation differences differences -772 TNOK-772 TNOK Book valueBook 31.12.2018 value 31.12.2018 10 966 10TNOK 966 TNOK

The shareThe of share result of stated result above stated is above classified is classified as income as incomefrom investment from investment associated associated company company in the income in the incomestatement statement for 2018. for 2018.

50% share50% of share booked of bookedequity in equity Hirtshals in Hirtshals LNG A/S LNG per A/S 31.12.2018: per 31.12.2018: 11 394 11TNOK 394 TNOK Added valuesAdded assigned values assigned to the investment to the investment -428 TNOK-428 TNOK Book valueBook of value investment of investment in associated in associated company company 31.12.2018 31.12.2018 10 966 10TNOK 966 TNOK

Note 6 InventoriesNote 6 Inventories and fuel and expenses fuel expenses - group - group

(Figures(Figures in TNOK) in TNOK)

2018 2018 2017 2017 Fuel Fuel 3 384 3 384 3 214 3 214 Goods forGoods resale for *) resale *) 16 263 16 263 19 423 19 423 Other items,Other including items, including key-cards key-cards etc. etc. 3 186 3 186 3 380 3 380 Total inventoriesTotal inventories at acquisition at acquisition cost 31.12. cost 31.12. 22 833 22 833 26 017 26 017 Write-downWrite-down 31.12. 31.12. 0 0 0 0 Total bookTotal value book of value inventories of inventories 31.12. 31.12. Fjord Line Annual Report22 833 222018 833 ⁄⁄ Notes26 017 26 017

No write-downNo write-down has been has made been of made the inventory of the inventory per year-end. per year-end.

ExpensesExpenses related torelated fuel areto fuelclassified are classified as other as operating other operating expenses expenses in the income in the incomestatement. statement. This amountsThis amounts to TNOK to 165.314TNOK 165.314 in 2018 in(TNOK 2018 (TNOK 153.199 153.199 for 2017). for 2017).

Note 7 ⁄⁄ Trade receivables – Group Note 7 TradeNote 7 receivablesTrade receivables - group - group

(Figures(Figures in TNOK) in TNOK)

2018 2018 2017 2017 Trade receivablesTrade receivables at nominal at nominal value 31.12. value 31.12. 45 873 45 873 41 986 41 986 ProvisionsProvisions for bad fordebts bad 31.12. debts 31.12. -2 197 -2 197 -2 198 -2 198 Trade receivablesTrade receivables 31.12. 31.12. 43 676 43 676 39 788 39 788

Change Changeprovisions provisions for bad fordebts bad in debts the year in the year 0 0 1 497 1 497 Actual badActual debts bad in debts the year in the year 639 639 211 211 ReceivedReceived on receivables on receivables previously previously written writtenoff off 0 0 0 0 Loss onLoss bad ondebts bad debts 639 639 1 708 1 708

Bad debtsBad are debts included are included in the item in the "other item operating "other operating expenses" expenses" in the income in the incomestatement. statement.

Note 8 ⁄⁄ Other current receivables – Group Note 8 Other current receivables - group

(Figures in TNOK)

Other receivables 2018 2017 Refund from public authorities, including vat receivable 8 699 4 144 Prepaid expenses, incl. insurance ships 20 984 11 998 Grants, not received (Danish subsidiary) 0 0 Other receivables 31 125 15 229 Other current receivables 31.12. 60 808 31 371

VAT balance due to the company Per 31.12.2018 the company has recognised TNOK 8.699 in the balance sheet which relates to VAT due to the company (TNOK 3.708 per 31.12.2017).

Note 9 Restricted funds - group

(Figures in TNOK) 2018 2017 Restricted tax deduction funds per 31.12.: 3 451 4 287 The tax deduction funds are deposited on separate bank accounts.

Note 10 Changes in equity - group

(Figures in TNOK)

Share premium Other equity, not Retained Share capital Own Shares account recognised in earnings Non-controlling Total equity income statement interests

Equity 01.01.2017 519 107 -10 178 227 126 930 25 473 0 849 727

Net income 2017 0 0 0 0 78 213 0 78 213 Other comprehensive income 2017 0 0 0 109 186 0 0 109 186

Equity 31.12.2017 519 107 -10 178 227 236 116 103 686 0 1 037 125

Net income 2018 0 0 0 0 67 881 0 67 881 Other comprehensive income 2018 0 0 0 -45 603 0 0 -45 603 Sale of own shares 0 1 0 0 0 0 1

Equity 31.12.2018 519 107 -9 178 227 190 513 171 567 0 1 059 403

Note 11 Share capital and shareholders' information - group

The share capital is NOK 519.107.350 per 31.12.2018, and consists of 207.642.940 shares each NOK 2,50. All shares have equal rights.

The major shareholders per 31.12.2018. Owner share Ferd AS 44.6% Kontrari AS 34.8% Kontrazi AS 17.4% Arne Teigen 1.1% Moly AS 0.8% Others, including own shares *) 1.3% Total 100.0%

*) Fjord Line AS has a total of 664 own shares per 31.12.2018. 37 The major shareholders per 31.12.2017. Owner share Ferd AS 44.6% Kontrari AS 34.8% Kontrazi AS 17.4% Arne Teigen 1.1% Moly AS 0.8% Other, including own shares *) 1.3% Total 100.0%

*) Per 31.12.2017 Fjord Line AS had a total of 764 own shares. Note 8 Other current receivables - group

(Figures in TNOK)

Other receivables 2018 2017 Refund from public authorities, including vat receivable 8 699 4 144 Prepaid expenses, incl. insurance ships 20 984 11 998 Grants, Notes not received ⁄⁄ Fjord (Danish Line subsidiary) Annual Report 2018 0 0 Note 8 Other currentOtherNote 8receivables receivablesOther current - group receivables - group 31 125 15 229 Other current receivables 31.12. 60 808 31 371 (Figures in TNOK)(Figures in TNOK) VAT balance due to the company Other receivablesPerOther 31.12.2018 receivables the company has recognised TNOK 8.699 in the balance sheet which relates to VAT due to the company (TNOK 3.708 per2018 31.12.2017). 20182017 2017 Refund from publicRefund authorities, from public including authorities, vat receivable including vat receivable 8 699 8 6994 144 4 144 Prepaid expenses,Prepaid incl. insurance expenses, ships incl. insurance ships 20 984 20 98411 998 11 998 Grants, not receivedGrants,Note Note(Danish 8 not Other received9 subsidiary) ⁄⁄ current Restricted (Danish receivables subsidiary) funds - group – Group 0 0 0 0 Other receivablesNoteOther 9receivables Restricted funds - group 31 125 31 12515 229 15 229 Other current receivablesOther(Figures current in 31.12. TNOK) receivables 31.12. 60 808 60 80831 371 31 371 (Figures in TNOK) VAT balance dueVATOther to balancethe receivables company due to the company 2018 2017 2018 2017 Per 31.12.2018 PerRestrictedtheRefund company31.12.2018 from tax has deduction publicthe recognised company authorities, funds TNOK has per recognised 31.12.: including8.699 in TNOKthe vat balance receivable 8.699 sheet in the which balance relates sheet to whichVAT duerelates to theto VATcompany due to(TNOK the company 3.7083 451 per (TNOK 31.12.2017). 3.708 per4 28731.12.2017). 8 699 4 144 ThePrepaid tax deduction expenses, funds incl. areinsurance deposited ships on separate bank accounts. 20 984 11 998 Grants, not received (Danish subsidiary) 0 0 Other receivables 31 125 15 229 Note 9 RestrictedNoteOther funds 109 Restricted currentChanges - group receivables infunds equity - group - 31.12.group 60 808 31 371 (Figures in TNOK)(Figures in TNOK) (FiguresVAT balance in TNOK) due to the company 2018 20182017 2017 Restricted tax deductionRestrictedPer 31.12.2018 funds tax deductionper the 31.12.: company funds per has 31.12.: recognised TNOK 8.699 in the balance sheet which relates to 3VAT 451 due to the3 451company4 287 (TNOK4 3.708 287 per 31.12.2017). Share premium Other equity, not Retained The tax deductionThe funds tax deductionare deposited funds on are separate deposited bank on accounts. separate bank accounts. Share capital Own Shares account recognised in earnings Non-controlling Total equity income statement interests Note 10 ChangesNoteNote inNote equity10 9 RestrictedChanges 10- group ⁄⁄ in Changes fundsequity -- groupgroup in equity – Group Equity 01.01.2017 519 107 -10 178 227 126 930 25 473 0 849 727 (Figures in TNOK)(Figures(Figures in in TNOK) TNOK) Net income 2017 0 0 0 2018 0 2017 78 213 0 78 213 Other comprehensive income 2017 0 0 0 109 186 0 0 109 186 Restricted tax deduction funds per 31.12.: Share premiumShare Other premium equity, not Other3 451 Retainedequity, not 4Retained 287 The tax deduction funds are deposited on separate bank accounts. Equity 31.12.2017 Share capital ShareOwn519 capital Shares 107 Own Sharesaccount-10 accountrecognised178 227 in recognisedearnings236 in 116 Non-controllingearnings103 686 Non-controlling Total equity0 Total1 equity037 125 income statementincome statement interests interests Net income 2018 0 0 0 0 67 881 0 67 881 Note 10 Changes in equity - group Equity 01.01.2017OtherEquity comprehensive 01.01.2017 income 2018 519 107 519 1070 -10 178-10 2270 178 2271260 930 126-4525 603930 473 25 4730 0 849 7270 849-45 603727 Sale of own shares 0 1 0 0 0 0 1 Net income 2017Net(Figures income in 2017 TNOK) 0 0 0 0 0 0 0 78 2130 78 213 0 78 2130 78 213 Other comprehensiveEquityOther incomecomprehensive 31.12.2018 2017 income 2017 0 519 1070 0 -90 0 178 2271090 186 190109 5131860 171 5670 0 109 1860 1 059109 403186 Share premium Other equity, not Retained Equity 31.12.2017Equity 31.12.2017 519 107 519 107 -10 178-10 227 178 227236 116 236103 116 686 103 686 0 1 037 1250 1 037 125 Share capital Own Shares account recognised in earnings Non-controlling Total equity Note 11 Share capital and shareholders' information - group Net income 2018Net income 2018 0 0 0 0 0 0 0 income67 881statement0 67 881 0 67 interests8810 67 881 Other comprehensiveOther incomecomprehensive 2018 income 2018 0 0 0 0 0 -450 603 -45 6030 0 0 -45 6030 -45 603 Equity 01.01.2017 519 107 -10 178 227 126 930 25 473 0 849 727 Sale of own sharesTheSale shareof own capital shares is NOK 519.107.350 per 31.12.2018, and consists0 of 207.642.9400 shares1 each NOK 2,50.1 0 All shares have0 equal0 rights. 00 0 0 01 1

Equity 31.12.2018TheEquityNet majorincome 31.12.2018 shareholders 2017 per 31.12.2018. 519 107 519 107 -90 178-9 227 0 178 227190 513 0 190171 513 567 0171 567 078 213 1 059 4030 1 0590 403 78 213 Other comprehensive income 2017 0 0 0 109Owner 186 share 0 0 109 186 Ferd AS 44.6% Note 11 Share capitalKontrariNoteEquity 11 and Share31.12.2017AS shareholders' capital and information shareholders' - group information - group 519 107 -10 178 227 236 116 34.8% 103 686 0 1 037 125 Kontrazi AS 17.4% ArneNet incomeTeigen 2018 0 0 0 0 1.1% 67 881 0 67 881 The share capitalMolyTheOther is NOKshare AS comprehensive 519.107.350capital is NOK perincome 519.107.350 31.12.2018, 2018 perand 31.12.2018, consists of 207.642.940and consists ofshares 207.642.940 each NOK shares 2,50.0 each All sharesNOK 2,50.have equalAll0 shares rights. have equal0 rights. -45 603 0.8% 0 0 -45 603 Others,Sale of including own shares own shares *) 0 1 0 0 1.3% 0 0 1 The major shareholdersTotalThe major per shareholders 31.12.2018. per 31.12.2018. 100.0% Equity 31.12.2018 519 107 -9 178 227Owner share190Owner 513 share 171 567 0 1 059 403 Ferd AS *)Ferd Fjord AS Line AS has a total of 664 own shares per 31.12.2018. 44.6% 44.6% Kontrari AS Kontrari AS 34.8% 34.8% Kontrazi AS TheKontrazi major AS shareholders per 31.12.2017. 17.4% 17.4% Arne Teigen ArneNoteNote Teigen 11 Share 11 ⁄⁄ capital Share and capital shareholders' and informationshareholders’ - group information – Group 1.1% 1.1% Owner share Moly AS Moly AS 0.8% 0.8% Ferd AS 44.6% Others, includingOthers, own shares including *) own shares *) 1.3% 1.3% Kontrari AS 34.8% Total TotalThe share capital is NOK 519.107.350 per 31.12.2018, and consists of 207.642.940 shares each NOK 2,50. All shares have equal100.0% rights. 100.0% Kontrazi AS 17.4% Arne Teigen 1.1% *) Fjord Line AS*)The hasFjord majora total Line ofshareholders AS 664 has own a total shares perof 664per 31.12.2018. 31.12.2018.own shares per 31.12.2018. Moly AS 0.8% Owner share Other, including own shares *) 1.3% The major shareholdersThe major per shareholders 31.12.2017. per 31.12.2017. TotalFerd AS 100.0% 44.6% Kontrari AS Owner share Owner share 34.8% Ferd AS *)FerdKontrazi Per AS 31.12.2017 AS Fjord Line AS had a total of 764 own shares. 44.6% 44.6% 17.4% Kontrari AS KontrariArne Teigen AS 34.8% 34.8% 1.1% Kontrazi AS KontraziMoly AS AS 17.4% 17.4% 0.8% Arne Teigen ArneOthers, Teigen including own shares *) 1.1% 1.1% 1.3% Moly AS MolyTotal AS 0.8% 0.8% 100.0% Other, includingOther, own shares including *) own shares *) 1.3% 1.3% Total Total*) Fjord Line AS has a total of 664 own shares per 31.12.2018. 100.0% 100.0%

*) Per 31.12.2017*)The PerFjord major 31.12.2017 Line shareholders AS hadFjord a total Line per of AS 76431.12.2017. had own a total shares. of 764 own shares. Owner share Ferd AS 44.6% Kontrari AS 34.8% Kontrazi AS 17.4% Arne Teigen 1.1% Moly AS 0.8% Other, including own shares *) 1.3% Total 100.0%

*) Per 31.12.2017 Fjord Line AS had a total of 764 own shares.

38 Fjord Line Annual Report 2018 ⁄⁄ Notes

«Responsible shipping – for a sustainable world!»

39 Notes ⁄⁄ Fjord Line Annual Report 2018

Note 12 Taxes - group Note 12 Taxes - group Note 12 ⁄⁄ Taxes – Group (Figures in TNOK) Note(Figures 12 Taxes in TNOK) - group

Calculation of deferred tax/deferred(FiguresCalculation tax in asset TNOK) of allocated deferred totax/deferred the Norwegian tax asset activity allocated to the Norwegian activity

Temporary differences CalculationTemporary ofdifferences deferred tax/deferred tax asset allocated to the Norwegian activity31.12.2017 31.12.2018 31.12.2017Change 31.12.2018 Change Fixed assets Fixed assets -8 990 1 751 -8-10 990 741 1 751 -10 741 Receivables TemporaryReceivables differences -2 197 31.12.2017-2 197 -2 19731.12.20180 -2 197Change 0 Derivatives FixedDerivatives assets 17 916 12 582-8 990 17 9165 334 1 751 12 582-10 741 5 334 Gain/loss account ReceivablesGain/loss account 13 477 10 782-2 197 13 4772 695-2 197 10 782 0 2 695 Derivatives 17 916 12 582 5 334 Other differences, including accountingGain/lossOther accrualsdifferences, account including accounting accruals -90 964 -88 97313 477 -90 964-1 99110 782 -88 9732 695 -1 991 Total OtherTotal differences, including accounting accruals -70 758 -66 055-90 964 -70 758-4 703-88 973 -66 055-1 991 -4 703 Carry forward loss TotalCarry forward loss -1 194 370 -1 150 467-70 758-1 194-43 370 903-66 055 -1 150 467-4 703 -43 903 Basis for deferred tax (-deferredCarryBasis tax asset) forwardfor deferred loss tax (-deferred tax asset) -1 265 128 -1 216-1 522194 370-1 265-48 128 -1606 150 467 -1 216 522-43 903 -48 606 23% (24%) of the basis Basis23% (24%)for deferred of the tax basis (-deferred tax asset) -290 979 -267-1 635265 128 -290 23979 -1345 216 522 -267 635-48 606 23 345 Deferred tax (-deferred tax asset)23%Deferred recognised (24%) tax of thein(-deferred thebasis balance tax sheetasset) recognised in the balance sheet -125 000 -178-290 000 979 -125-53 000 000-267 635 -178 00023 345 -53 000 Deferred tax asset not recognised inDeferred the balance taxtax (-deferredasset sheet not recognised tax asset) recognisedin the balance in the sheet balance sheet -165 979 -89-125 635 000 -165 76979 346-178 000 -89 635-53 000 76 346 Deferred tax asset not recognised in the balance sheet -165 979 -89 635 76 346 Payable tax recognised in the balacePayable sheet pertax 31.12.2018recognised inconnected the balace to sheetthe Norwegian per 31.12.2018 activity connected makes TNOK to the 0Norwegian (TNOK 0 activityper 31.12.2017). makes TNOK 0 (TNOK 0 per 31.12.2017). Payable tax recognised in the balace sheet per 31.12.2018 connected to the Norwegian activity makes TNOK 0 (TNOK 0 per 31.12.2017). Foreign subsidiaries Foreign subsidiaries Foreign subsidiaries The Danish shipowning companiesThe are Danishunder Danish shipowning law connected companies to are tonnage under tax Danish system law and connected have calculated to tonnage taxable tax system income and based have on calculated these conditions. taxable income based on these conditions. The Danish shipowning companies are under Danish law connected to tonnage tax system and have calculated taxable income based on these conditions. Further on, the Danish subsidiariesFurther are jointly on,on, the thetaxed. Danish Danish Tax subsidiaries subsidiaries2018 for arethe are jointlyDanish jointly taxed. subsidiaries taxed. Tax 2018Tax is 2018 forTNOK the for Danish 2.058 the Danish subsidiaries(TNOK subsidiaries 1.239 is TNOK in 2017)is 2.058TNOK (TNOK 2.058 1.239 (TNOK in 2017) 1.239 in 2017) The Danish subsidiaries received taxableThe DanishDanish grants subsidiaries subsidiaries in 2015. receivedThis received was taxable reflectedtaxable grants grants in in payable 2015. in 2015. This tax recognisedThiswas reflectedwas reflected in inthe payable balance in payable tax sheet, recognised tax TNOK recognised in the17.480 balance in per the sheet,31.12.2015 balance TNOK sheet, 17.480 TNOK per 31.12.201517.480 per 31.12.2015 which was allocated to the Danish whichsubsidiaries. waswas allocated allocated to to the the Danish Danish subsidiaries. subsidiaries. As the grants are recognised as reductionAs the grantsgrantsof the are ships'are recognised recognised acquisition as asreduction cost,reduction the of grantthe of ships'the is ships'recognised acquisition acquisition throughcost, thecost, gains/lossesgrant the is grant recognised inis recognisedline through with the throughgains/losses depreciation gains/losses in line of withthe in ships. the line depreciation with the depreciation of the ships. of the ships. The grant is considered not to be comprisedThe grantgrant isbyis considered consideredIAS 12. notTherefore not to tobe becomprised acomprised deferred by IAS taxby IASasset12. Therefore 12.corresponding Therefore a deferred ato deferred payable tax asset taxtax corresponding assetconnected corresponding to to thepayable grant to tax payablewas connected recognised tax connectedto the grant to was the recognised grant was recognised in the balance sheet upon receipt ofin the thethe grant balancebalance in sheet 2015.sheet upon uponThis receipt deferredreceipt of theof tax thegrant asset grant in is 2015. inbeing 2015. This reversed Thisdeferred deferred over tax theasset tax depreciation is asset being is reversed being period reversed over of thethe over depreciationships. the depreciation period of theperiod ships. of the ships. Net book value of deferred tax assetNet per bookbook 31.12.2018 value value of of deferred anddeferred 31.12.2017 tax tax asset asset per relating per31.12.2018 31.12.2018 to foreign and 31.12.2017and subsidiary 31.12.2017 relating is listed relating to below. foreign to foreign subsidiary subsidiary is listed below.is listed below. The main element of this net amountThe (TNOK mainmain element element 17.673 of of perthis this 31.12.2018)net net amount amount (TNOK is (TNOK thus 17.673 connected 17.673 per 31.12.2018) perto the 31.12.2018) mentioned is thus is connectedgrants. thus connected to the mentioned to the mentioned grants. grants.

Specification of tax expense 2018 2017 Specification of tax expense Specification of tax expense 2018 2017 2018 2017 Change in deferred tax asset connected to the Norwegian activity -53 000 -75 000 Change in deferred tax asset connectedPayableChange to taxthein deferred connectedNorwegian tax to theactivityasset Norwegian connected activity to the (partially Norwegian owned activity subsidiary) -53 000 -75 000 0 -53 000 0 -75 000 Payable tax connected to the NorwegianPayable activity taxtax connected connected (partially to toforeign owned the Norwegian subsidiaries subsidiary) activity (partially owned subsidiary) 0 -1 2510 01 153 0 Payable tax connected to foreign subsidiariesChangePayable in tax deferred connected tax asset to foreign connected subsidiaries to foreign subsidiaries -1 251 1 153594 -1 251 129 1 153 Change in deferred tax asset connectedOtherChange to adjustments, foreignin deferred subsidiaries including tax asset foreign connected exchange to foreign translation subsidiaries differences 594 129 0 594 0 129 Other adjustments, including foreignTaxOther exchange expense adjustments, translation including differences foreign exchange translation differences 0 -53 6470 -730 718 0 Tax expense Tax expense -53 647 -73 718 -53 647 -73 718

Specification of payable tax 2018 2017 Specification of payable tax PayableSpecification tax connected of payable to the taxparent company 2018 2017 0 2018 0 2017 Payable tax connected to the parentPayable company taxtax connected connected to topartially the parent owned company Norwegian subsidiary 0 0 0 0 0 0 Payable tax connected to partially Payableowned Norwegian taxtax connected connected subsidiary to toforeign partially subsidiaries owned Norwegian subsidiary 0 1 5790 0 412 0 Payable tax recognised in the balance sheet 31.12. 1 579 412 Payable tax connected to foreign subsidiariesPayable tax connected to foreign subsidiaries 1 579 412 1 579 412 Payable tax recognised in the balancePayable sheet tax 31.12.recognised in the balance sheet 31.12. 1 579 412 1 579 412 Specification of deferred tax asset 2018 2017 Deferred tax asset connected to parent company*) 178 000 125 000 Specification of deferred tax assetDeferredSpecification tax asset of connecteddeferred totax partly asset owned Norwegian subsidiary 2018 2017 0 2018 0 2017 Deferred tax asset connected to parentDeferred company*) tax tax asset asset connected connected to toforeign parent subsidiaries company*) (net) 178 000 12517 000 473 178 00018 124 125 000 Deferred tax asset connected to partlyDeferred owned tax Norwegian asset recognisedconnected subsidiary toin partlythe balance owned sheet Norwegian 31.12. subsidiary 0 195 4730 1430 124 0 Deferred tax asset connected to foreignDeferred subsidiaries tax asset (net) connected to foreign subsidiaries (net) 17 473 18 124 17 473 18 124 Deferred tax asset recognised in Deferredthe balance tax sheet asset 31.12.recognised in the balance sheet 31.12. 195 473 143 124 195 473 143 124 Reconciliation of tax expense for the group 2018 2017 23% (24%) of result before tax -3 274 -3 554 Change of deferred tax asset not recognised in the balance sheet connected to the Norwegian activity -76 345 -85 851 Reconciliation of tax expense for25%Reconciliation the (27%)group of not of taxable tax expense income forforeign the subsidiariesgroup etc. 2018 2017-3 003 2018-18 247 2017 23% (24%) of result before tax Impact23% (24%) of changed of result tax ratebefore in Norwaytax -3 274 -312 554 165 -3 27412 651 -3 554 Change of deferred tax asset not recognisedOtherChange permanent of in deferred the differencesbalance tax assetsheet (net) not connected including recognised todifferent the in theNorwegian taxbalance rate between activitysheet connected the countries to the Norwegian activity -76 345 -8516 851 808 -76 34521 211 -85 851 25% (27%) of not taxable income Tax25%foreign expense (27%) subsidiaries of not taxable etc. income foreign subsidiaries etc. -3 003 -18-53 247 647 -3 003-73 718 -18 247 Impact of changed tax rate in NorwayImpact of changed tax rate in Norway 12 165 12 651 12 165 12 651 Other permanent differences (net) Otherincluding permanent different differences tax rate between (net) including the countries different tax rate between the countries 16 808 21 211 16 808 21 211 Tax expense *)Tax Fjord expense Line AS has accumulated basis for deferred tax asset of TNOK 1.216.522 per 31.12.2018 -53 647 -73 718 -53 647 -73 718 This implies a deferred tax asset (22 %) of TNOK 267.635 at full capitalisation.

*) Fjord Line AS has accumulatedThe*) basis Fjord Board for Line deferredof Directiors AS has tax accumulatedfollowingasset of TNOK a concrete basis 1.216.522 for assessment deferred per of 31.12.2018tax the asset future of prospects TNOK 1.216.522of Fjord Line per AS, 31.12.2018 This implies a deferred tax asset (22underThis %) implies theof basisTNOK a of deferred the267.635 net incometax at assetfull from capitalisation.(22 the %) last of two TNOK years, 267.635 found that at itfull has capitalisation. convincing evidence that future earnings will justify a recognition of a further 53 MNOK in addition to the 125 MNOK that have already been recognized, thus the calculated deferred tax asset will be 178 MNOK. The Board of Directiors following Thea concrete Board assessmentof Directiors of followingthe future aprospects concrete ofassessment Fjord Line of AS, the future prospects of Fjord Line AS, under the basis of the net income fromWeunder believe the the last basis that two thisof years, theargument net found income is thatsustained fromit has bythe convincing the last positive two years,evidence operating found result that in it recenthas convincing years, combined evidence with the over budget earnings that future earnings will justify a recognitionsothat far future this year ofearnings aand further that will we 53 justifysee MNOK a positive a recognition development of a furtherin the booking 53 MNOK reserves before the high season. in addition to the 125 MNOK that haveThisin addition combinedalready to been thewith 125 recognized, the MNOKexpansion thatthus of havecapacity the calculated already on MS been Stavangerfjorddeferred recognized, tax asset and thus willMS the Bergensfjordbe calculated 178 MNOK. todeferred increase tax the asset earnings will in be the 178 high MNOK. season indicates that we have convincing evidence that we can at least have equivalent earnings in the years to come as shown in We believe that this argument is sustained2018We believe and by this the that has positive thisbeen argument taken operating into isaccount sustainedresult in in the recentby assessment. the years, positive combined operating with result the inover recent budget years, earnings combined with the over budget earnings so far this year and that we see a positiveso far thisdevelopment year and thatin the we booking see a positive reserves development before the highin the season. booking reserves before the high season. This combined with the expansion 40Thisof capacity combined on MSwith Stavangerfjord the expansion andof capacity MS Bergensfjord on MS Stavangerfjord to increase the and earnings MS Bergensfjord in the high toseason increase the earnings in the high season indicates that we have convincing evidenceindicates thatthat wewe canhave at convincing least have equivalent evidence that earnings we can in at the least years have to comeequivalent as shown earnings in in the years to come as shown in 2018 and this has been taken into account2018 and in thisthe assessment.has been taken into account in the assessment. Note 12 Taxes - group

(Figures in TNOK)

Calculation of deferred tax/deferred tax asset allocated to the Norwegian activity

Temporary differences 31.12.2017 31.12.2018 Change Fixed assets -8 990 1 751 -10 741 Receivables -2 197 -2 197 0 Derivatives 17 916 12 582 5 334 Gain/loss account 13 477 10 782 2 695 Other differences, including accounting accruals -90 964 -88 973 -1 991 Total -70 758 -66 055 -4 703 Carry forward loss -1 194 370 -1 150 467 -43 903 Basis for deferred tax (-deferred tax asset) -1 265 128 -1 216 522 -48 606 23% (24%) of the basis -290 979 -267 635 23 345 Deferred tax (-deferred tax asset) recognised in the balance sheet -125 000 -178 000 -53 000 Deferred tax asset not recognised in the balance sheet -165 979 -89 635 76 346

Payable tax recognised in the balace sheet per 31.12.2018 connected to the Norwegian activity makes TNOK 0 (TNOK 0 per 31.12.2017).

Foreign subsidiaries The Danish shipowning companies are under Danish law connected to tonnage tax system and have calculated taxable income based on these conditions. Further on, the Danish subsidiaries are jointly taxed. Tax 2018 for the Danish subsidiaries is TNOK 2.058 (TNOK 1.239 in 2017) 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 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 31.12.2018 and 31.12.2017 relating to foreign subsidiary is listed below. The main element of this net amount (TNOK 17.673 per 31.12.2018) is thus connected to the mentioned grants.

Specification of tax expense 2018 2017 Change in deferred tax asset connected to the Norwegian activity -53 000 -75 000 Payable tax connected to the Norwegian activity (partially owned subsidiary) 0 0 Payable tax connected to foreign subsidiaries -1 251 1 153 Change in deferred tax asset connected to foreign subsidiaries 594 129 Other adjustments, including foreign exchange translation differences 0 0 Tax expense -53 647 -73 718

Specification of payable tax 2018 2017 Payable tax connected to the parent company 0 0 Payable tax connected to partially owned Norwegian subsidiary 0 0 Payable tax connected to foreign subsidiaries 1 579 412 Payable tax recognised in the balance sheet 31.12. 1 579 412

Specification of deferred tax asset 2018 2017 Deferred tax asset connected to parent company*) 178 000 125 000 Deferred tax asset connected to partly owned Norwegian subsidiary 0 0 Deferred tax asset connected to foreign subsidiaries (net) 17 473 18 124 Deferred tax asset recognised in the balance sheet 31.12. Fjord Line Annual Report 2018 ⁄⁄ Notes 195 473 143 124

Reconciliation of tax expense for the group 2018 2017 23% (24%) of result before tax -3 274 -3 554 Change of deferred tax asset not recognised in the balance sheet connected to the Norwegian activity -76 345 -85 851 25% (27%) of not taxable income foreign subsidiaries etc. -3 003 -18 247 Note 12 Taxes - group Impact of changed tax rate in Norway 12 165 12 651 (Figures in TNOK) Other permanent differences (net) including different tax rate between the countries 16 808 21 211 Tax expense -53 647 -73 718 Calculation of deferred tax/deferred tax asset allocated to the Norwegian activity

Temporary differences 31.12.2017 31.12.2018 Change *) Fjord Line AS has accumulated basis for deferred tax asset of TNOK 1.216.522 per 31.12.2018 Fixed assets -8 990 1 751 -10 741 This implies a deferred tax asset (22 %) of TNOK 267.635 at full capitalisation. Receivables -2 197 -2 197 0 Derivatives 17 916 12 582 5 334 Gain/loss account 13 477 10 782 2 695 The Board of Directiors following a concrete assessment of the future prospects of Fjord Line AS, Other differences, including accounting accruals -90 964 -88 973 -1 991 under the basis of the net income from the last two years, found that it has convincing evidence Total -70 758 -66 055 -4 703 that future earnings will justify a recognition of a further 53 MNOK Carry forward loss -1 194 370 -1 150 467 -43 903 in addition to the 125 MNOK that have already been recognized, thus the calculated deferred tax asset will be 178 MNOK. Basis for deferred tax (-deferred tax asset) -1 265 128 -1 216 522 -48 606 23% (24%) of the basis -290 979 -267 635 23 345 We believe that this argument is sustained by the positive operating result in recent years, combined with the over budget earnings Deferred tax (-deferred tax asset) recognised in the balance sheet -125 000 -178 000 -53 000 Deferred tax asset not recognised in the balance sheet -165 979 -89 635 76 346 so far this year and that we see a positive development in the booking reserves before the high season. This combined with the expansion of capacity on MS Stavangerfjord and MS Bergensfjord to increase the earnings in the high season Payable tax recognised in the balace sheet per 31.12.2018 connected to the Norwegian activity makes TNOK 0 (TNOK 0 per 31.12.2017). indicates that we have convincing evidence that we can at least have equivalent earnings in the years to come as shown in 2018 and this has been taken into account in the assessment. Foreign subsidiaries The Danish shipowning companies are under Danish law connected to tonnage tax system and have calculated taxable income based on these conditions. Further on, the Danish subsidiaries are jointly taxed. Tax 2018 for the Danish subsidiaries is TNOK 2.058 (TNOK 1.239 in 2017) 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 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 31.12.2018 and 31.12.2017 relating to foreign subsidiary is listed below. The main element of this net amount (TNOK 17.673 per 31.12.2018) is thus connected to the mentioned grants.

Specification of tax expense 2018 2017 Change in deferred tax asset connected to the Norwegian activity -53 000 -75 000 Payable tax connected to the Norwegian activity (partially owned subsidiary) 0 0 Payable tax connected to foreign subsidiaries -1 251 1 153 Change in deferred tax asset connected to foreign subsidiaries 594 129 Other adjustments, including foreign exchange translation differences 0 0 Tax expense -53 647 -73 718

Specification of payable tax 2018 2017 Payable tax connected to the parent company 0 0 Payable tax connected to partially owned Norwegian subsidiary 0 0 Payable tax connected to foreign subsidiaries 1 579 412 Payable tax recognised in the balance sheet 31.12. 1 579 412

Specification of deferred tax asset 2018 2017 Deferred tax asset connected to parent company*) 178 000 125 000 Deferred tax asset connected to partly owned Norwegian subsidiary 0 0 Deferred tax asset connected to foreign subsidiaries (net) 17 473 18 124 Deferred tax asset recognised in the balance sheet 31.12. 195 473 143 124

Reconciliation of tax expense for the group 2018 2017 23% (24%) of result before tax -3 274 -3 554 Change of deferred tax asset not recognised in the balance sheet connected to the Norwegian activity -76 345 -85 851 25% (27%) of not taxable income foreign subsidiaries etc. -3 003 -18 247 Impact of changed tax rate in Norway 12 165 12 651 Other permanent differences (net) including different tax rate between the countries 16 808 21 211 Tax expense -53 647 -73 718

*) Fjord Line AS has accumulated basis for deferred tax asset of TNOK 1.216.522 per 31.12.2018 This implies a deferred tax asset (22 %) of TNOK 267.635 at full capitalisation.

The Board of Directiors following a concrete assessment of the future prospects of Fjord Line AS, under the basis of the net income from the last two years, found that it has convincing evidence that future earnings will justify a recognition of a further 53 MNOK in addition to the 125 MNOK that have already been recognized, thus the calculated deferred tax asset will be 178 MNOK.

We believe that this argument is sustained by the positive operating result in recent years, combined with the over budget earnings so far this year and that we see a positive development in the booking reserves before the high season. This combined with the expansion of capacity on MS Stavangerfjord and MS Bergensfjord to increase the earnings in the high season indicates that we have convincing evidence that we can at least have equivalent earnings in the years to come as shown in 2018 and this has been taken into account in the assessment.

41 Notes ⁄⁄ Fjord Line Annual Report 2018

NoteNote 13 Liabilities 13 ⁄⁄ Liabilities - group – Group Note 13 Liabilities Note- group 13 Liabilities - group (Figures in table in TNOK) (Figures in table in TNOK)(Figures in table in TNOK) Non-current interest bearing debt per 31.12. 2018 2017 Non-current interestNon-currentDebt bearing to credit debt interestinstitutions per 31.12. bearing etc. debt per 31.12. 2018 2 20420172018 939 2 1232017 612 Debt to credit institutionsDebtBond toloanetc. credit institutions etc. 2 204 939 2 1232 204 612 9390 2 123 6120 Bond loan BondDebt connectedloan to leasing contracts recognised in the balance sheet 0 1 00150 1 5770 Debt connected to leasingTotalDebt connected non-currentcontracts recognisedto leasing interest contracts in bearing the balance recognised debt sheet 31.12. in theexcl. balance of first sheet year's installment 1 015 2 1205 5771 954015 2 1251 189577 Total non-current Totalinterest non-current bearing debt interest 31.12. bearing excl. of debt first 31.12.year's excl.installment of first year's installment 2 205 954 2 1252 205 189 954 2 125 189 Current interest bearing debt per 31.12. 2018 2017 Current interest bearingCurrentDebt to debt credit interest per institutions 31.12. bearing (overdraft debt per 31.12.facilities) 2018 201720180 20170 Debt to credit institutionsDebtCurrent to(overdraft creditportion institutions offacilities) debt to (overdraftcredit institutions facilities) 0 223 02530 164 9460 Current portion of debtCurrent to credit portion institutions of bonddebt todebt credit institutions 223 253 164223 946 2530 16474 000946 Current portion of bondCurrent debt portion of leasingbond debt debt 0 74 000 0 74 964000 Current portion of leasingTotalCurrent currentdebt portion interest of leasing bearing debt debt 31.12. 0 223964 2530 239 910964 Total current interestTotal bearing current debt interest 31.12. bearing debt 31.12. 223 253 239223 910 253 239 910 Total book value of interest bearing debt 31.12. 2 429 207 2 365 099 Total book value ofTotal interest book bearing value ofdebt interest 31.12. bearing debt 31.12. 2 429 207 2 3652 429 099 207 2 365 099 Fjord Line AS had an unused overdraft facility of MNOK 35 per 31.12.2018 (15 MNOK per 31.12.2017). Fjord Line AS had anPerFjord unused 31.12.2018 Line overdraft AS hadthe ancompanyfacility unused of has overdraftMNOK a positive 35 facility per balance 31.12.2018 of MNOK on the (15overdraft35 perMNOK 31.12.2018 facility per 31.12.2017). account (15 MNOK of 128,1 per MNOK31.12.2017). (23,6 MNOK per 31.12.2017). Per 31.12.2018 the companyThePer 31.12.2018subsidiary has a positiveFjord the company Line balance DK has A/S on a thepositivehas overdraft an unused balance facility overdraft on the account overdraft facility of 128,1of facility 3 MDKK MNOK account (3 (23,6 MDKK of 128,1MNOK per MNOK 31.12.2017)per 31.12.2017). (23,6 MNOK per 31.12.2017). The subsidiary FjordThe Line subsidiary DK A/S Fjordhas an Line unused DK overdraft A/S has anfacility unused of overdraft3 MDKK facility (3 MDKK of 3 per MDKK 31.12.2017) (3 MDKK per 31.12.2017) Interest bearing debt to credit institutions (incl. leasing) - distributed on currency per 31.12.2018 (figures in NOK 1,000) Interest bearing debtInterest to credit bearing institutions debt to (incl.credit leasing) institutions - distributed (incl. leasing) on currency - distributed per 31.12.2018 on currency (figures per 31.12.2018 in NOK 1,000) (figures in NOK 1,000) Currency Nominal currency Exchange rate Book value in NOK 31.12.2017 Currency CurrencyNOK Nominal currency Nominal112 currency 329 Exchange rate Exchange1,000 rateBook value in NOKBook 31.12.2017 value in NOK 31.12.2017112 329 NOK NOKDKK 112 329 415112 202329 1,000 1,0001,332 112 329 112553 329132 DKK DKKEuro 415 202 415177 202291 1,332 1,3329,948 553 132 1 553763 132744 Euro EuroTOTAL 177 291 177 291 9,948 9,948 1 763 744 12 763429 744206 incl. first year's installment TOTAL TOTAL 2 429 206 incl. first2 year's 429 206 installmentincl. first year's installment Interest bearing debt to credit institutions (incl. leasing) - distributed on currency per 31.12.2017 (figures in 1,000) incl. first year’s installment Interest bearing debtInterest to credit bearing institutions debt to (incl.credit leasing) institutions - distributed (incl. leasing) on currency - distributed per 31.12.2017 on currency (figures per 31.12.2017 in 1,000) (figures in 1,000) Currency Nominal currency Exchange rate Book value in NOK 31.12.2017 Currency CurrencyNOK Nominal currency Nominal132 currency 727 Exchange rate Exchange1,000 rateBook value in NOKBook 31.12.2017 value in NOK 31.12.2017132 727 NOK NOKDKK 132 727 256132 710727 1,000 1,0001,322 132 727 132344 727832 DKK DKKEuro 256 710 256192 710762 1,322 1,3229,840 344 832 1 344887 832540 Euro EuroTOTAL 192 762 192 762 9,840 9,840 1 887 540 12 887365 540099 incl. first year's installment TOTAL TOTAL 2 365 099 incl. first2 year's 365 099 installmentincl. first year's installment Borrowing in Euro and DKK incl. first year’s installment Borrowing in EuroBorrowing and DKK inin Euro Euro and and DKK DKK is recognised in the balance sheet at current exchange rate per 31.12.2018 and 31.12.2017, cf. the table above. Borrowing in Euro andBorrowingForeign DKK exchange is in recognised Euro loss and in inDKK 2018 the isbalance related recognised sheetto non-current inat thecurrent balance borrowingexchange sheet at ratein current Euro per 31.12.2018and exchange DKK is rateand 108,7 per31.12.2017, MNOK.31.12.2018 cf. andthe table31.12.2017, above. cf. the table above. Foreign exchange lossForeign in 2018 exchange related lossgainto non-current inin 20182017 relatedrelated borrowing toto non-currentnon-current in Euro and borrowingborrowing DKK is in in108,7 EuroEuro MNOK. andwas DKK 159,3 is MNOK. 108,7 MNOK. Foreign exchange gainForeign in 2017 exchange related gain to non-current in 2017 related borrowing to non-current in Euro wasborrowing 159,3 MNOK. in Euro was 159,3 MNOK. Book value per 31.12. for the Euro-borrowings and DKK is as follows in NOK (figures in TNOK): 2018 2017 Book value per 31.12.BookPrincipal for value the amount: Euro-borrowings per 31.12. for the and Euro-borrowings DKK is as follows and in DKK NOK is (figuresas follows in TNOK):in NOK (figures in TNOK): 2018 2 33120172018 576 2 2272017 288 Principal amount: PrincipalAmortization amount: effect of the borrowings, incl. guarantee commission 2 331 576 2 227331-14 288700576 2 227-15 682288 Amortization effect AmortizationBookof the value borrowings, per effect 31.12. incl.of the guarantee borrowings, commission incl. guarantee commission -14 700 2 316-15-14 682700876 2 211-15 682606 Book value per 31.12.Book value per 31.12. 2 316 876 2 211316 606876 2 211 606 Borrowing in NOK, incl. bond loan Borrowing in NOK,BorrowingNon-current incl. bond in debtloan NOK, in NOK incl. 31.12.2017bond loan comprise of new non-current loan regarding the rebulding of MS Stavangerfjord. Non-current debt in Non-currentTheNOK bond 31.12.2017 loan debt was in comprise settled NOK 31.12.2017in of its new entirety non-current comprise in 2018 of loanand new wasregarding non-current in 2016 the reclassified rebulding loan regarding ofas MScurrent the Stavangerfjord. rebulding debt. of MS Stavangerfjord. The bond loan was settledThe bond in its loan entirety was settled in 2018 in andits entirety was in 2016in 2018 reclassified and was inas 2016current reclassified debt. as current debt. 2018 2017 Total amount of bonds: 2018 201820170 742017 000 Total amount of bonds:OwnTotal holdingamount of bonds: 0 74 0000 74 0000 Own holding AmortizationOwn holding effect of the loan (expenses etc.) *) 0 00 0 Amortization effect BookAmortizationof the value loan (expensesbond effect loan of etc.) the 31.12. loan*) (expenses etc.) *) 0 00 74 0000 Book value bond loanBook 31.12. value bond loan 31.12. 0 74 0000 74 000 Borrowing in DKK Borrowing in DKKBorrowing inin DKK DKK 31.12.2017 consists of a new non-current loan to Danica Pension of TNOK 333.450. Total available loan facility is MDKK 400. Borrowing in DKK TheBorrowing31.12.2017 loan facility in consists DKK is issued 31.12.2017of a new in its non-current entirityconsists inof loan2018 a new to and non-currentDanica the debt Pension in loan DKK of to TNOK toDanica Danica 333.450. Pension Pension ofTotal amountTNOK available 333.450.to MDKK loan Totalfacility 400. available is MDKK loan 400. facility is MDKK 400. The loan facility is issuedThe loan in itsfacility entirity is issuedin 2018 in andits entiritythe debt in in 2018 DKK and to theDanica debt Pension in DKK amount to Danica to MDKKPension 400. amount to MDKK 400. Derecognition of financial obligations Derecognition of financialDerecognitionFjord line obligations group of has financial entered obligationsinto a loan agreement with the australian export finance body EFIC about financing the purchase of a new catamaran Fjord line group hasFjordto entered operate line into thegroup aroute loan has Kristiansand agreemententered into with Hirtshals.a loan the australianagreement Fjord Line export with group the finance australian stands body as export theEFIC formal aboutfinance borrower financing body EFICalso the during aboutpurchase financingthe ofconstruction a new the catamaran purchase period, of but a newas a catamaranresult of the entered to operate the route toagreementKristiansand operate thewith Hirtshals. route EFIC Kristiansand and Fjord the Linecontractor Hirtshals. group ofstands Fjordthe catamaranas Line the formalgroup Austal-group standsborrower as the alsowill formal duringFjord borrower Linethe construction not alsobe required during period, theto pay constructionbut interestas a result or period, instalmentsof the but entered as ina resultthe construction of the entered agreement with EFICagreementperiod and thetogether contractorwith withEFIC aof andadditional the the catamaran contractor agreement Austal-group of thethat catamaran in the will event Fjord Austal-group of Line a default not willbe of required debt,Fjord will Line to EFICpay not interest beseek required full or coverageinstalments to pay interestfrom in theAustal or construction instalments before they in kanthe constructionseek period together withperiodcoverage a additional together of the agreement withdebt afrom additional that Fjord in the Lineagreement event group. of athat Thisdefault in results the of event debt, in Fjord of will a defaultLineEFIC not seekof consideringdebt, full willcoverage EFIC itself from seek as the Austalfull primary coverage before responsible theyfrom kan Austal ofseek the before debt theyduring kan the seek construction period and thus coverage of the debtcoveragederecognise from Fjord of theLine debt group. fromin accordance This Fjord results Line with ingroup. FjordIFRS This 9.Line results not considering in Fjord Line itself not as consideringthe primary itself responsible as the primaryof the debt responsible during the of constructionthe debt during period the constructionand thus period and thus derecognise the debtderecognise in accordance the withdebt IFRSin accordance 9. with IFRS 9. Loan agreement and financial covenants Loan agreement andLoanThe financial Group's agreement covenantsloan agreementsand financial include covenants a demand for booked equity per 31.12.2018 of minimum 500 MNOK, The Group's loan agreementsTheand freeGroup's liquidity include loan aofagreements demand 50 MNOK. for include booked Measurement a demandequity pertakes for 31.12.2018 bookedplace at equity the of end minimum per of 31.12.2018 each 500 quarter. MNOK, of Theminimum group 500as a MNOK,whole is subject to measurement. and free liquidity of42andThere 50 MNOK.free is liquidityalso Measurementa demand of 50 forMNOK. takesa level placeMeasurement of 12 at monththe end takes EBITDA of each place quarter. relatedat the endtoThe non-current of group each asquarter. a debt. whole TheThe is groupsubjectfirst measurement as to a measurement.whole is date subject is 31.12.2018. to measurement. There is also a demandThereThe for company's is a alsolevel a of demandBoard 12 month of for Directors aEBITDA level ofand 12related management month to EBITDAnon-current are continuously related debt. to The non-current monitoringfirst measurement debt. the financialThe date first is debtmeasurement 31.12.2018. covenants, date and is per 31.12.2018. 31.12.18 the company had The company's BoardThesatisfactory of company's Directors positive andBoard management margin. of Directors The are group and continuously managementhad also satisfactory monitoring are continuously positive the financial marginmonitoring debt into covenants, thefirst financial quarter and of debtper 2019. 31.12.18covenants, The themargin and company per is subject31.12.18 had to thefluctuations company relatedhad satisfactory positive satisfactorytomargin. a number The positive of group financial hadmargin. alsocircumstances, Thesatisfactory group hadin positive particular also satisfactorymargin the developmentinto positive first quarter margin of underlying of into2019. first Theoperations, quarter margin of and is2019. subject foreign The to exchange marginfluctuations is ratessubject related for to translation fluctuations of therelated company's to a number of financialtoassets a numbercircumstances, and liabilities. of financial in If particular the circumstances, conditions the development make in particular it necessary, of theunderlying development the Board operations, of of Directors underlying and foreignwill operations, take exchange action and to rates strengthen foreign for translation exchange the group's ratesof the ability for company's translation to meet the of thefinancial company's covenants. assets and liabilities.assets If the and conditions liabilities. make If the it necessary, conditions the make Board it necessary, of Directors the willBoard take of actionDirectors to strengthen will take actionthe group's to strengthen ability to the meet group's the financial ability to covenants. meet the financial covenants. Installment plan non-current interest-bearing debt to credit institutions/mortgage loan, leasing debt and bond loan Installment plan non-currentInstallment interest-bearing plan non-current debt interest-bearing to credit institutions/mortgage debt to credit institutions/mortgage loan, leasing debt andloan, bond leasing loan debt and bond loan Note 13 Liabilities - group

(Figures in table in TNOK)

Non-current interest bearing debt per 31.12. 2018 2017 Debt to credit institutions etc. 2 204 939 2 123 612 Bond loan 0 0 Debt connected to leasing contracts recognised in the balance sheet 1 015 1 577 Total non-current interest bearing debt 31.12. excl. of first year's installment 2 205 954 2 125 189

Current interest bearing debt per 31.12. 2018 2017 Debt to credit institutions (overdraft facilities) 0 0 Current portion of debt to credit institutions 223 253 164 946 Current portion of bond debt 0 74 000 Current portion of leasing debt 0 964 Total current interest bearing debt 31.12. 223 253 239 910

Total book value of interest bearing debt 31.12. 2 429 207 2 365 099

Fjord Line AS had an unused overdraft facility of MNOK 35 per 31.12.2018 (15 MNOK per 31.12.2017). Per 31.12.2018 the company has a positive balance on the overdraft facility account of 128,1 MNOK (23,6 MNOK per 31.12.2017). The subsidiary Fjord Line DK A/S has an unused overdraft facility of 3 MDKK (3 MDKK per 31.12.2017)

Interest bearing debt to credit institutions (incl. leasing) - distributed on currency per 31.12.2018 (figures in NOK 1,000)

Currency Nominal currency Exchange rate Book value in NOK 31.12.2017 NOK 112 329 1,000 112 329 DKK 415 202 1,332 553 132 Euro 177 291 9,948 1 763 744 TOTAL 2 429 206 incl. first year's installment

Interest bearing debt to credit institutions (incl. leasing) - distributed on currency per 31.12.2017 (figures in 1,000)

Currency Nominal currency Exchange rate Book value in NOK 31.12.2017 NOK 132 727 1,000 132 727 DKK 256 710 1,322 344 832 Euro 192 762 9,840 1 887 540 TOTAL 2 365 099 incl. first year's installment

Borrowing in Euro and DKK Borrowing in Euro and DKK is recognised in the balance sheet at current exchange rate per 31.12.2018 and 31.12.2017, cf. the table above. Foreign exchange loss in 2018 related to non-current borrowing in Euro and DKK is 108,7 MNOK. Foreign exchange gain in 2017 related to non-current borrowing in Euro was 159,3 MNOK.

Book value per 31.12. for the Euro-borrowings and DKK is as follows in NOK (figures in TNOK): 2018 2017 Principal amount: 2 331 576 2 227 288 Amortization effect of the borrowings, incl. guarantee commission -14 700 -15 682 Book value per 31.12. 2 316 876 2 211 606

Borrowing in NOK, incl. bond loan Non-current debt in NOK 31.12.2017 comprise of new non-current loan regarding the rebulding of MS Stavangerfjord. The bond loan was settled in its entirety in 2018 and was in 2016 reclassified as current debt.

2018 2017 Total amount of bonds: Fjord0 Line Annual74 000 Report 2018 ⁄⁄ Notes Own holding 0 0 Amortization effect of the loan (expenses etc.) *) 0 0 Book value bond loan 31.12. 0 74 000

Borrowing in DKK Borrowing in DKK 31.12.2017 consists of a new non-current loan to Danica Pension of TNOK 333.450. Total available loan facility is MDKK 400. The loan facility is issued in its entirity in 2018 and the debt in DKK to Danica Pension amount to MDKK 400.

Derecognition of financial obligations Fjord line group 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 group 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 group. This results in Fjord Line not considering itself as the primary responsible of the debt during the construction period and thus derecognise the debt in accordance with IFRS 9.

Loan agreement and financial covenants The Group's loan agreements include a demand for booked equity per 31.12.2018 of minimum 500 MNOK, and free liquidity of 50 MNOK. Measurement takes place at the end of each quarter. The group as a whole is subject to measurement. There is also a demand for a level of 12 month EBITDA related to non-current debt. The first measurement date is 31.12.2018. The company's Board of Directors and management are continuously monitoring the financial debt covenants, and per 31.12.18 the company had satisfactory positive margin. The group had also satisfactory positive margin into first quarter of 2019. The margin is subject to fluctuations related to a number of financial circumstances, in particular the development of underlying operations, and foreign exchange rates for translation of the company's assets and liabilities. If the conditions make it necessary, the Board of Directors will take action to strengthen the group's ability to meet the financial covenants.

Installment plan non-current interest-bearing debt to credit institutions/mortgage loan, leasing debt and bond loan

(Figures in TNOK) (Figures in TNOK) 2019 2020 2021 20192022 20232020 2021 2022 2023 Annual installments* Annual installments* -221 544 -244 242 -266 941 -221-337 544511 -228-244 797 242 -266 941 -337 511 -228 797 Remaining loan per 31.12. Remaining loan per 31.12. 1 988 499 1 744 257 1 477 316 11 988139 499804 9111 744 007 257 1 477 316 1 139 804 911 007

Book value of mortgaged assets 31.12.2018: Book value of mortgaged assets 31.12.2018: Ships 3 078 012 Ships 3 078 012 Prepaid ships 183 636 Prepaid ships 183 636 Receivables 102 587 Receivables 102 587 Inventories 22 833 Inventories 22 833 Total 3 387 068 Total 3 387 068

Note 14 Operating income ands other gains/losses - groupNote 14 Operating income ands other gains/losses - group

(Figures in TNOK) (Figures in TNOK) 2018 2017 2018 2017 Sales revenues Sales revenues Ticket income Ticket income 522 949 471 878 522 949 471 878 Sales income etc. onboard Sales income etc. onboard 742 400 652 281 742 400 652 281 Cargo income Cargo income 218 990 190 037 218 990 190 037 Other Other 21 531 14 328 21 531 14 328 Total sales revenues Total sales revenues 1 505 870 1 328 524 A 1 505 870 1 328 524 A

Other operating income Other operating income 25 427 23 508 B 25 427 23 508 B

Other gains/losses (net) Other gains/losses (net)

! B

Gain by transfer of subsidiary to associated company Gain by transfer of subsidiary to associated company 0 0 T 0 0 E T N Loss from exit subsidiary Loss from exit subsidiary 0 T 0E 0 0 E M R N Unrealized gain derivatives (value change recognised in Unrealizedincome statement), gain derivatives cf. note (value20 change recognised in income-1 975 statement), F cf. note6 995O 20 -1 975 6 995 OR IR Total other gains/losses (net) Total other gains/losses (net) -1 975 THE ENV6 995 C -1 975 6 995 C

Total operating income and other gains/losses (net) Total operating income and other gains/losses (net) 1 529 322 1 359 027 A+B+C 1 529 322 1 359 027 A+B+C

Note 15 Wage costs, number of employees, remunerations,Note 15 loans Wage to employeescosts, number etc. of- group employees, remunerations, loans to employees etc. - group (Figures in table below in TNOK) (Figures in table«In below 2020 in TNOK) we launch a high-speed catamaran that will service the route Wage costs Wage costs between Kristiansand, Norway and Hirtshals,2018 Denmark.2017 2018 2017 Wages, incl. feeding crew, social costs etc. Wages, incl. feeding crew, social costs etc. 306 858 298 069 306 858 298 069 Payroll tax and other public duties related to wages Payroll tax and otherThe public dutiesvessel related emits to wages 32 percent less CO2 compared24 319 to present19 vessel461 24 319 19 461 Pension costs etc. Pension costs etc. 15 629 15 417 15 629 15 417 Other remunerations Other remunerations measured per passenger kilometre. That’s23 244 a lot!»19 057 23 244 19 057 Total Total 370 051 352 004 370 051 352 004

Average number of man-labour years in the group duringAverage the accounting number yearof man-labour 2018 has been years 677 in the(716 group in 2017) during the accounting year 2018 has been 677 (716 in 2017)

Remunerations for CEO and the Board of Directors Remunerations(figures in TNOK) for CEO and the Board of Directors (figures in TNOK) 2018 2017 2018 2017 Wages CEO Wages CEO 2 050 2 050 2 050 2 050 Bonus CEO Bonus CEO 513 129 513 129 Other remuneration CEO Other remuneration CEO 239 12 239 12 Board of Directors' fee Board of Directors' fee 91 450 91 450 The figures above do not include the option program. SeeThe below figures for abovefurther do information. not include the option program. See below for further information. 43 No loan or gurarantee has been provided for CEO or anyNo of loanthe members or gurarantee of the has Board been of provided Directors. for CEO or any of the members of the Board of Directors. The CEO is included in the company's pension agreement,The cf CEOmentioned is included below. in the company's pension agreement, cf mentioned below. According to the agreement, 20% of gross salary is allocatedAccording annually to theand agreement, the liability 20% amounts of gross to per salary 31.12.2018 is allocated TNOK annually 1.417 and (TNOK the liability 1.007 peramounts 31.12.2017) to per 31.12.2018 TNOK 1.417 (TNOK 1.007 per 31.12.2017)

Pensions Pensions The company has taken on a pension savings agreement onThe behalf company of the has former taken andon a the pension present savings CEO andagreement another on two behalf individuals. of the former and the present CEO and another two individuals. The market value of the contributions/assets was var TNOKThe 4.047market per value 31.12.2018 of the contributions/assets (TNOK 4.127 per was31.12.2017). var TNOK 4.047 per 31.12.2018 (TNOK 4.127 per 31.12.2017). Gross liability per 31.12.2018 is calculated to TNOK 6 587Gross related liability to these per 31.12.2018four persons is (TNOKcalculated 6 149 to TNOK per 31.12.2017). 6 587 related to these four persons (TNOK 6 149 per 31.12.2017). Net liability is thus TNOK 3.486 per 31.12.2018 (TNOKNet 3.048 liability per 31.12.2017), is thus TNOK and 3.486 is classified per 31.12.2018 as pension (TNOK liability 3.048 in theper balance 31.12.2017), sheet. and is classified as pension liability in the balance sheet.

In addition the company has established a defined contributionIn addition pension the schemecompany for has its establishedemployees. a defined contribution pension scheme for its employees. The company pays fixed contributions to an insurance company.The company The company pays fixed has contributions no further obligations to an insurance to pay company. once the contributionsThe company havehas no been further paid. obligations to pay once the contributions have been paid. The contribution constitutes from 2% to 4% of the employees'The contribution salary. constitutes from 2% to 4% of the employees' salary.

Auditor Auditor Auditor's fee relates to the following services (exclusive Auditor'sof vat): fee relates to the following services (exclusive of vat): (Figures in TNOK) (Figures in TNOK) 2018 2017 2018 2017 Audit services - group auditor Audit services - group auditor 1 388 1 582 1 388 1 582 Audit services other auditors Audit services other auditors 0 0 0 0 Accounting and tax related consultancy other auditors Accounting and tax related consultancy other auditors 0 0 0 0 Certification services/agreed-upon control procedures groupCertification auditor services/agreed-upon control procedures group auditor 11 26 11 26 Certification services/agreed-upon control procedures otherCertification auditors services/agreed-upon control procedures other auditors 0 0 0 0 Total auditor's fee Total auditor's fee 2 024 2 323 2 024 2 323 (Figures in TNOK) 2019 2020 2021 2022 2023 Annual installments* -221 544 -244 242 -266 941 -337 511 -228 797 Remaining loan per 31.12. 1 988 499 1 744 257 1 477 316 1 139 804 911 007

Book Notes value ⁄⁄ ofFjord mortgaged Line Annual assets Report 31.12.2018: 2018 Ships 3 078 012 (Figures(Figures in inTNOK) TNOK)(Figures in TNOK) Prepaid ships 183 636 20192019 202020192020 202120212020 202220212022 202320232022 2023 AnnualAnnual installments* installments*Annual installments* -221-221 544 544 -244-221-244 242544 242 -266-266-244 941 941 242 -337-266-337 511 941 511 -228-228-337 797 797 511 -228 797 Receivables 102 587 RemainingRemaining loan loan per perRemaining 31.12. 31.12. loan per 31.12. 1 9881 988 499 499 11 7449881 744 257499 257 1 4771 1477 744316 316 257 11 139 1477 139 804 316 804 9111911 139007 007 804 911 007 Inventories 22 833 Total 3 387 068 BookBook value value of ofmortgaged mortgagedBookNote valueassets assets 14 of 31.12.2018: ⁄⁄ mortgaged31.12.2018: Operating assets income 31.12.2018: ands other gains/losses – Group ShipsShips ShipsNote 14 Operating3 0783 078 012income 012 ands 3other 078 012gains/losses - group PrepaidPrepaid ships ships Prepaid ships 183183 636 636 183 636 ReceivablesReceivables Receivables(Figures in TNOK)102102 587 587 102 587 InventoriesInventories Inventories 2222 833 833 22 833 2018 2017 TotalTotal TotalSales revenues3 3873 387 068 068 3 387 068 Ticket income 522 949 471 878 NoteNote 14 14 Operating Operating incomeNoteSales income 14income ands Operating ands other etc. other onboard gains/lossesincome gains/losses ands - group other- group gains/losses - group 742 400 652 281 Cargo income 218 990 190 037 (Figures(Figures in inTNOK) TNOK)(FiguresOther in TNOK) 21 531 14 328 Total sales revenues 20182018 201720181 2017505 870 20171 328 524 A SalesSales revenues revenues Sales revenues TicketTicket income income TicketOther incomeoperating income 522522 949 949 471522471 878949 87825 427 471 87823 508 B SalesSales income income etc. etc. onboard onboardSales income etc. onboard 742742 400 400 652742652 281400 281 652 281 CargoCargo income income CargoOther incomegains/losses (net) 218218 990 990 190218190 037990 037 190 037 OtherOther OtherGain by transfer of subsidiary to associated company 2121 531 531 142114 328531 328 0 14 328 0 TotalTotal sales sales revenues revenuesTotalLoss from sales exitrevenues subsidiary 1 5051 505 870 870 11 3285051 328 524870 524 0 A A1 328 524 0 A Unrealized gain derivatives (value change recognised in income statement), cf. note 20 -1 975 6 995 OtherOther operating operating income incomeOther operating income 2525 427 427 232523 508427 508 B B 23 508 B Total other gains/losses (net) -1 975 6 995 C OtherOther gains/losses gains/losses (net)Other (net) gains/losses (net) GainGain by by transfer transfer of ofsubsidiaryGainTotal subsidiary by operating transfer to toassociated associated of income subsidiary company company and to other associated gains/losses company (net) 0 0 1 52900 0 322 1 3590 027 A+B+C LossLoss from from exit exit subsidiary subsidiaryLoss from exit subsidiary 0 0 00 0 0 UnrealizedUnrealized gain gain derivatives derivativesUnrealizedNote 15 (value Wage(value gain change costs,derivativeschange recognised number recognised (value ofin changeinemployees,income income recognised statement), statement), remunerations, in cf. income cf. note note 20 statement), loans20 to employeescf. note 20 etc. - group-1 -1975 975 -16 9959756 995 6 995 TotalTotal other other gains/losses gains/lossesTotal (net) other(net) gains/losses (net) -1 -1975 975 -16 9959756 995 C C 6 995 C (Figures in table below in TNOK) TotalTotal operating operating income incomeTotal and operating and other other gains/losses income gains/losses and (net) other(net) gains/losses (net) 1 5291 529 322 322 11 3595291 359 027322 027 A+B+CA+B+C1 359 027 A+B+C WageNote costs 15 ⁄⁄ Wage costs, number of employees, remunerations, loans to employees etc. – Group 2018 2017 NoteNote 15 15 Wage Wage costs, costs,NoteWages, number number 15 incl.Wage of of employees,feeding employees,costs, numbercrew, remunerations, remunerations, social of employees, costs etc.loans loans remunerations, to toemployees employees etc.loans etc. - groupto- group employees etc. - group 306 858 298 069 Payroll tax and other public duties related to wages 24 319 19 461 (Figures(Figures in intable table below below(FiguresPension in inTNOK) TNOK) costsin table etc. below in TNOK) 15 629 15 417 Other remunerations 23 244 19 057 WageWage costs costs WageTotal costs 20182018 201720182017370 051 2017 352 004 Wages,Wages, incl. incl. feeding feeding Wages,crew, crew, social incl. social costsfeeding costs etc. crew,etc. social costs etc. 306306 858 858 298306298 069 858 069 298 069 PayrollPayroll tax tax and and other otherPayrollAverage public public dutiestax number duties and related other related of man-labourpublicto towages wages duties years related in tothe wages group during the accounting year 2018 has been 677 (716 in 2017) 2424 319 319 192419 461 319 461 19 461 PensionPension costs costs etc. etc. Pension costs etc. 1515 629 629 151515 417 629 417 15 417 OtherOther remunerations remunerationsOther remunerations 2323 244 244 192319 057 244 057 19 057 Remunerations for CEO and the Board of Directors (figures in TNOK) 2018 2017 TotalTotal Total 370370 051 051 352370352 004 051 004 352 004 Wages CEO 2 050 2 050 Bonus CEO 513 129 AverageAverage number number of ofman-labourAverage man-labour number years years ofin intheman-labour the group group during yearsduring thein the theaccounting accounting group during year year 2018the 2018 accounting has has been been 677 year 677 (716 2018 (716 in hasin2017) 2017) been 677 (716 in 2017) Other remuneration CEO 239 12 RemunerationsRemunerations for for RemunerationsBoardCEO CEO and of and Directors' the the Board forBoard feeCEO of ofDirectors andDirectors the (figuresBoard (figures of in Directors inTNOK) TNOK) (figures in TNOK) 20182018 201720182017 91 2017 450 WagesWages CEO CEO WagesThe figures CEO above do not include the option program. See below for further information. 2 0502 050 22 050 2050 050 2 050 BonusBonus CEO CEO BonusNo loan CEO or gurarantee has been provided for CEO or any of the members of the Board of Directors. 513513 129513129 129 OtherOther remuneration remuneration OtherTheCEO CEO CEO remuneration is included CEO in the company's pension agreement, cf mentioned below. 239239 2391212 12 BoardBoard of ofDirectors' Directors' feeBoardAccording fee of Directors' to the agreement, fee 20% of gross salary is allocated annually and the liability amounts to per 31.12.2018 TNOK 1.417 (TNOK9191 1.007 per 31.12.2017)45091450 450 TheThe figures figures above above do Thedo not not figuresinclude include above the the option dooption not program. includeprogram. Seethe See optionbelow below program.for for further further See information. information.below for further information. NoNo loan loan or orgurarantee guraranteeNoPensions has loanhas been beenor providedgurarantee provided for hasfor CEO beenCEO or provided orany any of ofthe for the members CEO members or ofany ofthe ofthe Board the Board members of ofDirectors. Directors. of the Board of Directors. TheThe CEO CEO is includedis includedThe in inthe CEOcompany the company's company'sis included has pensiontaken pension in the on agreement, company's aagreement, pension cf pensionsavings cfmentioned mentioned agreement,agreement below. below. oncf mentionedbehalf of thebelow. former and the present CEO and another two individuals. AccordingAccording to tothe the agreement, agreement,AccordingThe market 20% 20%to value ofthe ofgross agreement, grossof thesalary salary contributions/assets is20% allocatedis allocated of gross annually annuallysalary was isand varallocatedand the TNOK the liability liability annually 4.047 amounts amounts perand 31.12.2018 theto to perliability per 31.12.2018 31.12.2018 (TNOKamounts TNOK 4.127toTNOK per 1.417 per31.12.2018 1.417 31.12.2017). (TNOK (TNOK TNOK 1.007 1.007 1.417per per 31.12.2017) (TNOK31.12.2017) 1.007 per 31.12.2017) Gross liability per 31.12.2018 is calculated to TNOK 6 587 related to these four persons (TNOK 6 149 per 31.12.2017). PensionsPensions PensionsNet liability is thus TNOK 3.486 per 31.12.2018 (TNOK 3.048 per 31.12.2017), and is classified as pension liability in the balance sheet. TheThe company company has has taken takenThe on company on a pensiona pension has savings taken savings onagreement agreementa pension on savingson behalf behalf agreementof ofthe the former former on behalfand and the theof present the present former CEO CEO andand and theanother another present two twoCEO individuals. individuals. and another two individuals. TheThe market market value value of ofTheInthe theaddition contributions/assetsmarket contributions/assets valuethe company of the was contributions/assets washas var establishedvar TNOK TNOK 4.047 4.047a definedwas per pervar 31.12.2018 31.12.2018contributionTNOK 4.047 (TNOK (TNOK pensionper 4.12731.12.2018 4.127 scheme per per 31.12.2017). (TNOK31.12.2017).for its employees. 4.127 per 31.12.2017). GrossGross liability liability per per 31.12.2018 GrossThe31.12.2018 company liability is calculatedis calculatedperpays 31.12.2018 fixed to toTNOK contributions TNOK is calculated6 5876 587 related to related toan TNOKtoinsurance tothese these 6 four587 company.four personsrelated persons to(TNOKThe these(TNOK company four 6 1496 persons149 perhas per 31.12.2017).no (TNOK31.12.2017). further 6 obligations149 per 31.12.2017). to pay once the contributions have been paid. NetNet liability liability is thusis thus TNOKNetThe TNOK liabilitycontribution 3.486 3.486 isper thusper 31.12.2018 constitutes 31.12.2018TNOK 3.486 (TNOK from (TNOK per 2% 3.04831.12.2018 3.048to 4%per per of31.12.2017), (TNOK31.12.2017),the employees' 3.048 and and per is salary. classifiedis31.12.2017), classified as aspension andpension is classifiedliability liability in as inthe pension the balance balance liability sheet. sheet. in the balance sheet. In Inaddition addition the the company companyIn addition has has established established the company a defineda defined has establishedcontribution contribution a definedpension pension contributionscheme scheme for for its pension itsemployees. employees. scheme for its employees. TheThe company company pays pays fixedTheAuditor fixed contributionscompany contributions pays to fixed toan aninsurance contributions insurance company. company. to an Theinsurance The company company company. has has no no Thefurther further company obligations obligations has no to further topay pay once obligationsonce the the contributions contributions to pay once have have the been contributionsbeen paid. paid. have been paid. TheThe contribution contribution constitutes constitutesThe contribution from from 2% 2% constitutesto to4% 4% of ofthe from the employees' employees' 2% to 4% salary. salary.of the employees' salary. Auditor's fee relates to the following services (exclusive of vat): (Figures in TNOK) AuditorAuditor Auditor 2018 2017 Auditor'sAuditor's fee fee relates relates toAuditor'sAudit tothe the followingservices following fee relates - servicesgroup services to the auditor (exclusive following(exclusive of services ofvat): vat): (exclusive of vat): 1 388 1 582 (Figures(Figures in inTNOK) TNOK)(FiguresAudit services in TNOK) other auditors 0 0 Accounting and tax related consultancy other auditors 20182018 201720182017 0 2017 0 AuditAudit services services - group - groupAuditCertification auditor auditor services services/agreed-upon - group auditor control procedures group auditor 1 3881 388 11 582 1388 582 11 1 582 26 AuditAudit services services other other auditorsAuditCertification auditors services services/agreed-upon other auditors control procedures other auditors 0 0 000 0 0 0 AccountingAccounting and and tax tax relatedAccountingTotal related auditor'sconsultancy consultancy and tax fee other related other auditors auditorsconsultancy other auditors 0 0 000 2 024 0 2 323 CertificationCertification services/agreed-upon services/agreed-uponCertification services/agreed-upon control control procedures procedures group control group auditor auditorprocedures group auditor 1111 261126 26 CertificationCertification services/agreed-upon services/agreed-uponCertification services/agreed-upon control control procedures procedures other control other auditors auditors procedures other auditors 0 0 000 0 TotalTotal auditor's auditor's fee feeTotal auditor's fee 2 0242 024 22 323 2024 323 2 323

44 Fjord Line Annual Report 2018 ⁄⁄ Notes

Note Note16 Other 16 current ⁄⁄ Other liabilities current - group liabilities – Group

(Figures in TNOK)

Other current liabilities per 31.12: 2018 2017 Incurred costs regarding wages/pay etc. (Denmark) 43 645 41 027 PrepaymentNote 16 Other from current customers liabilities - group 63 112 59 804 Incurred interests and guarantee commission 17 854 22 315 Provision(Figures in for TNOK) other incurred costs 26 764 24 191 Other current liabilities 31.12. 151 373 147 337 Other current liabilities per 31.12: 2018 2017 Incurred costs regarding wages/pay etc. (Denmark) 43 645 41 027 NotePrepayment 17 Refund from of customers advance payment - group 63 112 59 804 Incurred interests and guarantee commission 17 854 22 315 Provision for other incurred costs 26 764 24 191 OnOther 31 Augustcurrent 2011 liabilities Fjord 31.12.Line AS entered into a contract where the operation of the tax free activity 151 373 147 337 onboard the two ships "MS Bergensfjord" and "MS Stavangerfjord" was outsourced to the contracting party. The twoNote ships 17 were ⁄⁄ Refunddelivered in of July advance 2013 and in payment January 2014. – Group Note 17 Refund of advance payment - group According to the original contract Fjord Line AS should receive a commission based on turnover among other things after the operation of the tax-free activity had started. The contract period was 5 years from delivery of the last ship, that is till January 2019. InOn addition 31 August Fjord 2011 Line Fjord AS receivedLine AS a entered consideration into a contractof MNOK where 50 accordingthe operation to the of contract the tax freeon 9 activity January 2012. onboard the two ships "MS Bergensfjord" and "MS Stavangerfjord" was outsourced to the contracting party. The incometwo ships related were todelivered the mentioned in July payment2013 and of in MNOK January 50 2014. was basically recognised by Fjord Line AS as earned, i.e. over the maturity of the contract. Thus a liability/unearned income of MNOK 50 was recognised in the balance sheet per 31.12.2012. InAccording 2015 Fjord to theLine original group contractrecognised Fjord as income Line AS MNOK should 10 receive related a to commission this payment. based It was on turnoverclassified among as sales other revenues things in afterthe income the operation statement of forthe 2015.tax-free activity had started. BookThe contract value 31.12.2015 period was of 5 unearned years from income delivery was ofMNOK the last 28.3 ship, - partly that is classified till January as current 2019. debt and partly as non-current debt. In addition Fjord Line AS received a consideration of MNOK 50 according to the contract on 9 January 2012. According to the contract the pricipal amount should be repaid pro rata in case the contract was terminated before expiry of the five year period FjordThe income Line has related a strategy to the involving mentioned to paymentinsource ofthe MNOK core activity. 50 was Onbasically this background recognised an by agreement Fjord Line was AS negotiated as earned, in i.e. March over 2016 the maturityimplying of that the Fjord contract. Line Note 15 ⁄⁄ Wage costs, number of employees, remunerations, loans to employees etc. – Group takesThus overa liability/unearned the tax-free activity income on ofthese MNOK ships 50with was effect recognised from 31 in August the balance 2016. sheet per 31.12.2012. RemainingIn 2015 Fjord unearned Line group income recognised per 31 August as income 2016 MNOKhas been 10 agreed related to tobe thisrepaid payment. through It fourwas installmentsclassified as withinsales revenues eighteen inmonths. the income statement for 2015. TheBook installments value 31.12.2015 that are of to unearnedbe paid after income 31.12.2017 was MNOK are classified 28.3 - partly as current classified liabilities as current per 31.12.2017 debt and partly (TNOK as non-current6.295) debt.

According to the contract the pricipal amount should be repaid pro rata in case the contract was terminated before expiry of the five year period ChangeFjord Line in carrying has a strategy value ofinvolving the items to "refund insource advance the core payment" activity. for On 2017 this (currentbackground and annon-current) agreement appears was negotiated as follow: in March 2016 implying that Fjord Line Carryingtakes over value the tax-free 31.12.2017 activity of the on items these "Refundships with advance effect payment":from 31 August 2016. 18 884 TNOK (non-current and current item) RefundRemaining and unearnedreversal allocation income per in 312018 August 2016 has been agreed to be repaid through four installments within eighteen months. -18 884 TNOK CarryingThe installments value 31.12.2018that are to beof paidthe items after 31.12.2017"Refund advance are classified payment": as current liabilities per 31.12.2017 (TNOK 6.295) 0 TNOK (current item)

Change in carrying value of the items "refund advance payment" for 2017 (current and non-current) appears as follow: Carrying value 31.12.2017 of the items "Refund advance payment": 18 884 TNOK (non-current and current item) Refund and reversal allocation in 2018 -18 884 TNOK Carrying value 31.12.2018 of the items "Refund advance payment": 0 TNOK (current item)

45 Notes ⁄⁄ Fjord Line Annual Report 2018

NoteNote 18 NOx-grants 18 ⁄⁄ NOx-grants - group – Group

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. 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 from time of delivery.

Fjord Line AS received 0 MNOK in NOx-grants in 2018 (0 MNOK in 2017).

In the 2018-accounts MNOK 5,4 of the grants have been recorded (5,4 MNOK in 2017). The amount is classified as reduction of depreciation in the income statement. 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.

Below is a list of accounting values (figures in TNOK)

Total received grants 01.01.2014 38 200 A Received grants 2014 112 945 B Total received grants 31.12.2014 151 145 C (A+B) Grants recognised through profit and loss 2013 -857 D Grants recognised through profit and loss 2014 -4 318 E Grants received, not recognised through profit and loss 31.12.2014 145 970 F (C + D + E) Grants received 2015 3 914 G Total received grants 31.12.2015 155 059 H (C + G) Grants recognised through profit and loss 2015 -5 278 I Accumulated grants recognised through profit and loss 31.12.2015 -10 453 J (D + E + I) Grants received, not recognised through profit and loss 31.12.2015 144 606 K (H + J) Grants received 2016 11 750 L Total received grant 31.12.2016 166 809 M (H + L) Grants recognised through profit and loss 2016 -6 128 N Accumulated grants recognised through profit and loss 31.12.2016 -16 581 O (J + N) Grants received, not recognised through profit and loss 31.12.2016 150 228 P (M + O) Grants received 2017 0 Q Total received grant 31.12.2017 166 809 R (M + Q) Grants recognised through profit and loss 2017 -5 469 T Accumulated grants recognised through profit and loss 31.12.2017 -22 050 U (O + T) Grants received, not recognised through profit and loss 31.12.2017 144 759 V (R + U) Grants received 2018 0 W Total received grant 31.12.2018 166 809 X (R + W) Grants recognised through profit and loss 2018 -5 469 Y Accumulated grants recognised through profit and loss 31.12.2018 -27 519 Z (U + Y) Grants received, not recognised through profit and loss 31.12.2018 139 290 V (R + U)

Note 20 Derivatives - group

Fjord Line has the following financial contracts connected to fuel: i) MGO (Marine Gas Oil), delivery in 2019 - 2021 ii) LNG (the ships Bergensfjord and Stavangerfjord), delivery in 2019 - 2021

The derivatives are recognised in the balance sheet at fair value at the time of entering into the contracts and then continuously at fair value. Derivatives entered prior to 2018 are not included as part of the recognised hedge and the value change is recognised through gains/losses as "other gains/losses (net").

Items not included in the company's recognised hedge have the following values at the balance sheet date: Derivatives related to MGO has delivery in the period 2019. Fair value of these derivatives per 31.12.2018 is TNOK -148 (TNOK 9.600 per 31.12.2017). The contracts are classified as current liabilities.

The derivatives related to LNG has delivery in the period 2019-2021. Fair value of these derivatives per 31.12.2018 is TNOK 16.073 (TNOK 8.300 per 31.12.2017). From this amount TNOK 12.200 delivers in 2019 and are classified as current assets, and TNOK 3.873 are classified as fixed assets.

The contract entered during 2018 are entirely considered as hedges and are recognised as follows.

The derivatives related to MGO has delivery in the period 2019-2021. Fair value of these derivatives per 31.12.2018 is TNOK 23.824. From this amount TNOK 4.169 delivers in 2019 and are classified as current assets, and TNOK 19.656 are classified as fixed assets.

The derivatives related to LNG has delivery in the period 2019-2021. Fair value of these derivatives per 31.12.2018 is TNOK 5.642. From this amount TNOK 382 delivers in 2019 and are classified as current assets, and TNOK 5.260 are classified as fixed assets.

The group has also entered into a interest rate hedge agreement related to its external financing. As described in the accounting principle note, the group follows hegde accounting linked to these contracts. At the balance sheet date, the net value of future contracts amounts to TNOK -43.870 and is classified as long-term debt.

46 Note 18 NOx-grants - group

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. 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 from time of delivery.

Fjord Line AS received 0 MNOK in NOx-grants in 2018 (0 MNOK in 2017).

In the 2018-accounts MNOK 5,4 of the grants have been recorded (5,4 MNOK in 2017). The amount is classified as reduction of depreciation in the income statement. 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.

Below is a list of accounting values (figures in TNOK)

Total received grants 01.01.2014 38 200 A Received grants 2014 112 945 B Total received grants 31.12.2014 151 145 C (A+B) Grants recognised through profit and loss 2013 -857 D Grants recognised through profit and loss 2014 -4 318 E Grants received, not recognised through profit and loss 31.12.2014 145 970 F (C + D + E) Grants received 2015 3 914 G Total received grants 31.12.2015 155 059 H (C + G) Grants recognised through profit and loss 2015 -5 278 I Accumulated grants recognised through profit and loss 31.12.2015 -10 453 J (D + E + I) Grants received, not recognised through profit and loss 31.12.2015 144 606 K (H + J) Grants received 2016 11 750 L Total received grant 31.12.2016 166 809 M (H + L) Grants recognised through profit and loss 2016 -6 128 N Accumulated grants recognised through profit and loss 31.12.2016 -16 581 O (J + N) Grants received, not recognised through profit and loss 31.12.2016 150 228 P (M + O) Grants received 2017 0 Q Total received grant 31.12.2017 166 809 R (M + Q) Grants recognised through profit and loss 2017 -5 469 T Accumulated grants recognised through profit and loss 31.12.2017 -22 050 U (O + T) Fjord Line Annual Report 2018 ⁄⁄ Notes Grants received, not recognised through profit and loss 31.12.2017 144 759 V (R + U) Grants received 2018 0 W Total received grant 31.12.2018 166 809 X (R + W) Grants recognised through profit and loss 2018 -5 469 Y Accumulated grants recognised through profit and loss 31.12.2018 -27 519 Z (U + Y) Grants received, not recognised through profit and loss 31.12.2018 139 290 V (R + U) Note 19 ⁄⁄ Derivatives – Group

Note 20 Derivatives - group

Fjord Line has the following financial contracts connected to fuel: i) MGO (Marine Gas Oil), delivery in 2019 - 2021 ii) LNG (the ships Bergensfjord and Stavangerfjord), delivery in 2019 - 2021

The derivatives are recognised in the balance sheet at fair value at the time of entering into the contracts and then continuously at fair value. Derivatives entered prior to 2018 are not included as part of the recognised hedge and the value change is recognised through gains/losses as "other gains/losses (net").

Items not included in the company's recognised hedge have the following values at the balance sheet date: Derivatives related to MGO has delivery in the period 2019. Fair value of these derivatives per 31.12.2018 is TNOK -148 (TNOK 9.600 per 31.12.2017). The contracts are classified as current liabilities.

The derivatives related to LNG has delivery in the period 2019-2021. Fair value of these derivatives per 31.12.2018 is TNOK 16.073 (TNOK 8.300 per 31.12.2017). From this amount TNOK 12.200 delivers in 2019 and are classified as current assets, and TNOK 3.873 are classified as fixed assets.

The contract entered during 2018 are entirely considered as hedges and are recognised as follows.

The derivatives related to MGO has delivery in the period 2019-2021. Fair value of these derivatives per 31.12.2018 is TNOK 23.824. From this amount TNOK 4.169 delivers in 2019 and are classified as current assets, and TNOK 19.656 are classified as fixed assets.

The derivatives related to LNG has delivery in the period 2019-2021. Fair value of these derivatives per 31.12.2018 is TNOK 5.642. From this amount TNOK 382 delivers in 2019 and are classified as current assets, and TNOK 5.260 are classified as fixed assets.

The group has also entered into a interest rate hedge agreement related to its external financing. As described in the accounting principle note, the group follows hegde accounting linked to these contracts. At the balance sheet date, the net value of future contracts amounts to TNOK -43.870 and is classified as long-term debt.

47 Notes ⁄⁄ Fjord Line Annual Report 2018

48 Fjord Line Annual Report 2018 ⁄⁄ Annual Accounts

INCOME STATEMENT – FJORD LINE AS (PARENT COMPANY) (1,000 NOK)

Fjord Line AS - Income statement

(1,000 NOK) Parent company Parent company 2018 2017 NoteNote Parent cNGAAPompany Parent cNGAAPompany 2018 2017 NGAAP NGAAP Operating income: Sales revenues 14 1 505 870 1 328 524 Other operating income 14, 19 30 657 22 383 Total operating income 14 1 536 527 1 350 907

Operating expenses: Cost of goods 357 284 276 066 Wage costs 17 100 729 91 951 Depreciation of property, plant and equipment and intangible assets 1, 2 9 466 5 306 Other operating expenses 3, 6, 7, 17 975 917 929 037 Total operating expenses 1 443 396 1 302 360

Operating result 93 131 48 547

Financial items: Interest income 11, 18 100 810 83 586 Income from investment in subsidiaries 4, 11 0 38 483 Other financial income 9 114 239 138 169 Intergroup guarantee expense 18 -24 471 -22 592 Interest expenses 16, 18 -102 724 -88 071 Other financial expenses 9, 16 -127 222 -174 197 Net financial items -39 368 -24 622

Ordinary result before tax 53 763 23 925

Tax expense on ordinary result 15 -53 000 -75 000

Ordinary result after tax 106 763 98 925

Result for the year 106 763 98 925

Allocation of the result Transferred to other equity/uncovered loss 106 763 98 925 Total 106 763 98 925

49 Annual Accounts ⁄⁄ Fjord Line Annual Report 2018

Balanse Fjord Line AS (morselskap), BALANCE SHEET– FJORD LINE AS (PARENT COMPANY) per 31. desember 2018 – alle tall i TNOK perFj o31r Desemberd Line A2018S -– (1,000Bala NOK)nce sheet per 31 December (1,000 NOK) Parent company Parent company AssetsASSETS Note Parent co31.12.2018mpany Parent 31.12.2017company Note 31.12.20NGAAP18 31.12NGAAP.2017 NGAAP NGAAP Fixed assets Intangible assets WEB-project, concept development etc. 1 70 557 38 729 Deferred tax asset 15 178 000 125 000 Total intangible assets 248 557 163 729

Property, plant and equipment Buildings and plants 2 7 035 6 600 Movables, equipment, improvements ships etc. 2 247 0 Total property, plant and equipment 2 7 282 6 600

Financial fixed assets Investment in subsidiary 4 992 642 992 642 Financial receivables 11, 18 1 987 706 1 788 977 Other investments, incl. shares in associate 5 80 80 Total financial fixed assets 2 980 428 2 781 699

Total fixed assets 3 236 267 2 952 028

Current assests Inventory 6 21 976 25 195

Receivables Trade receivables 7 43 579 39 719 Intergroup balances 11 0 61 465 Other current receivables 8 32 277 14 990 Total receivables 75 856 116 174

Bank deposit, cash etc. 10 70 640 146 829

Total current assets 168 472 288 198

Total assets 3 404 739 3 240 226

50 Fjord Line Annual Report 2018 ⁄⁄ Annual Accounts

BALANCE SHEET– FJORD LINE AS (PARENT COMPANY) perFjo 31r dDesember Line - 2018 Ba –l a(1,000nce NOK) sheet per 31 December (1,000 NOK)

Parent company Parent company EEquityQUITY A andND L ILiabilitiesABILITIES Note Parent31.12.2018 company Parent31.12.2017 company Note 31.12NGAAP.2018 31.12NGAAP.2017 NGAAP NGAAP EQUITY Paid-in equity Share capital 12, 13 519 107 519 107 Own shares 12 -9 -9 Share premium account 12 178 227 178 227 Total paid-in equity 12 697 325 697 325

Retained earnings Other equity/Uncovered loss 12 -12 768 -119 488 Total retained earnings -12 768 -119 488

Total equity 12 684 557 577 837

LIABILITIES Non-current liabilities/non-current provisions Bond debt 16 0 74 000 Non-current debt to credit institutions etc. 16 2 408 955 2 270 334 Received, not recognised contribution 19 92 829 98 298 Pension liability 17 3 486 3 048 Total non-current liabilities/non-current provisions 2 505 270 2 445 680

Current liabilities Debt to credit institutions 0 0 Trade payables 82 137 78 312 Refund previous advance payment 19 0 6 295 Tax payable 15 0 0 Public duties owing 7 173 8 121 Intergroup balances 11 0 18 571 Other current liabilities 16 125 602 105 410 Total current liabilities 214 912 216 709

Total liabilities 2 720 182 2 662 389

Total equity and liabilities 3 404 739 3 240 226

Egersund, 26 April 2019

Peter Frølich Kristian Eikre Frode Teigen Chairman of the Board Board Member Board Member

Kristian Falnes Kaj Frediksen Rickard Ternblom Board Member Board Member CEO

51 Notes ⁄⁄ Fjord Line Annual Report 2018

52 Fjord Line Annual Report 2018 ⁄⁄ Annual Accounts

CASH FLOW STATEMENT – FJORD LINE AS (PARENT COMPANY) per 31 Desember 2018 – (1,000 NOK)

CaCsahs fhlo fwlo wst astaetmemenetn -t p-a praernetn cto cmompapnayny (TN(TONKO)K) 20218018 20217017 CaCsahs fhlo fwlosw fsro fmro mop oepraetriaotnioanl acl aticvtitivieitsies ResultResult before before tax tax expense expense 5353 763 763 2323 925 925 TaxesTaxes paid paid in thein the period period 0 0 0 0 DepreciationDepreciation 9 4669 466 5 3065 306 Write-downsWrite-downs 0 0 0 0 ChangeChange in inventoriesin inventories 3 2193 219 1 8271 827 ChangeChange in tradein trade receivables receivables -75-75 428 428 -5-5 591 591 ChangeChange in tradein trade payables payables 5 7155 715 2828 618 618 Gain/lossGain/loss from from sale sale of ofoperating operating assets/intangible assets/intangible assets assets 0 0 0 0 ChangeChange in otherin other accurals, accurals, incl. incl. net net agio agio and and non-current non-current balances balances 103103 687 687 4 5194 519 NeNt ecta csahs fhlo fwlosw fsro fmro mop oepraetriaotnioanl acl aticvtitivieitsies 10010 402 4222 585 680 6404

CaCsahs fhlo fwlosw fsro fmro minv inevsetisntgin agc aticvtitivieitsies ProceedsProceeds from from sale sale of ofproperty, property, plant plant and and equipment equipment 0 0 0 0 Purchase/manufacturingPurchase/manufacturing of ofproperty, property, plant plant and and equipment/intangible equipment/intangible assets assets -42-42 503 503 -27-27 610 610 LoanLoan to tosubsidiary subsidiary -198-198 729 729 -139-139 371 371 InvestmentInvestment in subsidiaryin subsidiary 0 0 -641-641 NeNt ecta csahs fhlo fwlosw fsro fmro minv inevsetisntgin agc aticvtitivieitsies -24-21 4213 2232 -16-716 672 6222

CaCsahs fhlo fwlosw fsro fmro mfin fainnacnincgin agc aticvtitivieitsies RaisingRaising of ofinterest interest bearing bearing debt debt (net) (net) 138138 621 621 279279 689 689 PaymentPayment of ofinterest interest bearing bearing debt debt -74-74 000 000 -136-136 386 386 CashCash contribution contribution share share issue issue (net) (net) 0 0 0 0 NeNt ecta csahs fhlo fwlosw fsro fmro mfin fainnacnincgin agc aticvtitivieitsies 646 642 6121 14314 330 3303

NeNt ecth cahnagneg ine cina csahs ahn adn cda csahs ehq euqivuaivleanletsnts -76-7 168 9189 343 248 2585

CashCash and and cash cash equivalents equivalents at atthe the beginning beginning of ofthe the period period 146146 829 829 112112 544 544 CaCsahs ahn adn cda csahs ehq euqivuaivleanletsn tast atht eth een edn odf othf eth pee prieordiod 707 604 6040 14614 862 8929

SpSepceifcicifaictiaotnio onf ocfa csahs rhe sresrveervse ast atht eth een edn odf othf eth pee prieordiod BankBank deposit deposit and and cash cash 7070 640 640 146146 829 829

53 Notes ⁄⁄ Fjord Line Annual Report 2018

Accounting policies FJORD LINE AS (PARENT COMPANY)

The financial statements have been prepared in accor- PROPERTY, PLANT AND EQUIPMENT dance with the Accounting Act and generally accepted Property, plant and equipment are reflected in the accounting principles in Norway. balance sheet and depreciated over the assets’ expected useful life on a straight-line basis provided they have an SALES REVENUES expected useful life of more than 3 years and a cost price Sale of goods is recognisedin the income statement at exceeding NOK 15,000.Direct maintenance of an asset is the time of delivery. Time of delivery means the time of recognisedunder operating expenses as and when it transfer of risk and control connected to the delivered is incurred. Additions or improvements are added to the goods. Services, including sale of travels and freight, are asset’s cost price and depreciated together with the as- recognised as executed. The portion of the sales income, set. The split between maintenance and additions/ which relates to future service work is reflected in the bal- improvements are determined based on the asset’s ance sheet as unearned income from the sale and is then condition at the acquisition date. recognised in line with the service work performed. LEASING CLASSIFICATION AND VALUATION A leasing agreement is classified as financial or OF BALANCE SHEET ITEMS operational lease in accordance with the contents of the Assets intended for long term ownership or use have individual agreement. The agreement is classified as been classified as fixed assets. Assets relating to the financial lease if the major part of financial risk and trading cycle have been classified as current assets. control connected to the underlying lease object has Receivables are classified as current assets if they are been transferred to the lessee. Other leasing agreements to be repaid within one year after the transaction date. are classified as operational. Operational assets in leasing Similar criteria apply to liabilities. agreements assessed as financial lease are activated in Current assets are valued at the lower of acquisition the balance sheet at the value of the compensation in the cost and net realizable value. Current liabilities are leasing agreement and depreciated as property, plant and reflected in the balance sheet at nominal value on the equipment. The principal portion of the leasing liability is establishment date. recorded as non-current liabilities. The liability is reduced Fixed assets are valued at acquisition cost.Property, with lease paid less deduction for calculated interest plant and equipment whose value will deteriorate are expense. The lease payments are treated as an operating depreciated on a straight line basis over the asset’s expense which is distributed over the total leasing period estimated useful life. The fixed assets are subject to for agreements that are classified as operational. impairment to net realizable value if a value reduction occurs which is not believed to be temporary. The im- SUBSIDIARIES, ASSOCIATED COMPANIES pairment is reversed to the extent that the reason for the AND JOINT VENTURES impairment is no longer present. Non-current liabilities Subsidiaries, associated companies and joint ventures are reflected in the balance sheet at nominal value at the are assessed inaccordancewith the cost method establishment date. in the company accounts.The investment is valued at acquisition cost for the shares,unless impairment has INTANGIBLE ASSETS been necessary. Dividend from the subsidiaries is Expenses for intangible assets are reflected in the recognisedas income to the extent accumulated dividend balance sheet when it is considered likely that the future exceeds accumulated result in the owner period. financial benefits relating to the asset will be received by the company and the acquisition cost of the asset can be reliably measured.

54 Fjord Line Annual Report 2018 ⁄⁄ Notes

TRADE RECEIVABLES GRANTS Trade receivables and other receivablesare reflectedin Grants from the NOx-fund related to investments are the balance sheet at nominal value after deduction of recognised in the income statement/accrued in line with provision forbad debts. Provision for bad debtsis made the depreciation profile of the operating assets that the based on individual assessment of each receivable. grants relate to. Grants not recognised in the income statement have been recognised as non-current lia- CURRENT INVESTMENTS bilities/allocation.Further information about accounting Current investments (including shares and derivatives treatment and numerical effects is disclosed in notes valued as current assets) are considered to be trading to the financial statements. portfolio and are valued at fair value at the balance sheet date. Unrealizedgain/loss is recognised in the PENSIONS income statement under financial items. Dividend and A defined contribution plan is a pension plan under other contributions are recognised as other financial which the group pays fixed contributions to an insurance income. company. The group has no legal or constructive obliga- tions once the contributions have been paid. The contri- HEDGING butions are recognised as wage costs. A defined benefit Derivatives valuedas hedging are recognised in the plan is a pension plan that is not a defined contribution balance sheet at acquisition cost. This corresponds to fair plan. Typically defined benefit plans define an amount value at the time of entering into the derivative contracts. of pension benefit that an employee will receive on The derivatives are recognised through profitor loss when retirement, usually dependent on one or more factors delivered and classified in the income statement on the such as age, years of service and compensation. The same line as the underling hedging object. liability recognised in the balance sheet in respect of defined benefit plans is the present value of the defined MONETARY ITEMS IN FOREIGN CURRENCY benefit obligationat the balance sheet date. Monetaryitems in foreign exchange are valued at the exchange rate at the end of the accounting year. CASH FLOW STATEMENT Hedge accounting is not used. Transactions in foreign The cash flow statements are reported gross from in- currency areconverted into the functionalcurrency (NOK) vesting and financing activities, whereas the accounting at the current exchange rate atthe transaction date. result is reconciled against net cash flow from operational Further information is disclosed in notes to the finan- activities. Cash and cash equivalents include cash and cial statement. bank deposits.

TAX 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 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.

OPTIONS FOR EMPLOYEES When granting options to the employees a valuation of the options is performedat grant date. Calculated amount is expensedas wages over the term, set off against equity.

55 Notes ⁄⁄ Fjord Line Annual Report 2018

56 Fjord Line Annual Report 2018 ⁄⁄ Notes

Notes FJORD LINE AS – PARENT COMPANY

Note 1 ⁄⁄ Intangible assets – Parent company Note 1 Intangible assets - parentNote company 1 Intangible assets - parent company Note 1 Intangible assets - parent company (Figures in TNOK) (Figures in TNOK) (Figures in TNOK) Concept Concept Intangible Intangibledevelopment developmentConcept assets in WEB-projectsIntangible assetsand in marketWEB-projects Other intangibledevelopmentand market Total intangibleOther intangible Total intangible progress etc.assetsprogress in projectsWEB-projectsetc. andassets marketprojects Otherassets intangibleassets Total intangibleassets progress etc. projects assets assets Acquisition cost 31.12.2017 Acquisition cost 31.12.2017 0 39 472 0 902 39 472 1 903 902 42 276 1 903 42 276 Completed projects 2018 AcquisitionCompleted projectscost 31.12.2017 2018 0 0 0 0 0 39 472 0 902 0 0 1 903 42 276 0 Additons 2018 CompletedAdditons 2018 projects 2018 33 810 6 472 33 8100 6 0472 0 40 282 400 282 Disposal 2018 AdditonsDisposal 2018 0 0 33 810 0 6 472 0 0 40 282 0 Acquisition cost 31.12.2018 DisposalAcquisition 2018 cost 31.12.2018 33 810 45 944 33 8100 902 45 0944 1 903 902 82 558 1 903 820 558 Acquisition cost 31.12.2018 33 810 45 944 902 1 903 82 558 Accumulated write-down 31.12.2017Accumulated write-down 31.12.2017 0 0 0 0 0 0 Accumulated depreciation 31.12.2017AccumulatedAccumulated write-downdepreciation 31.12.2017 31.12.2017 0 4 498 0 0 792 4 0498 1 196 792 6 486 1 196 60 486 Book value 31.12.2017 AccumulatedBook value 31.12.2017 depreciation 31.12.2017 0 34 974 0 0 109 4 34498 974 707792109 35 790 1 196707 6 48635 790 Accumulated write-down 31.12.2018BookAccumulated value 31.12.2017 write-down 31.12.2018 0 0 0 0 34 974 0 0109 0 707 0 35 790 0 Accumulated depreciation 31.12.2018AccumulatedAccumulated write-downdepreciation 31.12.2018 31.12.2018 0 9 703 0 0 889 9 0703 1 408 889 12 000 10 408 120 000 Book value 31.12.2018 AccumulatedBook value 31.12.2018depreciation 31.12.2018 33 810 36 241 33 8100 12 9 36703 241 495889 12 70 558 1 408495 12 00070 558 Book value 31.12.2018 33 810 36 241 12 495 70 558 Depreciation in the year Depreciation in the year 0 5 206 0 97 5 206 211 97 5 514 211 5 514 Write-down in the year DepreciationWrite-down in the year 0 0 0 0 5 206 0 0 97 0 211 0 5 514 0 Total depreciation and write-downWrite-downTotal depreciation 2018 in the year and write-down 2018 0 5 206 0 0 97 5 0206 211 97 5 514 0211 50 514 Total depreciation and write-down 2018 0 5 206 97 211 5 514 Intangible assets cost relates mainlyIntangible to the assets development cost relates of mainlyour new to ERP the developmentsystemt Dynanmics of our 365,new ERPphase systemt two. Dynanmics 365, phase two. Termination 31.03.2019 IntangibleTermination assets 31.03.2019 cost relates mainly to the development of our new ERP systemt Dynanmics 365, phase two. Termination 31.03.2019 The new WEB-projects in 2018The are new New WEB-projects front-end booking in 2018 system. are New The front-end system is booking developed system. to give The our system customers is developed a simplified to give and our user customers friendly digitala simplified and user friendly digital bookingsolution. The system wasThebookingsolution. launchednew WEB-projects in 2018. The systemAnother in 2018 was neware launched NewWeb front-end project in 2018. is booking the Another new system.ERP new system Web The systemproject Dynamics isis developedthe 365. new The ERP to system give system our was Dynamicscustomers put in to 365.ause simplified in The 2018 system and userwas friendlyput in to digital use in 2018 and includes phase 1 in the project.bookingsolution.and includes Phase 2 phase of theThe 1 ERP insystem the system project. was launchedwas Phase in 2018 in2 of2018. under the ERPAnother development system new was Web and in project is2018 included under is the as developmentnew a intangible ERP system andasset. Dynamicsis Theincluded deprecation 365. as a Theintangible period system asset.was put The in deprecation to use in 2018 period here is 10 years. The remainingandhere WEB includes is 10 projects years. phase referThe 1 in remainingto the development project. WEB Phase costsprojects 2 of related the refer ERP to to development systemdevelopment was in of costs2018 WEB-pages relatedunder development to and development WEB-platform and ofis includedWEB-pages including as a new andintangible WEB-platformgraphic asset. The including deprecation new period graphic profile and link to the bookinghereprofile system. is 10 and Theyears. link deprecation Theto the remaining booking period WEBsystem. here projectsis The 3-5 deprecationyears. refer to development period here costs is 3-5 related years. to development of WEB-pages and WEB-platform including new graphic profile and link to the booking system. The deprecation period here is 3-5 years. Other intangible assets compriseOther among intangible other things assets developmentcomprise among of keycard other things system development that is installed of keycard onboard system that is installed onboard Other intangible assets comprise among other things development of keycard system that is installed onboard the ships MS Bergensfjord andthe MS ships Stavangerfjord. MS Bergensfjord Depreciation and MS periodStavangerfjord. is 5-10 years. Depreciation period is 5-10 years. the ships MS Bergensfjord and MS Stavangerfjord. Depreciation period is 5-10 years.

Note 2 Property, plant and equipmentNote 2 Property, - parent plant company and equipment - parent company Note 2 Property, plant and equipment - parent company

(Figures in TNOK) (Figures(Figures inin TNOK)TNOK)

Equipment, Equipment,Equipment,Total property, TotalTotal property, property, Terminal, machineryTerminal,Terminal, Means machineryofmachinery plantMeans andMeans of of plantplant and and Property, plant and equipmentProperty,Property, (figures plantplant in TNOK) and and equipment equipment (figures (figures in in TNOK) TNOK) buildings onshore etc.buildingsbuildingstransportonshoreonshore etc. etc. equipmenttransporttransport equipmentequipment

Acquisition cost 31.12.2017 AcquisitionAcquisition costcost 31.12.2017 31.12.2017 10 361 7 763 1010 361 361 0 7 7637 763 18 124 0 0 18 12418 124 Addition 2018 AdditionAddition 20182018 748 1 137 748748 337 1 1371 137 2 221337337 2 2212 221 Disposal 2018 DisposalDisposal 20182018 0 0 0 0 0 0 0 0 0 0 0 0 Acquisition cost 31.12.2018 AcquisitionAcquisition costcost 31.12.2018 31.12.2018 11 109 8 900 1111 109 109 337 8 9008 900 20 346337337 20 34620 346

Accumulated write-down 31.12.2017AccumulatedAccumulated write-downwrite-down 31.12.2017 31.12.2017 0 0 0 0 0 0 0 0 0 0 0 0 Accumulated depreciation 31.12.2017AccumulatedAccumulated depreciationdepreciation 31.12.2017 31.12.2017 5 684 3 406 5 6845 684 0 3 4063 406 9 090 0 0 57 9 0909 090 Book value 31.12.2017 BookBook valuevalue 31.12.201731.12.2017 4 677 4 357 4 6774 677 0 4 3574 357 9 034 0 0 9 0349 034 Accumulated write-down 31.12.2018AccumulatedAccumulated write-downwrite-down 31.12.2018 31.12.2018 0 0 0 0 0 0 0 0 0 0 0 0 Accumulated depreciation 31.12.2018AccumulatedAccumulated depreciationdepreciation 31.12.2018 31.12.2018 8 280 4 694 8 2808 280 90 4 6944 694 13 064 90 90 13 06413 064 Book value 31.12.2018 BookBook valuevalue 31.12.201831.12.2018 2 829 4 206 2 8292 829 247 4 2064 206 7 282247247 7 2827 282

Depreciation in the year DepreciationDepreciation inin thethe year year 2 596 1 288 2 5962 596 90 1 2881 288 3 974 90 90 3 9743 974 Write-down in the year Write-downWrite-down inin the the year year 0 0 0 0 0 0 0 0 0 0 0 0

Depreciation period (completedDepreciationDepreciation operating assets) periodperiod (completed (completed operating operating assets) assets) 5 - 10 years 3 - 5 years5 -5 10- 10 years years 5 years3 -3 5 - years5 years 5 years5 years Depreciation plan DepreciationDepreciation planplan Linear Linear LinearLinear Linear LinearLinear LinearLinear

In 2018 the book value TNOKInIn 2,2 20182018 relates thethe bookbookto reconstruction value value TNOK TNOK of2,2 2,2 terminals relates relates to toand reconstruction reconstruction other small ofprojects of terminals terminals associated and and other other to operationssmall small projects projects in Bergenfjord associated associated to and tooperations operationsStavangerfjord. in Bergenfjordin Bergenfjord and and Stavangerfjord. Stavangerfjord. This has been classified as buildingsThisThis hashas and beenbeen plants classifiedclassified in the as balanceas buildings buildings sheet and andand plants plantsdepreciation in in the the balance balanceperiod sheet issheet 5 years.and and depreciation depreciation period period is is5 years.5 years. Note 1 Intangible assetsNote - parent 1 Intangible company assets - parent company

(Figures in TNOK) (Figures in TNOK)

Concept Concept Intangible Intangible development development assets in WEB-projectsassets in andWEB-projects market Otherand intangible market TotalOther intangible intangible Total intangible Note 1 Intangible assets - parent company progress progressetc. projects etc. projectsassets assetsassets assets

Acquisition cost 31.12.2017(FiguresAcquisition in TNOK) cost 31.12.2017 0 39 472 0 90239 472 1 903902 42 2761 903 42 276 Completed projects 2018Completed projects 2018 0 0 0 0 0 0 0 0 Additons 2018 Additons 2018 33 810 6 47233 810 6 472Concept 40 282 40 282 Disposal 2018 Disposal 2018 0 Intangible 0 0 development0 0 0 Acquisition cost 31.12.2018Acquisition cost 31.12.2018 33 810 assets in45 94433WEB-projects 810 90245and 944 market Other1 903902 intangible Total82 558 intangible1 903 82 558 progress etc. projects assets assets Accumulated write-downAccumulated 31.12.2017 write-down 31.12.2017 0 0 0 0 0 0 Acquisition cost 31.12.2017 0 39 472 902 1 903 42 276 Accumulated depreciationCompletedAccumulated 31.12.2017 projects depreciation 2018 31.12.2017 0 04 498 0 0 7924 498 0 1 196792 6 4861 196 0 6 486 Book value 31.12.2017AdditonsBook value 2018 31.12.2017 0 33 81034 974 0 6 472 10934 974 707109 35 79070740 282 35 790 Accumulated write-downDisposalAccumulated 31.12.2018 2018 write-down 31.12.2018 0 0 0 0 0 0 0 0 0 0 0 Accumulated depreciationAcquisitionAccumulated 31.12.2018 cost depreciation 31.12.2018 31.12.2018 0 33 8109 703 0 45 944 8899 703 902 1 408889 1 903 12 0001 40882 558 12 000 Book value 31.12.2018Book value 31.12.2018 33 810 36 24133 810 1236 241 49512 70 558495 70 558 Accumulated write-down 31.12.2017 0 0 0 Depreciation in the yearAccumulatedDepreciation depreciation in the year 31.12.2017 0 05 206 0 4 498 975 206 792 21197 1 196 5 5142116 486 5 514 Write-down in the yearBookWrite-down value 31.12.2017 in the year 0 0 0 0 34 974 0 109 0 707 0 350 790 0 Total depreciation andAccumulatedTotal write-down depreciation write-down 2018 and 31.12.2018 write-down 2018 0 05 206 0 0 975 206 21197 0 5 514211 0 5 514 Accumulated depreciation 31.12.2018 0 9 703 889 1 408 12 000 Book value 31.12.2018 33 810 36 241 12 495 70 558 Intangible assets cost relatesIntangible mainly assets to the cost development relates mainly of ourto thenew development ERP systemt of Dynanmics our new ERP 365, systemt phase two.Dynanmics 365, phase two. Termination 31.03.2019DepreciationTermination in 31.03.2019 the year 0 5 206 97 211 5 514 Write-down in the year 0 0 0 0 The new WEB-projects TotalThein 2018 new depreciation areWEB-projects New front-endand write-down in 2018 booking are 2018 Newsystem. front-end The system booking is developed system. The to givesystem our is customers developed0 a tosimplified give our5 206 andcustomers user friendly a simplified 97digital and user friendly211 digital 5 514 bookingsolution. The systembookingsolution. was launched The in system2018. Anotherwas launched new Web in 2018. project Another is the new WebERP projectsystem Dynamicsis the new 365.ERP Thesystem system Dynamics was put 365. in toThe use system in 2018 was put in to use in 2018 and includes phase 1 in Intangibleandthe project.includes assets Phase phase cost 2 1relates ofin thethe mainly ERPproject. system to thePhase development was 2 ofin 2018the ERPof under our system new development ERP was systemt in 2018 and Dynanmics underis included development 365, as phase a intangible two.and is includedasset. The as deprecationa intangible period asset. The deprecation period here is 10 years. The remainingTerminationhere is 10 WEB years. 31.03.2019 projects The remaining refer to development WEB projects costs refer related to development to development costs ofrelated WEB-pages to development and WEB-platform of WEB-pages including and WEB-platform new graphic including new graphic profile and link to the bookingprofile Notes andsystem. ⁄⁄ Fjordlink Theto Line the deprecation Annualbooking Report system. period 2018 Thehere deprecationis 3-5 years. period here is 3-5 years. The new WEB-projects in 2018 are New front-end booking system. The system is developed to give our customers a simplified and user friendly digital Other intangible assets comprisebookingsolution.Other intangible among The otherassets system thingscomprise was development launched among in other 2018. of keycardthings Another development system new Web that project isof installed keycard is the onboardnewsystem ERP that system is installed Dynamics onboard 365. The system was put in to use in 2018 and includes phase 1 in the project. Phase 2 of the ERP system was in 2018 under development and is included as a intangible asset. The deprecation period the ships MS Bergensfjordthe andships MS MS Stavangerfjord. Bergensfjord and Depreciation MS Stavangerfjord. period is 5-10 Depreciation years. period is 5-10 years. here is 10 years. The remaining WEB projects refer to development costs related to development of WEB-pages and WEB-platform including new graphic profile and link to the booking system. The deprecation period here is 3-5 years.

Note 2 Property, plantOtherNote andNote 2intangibleequipment Property, 2⁄⁄Property, assets -plant parent comprise andplant company equipmentamong and other equipment -things parent development company– Parent of companykeycard system that is installed onboard the ships MS Bergensfjord and MS Stavangerfjord. Depreciation period is 5-10 years. (Figures in TNOK) (Figures in TNOK)

Note 2 Property, plant and equipment - parent company Equipment, Equipment, Total property, Total property, (Figures in TNOK) Terminal, machineryTerminal, Meansmachinery of plantMeans and of plant and Property, plant and equipmentProperty, (figuresplant and in equipmentTNOK) (figures in TNOK) buildings onshorebuildings etc. transportonshore etc. equipmenttransport equipment Equipment, Total property, Acquisition cost 31.12.2017Acquisition cost 31.12.2017 10 361 Terminal,7 76310 361machinery 07 763Means of 18 1240plant and 18 124 Addition 2018 Property,Addition 2018plant and equipment (figures in TNOK) 748 buildings1 137748onshore etc. 3371 137transport 2 221337equipment 2 221 Disposal 2018 Disposal 2018 0 0 0 0 0 00 0 Acquisition cost 31.12.2018Acquisition cost cost 31.12.2017 31.12.2018 11 109 10 3618 90011 109 7 763 3378 900 0 20 346337 18 124 20 346 Addition 2018 748 1 137 337 2 221 Accumulated write-downDisposalAccumulated 31.12.2017 2018 write-down 31.12.2017 0 0 0 0 0 0 0 0 00 0 0 Accumulated depreciationAcquisitionAccumulated 31.12.2017 cost depreciation 31.12.2018 31.12.2017 5 684 11 1093 4065 684 8 900 03 406 337 9 0900 20 346 9 090 Book value 31.12.2017Book value 31.12.2017 4 677 4 3574 677 04 357 9 0340 9 034 Accumulated write-downAccumulated 31.12.2018 write-down write-down 31.12.2017 31.12.2018 0 0 0 0 0 0 0 0 00 0 0 Accumulated depreciation 31.12.2017 5 684 3 406 0 9 090 Accumulated depreciationAccumulated 31.12.2018 depreciation 31.12.2018 8 280 4 6948 280 904 694 13 06490 13 064 Book value 31.12.2017 4 677 4 357 0 9 034 Book value 31.12.2018AccumulatedBook value write-down31.12.2018 31.12.2018 2 829 04 2062 829 0 2474 206 0 7 282247 0 7 282 Accumulated depreciation 31.12.2018 8 280 4 694 90 13 064 Depreciation in the yearBookDepreciation value 31.12.2018 in the year 2 596 2 8291 2882 596 4 206 901 288 247 3 97490 7 282 3 974 Write-down in the year Write-down in the year 0 0 0 0 0 00 0 Depreciation in the year 2 596 1 288 90 3 974 Depreciation period (completedWrite-downDepreciation operating in periodthe year assets) (completed operating assets) 5 - 10 years 3 -5 5 - 0 years10 years 503 years - 5 years 0 5 years 0 Depreciation plan Depreciation plan Linear LinearLinear LinearLinear Linear Depreciation period (completed operating assets) 5 - 10 years 3 - 5 years 5 years In 2018 the book value DepreciationInTNOK 2018 2,2the relatesplanbook value to reconstruction TNOK 2,2 relates of terminals to reconstruction and other smallof terminals projects and associated other Linearsmall to operations projects associated in LinearBergenfjord to operations and Stavangerfjord.Linear in Bergenfjord and Stavangerfjord. This has been classified Thisas buildings has been and classified plants inas thebuildings balance and sheet plants and in depreciation the balance period sheet andis 5 depreciationyears. period is 5 years. In 2018 the book value TNOK 2,2 relates to reconstruction of terminals and other small projects associated to operations in Bergenfjord and Stavangerfjord. This has been classified as buildings and plants in the balance sheet and depreciation period is 5 years.

Note 3 Leasing expenses and transactionsNoteNote 3 Leasing 3⁄⁄ withLeasing expenses related expenses andparties transactions - parent and transactions companywith related parties with related- parent partiescompany – Parent company

Expensed lease of operating assetsExpensed not recognised lease of operating in the balance assets notsheet recognised for 2018 andin the 2017 balance (operational sheet for lease) 2018 and 2017 (operational lease) (Figures in TNOK) (Figures in TNOK) Expensed ExpensedExpensed lease Expensed lease lease 2018 lease 2017 Operating assets Operating assets Expensed lease 2018 Expensed2017 lease 2018 2017 Lease of machines and operatingLease movables of machines and operating movables 0 0 0 0 Lease of premises and similar *)Lease of premises and similar *) 15 709 15 199 15 709 15 199 Lease of ships, including crew Lease of ships, including crew 514 191 491 474 514 191 491 474

*) Leasing expenses and similar:*) For Leasing 2018 expensesleasing expenses and similar: of TNOK For 2018 1 661 leasing to company expenses controlled of TNOK by 1 owners.661 to company controlled by owners. (TNOK 2 008 in 2017). The leasing(TNOK conditions 2 008 in are2017). market The conditions. leasing conditions are market conditions.

Note 4 Investments in subsidiariesNote -4 parentInvestments company in subsidiaries - parent company

(Figures in TNOK) (Figures in TNOK)

The investments in subsidiaries Theare accountedinvestments for in in subsidiaries accordance are with accounted the cost formethod. in accordance with the cost method. Accounting values are presentedAccounting below (figures values in areTNOK). presented below (figures in TNOK). Owner Owner Business share/voting BusinessCost price share/votingBook value Cost priceBook valueBook value Book value Subsidiary SubsidiaryTime of acquisition addressTime of acquisitionshare address31.12.2018 share31.12.2018 31.12.201831.12.201731.12.2018 31.12.2017 Fjord Line Danmark A/S Fjord Line Danmark2006 A/S Danmark 2006100 % Danmark 13 753100 % 13 753 13 753 13 753 13 753 13 753 Fjord Skibsholding I A/S 58Fjord Skibsholding2007 I A/S Danmark 2007100 % Danmark 268 986100 % 224 987 268 986 224 987224 987 224 987 Fjord Skibsholding II A/S Fjord Skibsholding2008 II A/S Danmark 2008100 % Danmark 150 362100 % 109 849 150 362 109 849109 849 109 849 Fjord Skibsholding III A/S Fjord Skibsholding2010 III A/S Danmark 2010100 % Danmark 310 368100 % 310 368 310 368 310 368310 368 310 368 Fjord Skibsholding IV A/S Fjord Skibsholding2010 IV A/S Danmark 2010100 % Danmark 332 843100 % 332 842 332 843 332 842332 842 332 842 Fjord Skibsholding V A/S Fjord Skibsholding2017 V A/S Danmark 2017100 % Danmark 642100 % 642 642 642 642 642 Fjord Line GmbH Fjord Line GmbH 2008 Tyskland 2008100 % Tyskland 201100 % 201 201 201 201 201 TOTAL TOTAL 1 077 155 992 642 1 077 155 992 642992 642 992 642

Income from investment in subsidiariesIncome from and investment write-down in 2018 subsidiaries and write-down 2018 No dividend has been approvedNo from dividend Fjord Linehas been AS subsidiariesapproved from in 2018. Fjord Line AS subsidiaries in 2018.

Income from investment in subsidiariesIncome from and investment write-down in 2017 subsidiaries and write-down 2017 In 2017 Fjord Line AS has recognisedIn 2017 dividendFjord Line allocated AS has in recognised Fjord Skibsholding dividend allocated I A/S, Fjord in Fjord Skibsholding Skibsholding III A/S I A/S, Fjord Skibsholding III A/S and Fjord Skibsholding IV A/Sand as shownFjord Skibsholdingbelow (FSH I,IV FSH A/S III as andshown FSH below IV). (FSH I, FSH III and FSH IV). Dividend for 2017 is within theDividend financial forresult 2017 in 2017is within for the companies.financial result in 2017 for the companies.

FSH I FSH III FSH IFSH IV FSH III TOTALFSH IV TOTAL Total dividend provision in 2017Total dividend provision in 2017 10 422 2 535 10 422 25 526 2 535 38 483 25 526 38 483 Recognised as income in Fjord RecognisedLine AS 2017 as income in Fjord Line AS 2017 10 422 2 535 10 422 25 526 2 535 38 483 25 526 38 483 Reduction carried value investmentReduction due to carrieddividend value investment due to dividend 0 0 0 0 0 0 0 0

Background for difference betweenBackground cost price for differenceand carrying between value costof the price shares and in carrying FSH I valueand FSH of the II: shares in FSH I and FSH II: In 2008 the shares in FSH II wereIn 2008 written the downshares by in TNOKFSH II 20 were 291. written down by TNOK 20 291. In 2009 the shares in FSH I wereIn 2009written the down shares by in TNOK FSH I39 were 246 written and the down shares by in TNOK FSH II 39 were 246 writtenand the downshares by in TNOKFSH II 8 were 000 written down by TNOK 8 000 I 2009 also TNOK 4.754 in dividendI 2009 fromalso TNOKFSH I and4.754 TNOK in dividend 12 222 from in dividend FSH I andfrom TNOK fra FSH 12 II222 were in dividendrecognised from as reductionfra FSH II of were recognised as reduction of carrying value of shares. carrying value of shares.

Note 5 Investments in other shares/partsNote 5 Investments -parent incompany other shares/parts -parent company

In 2010 Fjord Line AS acquiredIn shares 2010 Fjordamounting Line toAS TNOK acquired 50 sharesin Visit amounting Sørlandet toAS. TNOK After 50 2010 in Visit there Sørlandet has been AS.neither After additions 2010 there nor disposals.has been neither additions nor disposals. The investment is recognised inThe accordance investment with is therecognised cost method. in accordance There has with been the no cost write-down method. inThere 2018 has or been2017. no write-down in 2018 or 2017.

In addition Fjord Line AS investedIn addition TNOK Fjord30 in LineVisit ASTelemark invested AS TNOK in 2016. 30 inThe Visit investment Telemark is AS recognised in 2016. inThe accordance investment with is therecognised cost method. in accordance Nor has with the cost method. Nor has write-down been made on this investment.write-down been made on this investment. Note 3 Leasing expenses and transactions with related parties - parent company

Expensed lease of operating assets not recognised in the balance sheet for 2018 and 2017 (operational lease) (Figures in TNOK) Expensed lease NoteOperating 3 Leasing assets expenses and transactions with related parties - parent company Expensed lease 2018 2017 Lease of machines and operating movables 0 0 Lease of premises and similar *) 15 709 15 199 Expensed lease of operating assets not recognised in the balance sheet for 2018 and 2017 (operational lease) (FiguresLease of in ships, TNOK) including crew 514 191 491 474 *) Leasing expenses and similar: For 2018 leasing expenses of TNOK 1 661 to company controlled by owners. Expensed lease Operating(TNOK 2 008assets in 2017). The leasing conditions are market conditions. Expensed lease 2018 2017 Lease of machines and operating movables Fjord Line Annual Report 2018 ⁄⁄ Notes 0 0 Lease of premises and similar *) 15 709 15 199 Lease of ships, including crew 514 191 491 474

*) Leasing expenses and similar: For 2018 leasing expenses of TNOK 1 661 to company controlled by owners. (TNOK 2 008 in 2017). The leasing conditions are market conditions. Note 4 ⁄⁄Investments in subsidiaries – Parent company Note 4 Investments in subsidiaries - parent company

(Figures in TNOK)

The investments in subsidiaries are accounted for in accordance with the cost method. Accounting values are presented below (figures in TNOK). Note 4 Investments in subsidiaries - parent company Owner (Figures in TNOK) Business share/voting Cost price Book value Book value Subsidiary Time of acquisition address share 31.12.2018 31.12.2018 31.12.2017 TheFjord investments Line Danmark in subsidiaries A/S are accounted for in2006 accordance withDanmark the cost method. 100 % 13 753 13 753 13 753 AccountingFjord Skibsholding values are I A/Spresented below (figures in TNOK).2007 Danmark 100 % 268 986 224 987 224 987 Fjord Skibsholding II A/S 2008 Danmark Owner100 % 150 362 109 849 109 849 Fjord Skibsholding III A/S 2010 BusinessDanmark share/voting100 % Cost price310 368 Book value310 368 Book value310 368 SubsidiaryFjord Skibsholding IV A/S Time of 2010acquisition Danmarkaddress share100 % 31.12.2018332 843 31.12.2018332 842 31.12.2017332 842 FjordFjord LineSkibsholding Danmark V A/S A/S 20062017 DanmarkDanmark 100100 %% 13 753642 13 753642 13 753642 FjordFjord SkibsholdingLine GmbH I A/S 20072008 DanmarkTyskland 100100 %% 268 986201 224 987201 224 987201 FjordTOTAL Skibsholding II A/S 2008 Danmark 100 % 1 150077 362155 109992 849642 109992 849642 Fjord Skibsholding III A/S 2010 Danmark 100 % 310 368 310 368 310 368 Fjord Skibsholding IV A/S 2010 Danmark 100 % 332 843 332 842 332 842 Income from investment in subsidiaries and write-down 2018 Fjord Skibsholding V A/S 2017 Danmark 100 % 642 642 642 No dividend has been approved from Fjord Line AS subsidiaries in 2018. Fjord Line GmbH 2008 Tyskland 100 % 201 201 201 TOTAL 1 077 155 992 642 992 642 Income from investment in subsidiaries and write-down 2017 In 2017 Fjord Line AS has recognised dividend allocated in Fjord Skibsholding I A/S, Fjord Skibsholding III A/S Incomeand Fjord from Skibsholding investment IV in A/S subsidiaries as shown andbelow write-down (FSH I, FSH 2018 III and FSH IV). NoDividend dividend for has 2017 been is withinapproved the from financial Fjord result Line in AS 2017 subsidiaries for the companies. in 2018.

FSH I FSH III FSH IV TOTAL IncomeTotal dividend from investment provision in in 2017 subsidiaries and write-down 2017 10 422 2 535 25 526 38 483 InRecognised 2017 Fjord as Lineincome AS in has Fjord recognised Line AS dividend 2017 allocated in Fjord Skibsholding I A/S, Fjord10 Skibsholding422 III A/S2 535 25 526 38 483 andReduction Fjord Skibsholding carried value IVinvestment A/S as shown due to below dividend (FSH I, FSH III and FSH IV). 0 0 0 0 Dividend for 2017 is within the financial result in 2017 for the companies.

FSH I FSH III FSH IV TOTAL TotalBackground dividend for provision difference in 2017 between cost price and carrying value of the shares in FSH10 I422 and FSH II: 2 535 25 526 38 483 RecognisedIn 2008 the as shares income in FSHin Fjord II were Line written AS 2017 down by TNOK 20 291. 10 422 2 535 25 526 38 483 ReductionIn 2009 the carried shares value in FSH investment I were written due to dividenddown by TNOK 39 246 and the shares in FSH II were0 written down by TNOK0 8 000 0 0 I 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. Background for difference between cost price and carrying value of the shares in FSH I and FSH II: InNote 2008 5 Investmentsthe shares in inFSH other II were shares/parts written down -parent by TNOKcompany 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 IIn 2009 2010 also Fjord TNOK Line 4.754 AS acquired in dividend shares from amounting FSH I and to TNOKTNOK 5012 in222 Visit in dividendSørlandet from AS. fraAfter FSH 2010 II were there recognised has been neither as reduction additions of nor disposals. carryingThe investment value of is shares. recognised in accordance with the cost method. There has been no write-down in 2018 or 2017.

In additionNote 5 Fjord⁄⁄Investments Line AS invested in other TNOK shares/parts30 in Visit Telemark – Parent AS in 2016. company The investment is recognised in accordance with the cost method. Nor has Notewrite-down 5 Investments been made in otheron this shares/parts investment. -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. The investment is recognised in accordance with the cost method. There has been no write-down in 2018 or 2017.

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.

59 Notes ⁄⁄ Fjord Line Annual Report 2018

NoteNote 6 Inventories 6⁄⁄Inventories and fuel expensesand fuel - expensesparent company – Parent company

(Figures in TNOK)

Inventories 2018 2017 Fuel 3 384 3 214 Goods for resale 16 263 19 423 Other items, including key-cards etc. 2 329 2 559 Total inventories at acquisition cost 31.12. 21 976 25 196 Write-downNote 6 Inventories 31.12. and fuel expenses - parent company 0 0 Total book value of inventories 31.12. 21 976 25 196 (Figures in TNOK) Note 6 Inventories and fuel expenses - parent company NoInventories write-down has been made of the inventory by year end. 2018 2017 Fuel 3 384 3 214 Goods(Figures for in resale TNOK) 16 263 19 423 Expenses related to fuel are classified as other operating expenses in the income statement. Other items, including key-cards etc. 2 329 2 559 For 2018 this amounts to TNOK 165.314 (TNOK 153.999 in 2017) TotalInventories inventories at acquisition cost 31.12. 212018 976 252017 196 Write-downFuel 31.12. 3 3840 3 2140 Fjord Line has the following financial contracts related to fuel: TotalGoods book for resale value of inventories 31.12. 2116 976263 2519 196423 i)Other MGO items, (Marine including Gas Oil), key-cards delivery etc. in 2018 and 2019. 2 329 2 559 ii)Total LNG inventories (The ships at Bergensfjord acquisition andcost Stavangerfjord), 31.12. delivery in 2018, 2019 and 2020 21 976 25 196 The derivatives are considered as hedging in the accounts, and unrealized gain/loss is not recognised in the balance sheet. NoWrite-down write-down 31.12. has been made of the inventory by year end. 0 0 GainTotal and/or book valueloss related of inventories to the contracts 31.12. are recognised over profit or loss at delivery/realization. 21 976 25 196

Expenses related to fuel are classified as other operating expenses in the income statement. For 2018 this amounts to TNOK 165.314 (TNOK 153.999 in 2017) NoNote write-down 7 Trade receivables has been made and ofbad the debts inventory - parent by year company end. Fjord Line has the following financial contracts related to fuel: (Figures in TNOK) i)Expenses MGO (Marinerelated toGas fuel Oil), are deliveryclassified in as 2018 other and operating 2019. expenses in the income statement. 2018 2017 ii)For LNG 2018 (The this amountsships Bergensfjord to TNOK 165.314and Stavangerfjord), (TNOK 153.999 delivery in 2017) in 2018, 2019 and 2020 The derivatives are considered as hedging in the accounts, and unrealized gain/loss is not recognised in the balance sheet. Trade receivables at nominal value 31.12. 45 776 41 917 GainFjord and/orLine has loss the related following to the financial contracts contracts are recognised related overto fuel: profit or loss at delivery/realization. Provisions for bad debts 31.12. -2 197 -2 197 i) MGO (Marine Gas Oil), delivery in 2018 and 2019. ii)Book LNG value (The trade ships receivables Bergensfjord 31.12. and Stavangerfjord), delivery in 2018, 2019 and 2020 43 579 39 719 NoteTheNote derivatives 7 Trade 7⁄⁄ Tradereceivables are considered receivables and asbad hedging debts and -in bad parent the accounts,debts company – and Parent unrealized company gain/loss is not recognised in the balance sheet. GainChange and/or in provisions loss related for to bad the debts contracts in the are year recognised over profit or loss at delivery/realization. 0 1 497 Actual bad debts in the year 639 211 (Figures in TNOK) Received on receivables previously written off 0 0 2018 2017 NoteExpensed 7 Trade loss receivableson bad debts and bad debts - parent company 639 1 707 Trade receivables at nominal value 31.12. 45 776 41 917 Bad debts are included in the item "other operating expenses" in the income statement. Provisions(Figures in forTNOK) bad debts 31.12. -2 197 -2 197 Book value trade receivables 31.12. 432018 579 392017 719

ChangeTrade receivables in provisions at nominal for bad valuedebts in31.12. the year 45 7760 411 497917 ActualProvisions bad fordebts bad in debts the year 31.12. -2 639197 -2 211197 Note 8 Other receivables - parent company ReceivedBook value on tradereceivables receivables previously 31.12. written off 43 5790 39 7190 Expensed loss on bad debts 639 1 707 Change(Figures in in provisions TNOK) for bad debts in the year 0 1 497 BadActual debts bad are debts included in the inyear the item "other operating expenses" in the income statement. 639 211 ReceivedOther receivables on receivables previously written off 20180 20170 ExpensedRefund from loss public on bad authorities, debts including vat owing.* 8 699639 14 707143 Prepaid expenses etc. 23 578 10 847 BadOther debts receivables are included 31.12. in the item "other operating expenses" in the income statement. 32 277 14 990

*)Note Per 8 31.12.2018 Other receivables the company - parent has recognisedcompany TNOK 6.218 in the balance sheet relating to VAT due to the company in Norway (TNOK 3.708 per 31.12.2017). (Figures in TNOK)

OtherNoteNote 8 receivablesOther 8⁄⁄ Otherreceivables receivables - parent company – Parent company 2018 2017 Note 9 Other financial income and other financial expenses - parent company Refund from public authorities, including vat owing.* 8 699 4 143 Prepaid(Figures expensesin TNOK) etc. 23 578 10 847 (Figures in TNOK) Other receivables 31.12. 32 277 14 990 Other receivables 2018 2017 Other financial income and other financial expenses comprise the following: Refund*) Per 31.12.2018 from public the authorities, company hasincluding recognised vat owing.* TNOK 6.218 in the balance sheet relating to VAT due to the company8 699 in Norway (TNOK4 143 3.708 Prepaid per 31.12.2017). expenses etc. 23 578 10 847 Other financialreceivables income 31.12. 322018 277 142017 990 Foreign exchange gain, intergroup loan, cf. note 11 108 245 131 768 Foreign exchange gain related to non-current foreign exchange loan 0 *)Note Per 9 31.12.2018 Other financial the company income has and recognised other financial TNOK expenses6.218 in the- parent balance company sheet relating to VAT due to the company in Norway (TNOK 3.708 Otherper 31.12.2017). foreign exchange gain 5 929 6 323 Other financial income 65 78 (Figures in TNOK) Total 114 239 138 170 OtherNote 9financial Other financial income and income other andfinancial other expenses financial comprise expenses the - following:parent company Other financial expenses 2018 2017 Foreign exchange loss, intergroup receivables, cf. note 11 Other(Figures financial in TNOK) income 2018 2017 Foreign exchange loss, including non-current loan in Euro and DKK 127 222 173 927 Foreign exchange gain, intergroup loan, cf. note 11 108 245 131 768 Other financial expenses 0 270 ForeignOther financial exchange income gain relatedand other to non-currentfinancial expenses foreign comprise exchange the loan following: 0 Total 127 222 174 197 Other foreign exchange gain 5 929 6 323 Other financial financial income income 201865 201778 TotalForeign exchange gain, intergroup loan, cf. note 11 114108 239245 138131 170768 60Foreign exchange gain related to non-current foreign exchange loan 0 Other foreign financial exchange expenses gain 52018 929 62017 323 ForeignOther financial exchange income loss, intergroup receivables, cf. note 11 65 78 ForeignTotal exchange loss, including non-current loan in Euro and DKK 127114 222239 173138 927170 Other financial expenses 0 270 TotalOther financial expenses 1272018 222 1742017 197 Foreign exchange loss, intergroup receivables, cf. note 11 Foreign exchange loss, including non-current loan in Euro and DKK 127 222 173 927 Other financial expenses 0 270 Total 127 222 174 197 Note 6 Inventories and fuel expenses - parent company

(Figures in TNOK)

Inventories 2018 2017 Fuel 3 384 3 214 Goods for resale 16 263 19 423 Other items, including key-cards etc. 2 329 2 559 Total inventories at acquisition cost 31.12. 21 976 25 196 Write-down 31.12. 0 0 Total book value of inventories 31.12. 21 976 25 196

No write-down has been made of the inventory by year end.

Expenses related to fuel are classified as other operating expenses in the income statement. For 2018 this amounts to TNOK 165.314 (TNOK 153.999 in 2017)

Fjord Line has the following financial contracts related to fuel: i) MGO (Marine Gas Oil), delivery in 2018 and 2019. ii) LNG (The ships Bergensfjord and Stavangerfjord), delivery in 2018, 2019 and 2020 The derivatives are considered as hedging in the accounts, and unrealized gain/loss is not recognised in the balance sheet. 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

(Figures in TNOK) 2018 2017

Trade receivables at nominal value 31.12. 45 776 41 917 Provisions for bad debts 31.12. -2 197 -2 197 Book value trade receivables 31.12. 43 579 39 719

Change in provisions for bad debts in the year 0 1 497 Actual bad debts in the year 639 211 Received on receivables previously written off 0 0 Expensed loss on bad debts 639 1 707

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

Note 8 Other receivables - parent company

(Figures in TNOK)

Other receivables 2018 2017 Refund from public authorities, including vat owing.* 8 699 4 143 Prepaid expenses etc. Fjord23 578 Line Annual Report10 847 2018 ⁄⁄ Notes Other receivables 31.12. 32 277 14 990

*) Per 31.12.2018 the company has recognised TNOK 6.218 in the balance sheet relating to VAT due to the company in Norway (TNOK 3.708 per 31.12.2017).

NoteNote 9 Other 9⁄⁄ Otherfinancial financial income and income other financialand other expenses financial - parent expenses company – Parent company

(Figures in TNOK)

Other financial income and other financial expenses comprise the following:

Other financial income 2018 2017 Foreign exchange gain, intergroup loan, cf. note 11 108 245 131 768 Foreign exchange gain related to non-current foreign exchange loan 0 Other foreign exchange gain 5 929 6 323 Other financial income 65 78 Total 114 239 138 170

Other financial expenses 2018 2017 Foreign exchange loss, intergroup receivables, cf. note 11 Foreign exchange loss, including non-current loan in Euro and DKK 127 222 173 927 Other financial expenses 0 270 Total 127 222 174 197

Note 10⁄⁄Restricted funds – Parent company Note 10 Restricted funds - parent company

(FiguresNote 10 Restrictedin TNOK) funds - parent company 2018 2017 Restricted(Figures in tax TNOK) deduction funds per 31.12.: 3 451 4 287 The tax deduction funds are deposited on separate bank accounts. 2018 2017 Restricted tax deduction funds per 31.12.: 3 451 4 287 The tax deduction funds are deposited on separate bank accounts.

Note 11 Intercompany balance - parent company Note 11⁄⁄Intercompany balance – Parent company (FiguresNote 11 inIntercompany TNOK) balance - parent company

Assets(Figures - currentin TNOK) items: 2018 2017 Receivables on subsidiary related to operation etc.*) 0 61 465 TotalAssets - current items: 20180 612017 465 Receivables on subsidiary related to operation etc.*) 0 61 465 TotalLiabilities - current items: 0 61 465 Net debt to subsidiary related to operation 0 18 571 LiabilitiesTotal - current items: 0 18 571 Net debt to subsidiary related to operation 0 18 571 TotalNet current intercompany balance per 31.12 for Fjord Line AS 0 1842 571894 Net current intercompany balance per 31.12 for Fjord Line AS 0 42 894 Assets - non-current items Fjord Line AS has non-current receivables on the Danish subsidiaries of in total TNOK 1.987.706 per 31.12.2018 (TNOK 1.788.977 per 31.12.2017). AssetsThe amount - non-current is classified items as financial fixed assets. The loans are in DKK and are subject to interest calculation (cf. note 18). FjordForeign Line exchange AS has gain non-current on these receivablesloans was TNOK on the 108.245Danish subsidiaries in 2018 (foreign of in totalexchange TNOK loss 1.987.706 of TNOK per 131.768 31.12.2018 in 2017), (TNOK cf. note1.788.977 9. per 31.12.2017). TheNo specific amount installment is classified plan as financial has been fixeddetermined assets. forThe the loans loans, are butin DKKthe subsidiaries and are subject will useto interestfree liquidity calculation for repayment. (cf. note 18). ForeignInstallments exchange have beengain onpaid these in 2018 loans and was 2017. TNOK 108.245 in 2018 (foreign exchange loss of TNOK 131.768 in 2017), cf. note 9. No specific installment plan has been determined for the loans, but the subsidiaries will use free liquidity for repayment. Installments have been paid in 2018 and 2017. *) Allocation for dividends in the subsidiaries The subsidiaries FSH I, FSH III and FSH IV had per 31.12.2017 allocated in total TNOK 38 483 in dividend for Fjord Line AS, cf note 4. *)This Allocation amount is for included dividends in receivables in the subsidiaries on subsidiary per 31.12.2017 and is recognised as income with Fjord Line AS in 2017, cf. note 4. The subsidiaries FSH I, FSH III and FSH IV had per 31.12.2017 allocated in total TNOK 38 483 in dividend for Fjord Line AS, cf note 4. This amount is included in receivables on subsidiary per 31.12.2017 and is recognised as income with Fjord Line AS in 2017, cf. note 4.

61 Notes ⁄⁄ Fjord Line Annual Report 2018

Note 12 EquityNote - parentNote 12 Equity company12⁄⁄ Equity- parent company– Parent company

(Figures in TNOK)(Figures in TNOK)

Other Other Share premiumShare equity/uncovered premium equity/uncovered Changes in equityChanges for 2018 in equity for 2018 Share capital ShareOwn capital shares Own sharesaccount accountloss loss Total Total

Equity 31.12.2017NoteEquity 12 31.12.2017 Equity - parent company 519 107 519 107 -9 178-9 227 178 227-119 488 -119 577488 837 577 837 Mistakes from previousMistakes yearfrom previous year -43 -43 -43 -43 Net income 2018(FiguresNet income in 2018TNOK) 0 0 0 0 0 0106 763 106 106763 763 106 763 Equity 31.12.2018Equity 31.12.2018 519 107 519 107 -9 178-9 227 178 227-12 768 -12 684768 557 684 557

*) Net income 2018*) Net contains income a 2018 negativ contains tax expense a negativ of TNOKtax expense 53.000 of asTNOK a result 53.000 of the as changes a result inof deferredthe changes tax inasset. deferred tax asset. Other OtherShare premiumOther equity/uncovered Changes in equity for 2018 Share capitalShare premiumOwnShare sharesequity/uncovered premium accountequity/uncovered loss Total Change in equityChange for 2017 in equity for 2017 Share capital ShareOwn capital shares Own sharesaccount accountloss loss Total Total Equity 31.12.2017 519 107 -9 178 227 -119 488 577 837 Equity 31.12.2016Equity 31.12.2016 519 107 519 107 -9 178-9 227 178 227-218 462 -218 478462 863 478 863 Mistakes from previous year -43 -43 Net income 2017Net income 2017 0 0 0 0 0 0 98 974 98 97498 974 98 974 Equity 31.12.2017NetEquity income 31.12.2017 2018 519 107 519 107 -9 0 178-9 227 1780 227-119 488 -1190 577488 837 106577 763837 106 763 Equity 31.12.2018 519 107 -9 178 227 -12 768 684 557 *) Net income 2017*) Net contains income a 2017 negativ contains tax expense a negativ of TNOKtax expense 75.000 of asTNOK a result 75.000 of the as changes a result inof deferredthe changes tax inasset. deferred tax asset. *) Net income 2018 contains a negativ tax expense of TNOK 53.000 as a result of the changes in deferred tax asset.

Note 13 Share Notecapital 13 andShare shareholders' capital and informationshareholders' - parentinformation company - parent company Other The share capitalThe is shareNOK capital519.107.350 is NOK per 519.107.350 31.12.2018, per and 31.12.2018, consists of and207.642.940 consists of shares 207.642.940 each NOK shares 2,50. each All NOKshares 2,50. have Allequal shares rights. have equal rights.Share premium equity/uncovered Change in equity for 2017 Share capital Own shares account loss Total The major shareholdersThe major per shareholders 31.12.2018 per 31.12.2018 Equity 31.12.2016 519 107Owner share Owner-9 share 178 227 -218 462 478 863 Ferd AS NetFerd income AS 2017 0 44,6 % 44,60 % 0 98 974 98 974 Kontrari AS EquityKontrari 31.12.2017AS 519 107 34,8 % 34,8-9 % 178 227 -119 488 577 837 Kontrazi AS Kontrazi AS 17,4 % 17,4 % Arne Teigen Arne Teigen 1,1 % 1,1 % Moly AS *)Moly Net AS income 2017 contains a negativ tax expense of TNOK 75.000 as a result of the changes in deferred0,8 %tax asset. 0,8 % Others, includingOthers, own shares*)including own shares*) 1,3 % 1,3 % Total TotalNote 13⁄⁄Share capital and shareholders’ information – Parent company 100,0 % 100,0 % Note 13 Share capital and shareholders' information - parent company *) Fjord Line AS*) Fjordhas a totalLine ofAS 664 has owna total shares of 664 per own31.12.2018. shares per 31.12.2018. The share capital is NOK 519.107.350 per 31.12.2018, and consists of 207.642.940 shares each NOK 2,50. All shares have equal rights. The major shareholdersThe major per shareholders 31.12.2017 per 31.12.2017 The major shareholders per 31.12.2018 Eierandel Eierandel Ferd AS Ferd AS 44,6 % 44,6 % Owner share Kontrari AS FerdKontrari AS AS 34,8 % 34,8 % 44,6 % Kontrazi AS KontrariKontrazi ASAS 17,4 % 17,4 % 34,8 % Arne Teigen KontraziArne Teigen AS 1,1 % 1,1 % 17,4 % Moly AS ArneMoly ASTeigen 0,8 % 0,8 % 1,1 % Others, includingMolyOthers, own AS shares*)including own shares*) 1,3 % 1,3 % 0,8 % Sum Others,Sum including own shares*) 100,0 % 100,0 % 1,3 % *) Fjord Line ASTotal*) Fjordhad a totalLine ofAS 704 had own a total shares of 704 per own31.12.2017. shares per 31.12.2017. 100,0 % *) Fjord Line AS has a total of 664 own shares per 31.12.2018.

The major shareholders per 31.12.2017 Eierandel Ferd AS 44,6 % Kontrari AS 34,8 % Kontrazi AS 17,4 % Arne Teigen 1,1 % Moly AS 0,8 % Others, including own shares*) 1,3 % Sum 100,0 %

*) Fjord Line AS had a total of 704 own shares per 31.12.2017.

62 Fjord Line Annual Report 2018 ⁄⁄ Notes

Note 14⁄⁄Operating income – Parent company Note 14 Operating income - parent company (Figures in TNOK)

Operating income distributed on income area 2018 2017 Ticket income 522 949 471 878 Sales income etc. onboard - see also note 19 742 400 652 281 Cargo income 218 990 190 037 Recognised/accrued grant from the NOx-fund- see also note 20 5 469 5 469 Other 46 720 31 242 Total 1 536 527 1 350 907

Note 15 Taxes - parent company

(Figures in TNOK)

Specification of deferred tax asset

Temporary differences 31.12.2017 31.12.2018 Change Fixed assets -8 990 1 751 -10 741 Receivables -2 197 -2 197 0 Gain/loss account 13 477 10 782 2 695 Other differences including accounting accruals -91 024 -88 973 -2 051 Total -88 734 -78 637 -10 097 Carry-forward loss -1 194 310 -1 150 467 -43 843 Basis for deferred tax (-deferred tax asset) -1 283 044 -1 229 104 -53 940 22% (23%) of basis -295 100 -270 403 -24 697 Deferred tax (deferred tax asset) recognised in the balance sheet -125 000 -178 000 53 000 Deferred tax asset not recognised in the balance sheet -170 100 -92 403 -77 697

Per 31.12.2018 Fjord Line AS has accumulated basis for deferred tax asset of TNOK 1.229.104. This implies deferred tax asset (22%) of TNOK 270.403 when recognised in total in the balance sheet.

The Board of Directiors following a concrete assessment of the future prospects of Fjord Line AS, under the basis of the net income from the last two years, found that it has convincing evidence that future earnings will justify a recognition of a further 53 MNOK in addition to the 125 MNOK that have already been recognized, thus the calculated deferred tax asset will be 178 MNOK.

We believe that this argument is sustained by the positive operating result in recent years, combined with the over budget earnings so far this year and that we see a positive development in the booking reserves before the high season. This combined with the expansion of capacity on MS Stavangerfjord and MS Bergensfjord to increase the earnings in the high season indicates that we have convincing evidence that we can at least have equivalent earnings in the years to come as shown in 2018 and this has been taken into account in the assessment.

Specification of taxable result and tax expense:

Taxable result 2018 2017 Result before tax 53 764 23 925 Dividends from subsidiaries, not taxable 0 -38 521 Write-down of shares 0 0 Other permanent differences 176 99 Employee options recognised as expense 0 0 Change in temporary differences -10 097 -2 110 Issue expenses, offset against eqiuity 0 0 Application of carry forward loss -43 843 0 Taxable result 0 -16 607

Reconciliation of tax expense 2018 2017 23% (24%) of financial result 12 366 5 742 23% (24%) of permanent differences 40 -9 221 Impact of change tax rate 12 291 12 830 Change of deferred tax asset not recognised in the balance sheet -77 697 -84 351 Tax expense -53 000 -75 000

Specification of tax expense 2018 2017 Change in deferred tax asset -53 000 -75 000 Payable tax 0 0 Tax expense -53 000 -75 000

63 Note 14 Operating income - parent company (Figures in TNOK)

Operating income distributed on income area 2018 2017 Ticket income 522 949 471 878 Sales income etc. onboard - see also note 19 742 400 652 281 Cargo Notes income ⁄⁄ Fjord Line Annual Report 2018 218 990 190 037 Recognised/accrued grant from the NOx-fund- see also note 20 5 469 5 469 Other 46 720 31 242 Total 1 536 527 1 350 907

NoteNote 15 Taxes 15⁄⁄Taxes - parent – Parentcompany company

(Figures in TNOK)

Specification of deferred tax asset

Temporary differences 31.12.2017 31.12.2018 Change Fixed assets -8 990 1 751 -10 741 Receivables -2 197 -2 197 0 Gain/loss account 13 477 10 782 2 695 Other differences including accounting accruals -91 024 -88 973 -2 051 Total -88 734 -78 637 -10 097 Carry-forward loss -1 194 310 -1 150 467 -43 843 Basis for deferred tax (-deferred tax asset) -1 283 044 -1 229 104 -53 940 22% (23%) of basis -295 100 -270 403 -24 697 Deferred tax (deferred tax asset) recognised in the balance sheet -125 000 -178 000 53 000 Deferred tax asset not recognised in the balance sheet -170 100 -92 403 -77 697

Per 31.12.2018 Fjord Line AS has accumulated basis for deferred tax asset of TNOK 1.229.104. This implies deferred tax asset (22%) of TNOK 270.403 when recognised in total in the balance sheet.

The Board of Directiors following a concrete assessment of the future prospects of Fjord Line AS, under the basis of the net income from the last two years, found that it has convincing evidence that future earnings will justify a recognition of a further 53 MNOK in addition to the 125 MNOK that have already been recognized, thus the calculated deferred tax asset will be 178 MNOK.

We believe that this argument is sustained by the positive operating result in recent years, combined with the over budget earnings so far this year and that we see a positive development in the booking reserves before the high season. This combined with the expansion of capacity on MS Stavangerfjord and MS Bergensfjord to increase the earnings in the high season indicates that we have convincing evidence that we can at least have equivalent earnings in the years to come as shown in 2018 and this has been taken into account in the assessment.

Specification of taxable result and tax expense:

Taxable result 2018 2017 Result before tax 53 764 23 925 Dividends from subsidiaries, not taxable 0 -38 521 Write-down of shares 0 0 Other permanent differences 176 99 Employee options recognised as expense 0 0 Change in temporary differences -10 097 -2 110 Issue expenses, offset against eqiuity 0 0 Application of carry forward loss -43 843 0 Taxable result 0 -16 607

Reconciliation of tax expense 2018 2017 23% (24%) of financial result 12 366 5 742 23% (24%) of permanent differences 40 -9 221 Impact of change tax rate 12 291 12 830 Change of deferred tax asset not recognised in the balance sheet -77 697 -84 351 Tax expense -53 000 -75 000

Specification of tax expense 2018 2017 Change in deferred tax asset -53 000 -75 000 Payable tax 0 0 Tax expense -53 000 -75 000

64 Fjord Line Annual Report 2018 ⁄⁄ Notes

Note 16 Liabilities Note- parent 16 Liabilities companyNoteNote 16 Liabilities 16- parent⁄⁄Liabilities company- parent – company Parent company

(The figures in the table(The belowfigures(The is in in figuresthe TNOK) table in belowthe table is in below TNOK) is in TNOK)

Non-current interestNon-current bearingNon-current debt interest per 31.12. bearing interest debt bearing per 31.12.debt per 31.12. 2018 20182017 2018 2017 2017 Debt to credit institutionsDebt to etc. creditDebt institutions to credit institutions etc. etc. 2 408 955 2 408270 9553342 408 9552 270 3342 270 334 Bond loan Bond loanBond loan 0 74 0000 0 74 000 74 000 Total non-current Totalinterest non-current bearingTotal non-current debt interest 31.12. bearing interest debt bearing 31.12. debt 31.12. 2 408 955 2 408344 9553342 408 9552 344 3342 344 334

Current interest bearingCurrent debt interestCurrent per 31.12. bearing interest debt bearing per 31.12.debt per 31.12. 2018 20182017 2018 2017 2017 Debt to credit institutionsDebt to (overdraft creditDebt institutions to facilities)credit institutions (overdraft (overdraft facilities) facilities) 0 0 0 0 0 Other current interstOther bearing current debt,Other interst including current bearing interst debt debt, tobearing owners including debt, of the includingdebt parent to owners companydebt toof owners the parent of the company parent company 0 0 0 0 0 Total current interestTotal bearing currentTotal debt interest current 31.12. bearing interest debt bearing 31.12. debt 31.12. 0 0 0 0 0

Total book value ofTotal interest bookTotal bearing value book of debt interestvalue 31.12. of bearing interest debt bearing 31.12. debt 31.12. 2 408 955 2 408344 9553342 408 9552 344 3342 344 334

Fjord Line AS had Fjordan unused LineFjord overdraft AS hadLine an facilityAS unused had limit an overdraft unused of MNOK overdraftfacility 35 limitper facility 31.12.2018 of MNOK limit of (1535 MNOK perMNOK 31.12.2018 35 pr per 31.12.2017). 31.12.2018 (15 MNOK (15 pr MNOK 31.12.2017). pr 31.12.2017). Per 31.12.2018 the Perbalance 31.12.2018 onPer the 31.12.2018 overdraft the balance facilitythe on balance the is overdraftpositive on the by overdraftfacility 128,1 is MNOK facilitypositive (23,6 is by positive 128,1 MNOK MNOKby per128,1 31.12.2017). (23,6 MNOK MNOK (23,6 per MNOK 31.12.2017). per 31.12.2017).

Non-current interestNon-current bearingNon-current debt interest - distributed bearing interest debt bearing on currency - distributed debt per - distributed 31.12.2018 on currency onfigures currencyper 31.12.2018in 1.000) per 31.12.2018 figures in figures 1.000) in 1.000)

Currency CurrencyNominalCurrency currencyNominal NominalcurrencyExchange currency rate ExchangeExchange rateBook valuerate in NOKBook 31.12.2017 valueBook in NOKvalue 31.12.2017in NOK 31.12.2017 NOK NOK NOK112 329 112 329 112 329 1,000 1,000 1,000 112 329 112 329 112 329 Euro Euro Euro177 291 177 291 177 291 9,948 9,948 9,948 1 763 745 1 763 7451 763 745 DKK DKK DKK400 000 400 000 400 000 1,322 1,322 1,322 532 880 532 880 532 880 Total non-current Totalinterest non-current bearingTotal non-current debt interest 31.12. bearing interest debt bearing 31.12. debt 31.12. 2 408 955 2 408 9552 408 955

Non-current interestNon-current bearingNon-current debt interest - distributed bearing interest debt bearing on currency - distributed debt per - distributed 31.12.2017 on currency on(figures currencyper 31.12.2017 in 1,000) per 31.12.2017 (figures in (figures 1,000) in 1,000)

Currency CurrencyNominalCurrency currencyNominal NominalcurrencyExchange currency rate ExchangeExchange rateBook valuerate in NOKBook 31.12.2015 valueBook in NOKvalue 31.12.2015in NOK 31.12.2015 NOK NOK NOK132 727 132 727 132 727 1,000 1,000 1,000 132 727 132 727 132 727 Euro Euro Euro192 763 192 763 192 763 9,840 9,840 9,840 1 881 157 1 881 1571 881 157 DKK DKK DKK250 000 250 000 250 000 1,322 1,322 1,322 330 450 330 450 330 450 Total non-current Totalinterest non-current bearingTotal non-current debt interest 31.12. bearing interest debt bearing 31.12. debt 31.12. 2 344 334 2 344 3342 344 334

Borrowing in EuroBorrowing and DanishBorrowing in kroner Euro and in Euro Danish and kroner Danish kroner Borrowing in Euro Borrowingand DanishBorrowing inkroner Euro isand inrecognised EuroDanish and kroner in Danish the isbalance recognisedkroner sheet is recognised inat thecurrent balance in exchange the sheet balance atrate current sheet per 31.12.2018 atexchange current exchangerate and per31.12.2017, 31.12.2018 rate per cf.31.12.2018 and the 31.12.2017,table andabove. 31.12.2017, cf. the table cf. above.the table above. Foreign exchange lossForeign in 2018 exchangeForeign related exchange lossto non-current in 2018 loss related in loan 2018 toin related non-currentEuro and to non-currentDanish loan inkroner Euro loan wasand in 108,7EuroDanish andMNOK kroner Danish inwas 2018kroner 108,7 was MNOK 108,7 in MNOK 2018 in 2018 Foreign exchange gainForeign in 2017 exchangeForeign related exchangegain to non-current in 2017 gain related in loan 2017 toin related non-currentEuro is to 159,3 non-current loan MNOK in Euro loan in 2017is in 159,3 Euro MNOK is 159,3 in MNOK 2017 in 2017

Book value per 31.12.Book for value theBook Euro-borrowings per value31.12. per for 31.12. the and Euro-borrowings forDanish the Euro-borrowingskroner-borrowings and Danish and askroner-borrowings Danishfollows kroner-borrowings in NOK as follows as in follows NOK in NOK (figures in TNOK):(figures in(figures TNOK): in TNOK): 2018 20182017 2018 2017 2017 Principal amount: Principal amount:Principal amount: 2 247 072 2 2472 227072 2288 247 072 2 227 2882 227 288 Amortization effectAmortization of the borrowings,Amortization effect incl.of theeffect guarantee borrowings, of the commission borrowings, incl. guarantee incl. guaranteecommission commission -14 700 -14 -15700 682-14 700 -15 682 -15 682 Book value per 31.12.Book valueBook per value 31.12. per 31.12. 2 232 372 2 2322 211372 2606 232 372 2 211 6062 211 606

Bond issue Bond issueBond issue The bond loan was Thesettled bond in Theitsloan entirety bond was settledloan in 2018. was in itssettled entirety in its in entirety 2018. in 2018.

2018 20182017 2018 2017 2017 Total amount of bonds:Total amountTotal of amount bonds: of bonds: 0 74 0000 0 74 000 74 000 Own holding Own holdingOwn holding 0 00 0 0 0 Amortization effectAmortization of the loanAmortization (expenses effect of etc.) theeffect loan of (expenses the loan (expensesetc.) etc.) 0 00 0 0 0 Book value bond loanBook 31.12. valueBook bond value loan bond 31.12. loan 31.12. 0 74 0000 0 74 000 74 000

Installment plan non-currentInstallmentInstallment interest-bearingplan non-current plan non-current debt interest-bearing to credit interest-bearing institutions debt to credit(mortgage debt institutionsto credit loan) institutions and (mortgage bond loan(mortgage loan) (figures and loan) bond in TNOK): and loan bond (figures loan in (figures TNOK): in TNOK):

2019 20192020 2019 20212020 2020 20212022 2021 20222023 2022 2023 2023 Annual installments*Annual installments*Annual installments* -221 544 -221-244 544242 -221 544 -266-244 941242 -244 242-266-337 941 511-266 941 -337-228 511797 -337 511 -228 797 -228 797 Remaining loan perRemaining 31.12. Remaining loan per 31.12.loan per 31.12. 1 988 499 11 988744 4992571 988 49911 477744 3162571 744 2571 4771 139316 1804 477 316 1 139911 8040071 139 804 911 007 911 007

Other current liabilitiesOther percurrentOther 31.12 liabilities current(figures liabilitiesperin TNOK): 31.12 per (figures 31.12 in (figures TNOK): in TNOK): 2018 20182017 2018 2017 2017 Prepayment from customersPrepaymentPrepayment from customers from customers 63 270 6359 270804 63 270 59 804 59 804 Incurred interests andIncurred guarantee interestsIncurred commission and interests guarantee and guaranteecommission commission 17 854 1722 854315 17 854 22 315 22 315 Provision for other Provisionincurred costs Provisionfor other etc. incurredfor other costs incurred etc. costs etc. 44 478 4423 478292 44 478 23 292 23 292 Other current liabilitiesOther 31.12.currentOther liabilities current liabilities31.12. 31.12. 125 602 125105 602411 125 602 105 411 105 411

Derecognition of financialDerecognition obligationsDerecognition of financial of financialobligations obligations Fjord line AS has enteredFjord line intoFjord AS a loan has line enteredagreement AS has into entered with a loan the into agreementaustralian a loan agreement exportwith the finance australian with bodythe australianexport EFIC financeabout export financing body finance EFIC the body aboutpurchase EFIC financing aboutof a new financingthe catamaranpurchase the of purchase a new catamaranof a new catamaran to operate the route toKristiansand operateto the operate Hirtshals.route Kristiansandthe Fjordroute KristiansandLine Hirtshals. AS stands Hirtshals.Fjord as the Line formal Fjord AS stands Lineborrower AS as thestands also formal during as the borrower theformal construction borroweralso during period, also the during construction but as the a resultconstruction period, of the but enteredperiod, as a result but as of a the result entered of the entered agreement with EFICagreement and theagreement withcontractor EFIC with ofand the EFICthe catamaran contractor and the Austal-group contractor of the catamaran of will the catamaranFjord Austal-group Line Austal-group not willbe required Fjord will Line to Fjord paynot interest beLine required not or beinstalments torequired pay interest toin paythe or constructioninterest instalments or instalments in the construction in the construction period together withperiod a additional togetherperiod agreement with together a additional thatwith in a theadditional agreement event of agreement thata default in the thatof event debt, in theof will a event default EFIC of ofseeka defaultdebt, full will coverageof debt,EFIC will fromseek EFIC fullAustal coverageseek before full fromcoveragethey kanAustal seekfrom before Austal they before kan seekthey kan seek 65 coverage of the debtcoverage from Fjord ofcoverage the Line debt AS.of from the This debt Fjord results from Line in Fjord FjordAS. LineThis Line resultsAS. considering This in Fjordresults the Line in significant Fjord considering Line risk considering ofthe the significant debt the as significanttransfered risk of the torisk debt another of as the transfered partydebt asand transfered to thus another settled to party another and partythus settled and thus settled in accordance with NRSin accordance 18. in accordance with NRS with 18. NRS 18. Note 16 Liabilities Note- parent 16 Liabilities company - parent company

(The figures in the table(The belowfigures is in in the TNOK) table below is in TNOK)

Non-current interestNon-current bearing debt interest per 31.12. bearing debt per 31.12. 2018 20172018 2017 Debt to credit institutionsDebt to etc. credit institutions etc. 2 408 955 2 270408 334955 2 270 334 Bond loan Bond loan 0 74 0000 74 000 Total non-current Totalinterest non-current bearing debt interest 31.12. bearing debt 31.12. 2 408 955 2 344408 334955 2 344 334

Current interest bearingCurrent debt interest per 31.12. bearing debt per 31.12. 2018 20172018 2017 Debt to credit institutionsDebt to (overdraft credit institutions facilities) (overdraft facilities) 0 0 0 Other current interstOther bearing current debt, interst including bearing debt debt, to owners including of the debt parent to owners company of the parent company 0 0 0 Total current interestTotal bearing current debt interest 31.12. bearing debt 31.12. 0 0 0

Total book value ofTotal interest book bearing value ofdebt interest 31.12. bearing debt 31.12. 2 408 955 2 344408 334955 2 344 334

Fjord Line AS had anFjord unused Line overdraft AS had an facility unused limit overdraft of MNOK facility 35 perlimit 31.12.2018 of MNOK (1535 perMNOK 31.12.2018 pr 31.12.2017). (15 MNOK pr 31.12.2017). Per 31.12.2018 the Perbalance 31.12.2018 on the overdraft the balance facility on the is overdraftpositive by facility 128,1 isMNOK positive (23,6 by 128,1 MNOK MNOK per 31.12.2017). (23,6 MNOK per 31.12.2017).

Non-current interestNon-current bearing debt interest - distributed bearing debt on currency - distributed per 31.12.2018 on currency figures per 31.12.2018in 1.000) figures in 1.000)

Currency CurrencyNominal currency Nominal currencyExchange rate Exchange rateBook value in NOKBook 31.12.2017 value in NOK 31.12.2017 NOK NOK 112 329 112 329 1,000 1,000 112 329 112 329 Euro Euro 177 291 177 291 9,948 9,948 1 763 745 1 763 745 DKK DKK 400 000 400 000 1,322 1,322 532 880 532 880 Total non-current Totalinterest non-current bearing debt interest 31.12. bearing debt 31.12. 2 408 955 2 408 955

Non-current interestNon-current bearing debt interest - distributed bearing debt on currency - distributed per 31.12.2017 on currency (figures per 31.12.2017 in 1,000) (figures in 1,000)

Currency CurrencyNominal currency Nominal currencyExchange rate Exchange rateBook value in NOKBook 31.12.2015 value in NOK 31.12.2015 NOK NOK 132 727 132 727 1,000 1,000 132 727 132 727 Euro Euro 192 763 192 763 9,840 9,840 1 881 157 1 881 157 DKK DKK 250 000 250 000 1,322 1,322 330 450 330 450 Total non-current Totalinterest non-current bearing debt interest 31.12. bearing debt 31.12. 2 344 334 2 344 334

Borrowing in EuroBorrowing and Danish in kroner Euro and Danish kroner Borrowing in Euro Borrowingand Danish inkroner Euro isand recognised Danish kroner in the isbalance recognised sheet inat thecurrent balance exchange sheet atrate current per 31.12.2018 exchange rateand per31.12.2017, 31.12.2018 cf. andthe 31.12.2017,table above. cf. the table above. Foreign exchange lossForeign in 2018 exchange related lossto non-current in 2018 related loan toin non-currentEuro and Danish loan inkroner Euro wasand 108,7Danish MNOK kroner in was 2018 108,7 MNOK in 2018 Foreign exchange gainForeign in 2017 exchange related gain to non-current in 2017 related loan toin non-currentEuro is 159,3 loan MNOK in Euro in 2017is 159,3 MNOK in 2017

Book value per 31.12.Book for value the Euro-borrowings per 31.12. for the and Euro-borrowings Danish kroner-borrowings and Danish askroner-borrowings follows in NOK as follows in NOK (figures in TNOK):(figures in TNOK): 2018 20182017 2017 Principal amount: Principal amount: 2 247 072 2 2472 227 072 288 2 227 288 Amortization effect Amortizationof the borrowings, effect incl.of the guarantee borrowings, commission incl. guarantee commission -14 700 -14 -15700 682 -15 682 Book value per 31.12.Book value per 31.12. 2 232 372 2 2322 211 372 606 2 211 606

Notes ⁄⁄ Fjord Line Annual Report 2018 Bond issue Bond issue The bond loan was settledThe bond in itsloan entirety was settled in 2018. in its entirety in 2018.

2018 20182017 2017 Total amount of bonds:Total amount of bonds: 0 74 0000 74 000 Own holding Own holding 0 0 0 Amortization effect Amortizationof theNote loan 16(expenses effect⁄⁄Liabilities of etc.)the loan – (expenses Parent etc.)company 0 0 0 Book value bond loanBook 31.12. value bond loan 31.12. 0 74 0000 74 000

Installment plan non-currentInstallment interest-bearing plan non-current debt interest-bearing to credit institutions debt to (mortgagecredit institutions loan) and (mortgage bond loan loan) (figures and bondin TNOK): loan (figures in TNOK):

2019 20192020 20212020 20212022 20232022 2023 Annual installments*Annual installments* -221 544 -221-244 544242 -266-244 941242 -266-337 941 511 -228-337 797511 -228 797 Remaining loan perRemaining 31.12. loan per 31.12. 1 988 499 1 988744 499257 11 477744 316257 1 4771 139 316 804 1 911139 007804 911 007

Other current liabilitiesOther percurrent 31.12 liabilities (figures inper TNOK): 31.12 (figures in TNOK): 2018 20172018 2017 Prepayment from customersPrepayment from customers 63 270 5963 804270 59 804 Incurred interests andIncurred guarantee interests commission and guarantee commission 17 854 2217 315854 22 315 Provision for other Provisionincurred costs for otheretc. incurred costs etc. 44 478 2344 292478 23 292 Other current liabilitiesOther 31.12.current liabilities 31.12. 125 602 105125 411602 105 411

Derecognition of financialDerecognition obligations of financial obligations Fjord line AS has enteredFjord lineinto AS a loan has agreemententered into with a loan the agreementaustralian exportwith the finance australian body export EFIC financeabout financing body EFIC the aboutpurchase financing of a new the catamaran purchase of a new catamaran to operate the route toKristiansand operate the Hirtshals. route Kristiansand Fjord Line Hirtshals. AS stands Fjord as the Line formal AS stands borrower as the also formal during borrower the construction also during period, the construction but as a result period, of the but entered as a result of the entered agreement with EFICagreement and the contractorwith EFIC of and the the catamaran contractor Austal-group of the catamaran will Fjord Austal-group Line not willbe required Fjord Line to pay not interestbe required or instalments to pay interest in the or construction instalments in the construction period together withperiod a additional together agreement with a additional that in the agreement event of thata default in the of event debt, of will a default EFIC seekof debt, full willcoverage EFIC from seek Austalfull coverage before fromthey kanAustal seek before they kan seek coverage of the debtcoverage from Fjord of the Line debt AS. from This Fjord results Line in FjordAS. This Line results considering in Fjord the Line significant considering risk ofthe the significant debt as transfered risk of the to debt another as transfered party and to thus another settled party and thus settled in accordance with NRSin accordance 18. with NRS 18.

66 Fjord Line Annual Report 2018 ⁄⁄ Notes

Note 17 WageNote costs,Note 17 number Wage 17⁄⁄ costs,Wage of employees, number costs, of remunerations, numberemployees, of remunerations, employees,pension etc. - pensionparent remunerations, companyetc. - parent company pension etc. – Parent company

(Figures(Figures inin tabletable(Figures belowbelow in inin table TNOK)TNOK) below in TNOK)

Wage costs Wage costs 20182018 2018 20172017 2017 Wages, incl. feedingWages, crew incl. etc.feeding crew etc. 7474 432432 74 4327575 097097 75 097 Payroll tax Payroll tax 1212 616616 12 6161212 145145 12 145 Pension costs Pension costs 11 358358 1 35811 966966 1 966 Other remunerationsOther remunerations 1212 323323 12 32322 743743 2 743 Total Total 100100 729729 100 7299191 951951 91 951

Average numberAverage of man-labour number of years man-labour during the years accounting during the year accounting has been 121year inhas 2018 been (128 121 inin 2017).2018 (128 in 2017).

RemunerationsRemunerations for CEO and forthe CEOBoard and of Directorsthe Board (figures of Directors in TNOK) (figures in TNOK) 20182018 2018 20172017 2017 Wages CEO Wages CEO 22 050050 2 05022 050050 2 050 Bonus CEO Bonus CEO 513513 513 129129 129 Other remunerationOther remunerationCEO CEO 239239 239 1212 12 Board of Directors'Board fee of Directors' fee 9191 91 450450 450 The figures aboveThe dofigures not includeabove do the not option include program. the option See belowprogram. for Seefurther below information. for further information. No loan or guaranteeNo loan have or guarantee been provided have beenfor CEO provided or any for of CEO the membersor any of of the the members Board of of Directors. the Board of Directors. The CEO is includedThe CEO in theis included company's in thepension company's agreement, pension cf agreement,mentioned cfbelow. mentioned According below. to theAccording agreement, to the 20 agreement,% of gross 20salary % of is grossallocated salary annually is allocated annually andand thethe liabilityliabilityand amountsamounts the liability toto perper amounts 31.12.201831.12.2018 to per TNOKTNOK 31.12.2018 1.4171.417 (TNOK(TNOKTNOK 1.417 1.0071.007 (TNOK asas atat 31.12.17)31.12.17) 1.007 as at 31.12.17)

Pensions Pensions The company Thehas takencompany on a haspension taken savings on a pension agreement savings on behalfagreement of the on former behalf andof the the former present and CEO the and present another CEO two and individuals. another two individuals. The market valueThe ofmarket the contributions/assets value of the contributions/assets was var TNOK was 4.047 var perTNOK 31.12.2018 4.047 per (TNOK 31.12.2018 4.127 (TNOKper 31.12.2017). 4.127 per 31.12.2017). Gross liability Grossper 31.12.2018 liability per is 31.12.2018calculated to is TNOK calculated 6 587 to relatedTNOK to6 587these related four persons to these (TNOK four persons 6 149 (TNOKper 31.12.2017). 6 149 per 31.12.2017). Net liability isNet thus liability TNOK is3.486 thus perTNOK 31.12.2018 3.486 per (TNOK 31.12.2018 3.048 (TNOKper 31.12.2017), 3.048 per and31.12.2017), is classified and as ispension classified liability as pension in the liabilitybalance insheet. the balance sheet.

InIn additionaddition thetheIn companycompany addition hashasthe establishedestablishedcompany has aa defined definedestablished contributioncontribution a defined pensionpension contribution schemescheme pension forfor itsits scheme employees.employees. for its employees. The company Thepays companyfixed contributions pays fixed tocontributions an insurance to company. an insurance The company. company Thehas nocompany further hasobligations no further to obligationspay once the to contributions pay once the havecontributions been paid. have been paid. The contributionThe constitutes contribution from constitutes 2% to 4% from of the2% employees' to 4% of the salary. employees' salary.

Auditor Auditor Expensed fee toExpensed auditor relatesfee to auditorto the following relates to servicesthe following (exclusive services of vat),(exclusive figures of in vat), TNOK: figures in TNOK: 20182018 2018 20172017 2017 Audit servicesAudit services 633633 633 919919 919 Certification services/Agreed-uponCertification services/Agreed-upon control procedures control procedures 1111 11 2626 26 Accounting andAccounting tax related/duty and tax related related/duty technical related assistance technical assistance 254254 254 181181 181 Other servicesOther services 371371 371 250250 250 Total auditor'sTotal fee auditor's fee 11 269269 1 26911 376376 1 376

67 Notes ⁄⁄ Fjord Line Annual Report 2018

NoteNote 18 Interest18⁄⁄Interest income/interest income/interest expenses and expenses intergroup and guarantee intergroup commission guarantee - parent commission company – Parent company

(Figures in TNOK)

Interest income comprises:

2018 2017 Interest income on loan to subsidiary (intergroup interests) 99 854 82 315 External interest income 956 1 271 Total 100 810 83 586

Interest expenses comprises:

2018 2017 Interest expenses on loan to subsidiary (intergroup interests) 1 726 1 844 External interest expenses 100 998 86 227 Total 102 724 88 071

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 2018 Fjord Line AS has expensed an intergroup guarantee cost of TNOK 24.425 (TNOK 22.592 in 2017) 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.

NoteNote 19 NOx-grant 19⁄⁄NOx-grant - parent – companyParent company

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. 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 from time of delivery.

In 2018 Fjord Line AS received 0 MNOK in NOx-grants (8 MNOK in 2017). In the 2018 accounts MNOK 5,2 of the grants was recognised as income (5,5 MNOK in 2017). The amount was classified as other operating income in the income statement. For 2016 and 2017 the grants are subject to accrual in line with the depreciation profile of the operating assets to which the grants relate.

Below is a summary of accounting values (figures in TNOK)

Total received grants 31.12.2016 166 809 A Received grants 2017 0 B Total received grants 31.12.2017 166 809 C (A+B) Grants recognised as income 2017 -5 469 D Accumulated grants recognised as income 31.12.2017 -68 510 E Grants received, not recognised in the income statement 31.12.2017 98 298 F (C + D + E) Grants received 2018 0 G Total received grants 31.12.2018 166 809 H (C + G) Grants recognised as income 2018 -5 469 I Accumulated grants recognised as income 31.12.2018 -73 979 J (D + E + I) Grants received, not recognised in the income statement 31.12.2018 92 829 K (H + J)

68 Fjord Line Annual Report 2018 ⁄⁄ Auditors report

KPMG AS Telephone +47 04063 Forusparken 2 Fax Note 18⁄⁄Interest income/interest expenses and intergroup guarantee commission – Parent company Postboks 57 Internet www.kpmg.no 4064 Stavanger Enterprise 935 174 627 MVA

To the General Meeting of Fjord Line AS

Independent auditor’s report

Report on the Audit of the Financial Statements

Opinion We have audited the financial statements of Fjord Line AS, which comprise:

• The financial statements of the parent company Fjord Line AS (the Company), which comprise the balance sheet as at 31 December 2018, the income statement and cash flow statement for the year then ended, and notes to the financial statements, including a summary of significant accounting policies, and

• The consolidated financial statements of Fjord Line AS and its subsidiaries (the Group), which comprise the balance sheet as at 31 December 2018, the income statement, statement of comprehensive income and statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies.

In our opinion:

• The financial statements are prepared in accordance with the law and regulations.

• The accompanying financial statements give a true and fair view of the financial position of the Company as at 31 December 2018, and its financial performance and its cash flows for the year then ended in accordance with the Norwegian Accounting Act and accounting standards and practices generally accepted in Norway.

• The accompanying consolidated financial statements give a true and fair view of the financial position of the Group as at 31 December 2018, and its financial performance and its cash flows for the year then ended in accordance with simplified application of international accounting standards according to section 3-9 of the Norwegian Accounting Act.

Basis for Opinion We conducted our audit in accordance with laws, regulations, and auditing standards and practices generally accepted in Norway, including International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company and the Group as required by laws and regulations, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

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Fjord Line AS

Other information Management is responsible for the other information. The other information comprises information in the annual report, except the financial statements and our auditor's report thereon.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of the Board of Directors and the Managing Director for the Financial Statements The Board of Directors and the Managing Director (Management) are responsible for the preparation in accordance with law and regulations, including fair presentation of the financial statements of the Company in accordance with the Norwegian Accounting Act and accounting standards and practices generally accepted in Norway, and for the preparation and fair presentation of the consolidated financial statements of the Group in accordance with simplified application of international accounting standards according to the Norwegian Accounting Act section 3-9, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Company’s and the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern. The financial statements of the Company use the going concern basis of accounting insofar as it is not likely that the enterprise will cease operations. The consolidated financial statements of the Group use the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with laws, regulations, and auditing standards and practices generally accepted in Norway, including ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with laws, regulations, and auditing standards and practices generally accepted in Norway, including ISAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

• identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error. We design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's or the Group's internal control.

• evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

2 70 Fjord Line Annual Report 2018 ⁄⁄ Auditors report

Fjord Line AS

• conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company and the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company and the Group to cease to continue as a going concern.

• evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

• obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with the Board of Directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Report on Other Legal and Regulatory Requirements

Opinion on the Board of Directors’ report Based on our audit of the financial statements as described above, it is our opinion that the information presented in the Board of Directors’ report concerning the financial statements and the going concern assumption is consistent with the financial statements and complies with the law and regulations.

Opinion on Registration and Documentation Based on our audit of the financial statements as described above, and control procedures we have considered necessary in accordance with the International Standard on Assurance Engagements (ISAE) 3000, Assurance Engagements Other than Audits or Reviews of Historical Financial Information, it is our opinion that management has fulfilled its duty to produce a proper and clearly set out registration and documentation of the Company’s accounting information in accordance with the law and bookkeeping standards and practices generally accepted in Norway.

Stavanger, 14 May 2019 KPMG

Mads Hermansen State Authorised Public Accountant

Note: This translation from Norwegian has been prepared for information purposes only.

3 71 Foto: Francisco Munoz, www.fotografenas.no, Kimm Saatvedt/Palookaville, Jon Inge Nordnes/Allegro, Mike Louagie, Espen Gees, Gettyiimages.no. Layout: Fjord Line.Print: BK Grafisk / 500 Sandefjord–Strømstad MS Oslofjord Kristiansand–Hirtshals Langesund–Hirtshals Bergen–Stavanger–Hirtshals HSC Fjord Cat KRISTIANSAND |HIRTSHALS 2h15min HIRTSHALS 4h30min |LANGESUND STAVANGER |HIRTSHALS 11h30min BERGEN |STAVANGER 5h30min SANDEFJORD |STRØMSTAD 2h30min MS Stavangerfjord /MSBergensfjord MS Stavangerfjord /MSBergensfjord

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