Financial Accounts Directors Report

DIRECTORS’ REPORT

ASTRUP FEARNLEY AS DIRECTORS’ REPORT 2020

BUSINESS ACTIVITIES

Astrup Fearnley AS (“Astrup Fearnley” or the “Company”) is engaged in advisory and brokerage activities within shipping, offshore and financial services. In addition, the Company has ownership and investments in art, real estate, forestry and financial instruments.

Astrup Fearnley AS is the Group’s parent company and maintain its head office in Oslo, Norway.

OBJECTIVES FOR THE OPERATION

The Company’s main goal is to own and develop the brokerage firms within the Group as preferred, independent and research driven advisors and brokers for investors and companies involved in its core industries, such as shipping, offshore, oil and gas, aquaculture, renewable energy and real estate. The companies in the Group has a global approach to research, clients, and markets.

Astrup Fearnley has a strong focus on corporate governance, integrity, and high ethical standards. The Company operates in accordance with good business practice and has an open dialogue with regulatory authorities, industry organizations, official agencies, and other stakeholders. The Company’s board of directors and executive management seek to organize the business so that clients and the general public has confidence in the Company’s research, advise and decisions.

ENVIRONMENT

The Company’s operations are not of a nature that gives rise to pollution of the external environment.

GENDER EQUALITY, DISCRIMINATION AND THE WORKING ENVIRONMENT

The working environment in the Company is good and the general well-being in the workplace is satisfactory. Absence among employees due to illness is limited (2.04% on average for the Group), and no accidents or injuries were reported in 2020. The Company implemented comprehensive and strict preventive measures to protect its employees from Covid-19 during 2020.

Astrup Fearnley aims to be a workplace where there is equality between women and men. In its recruitment policy, the Company deliberately seeks to attract the most talented candidates, without discriminating on the basis of gender, ethnicity, religion or other factors.

The Astrup Fearnley Group has significantly increased its focus on HR in 2020 and established systems for mapping and following up matters covered by §26 of the Equality and Discrimination Act.

At the end of the year, the Company had 13 employees, 4 of whom are women. The board consists of five men and two women. The Astrup Fearnley Group has approx. 331 employees of which 68 are women.

FUTURE DEVELOPMENT

In addition to the Company’s own efforts and development, Astrup Fearnley’s earnings are affected by the activity in the world economy in general, and in particular activity in shipping, oil / offshore and energyrelated industries.

Covid-19 became a significant factor for our employees, our businesses and clients in 2020. Despite a demanding humanitarian situation and challenging market picture, Astrup Fearnley experienced positive developments in 2020. Both the Groups’s ship brokerage and financial services businesses delivered satisfactory results. The offshore businesses performed satisfactorily through difficult market conditions in addition to the pandemic.

Targeted strategic work over time contributed to developing the organization in a positive direction.

Despite persistent volatility in global markets and cyclical fluctuations within the Group’s core industries, our basic beliefs in shipping, oil / offshore and energy-related industries remain strong. Astrup Fearnley has comparative advantages in these areas and continues its focus on the ocean industries.

Astrup Fearnley has a solid balance sheet and is well equipped to tackle market challenges. The Board therefore maintains its optimistic view on the Company’s development and opportunities both in 2021 and in the longer term.

FINANCIAL RISK AND INTERNAL CONTROL

Financial risk in the Company consists primarily of market risk, credit risk, counterparty risk and settlement risk. Work with internal control, compliance and reporting are prioritized areas. The Group focuses on the implementation and maintenance of appropriate internal control routines as well as reliable reporting routines that ensure good monitoring of operations and compliance with regulatory requirements.

STATEMENT OF THE ANNUAL ACCOUNTS

The result for the year for the parent company, Astrup Fearnley AS, shows a profit of NOK 341.8 million (NOK 5.6 million in 2019) which is proposed to be distributed as a dividend of NOK 200 million and the remainder transferred to other equity. Book equity amounted to NOK 1,734,666 as of 31.12.2020 (NOK 1,593,610 in 2019).

The Group’s result for 2020 shows a profit of NOK 654.5 million before tax and NOK 494.3 million after tax (loss of NOK 57.5 million before tax and NOK 46.3 million after tax in 2019 respectively).

The Group’s assets per. 31.12.2020 has a book value of NOK 3,186.5 million. The Group’s debt amounts to NOK 1,318.9 million and the Group’s book equity is NOK 1,867.7 million. The liquidity in the Group is considered good.

Total cash flow from operations in the Group was NOK 308.8 million, while the operating profit for the Group amounted to NOK 638.5 million. The result of the total investment activities in the Group in 2020 gave a positive cash flow of NOK 521.7 million.

The Group has incurred expenses for research and development of support / research systems for the brokerage businesses.

GOING CONCERN

In accordance with the Accounting Act § 3-3a, it is confirmed that the assumptions about continued operations are present and have been used as a basis for the preparation of the accounts. The Company’s financial position is good.

EVENTS AFTER THE BALANCE SHEET DATE

The board has assessed whether the corona pandemic will have a significant financial effect in the time ahead, but it is challenging to say how large consequences this will have for the Group going forward.

The board believes that the annual accounts give a true and fair view of the Company’s assets and liabilities, financial position and results at the turn of the year, and is not aware of any company-specific events after the date of the financial statements that require specific discussion.

Cecilie Astrup Board member

Aage R. Bj. Figenschou Board member Oslo, May 11th, 2021

Jan Håkon Pettersen Chairman

Anna Catharina Astrup Board member

Erik Bartnes Board member

Even Matre Ellingsen Chief Executive Officer Harald Moræus Hanssen Board member

Lars Jacob Bø Board member