Hunter Group ASA

Untitled Annual report 2021 Hunter Group ASA – Annual report 2021 2 Table of contents ▪ Highlights 03 ▪ Corporate governance policy 04 ▪ Corporate social responsibility policy 11 ▪ Responsibility statement 15 ▪ Board of Directors’ report 16 ▪ Consolidated financial statements 20 ▪ Financial statements for Hunter Group ASA 50 ▪ Auditor’s report 63 Hunter Group ASA - 2021 3 Highlights Financial highlights in 2021 • Total revenues of USD 40.43m − Spot pool revenues of USD 7.44m − Time charter revenues of USD 29.72m − Gain on sale of assets of USD 2.57m • Total operating expenses of USD 27.26m − Vessel opex incl. insurance of USD 9.78m − Voyage expenses and commissions of USD 1.92m − G&A expenses of USD 1.81m − USD 1.34m administrative expenses − USD 0.15m legal expenses − USD 0.32m non-cash expenses • EBITDA of 26.92m • Net profit of USD 3.78m • Average daily earnings of USD 24,900 − Avg. daily spot earnings of USD 27,800 − Avg. daily time charter earnings of USD 17,500 • Opex incl. insurance of USD 6,300 per day • 1,494 earnings days and 1,557 opex days − 424 spot days − 1,070 time charter days • 2021 cash breakeven of USD 22,000 Key events in 2021 • The sale of the Company’s oldest vessel, Hunter Atla (2019) for USD 84.5m was concluded in April 2021, and the vessel was successfully delivered to her new owners. The sale resulted in a net gain of approx. USD 2.6m, a cash release of approx. and a investment ROI of approx. 46%. • Extraordinary General Meeting on 1 February 2021, which approved a NOK 1.0 per share distribution • The Company distributed a total of USD 98 million to its shareholders, or NOK 1.50 per share, as a reduction of the Company’s share premium. • Bought back a total of 3,551,702 of own shares at a dividend adjusted price of NOK 2.43 per share through a combination of open market purchases and an announced offer to buy back up to 50 million shares. Following the share buy-backs the Company currently holds 11,243,196 of it own shares • The Annual General Meeting was held on 3 June 2021, and all resolutions were passed in accordance with the previously announced proposals, including, inter alia, authorizations to acquire own shares and issue new shares Subsequent events • Entered into a 4+4 month time charter for Hunter Disen, which commenced on 27 January 2022. The first four month is for USD 18,000 per day, while the charterer has the option to extend for another four months as USD 25,000 per day. • Entered into two 12-month index-based linked charters for Hunter Idun and Hunter Frigg. Hunter Idun commenced on this charter on January 26th, while Hunter Frigg will commence her charter following the end of her current TC. • As of the date of this report, 93% of days in the first quarter of 2022 have been booked at an average est. dayrate of USD 20,200 − 84% of spot days booked at an avg. est. dayrate of USD 15,400 − Average Q1 TC dayrates of USD 23,900 Hunter Group ASA - 2021 4 Corporate governance policy Hunter Group ASA’s Board of Directors approved this updated Corporate Governance Policy on 23 th March 2022. 1. Introduction Corporate Governance regulates the responsibilities of the executive personnel and the Board of Directors of Hunter Group ASA and its subsidiaries. The subsidiaries adopts the relevant governing documents. Hunter Group ASA (“HUNT”, “the Company” or “the Group”) is a Norwegian public limited liability company which shares are listed on the Oslo Børs/Oslo Stock Exchange (Oslo Axess list) and it is therefore subject to the corporate governance requirements as set out in the Norwegian Code of Practice for Corporate Governance. HUNT works according the Norwegian Code of Practice for Corporate Governance dated 17th October 2018 (www.nues.no). Where HUNT does not fully comply with the recommendations, an explanation or comment is given. Oslo Børs/Oslo Stock Exchange prescribes that companies listed on the Oslo Børs/Oslo Stock Exchange must publish a report in their annual report on the Company’s corporate governance. HUNT aims to have effective systems in place for communication, monitoring, accountability, and incentives that also enhance the market value, corporate profit, long-term strength, continuity and overall success of the business of HUNT. In addition to strengthen the confidence amongst its shareholders. HUNT is a small company with limited resources available within the organization. The number of employees (including managers) were 4 at year-end 2021. This limits the ability to allocate resources to report and follow up on Corporate Governance and Corporate social responsibility (CSR). On the other hand, a limited organization in combination with external board and a transparency culture is a strength in the companys daily work with Corporate Governance and CSR. The principles, rules and regulations are outlined to meet both todays business model and complexity and future, more complex business environments. The board will monitor the need for increased capacity to fulfill external and internal rules and regulation as the business develops. 2. Reporting on Corporate Governance Hunter Group ASA’s Board of Directors review and approves this Corporate Governance Policy annually, which can also be found on its website (www.huntergroup.no) and is included in the annual report. The Company’s basic corporate values are incorporated in the Company’s management system. The Board of Directors has implemented ethical guidelines and a corporate social responsibility policy, which are reviewed and re-issued annually. 3. Business In the Article of Association HUNT’s business is described as follows: Hunter group is a publicly traded investment company focusing on shipping and oil service investments. The main investment is Hunter Tankers AS, a wholly owned subsidiary shipping company. Hunter Tanker AS’ fleet consisted of four identical VLCCs at year end 2021. All four VLCCs are built by DSME in Korea, and are equipped with Wärtsila scrubbers. The Badger Explorer technology for exploring and mapping of hydrocarbon resources is organized in the subsidiary Indicator AS. It has no employees and there has been no activity in the company in 2021. The cash burn is down to a bare minimum and is close to zero. The Company’s objectives and principal strategies are described in the annual report. 4. Equity and Dividends The development of the Group’s equity up to 31 December 2021 is described in the “Statement of change in equity” in the financial statements of the annual report. Hunter Group ASA - 2021 5 HUNT’s dividend policy aims to yield a competitive return on invested capital to the shareholders through a combination of dividends, share buybacks and share price developments. In 2021. the Company distributed NOK 1.50 per share as a reduction in the Company’s share premium. At the Company’s annual general meeting on 3 June 2021 the Board of Directors was granted a mandate to increase the Company's share capital by up to NOK 324,000,000 to fund investments and by up to NOK 35,000,000 to be used in connection with the Company's share incentive program. Furthermore, the Board of Directors were granted a mandate to acquire, on behalf of the Company, up to 57,535,000 of the Company’s own shares. The mandate granted by the Company’s annual general meeting on 3 June 2021 are valid until 30 June 2022. The authorizations are in accordance with Norwegian Code of Practice for Corporate Governance. 5. Equal Treatment of Shareholders and Transactions with Close Associates HUNT has one class of shares and is dedicated to applying equal treatment to all shareholders. The decision to waiver the existing shareholders’ pre-emption rights in the event of an increase in the share capital must be justified. The Board of Directors will disclose such a justification in the stock exchange notification in connection with the increase in share capital. If a transaction between the Company and a shareholder of the Company, a shareholder’s parent company, a member of the Board of Directors or a member of executive personnel (or related parties to such persons) is considered to be material in accordance with the Norwegian Code of Practice for Corporate Governance, the Board will obtain a valuation from an independent third party. This will not apply if the GM’s approval for such transactions is required according to the Norwegian Public Limited Companies Act §3-8. Board members and the executive personnel shall notify the Board of any material direct or indirect interest in any transaction entered into by HUNT. Deviation from the Norwegian Code of Practice for Corporate Governance: The shareholders’ pre-emptive rights are exempted because the Group wishes to be able to (i) use share issues for its employees, Directors and others important stakeholders with the Group as a part of the Group’s share incentive scheme and (ii) issue shares towards certain specifically chosen institutional investors or others if required or desired in conjunction with the Group’s expansion, development and/or strategic acquisitions. 6. Freely Negotiable Shares All HUNT shares carry equal rights and are freely negotiable. Each share represents one vote at the GMs. The nominal value per share amounts to NOK 1.25. At the date of this annual report, there are no restrictions regarding transferability in the Group’s Articles of Association or any other transfer restrictions related to HUNT’s shares. 7. General Meetings (“GM”) The shareholders exercise the highest authority in HUNT through AGMs. In 2022 the Annual General Meeting of HUNT will be held on 28 April. The Group’s financial calendar has been published in a notice to the Oslo Stock Exchange and is available on HUNT’s website. The GMs shall approve the annual accounts, the annual report, distribution of dividend, and otherwise make such resolutions as required under the Corporate Governance Policy and the applicable law. The Board shall publish notices of GMs and any supporting material, such as the agenda, recommendations of the Nomination Committee, the information about the shareholder’s right to propose resolutions in respect of matters to be dealt with by the General Meeting and other documents as set out in the bye-laws of the Group, no later than 21 days prior to the day of the GM, on the Group’s website (www.huntergroup.no). The Board will also ensure that the distributed notice and all supporting material are suﬃciently detailed. The Board will make reasonable eﬀorts to enable as many shareholders as possible to attend. Corporate governance policy Hunter Group ASA - 2021 6 The notice shall also include information on the procedure of representation through proxy, as well as a proxy that allows giving separate voting instructions for each matter to be considered by the General Meeting and for each candidate nominated for election. The Group will nominate a person who will be available to vote on the shareholder’s behalf if the shareholder has not appointed a proxy. The Board shall make such notices of General Meetings and the relevant supporting material available through the notification system of Oslo Børs/Oslo Stock Exchange and on the Group’s website no later than 21 days prior to the day of the GM. Every shareholder has the right to put matters on the agenda of a General Meeting along with a proposed resolution within the statutory timeframe. The shareholders may be asked to notify their attendance prior to the GM. The deadline for the notification of attendance for the AGM will be as close to the meeting as possible. Shareholders who are unable to attend may vote by proxy. A proxy form shall be attached to the notice of the GM. The GM’s chairperson shall be independent. The Company’s Board and the chairperson of the GM shall ensure that the shareholders vote separately for each candidate nominated for a corporate body. HUNT will publish the minutes of GMs (alternatively only such resolutions that were not made in accordance with the proposals made in the notice to the GM) through the notification system of Oslo Børs/Oslo Stock Exchange and on its website no later than 15 days after a GM has been held and will maintain them available for inspection in the Company's oﬃces. The Annual General Meeting in 2021 was held in Oslo on June 3 rd where 30.45% of all shares were represented. Deviation from the Norwegian Code of Practice for Corporate Governance: The Norwegian Code of Practice for Corporate Governance demands that the Board of Directors as a whole, the members of the Nomination Committee and the Auditor are present at the General Meetings. HUNT considers it suﬃcient that only the chairperson of the Board and the Auditor attend GMs. 8. Nomination Committee HUNT’s Nomination Committee consists of two to three members, elected by the Company’s General Meeting. The majority of the members shall be independent of the Board of Directors and the Company’s executive personnel. No more than one member of the Board of Directors shall be member of the Nomination Committee and should not oﬀer himself for re-election to the Board. The members of the Nomination Committee are elected by the shareholders in a GM for a period of no longer than two years. The Nomination Committee proposes to the GM candidates for election to the Board. The composition of the Board of Directors should reﬂect the provisions of the Group’s Corporate Governance Policy, commitment to shareholder return, independence and experience in relevant sectors (technology and business development, financing and accounting, disclosure and regulatory, etc.). The Nomination Committee also proposes the remuneration to be paid to the members of the Board of Directors. The Nomination Committee’s recommendations shall include justification as to how the recommendations take into account the shareholder interests and the Group’s requirements. The following information about the proposed candidates, in particular each person’s age, education, business experience, term of appointment to the Board (if applicable), ownership interest in the Company, independence, any assignments (other than the proposed Directorship) for the Company and material appointments with other companies and organizations will be disclosed. In the event that the Nomination Committee recommends re-electing current Directors, the recommendation will include information on when the Directors were appointed the Board and their attendance records. The Nomination Committee shall elect its own chairperson according to the Group’s Articles of Association. Meetings of the Nomination Committee shall be convened when deemed necessary by any of its members to adequately fulfill its assigned duties. Notice of a meeting shall be issued by the chairperson of the Nomination Committee no later than one week prior to the meeting, unless all members approve a shorter notice period. Corporate governance policy Hunter Group ASA - 2021 7 The Group will provide information on its website regarding the membership of the Committee and any deadlines for submitting proposals to the Nomination Committee. The Nomination Committee consists of: Jacob Iqbal (chairperson) – elected until AGM in 2023 Arne Fredly – elected until AGM in 2023 One member of the Nomination Committee is considered independent of the Board of Directors. Deviation from the Norwegian Code of Practice for Corporate Governance: The Group’s Articles of Association regulate the election of the chairperson of the Nomination Committee. According to §6 of the Articles of Association of Hunter Group ASA the Nomination Committee elects its own chairperson. The Norwegian Code of Practice for Corporate Governance requires guidelines regarding the Nomination Committee’s duties to be set out by the General Meeting. At HUNT, the Committee itself sets out its duties in accordance with the duties presented in chapter 8 of the Group’s Corporate Governance Policy. 9. Board of Directors: Composition and Independence HUNT shall be headed by a Board with collective responsibility for the success of the Group. The Board shall comprise between three and eight Directors according to §5 of HUNT's Articles of Association. Currently the Board consists of three Directors, who have all been elected by the shareholders and are not representatives of HUNT's executive personnel. The members of the Board of Directors are elected for a period of two years. The members of the Board of Directors that were elected in the AGM 30 April 2020 are: Henrik A. Christensen (Chairman) – elected until AGM in 2022 Kristin Hellebust – elected until AGM in 2022 Arne Fredly – elected until AGM in 2022 All members of the Company’s Board of Directors are considered independent according to the Norwegian Code of Practice for Corporate Governance. Detailed information on the individual Board member can be found in the Group’s website (www.huntergroup.no) and in the Annual Report. Board members and close associates’ ownership as of 31 December 2021: Henrik A. Christensen owns 750 000 shares, through August AS, which represents 0,13%. Kristin Hellebust owns zero shares. Arne Fredly owns a total of 167,500,000 shares, through Apollo Asset Limited, which represents a total of 29,29%. According to the Norwegian Public Limited Companies Act § 6-35 and the Norwegian Code of Practice for Corporate Governance a Group with more than 200 employees is required to elect a corporate assembly. The Group has less than 200 employees and has therefore not yet elected a corporate assembly. 10. The Work of the Board of Directors The Board shall ensure that the Group is well organized and that operations are carried out in accordance with applicable laws and regulations, and in accordance with the objects of HUNT as specified in its Articles of Association and guidelines given by the shareholders through resolutions in GMs. HUNT’s Board of Directors has the ultimate responsibility for inter alia the Group’s executive personnel, supervision of its activities and the Group’s budgets and strategic planning. The Board of Directors produces an annual plan of its work. Corporate governance policy Hunter Group ASA - 2021 8 To fulfill its duties and responsibilities, the Board has full access to the Group’s relevant information. The Board shall also consider for example obtaining such advice, opinions and reports from third party advisors as it deems necessary to fulfill its responsibilities. The “Rules of Procedure for the Board of Directors of HUNT and the Relation to CEO” were approved by the Board on 31st October 2017 and were implemented. All of the board members are also members of the Audit Committee and Remuneration Committee. The Board of Directors evaluates its own performance and expertise once a year. The Board of Directors arranged 13 board meeting during the fiscal year 2021. Deviation from the Norwegian Code of Practice for Corporate Governance: The Norwegian Code of Practice for Corporate Governance requires the Board of Directors to consider appointing a remuneration committee. At HUNT, the Board itself prepares all matters relating to compensation paid to the Group’s executive management. 11. Risk Management and Internal Control HUNT has implemented internal control and risk management systems appropriate to the size and nature of the Group’s activities. The Group’s core values, ethical guidelines and the corporate social responsibility policy are incorporated in the internal control and risk management systems. The Board of Directors carries out an annual review of the control and risk management systems and the Group’s most significant exposures. In the annual report, the Board of Directors describes the main features of the Group’s internal control and risk management systems in relation to the Group’s financial reporting. 12. Remuneration of the Board of Directors The remuneration of the members of the Board of Directors reﬂects the Board’s responsibilities, expertise, the committed time and the complexity of the Group’s activities. The Board Members’ remuneration (form and amount) will be reviewed annually by the Nomination Committee and is not linked to the Group’s performance. It is the Nomination Committee’s responsibility to prepare a proposal for the Annual General Meeting regarding the above-mentioned remuneration. 13. Remuneration of the Executive Personnel The Board of Directors establishes, as required by law, guidelines for the remuneration of the members of the executive personnel. The AGM will vote on these guidelines which help ensure convergence of the financial interest of the executive personnel and the shareholders. The guidelines for remuneration of the executive personnel are published in the Annual report 2021 in note 23. Performance related remuneration of the Group’s executive personnel shall aim for value creation for HUNT’s shareholders or the Group’s earnings performance. Such arrangements shall encourage performance and be based on quantifiable factors which can be inﬂuenced by the employee. Performance related remuneration shall be subject to an absolute limit. Corporate governance policy Hunter Group ASA - 2021 9 As of 31 st December 2021, the executive personnel’s holdings of shares are the following: Name Shares Erik A.S. Frydendal 1,650,000 Sujoy K. Seal 125,000 Lars M. Brynildsrud 15,400 Total 1,790,400 14. Information and Communications HUNT provides its shareholders, Oslo Børs/Oslo Stock Exchange and the financial markets generally (through Oslo Børs’/Oslo Stock Exchange’s Distribution Network) with timely and accurate information. Such information takes the form of annual reports, quarterly interim reports, stock exchange notifications and investor presentations as applicable. HUNT communicates its long-term potential, including its strategy, value drivers and risk factors, maintains an open and proactive investor relations policy and a best-practice website, and gives presentations regularly in connection with annual and interim results in Oslo and Stavanger, Norway. The Company’s current financial calendar with dates of important events including the Annual General Meeting, publishing of quarterly reports and its presentations, etc. are accessible for all shareholders on https://live.euronext.com/ and on the Company’s website www.huntergroup.no. Subscription to news about HUNT can be made on the Company’s website www.huntergroup.no. Generally, HUNT, as a company listed on Oslo Børs/Oslo Stock Exchange, discloses all required information as defined by law. Certain resolutions and circumstances will in any event be disclosed, including but not limited to Board and GM resolutions regarding dividends, mergers/de-mergers or changes in share capital, issue of warrants, issue of convertible or other loans, any changes in the rights vested in the shares of the Company (or other financial instruments issued by HUNT) and all agreements of material importance that are entered into between the Company and a shareholder, member of the executive personnel, or related parties thereof, or any other company in the Hunter Group ASA. An announcement regarding HUNT’s share capital and number of votes related thereto shall be made by the end of each month during which changes to any of these have occurred. HUNT will disclose all material information to all recipients equally in terms of timing and content. 15. Takeovers The Group has not implemented any specific guidelines on how to act in the event of a takeover bid. Deviation from the Norwegian Code of Practice for Corporate Governance: The Group has not yet implemented guidelines in case of a takeover. Any bid will be dealt with by the Board of Directors in accordance with applicable laws and regulations, the Norwegian Code of Practice for Corporate Governance and based on their recommendation the shareholders’ approval will be requested. 16. Auditor Under Norwegian law the auditor of the Company (the “Auditor”) is elected by the shareholders in a GM. The current Auditor serves until a new auditor has been elected. The Auditor participates in meeting(s) of the Board that deal with the annual accounts as well as the General Meetings. At these meetings the Auditor reviews any variations in the accounting principles applied, comments on material accounting estimates and issues of special interest to the Auditor, including possible disagreements between the Auditor and the management. Corporate governance policy Hunter Group ASA - 2021 10 At least once a year the Auditor and the Board of Directors meet without any members of the Group’s executive personnel present. The Auditor presents annually to the Audit Committee/Board of Directors the main features of its plan for the audit of the Group, as well as a review of the Group’s internal control procedures. The Board of Directors established guidelines in respect to the use of the auditor by the Group’s executive personnel for services other than the audit. The remuneration of the Auditor and all details regarding the fees of the audit work and other specific assignments are presented at the AGM. The Company’s auditor shall annually submit a written confirmation that the Auditor still continues to satisfy with the requirements for independence and a summary of all services in addition to audit work that has been undertaken for the Company. Corporate governance policy Hunter Group ASA - 2021 11 Corporate social responsibility policy 1. General The purpose of this policy is to provide information to all our stakeholders about Hunter Group ASA’s (“HUNT”, “the Company” or “the Group”) approach to ethical and corporate social responsibility and how we as a Company propose to work towards achieving it. HUNT is committed to enhancing shareholder value in an ethical and socially responsible manner. By implementing this policy, the Company aims to be responsible and an exemplar of good practice. Honesty, integrity and respect for people underpin everything we as employees do and are the foundation of the Company’s business practice. We are judged by how we act, and the Company’s reputation will be upheld if each one of us acts in accordance with the law and the Company’s social responsibility and ethical standards set out herein. The Company’s reputation and future success are critically dependent on compliance, not just with the law, but also with high ethical and social standards. A reputation for integrity is a priceless asset. This policy is a further commitment to integrity for all of us and will help to safeguard that asset. This document applies to staff, Board members, temporary employees, consultants and any person or entity acting on behalf of Hunter Group ASA and its subsidiaries. We encourage our business partners to strive for similar performance. We are committed to continuous improvement in our corporate social and ethical responsibility and the Board of Directors and the Company will therefore review this policy regularly. This policy was approved by the Board of Directors on 23 th March 2022 and shall apply until revised and re- approved. 2. Business practice 2.1 Correct Information, Accounting and Reporting HUNT’s business information is disclosed accurately, timely and entirely. According to the applicable laws and regulations and stock exchange listing standards, HUNT provides complete and precise accounts in all its periodic financial reports, in its public communication and documents submitted to regulatory authorities and agencies. No information shall be withheld from the external or internal auditor. All employees who draw up such documents are expected to apply the utmost care, and caution and will use the applicable accounting standards. 2.2 Fair Competition HUNT performs its business in such a manner that customers, partners and suppliers can trust in the Group and competes in a fair and open way. 2.3 Anti - Corruption Corruption diminishes legitimate business activities, destroys reputations and distorts competition. The Group opposes all forms of corruption. Through Group procedures, tight internal control and this policy all employees have to comply with, HUNT acts to prevent corruption within the Group. Bribery, trading in inﬂuence, facilitation payments and all forms of corruption are prohibited. HUNT promotes its policy on corruption amongst its business partners, contractors and suppliers. ▪ Bribery is defined as an attempt to inﬂuence individuals when performing their duties through oﬀering improper advantages. ▪ Trading in inﬂuence exists when an improper advantage (cash, loans, travel, services or similar) is oﬀered to an individual to inﬂuence the performance a third party’s duties. ▪ A facilitation payment is small payment to a public oﬃcial to enable or speed up a process, which is the oﬃcial’s job to arrange. Hunter Group ASA - 2021 12 Corporate social responsibility policy HUNT complies with all applicable national and international laws and regulations (for example the OECD Guidelines for Multinational Enterprises and the International Chamber of Commerce Rules of Conduct to Combat Extortion and Bribery) with respect to improper payments to local and foreign oﬃcials. 2.4 Money laundering Money laundering is when proceeds from criminal activity which appear to be legitimate sources is converted into assets. HUNT employees shall ensure financial transactions and business activities involve funds from legitimate sources and are not used to launder money. 2.5 Business Communications HUNT opposes inappropriate, inaccurate or careless communications as it can create serious liability and compliance risks for the Group. All employees are required to exercise due care when communicating both internally and externally and particularly when the communication is a written document (including email). 2.6 Political Activity HUNT does not support any political party. An individual employee may become involved politically as a private person without referencing to their relationship with the Group. 3. Personal conduct 3.1 Human Rights HUNT respects the principles of the UN’s Universal Declaration of Human Rights and is guided by its provisions in the conduct of the Group’s business. The Board of Directors adopted this policy to express the Group’s requirements for business practice and personal conduct and to demonstrate the Group’s commitment to maintaining a high standard of social responsibility, ethics and integrity. Relations with employees are based on respect. HUNT is committed to a working environment with mutual trust and where everyone is accountable for their own actions and share responsibility for the performance and reputation of HUNT. 3.2 Equal Opportunity HUNT does not tolerate any kind of discrimination of employees, customers and partners on account of religion, gender, sexual orientation, age, nationality, political views, disability or other circumstances. HUNT does not tolerate unlawful employment discrimination of any kind. The Group expects all of its employees to treat others they come in contact with through work with respect and courtesy, and to refrain from harassment, discrimination and any other behavior that may be regarded threatening or degrading. It is everyone’s responsibility to create and contribute to a positive working environment for all employees. 3.3 Protection of HUNT’s Property and Possessions HUNT assets are of considerable value, whether financial or physical assets or intellectual property, and may therefore only be used to advance HUNT business purposes and goals. These assets must be secured and protected in order to preserve their value. All employees are entrusted with Group assets in order to do their jobs and are personally responsible for safeguarding and using these appropriately. Such assets include buildings and sites, equipment, tools and supplies, communication facilities, funds, accounts, computer programs and data, information, technology, documents, and know-how, patents, trademarks, copyrights, time, and any other resources or property of HUNT. Employees are responsible for protecting Group assets against waste, loss, damage, misuse, theft, misappropriation or infringement and for using those assets in responsible ways. Use of Group assets without direct relation to HUNT requires the prior authorization of the employee’s supervisor. Hunter Group ASA - 2021 13 Corporate social responsibility policy 3.4 Confidentiality To protect the Group’s legitimate interests and the individual’s privacy and integrity, every employee shall apply the utmost care to prevent disclosure of confidential information. The Group’s property or information gained through the employee’s position in HUNT may never be used for personal benefit. The duty of confidentiality continues after the termination of the employment. 3.5 Conﬂict of Interest Individuals acting on behalf of HUNT shall behave objectively and without any kind of favoritism. Companies, organizations or individuals the Group does business with shall not be given any improper advantages. No employee may work on any matter or participate in any decision in which they, their spouse, partner, close relative or any other person with whom they have close relations has a material direct or indirect financial interest or where there are other circumstances that may undermine the trust in the employee’s impartiality or the integrity of their work. Closely related parties shall not have positions within the Group where one is the other’s supervisor without the CEO’s prior approval. No employee may participate through employment, directorship or any other assignment in companies in the same line of business as HUNT without the prior written approval of the CEO or the Chairman of the Board. Members of the Company’s Board shall inform the chairman of the Board of their involvement in other companies. 3.6 Gifts and Hospitality No employee may, directly or indirectly, accept gifts from any of the Group’s associates. This rule applies also to ongoing negotiations. If an employee is oﬀered or may be oﬀered such a gift, he/she shall immediately contact his/her supervisor, who will decide if the gift will aﬀect the employee’s independence should it be accepted. Token gifts in connection with Christmas, anniversaries and the like may be exempted from this rule. Social events, meals or entertainment may be acceptable if there is a clear business reason, and provided the cost is within reasonable limits. 4. Health, safety and environment (HSE) HUNT is committed to achieving excellence in all business activities, including health, safety and environmental performance. HUNT’s overriding goal is to operate safely, in environmentally and socially responsible ways, and thereby: ▪ Do no harm to people ▪ Protect the environment ▪ Comply with all applicable HSE laws and regulations. HUNT aims to provide a safe, secure and healthy working environment for all its employees, contractors and suppliers. We believe that accidents and occupational illnesses and injuries are preventable, and hence apply our eﬀorts and resources to achieving the goals listed above. HUNT requires its subsidiaries to implement HSE systems relevant to their industry in compliance with internationally recognized standards. HUNT is paying for insurance for all sub-contracted workers involved with the production of ordered vessels at DSME. HUNT has adopted the Norwegian “inkluderende arbeidsliv” (equal opportunity rights) scheme, incorporating procedures for an active follow-up on employees’ sick leave and cooperating with the Group’s health service. During 2021 absence due to sickness in HUNT was approximately 0%. Hunter Group ASA - 2021 14 Corporate social responsibility policy HUNT aims to reduce the Company’s carbon footprint and its impact on the environment through a commitment to continual improvement. It is the responsibility of the Company’s management and subsidiaries to meet the Company’s ambition and to comply with all applicable legislation and regulations. No injuries or accidents have been reported in 2021. 5. Follow-up 5.1 Personal Follow-Up Everyone to whom this policy applies shall make themselves familiar with the same and carry out their duties accordingly. 5.2 Handling Cases of Doubt and Breach All employees shall without undue delay contact their supervisor, the CEO or the chairman of the Board in the event of ethical doubts, breaches of this policy or when discovering anything illegal or unethical. 5.3 Manager’s Responsibility Managers shall ensure that this Group policy is communicated to their staﬀ, and shall give advice on how they are to be interpreted. Operations within their department shall be conducted according to this policy. 5.4 Outlook HUNT will work with and assign more priority to corporate social responsibility in 2022. HUNT aims to keep absence due to sick leave low in 2022. With further emphasis on HSE, the Group works towards another accident and injury free year at HUNT. Hunter Group ASA - 2021 15 Responsibility Statement The Board of Directors and the CEO confirm that to the best of our knowledge the financial statements as of 31 December 2021, which have been prepared in accordance with IFRS as adopted by the European Union and generally accepted accounting practice in Norway, provides a true and fair view on the Group’s consolidated assets, liabilities, financial position and result. We also confirm, to the best of our knowledge that the Board of Directors’ report includes a true and fair overview of the development, performance and financial position of the Group, together with a description of the principal risks and uncertainties they face. Oslo, 23 March 2022 The board of directors and Chief Executive Director Hunter Group ASA Erik A. S. Frydendal CEO Henrik A. Christensen Chairman of the board Hunter Group ASA - 2021 16 Board of Directors’ report 2021 Operations and locations HUNT is a public limited liability company pursuant to the Norwegian Public Limited Companies Act, incorporated under the laws of Norway. The legal and commercial name of the Company is Hunter Group ASA. The Company was established on 20 June 2003 and is registered in the Norwegian Register of Business Enterprises under the organization number 985 955 107. The Company changed its name to Hunter Group ASA in in April 2017 and also moved the Company’s registered office to Oslo. The Company's registered business address now is Dronningen 1, N-0287 Oslo, Norway. In April 2018 Hunter Group entered into a definitive VLCC contract transfer agreement with Apollo Asset Ltd. Subsequently, Hunter Tankers AS was established. In the May 2018 AGM, the shareholders of Hunter Group ASA approved taking over the four VLCC construction contracts and three options from Apollo Asset Ltd on a “back- to-back” basis as contracted with Daewoo Shipbuilding Marine Engineering Co., LTD whereby the Company will assume the obligations versus the Shipyard. In May 2018 the board decided to exercise the options for construction of three additional vessels. Each of the option vessels had a price of USD 82.8m, plus USD 2.7m for each scrubber. In November 2018, Hunter Tankers AS signed a contract for one additional VLCC at DSME, with identical specifications. In October 2019, the Company sold one VLCC for USD 98 million, taking the fleet to a total of seven VLCCs. Between August 2019 and August 2020, the Company successfully took delivery of it’s seven VLCCs. The vessels have since delivery been employed through a combination of spot and time charter contracts. The first three vessels were financed by a USD 180m sale and leaseback (“SLB”) with SFL Corporation Ltd. The remaining four vessels were financed with bank debt, which was drawn on delivery of each vessel. During the second half of 2020, the SLB was refinanced with bank debt on similar terms. Two vessels were sold during the second half of 2020, and one was sold during the first quarter of 2021. All three were successfully delivered to their new owners. The Company owned four VLCCs as of year end 2021. At present, there are no business activities in Indicator AS (containing the Badger-technology). The Company's shares are listed on Oslo Euronext Expand, a regulated market operated by the Euronext Group under the ticker "HUNT". Going concern In accordance with the Accounting Act § 3-3a, we confirm that the financial statements have been prepared under the assumption of going concern. This assumption is based on the sound financial position and the Group’s long term forecasts. Comments related to the financial statements The Group’s revenues decreased from USD 111.1 million in 2020 to USD 40.4 million in 2021. Net income from continuing operations in 2021 was USD 3.8 million compared to USD 63.1 million in 2020. The profit in 2021 is mainly due to successful employment and operation of the Company’s VLCCs. Hunter Group ASA - 2021 17 Board of Directors’ report 2021 Total cash flow from operating activities was USD 18.4 million in 2021 mainly driven by vessel chartering revenue and operational expenses. Net cash flow from financing for 2021 was negative USD 168.1 million, mainly related to dividend payments and net change in loans from financing institutions. Net cash flow from investments were USD 84.3 million, mainly related to the sale of Hunter Atla. Total consolidated adjusted cash position as per 31 December 2021 was USD 29.6 million. Total assets at year-end 2021 amounted to USD 371.9 million, compared to USD 529.6 million last year. The equity ratio was 47.5% as of 31 December 2021, compared to 51.3 % the year before. Financial risk Overall view on objectives and strategy HUNT’s main objective for the management of its capital structure is to maximize value creation for shareholders, while at the same time maintaining a sound financial position. HUNT manages its capital structure and adjusts it in light of changes in economic conditions. To maintain or adjust the capital structure, the Company may issue equity, take up debt or a combination of the two. No changes were made in the objectives policies or processes during the financial year. Market risk The Group's business is operations of VLCCs, hence the tanker market greatly affects the Group’s share price and its ability to issue equity or debt. The Group is positive on the future outlook of the tanker market. The Group’s exposure towards currency fluctuations is relatively low, since the majority both of revenues, operating expenses and capital expenditures are in USD. Credit risk The Company only trades with recognized, creditworthy third parties. It is the Group’s policy that all customers that wish to trade on credit terms are subject to credit verification procedures. All cash in the Group is deposited in the Norwegian bank DNB. Credit risk is managed through a framework that sets out policies and procedures covering the measurement and management of credit risk. Liquidity risk The Company monitors its liquidity on a regular basis and produces rolling liquidity forecasts on a monthly basis in order to identify liquidity requirements in future periods. The target for HUNT’s management of liquidity risk is to minimum maintain a liquidity corresponding to its net liquidity requirements for 12 months. The interest- bearing debt is due in Q1 2023 and the Company has initiated refinancing discussions with its lenders, and expect to receive binding commitments during 2022. The cash position of Hunter Group at year end 2021 was USD 29.6 million, compared to USD 95.1 million in 2020. The Company’s financial and liquidity position remained robust throughout the year, despite challenging market conditions. The Company has a cash balance well above covenant requirements and have zero remaining capital expenditures commitments as of the end of 2021. The management will continue to focus on eﬃcient operations, good planning and close monitoring of the liquidity situation and maintaining a clear business development strategy. Hunter Group ASA - 2021 18 Board of Directors’ report 2021 The working environment, the employees and equal opportunities The Company has not registered any critical incidents or leave of absence due to incidents. The percentage of days lost through illness was 0 % in 2021 and 2020. Relations with employees are based on respect. The Company is committed to a working environment with mutual trust and where everyone is accountable for their own actions and share responsibility for the performance and reputation of the Company. The Company had 4 employees by the end of 2021. We kindly refer to our corporate governance and corporate social responsibility documents on page 4 to 14 for further information. Discrimination The Discrimination Act’s objective is to promote gender equality, ensure equal opportunities and rights, and to prevent discrimination due to ethnicity, national origin, descent, skin color, language, religion and faith. The Company does not tolerate any kind of discrimination of employees, customers and partners on account of religion, gender, sexual orientation, age, nationality, political views, disability or other circumstances. The Company does not tolerate unlawful employment discrimination of any kind. The Group expects all of its employees to treat others they come in contact with through work with respect and courtesy, and to refrain from harassment, discrimination and any other behavior that may be regarded threatening or degrading. Environmental report There have been no incidents reported related to emissions that has resulted in a breach of the pollution act or other pollution of significance. Research and development All R&D activities in Indicator has been put on hold. Subsequent events Entered into a 4+4 month time charter for Hunter Disen, which commenced on 27 January 2022. The first four month is for USD 18,000 per day, while the charterer has the option to extend for another four months as USD 25,000 per day. Entered into a two 12-month index-based linked charters for Hunter Idun. Hunter Idun commenced on this charter on January 26th, immediately following the redelivery of the vessel from charterers to owners. Entered into a 12-month index-based charter for Hunter Frigg. The charter will commence immediately upon completion of its current charter. As of the date of this report, 93% of days in the first quarter of 2022 have been booked at an average est. dayrate of USD 20,200 - 84% of spot days booked at an avg. est. dayrate of USD 15,400 - Average Q1 TC dayrates of USD 23,900 The recent Ukraine-situation has affected the global economy. The Group is monitoring the development of the situation but is at the current not significantly exposed (receivables, the Pool, crew etc.). However, the indirect effects of the situation is difficult to estimate as of today. Hunter Group ASA - 2021 19 Board of Directors’ report 2021 Future challenges For the Group, the future challenges continues to be successful chartering and operation of the Company’s VLCCs. Allocation of net income The Board of Directors has proposed the net income of Hunter Group ASA to be attributed to: Retained Earnings USD 3.8 million Oslo, 23 March 2022 Henrik A. Christensen Chairman of the board Hunter Group ASA - 2021 20 Consolidated statement of profit and loss 2021 For the year ended 31 December (Figures in USD 1 000) Note 2021 2020 Revenues and other income Pool revenues 15 7 438 48 567 Time charter revenues 15 29 722 60 037 Other income 15 704 0 Net gain on sale of assets 2, 15 2 567 2 492 Total revenues and other income 40 431 111 096 Operating expenses Vessel operating expenses 16 9 776 12 404 Voyage expenses and commissions 1 916 2 912 Depreciation and amortisation expense 4, 5 13 754 16 325 General and administrative expenses 14, 16, 20 1 815 1 649 Total operating expenses 27 261 33 291 Operating profit (loss) 13 171 77 806 Net financial income (loss) 17 -9 394 -14 723 Profit (loss) before taxes 3 776 63 083 Tax on ordinary result 18 0 0 Net profit (loss) 3 776 63 083 Earnings per share 19 0.01 0.11 Earnings per share diluted 19 0.01 0.11 Consolidated statement of comprehensive income For the year ended 31 December (Figures in USD 1 000) 2021 2020 Profit (loss) for the year 3 776 63 083 Other comprehensive income, items to be reclassified to profit & loss Translation differences 0 0 Total compehensive income 3 776 63 083 Total comprehensive income attributable to: Equity holders of the parent company 3 776 63 083 Total comprehensive income continuing operations 3 776 63 083 Hunter Group ASA - 2021 21 Consolidated statement of financial position As at 31 December (Figures in USD 1 000) Note 2021 2020 NON-CURRENT ASSETS VLCC vessels 4, 10 332 521 427 249 Other tangible assets 4, 5, 10 318 210 Total tangible assets 332 839 427 459 TOTAL NON-CURRENT ASSETS 332 839 427 459 CURRENT ASSETS Trade and other receivables 6, 10, 13 5 513 5 416 Other short-term assets 7, 13 3 878 1 539 Total current assets 9 391 6 956 Cash and cash equivalents 8, 13 29 639 95 146 TOTAL CURRENT ASSETS 39 030 102 101 TOTAL ASSETS 371 869 529 560 Hunter Group ASA - 2021 22 Consolidated statement of financial position Oslo, 23 March 2022 Henrik A. Christensen Chairman of the board As at 31 December (Figures in USD 1 000) Note 2021 2020 EQUITY Share capital (575 362 013 shares) 21 82 625 82 625 Own shares 21 -1 660 -1 121 Share premium 15 034 113 364 Other equity 80 522 76 745 TOTAL EQUITY 176 521 271 614 LIABILITIES Interest-bearing debt 5, 9, 10 180 514 237 954 Total non-current liabilities 180 514 237 954 Trade payables 11, 13 195 2 124 Accrued public charges and indirect taxes 13 68 68 Current portion of interest-bearing debt 9, 10 13 500 16 605 Other current liabilities 12, 13 1 070 1 195 Total current liabilities 14 833 19 992 TOTAL LIABILITIES 195 346 257 946 TOTAL EQUITY AND LIABILITIES 371 869 529 560 Hunter Group ASA - 2021 23 Consolidated statement of cash flows For the year ended 31 December (Figures in USD 1 000) Note 2021 2020 Profit (loss) before tax 3 776 63 083 Depreciation 13 754 16 325 Gain on sale of VLCC 2 -2 567 -2 492 Financial income -4 -270 Financial expenses 8 430 15 074 Change in accounts receivables and accounts payables -2 026 981 Change in other receivables and payables and other -2 948 -1 857 Net cash flow from operating activities 18 415 90 844 Investments in VLCC newbuilds and PP & E 4 -8 -273 805 Interest received 17 4 270 Sale of VLCC ) 4 83 575 168 400 Net cash flow from investment activities 83 571 -105 135 Interest paid 17 -6 441 -14 050 Proceeds from borrowings financial institution 4, 10 0 254 348 Installments other interest-bearing debt 9, 10 -61 802 -180 214 Installment leasing-debt (IFRS 16) 5 -94 -93 Purchase of own shares Equity -1 267 -3 010 Dividend paid Equity -97 888 0 Net cash flow from financing activities -167 492 56 981 Total change in cash and cash equivalents -65 506 42 690 Currency effect on cash 0 0 Cash and cash equivalents beginning of year 95 146 52 455 Cash and cash equivalents end of year 8 29 639 95 146 ) Includes broker commision related to the sale of Hunter Atla of TUSD -925 in 2021. Hunter Group ASA - 2021 24 Consolidated statement of changes in equity Share Own Share Currency Retained Total (Figures in USD 1 000) Note Capital Shares premium translation earnings equity Equity as of 1 January 2020 82 625 0 114 914 -2 289 15 952 211 202 Net profit 2020 0 63 083 63 083 Other comprehensive income 0 0 0 Total comprehensive income 2020 0 63 083 63 083 Purchase of own shares -1 121 -1 889 0 0 -3 010 Share based payment 339 0 0 339 Equity as of 31 December 2020 82 625 -1 121 113 364 -2 289 79 035 271 614 Net profit 2021 0 3 776 3 776 Other comprehensive income 0 0 0 Total comprehensive income 2021 0 3 776 3 776 Purchase of own shares -539 -728 0 0 -1 267 Share based payment 285 0 0 285 Dividend paid ) -97 887 0 0 -97 887 Equity as of 31 December 2021 82 625 -1 660 15 034 -2 289 82 811 176 521 ) Dividend paid per share is USD 0.17. Hunter Group ASA - 2021 25 Note 1 - Significant accounting principles Hunter Group ASA (HUNT) is a public limited liability company, incorporated in Norway, headquartered in Oslo and listed on the Oslo Stock Exchange (Euronext Expand), address headquarter: Dronningen 1, 0287 Oslo, Norway. The financial statements of Hunter Group ASA for the fiscal year 2021 were approved in the board meeting on 23 March 2022. The Group’s activities are described in the Board of Director’s report. 1.1 Basis of presentation of the accounts HUNT’s financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS), and IFRS as adopted by the EU, and are mandatory for financial year beginning on or after 1 January 2021, and Norwegian disclosure requirements listed in the Norwegian Accounting Act as of 31 December 2021. The historical cost basis have been used when preparing the financial statements, except for financial instruments measured at fair value. These policies have been applied consistently to all periods presented, and certain amounts in the comparable year have been reclassified to be consistent with current year presentation. Some totals may not equal the sum of the amounts shown due to rounding. Consolidation Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Company obtains control, and continue to be consolidated until the date that such control ceases. The financial statements of the subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies. All intra-group balances, transactions, unrealized gains and losses resulting from intra-group transactions and dividends are eliminated in full. A change in the ownership interest of a subsidiary, without a loss of control, will be accounted for as an equity transaction. The Group consist of the following companies as per 31 December 2021: • Hunter Group ASA (parent company) • Indicator AS (100% owned subsidiary) • Hunter Tankers AS (100% owned subsidiary) Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, which is measured at acquisition date fair value, and the amount of any non-controlling interests in the acquiree. For each business combination, the Group elects whether to measure the non-controlling interests in the acquiree at fair value or at the proportionate share of the acquiree’s identifiable net assets. Acquisition-related costs are expensed as incurred and included in administrative expenses. When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree. 1.2 Use of estimates when preparing the annual financial statements Estimates and their underlying assumptions that aﬀect the application of accounting principles and reported amounts of assets and liabilities, income and expenses are based on historic experience and other factors considered reasonable under the circumstances. The estimates constitute the basis for the assessment of the net book value of assets and liabilities when these values cannot be derived from other sources. Actual results may diﬀer from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised and in any future periods aﬀected. Notes to the consolidated financial statements 2021 Hunter Group ASA - 2021 26 Note 1 - Significant accounting principles cont. Estimation uncertainty could mainly affect; • VLCC vessels (impairment) The preparation of the Group’s financial statements requires management to make judgements, estimates and assumptions that aﬀect the reported amounts of revenues, expenses, assets and liabilities, and the disclosures. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities aﬀected in future periods. Please refer to 1.3, 1.12 and note 4 for further information about VLCC. 1.3 Impairment of assets The Group assesses, at each reporting date, whether there is an indication that an asset may be impaired. An assessment of impairment losses on assets is made when there is an indication of a fall in value. If an asset’s carrying amount is higher than the asset’s recoverable amount, an impairment loss will be recognized in the statement of profit or loss. The recoverable amount is the higher of the fair value less costs to sell and the discounted cash flow from continued use. The fair value less costs to sell is the amount that can be obtained from a sale to an independent third party minus the sales costs. The recoverable amount is determined separately for all assets but, if this is impossible, it is determined together with the entity. Impairment losses recognized in the statements of profit or loss of previous periods are reversed when there is information that the need for the impairment loss no longer exists or is not as great as it was. However, no reversal takes place if the reversal leads to the carrying amount exceeding what the carrying amount would have been if normal depreciation periods had been used. The Group follows the development of the price of the Company’s listed shares, the daily market rates for the VLCC operations, and monitors the development of the pricing of new ships when evaluating if there exist indicators of the Group’s VLCCs. The recoverable amount was determined based on fair value less cost to sell. Management obtained an external valuation for similar newbuilds as evidence of fair value less cost to sell. Please refer to note 4 for further information. 1.4 Cash and cash equivalents Cash includes cash in hand and at bank. Cash equivalents are short-term liquid investments that can be immediately converted into a known amount of cash and have a maximum term to maturity of three months. 1.5 Statement of cash ﬂows The statement of cash ﬂows is prepared in accordance with the indirect method. 1.6 Functional currency and presentation currency The main transactions for Hunter Group ASA and Hunter Tankers AS are in USD. Due to the functional currency for the two main companies in the Group are in USD, it is also the considered to be beneficial to present the financial statements of the Group in USD. Transactions in foreign currency are translated at the rate applicable on the transaction date. Monetary items in a foreign currency are translated into USD using the exchange rate applicable on the balance sheet date. Notes to the consolidated financial statements 2021 Hunter Group ASA - 2021 27 Note 1 - Significant accounting principles cont. Non-monetary items that are measured at their historical price expressed in a foreign currency are translated into USD using the exchange rate applicable on the transaction date. Non-monetary items that are measured at their fair value expressed in a foreign currency are translated at the exchange rate applicable on the balance sheet date. Changes to exchange rates on monetary items are recognized in the income statement as they occur during the accounting period. 1.7 Financial assets Initial recognition and measurement Financial assets are classified, at initial recognition, as financial assets at fair value through profit or loss at amortized cost, as appropriate. All financial assets are recognized initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset. The Group determines the classification of its financial assets at initial recognition. The Group’s financial assets include cash and cash equivalents, trade and other receivables. Subsequent measurement Receivables are classified as financial assets measured at amortized costs. The subsequent measurement of financial assets depends on their classification as described below: Receivables Receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. After initial measurement, such financial assets are subsequently measured at amortized cost using the EIR (effective interest rate) method, less impairment. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included in finance income in the statement of profit or loss. The losses arising from impairment are recognized in the statement of profit or loss in other operating expenses for receivables. This category includes accounts receivable and other receivables carried at amortized cost or at nominal amount less provision for bad debt where this can be regarded as a reasonable proxy for fair value. Other financial assets are cash and cash equivalents and other financial investments, measured at balance sheet date rate for items in foreign currency. 1.8 Financial liabilities Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, or borrowings at amortized cost, as appropriate. HUNT’s financial liabilities include trade and other payables and IFRS 16 lease liabilities. Subsequent measurement Initial recognition and measurement Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings, net of directly attributable transaction costs. The Group’s financial liabilities include trade and other payables and borrowings. Subsequent measurement The measurement of financial liabilities depends on their classification, as described below (next page): Notes to the consolidated financial statements 2021 Hunter Group ASA - 2021 28 Note 1 - Significant accounting principles cont. Financial liabilities at fair value through profit or loss Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. Financial liabilities at amortized cost (loans and borrowings) This is the category most relevant to the Group. After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized cost using the EIR method. Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through the EIR amortization process. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included as finance costs in the statement of profit or loss. This category generally applies to interest-bearing loans and borrowings Derecognition A financial liability is derecognized when the obligation under the liability is discharged, cancelled or expires. Oﬀsetting of financial instruments Financial assets and financial liabilities are oﬀset and the net amount is reported in the statement of financial position if there is a currently enforceable legal right to oﬀset the recognized amounts and there is an intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously. 1.9 Property, plant and equipment Property, plant and equipment are carried at cost less accumulated depreciation and accumulated impairment losses. When fixed assets are sold or disposed of, the gross carrying amount and accumulated depreciation are derecognized, and any gain or loss on the sale or disposal is recognized in the statement of profit or loss. The gross carrying amount of fixed assets is the purchased price, including duties/taxes and direct acquisition costs relating to making the asset ready for use. Subsequent costs, such as repair and maintenance costs, are recognized in profit or loss as incurred. When increased future economic benefits as a result of repair/maintenance work can be proven, such costs will be recognized in the statement of financial position as additional to fixed assets. Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets, as follows: Plant and machinery: 3 - 5 years VLCC vessels: 25 years VLCC equipment: 3 – 5 years The depreciation period, the depreciation method and the residual value of fixed assets are evaluated annually. Vessels and equipment The net cost of the VLCCs (less estimated residual value) is the basis for a straight-line depreciation over the estimated remaining economic useful lives (25 years). Other equipments (excluding vessel upgrades) are depreciated over its estimated remaining useful life (5 years). The estimated residual value for the VLCCs is calculated by multiplying the lightweight tonnage with the market price of scrap per tonne. The market price of scrap per tonne is based on price of scrap at delivery (USD 325/lwt) in Pakistan. Residual values are reviewed annually. 1.10 Contracts new builds Paid instalments for new builds of VLCCs are capitalized at cost as fixed assets as each payment take place. Investments regarding the new vessels that are not included in the contract, such as inspection costs and other related costs during construction are capitalized. Vessels under construction are not depreciated until the asset is available for use. Paid instalments, inspection costs and a minor portion of the construction contract are financed using own equity. Borrowing costs will be capitalized together with the vessel to the extent that they are directly related to the acquisition of the vessel. Construction in progress is stated at cost, net of accumulated impairment losses, if any. Notes to the consolidated financial statements 2021 Hunter Group ASA - 2021 29 Note 1 - Significant accounting principles cont. 1.11 Provisions Provisions are recognized when the Group has a present obligation as a result of a past event, it is probable that an outﬂow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are evaluated at the end of each month and adjusted to reﬂect the available information about the provision. When the information available is insuﬃcient, the best estimate is used. 1.12 Recognition of revenue Revenue is recognized to reflect the transfer of promised goods or services to customers, and then at an amount that reflects the consideration the company expects to be entitled to in exchange for those goods or services. The Group hires out its vessels to the Tankers International (TI) pool and receives, as compensation, a daily rate that varies from day to day, depending on the net result generated in TI. The company will thus recognize such income on an ongoing basis based on earned daily rate. The company's revenues from the pool are presented as Pool revenues in the income statement. The time charter revenue is generated from fixed rate time charter contracts. Revenue from time charters are accounted for as lease in accordance with IFRS 16 and is classified as time charter revenue in the income statement. The Group’s time charter contracts have a duration of 3-9 months and a significant portion of the risks and rewards of ownership are retained by the lessor (Hunter), hence the lease is classified as operating lease. Payments received under operating leases are recognized as revenue on a straight-line basis over the lease term. Furthermore, the Group will also cover any surplus fuel after the ship arrives at the pool (without profit). In such cases, the Group will sell surplus fuel on board when the ship is delivered to TI. TI's surplus fuel coverage are recognized net. 1.13 Income tax The tax expense consists of the tax payable and changes to deferred tax. Deferred tax/tax assets are calculated on all diﬀerences between the book value and tax value of assets and liabilities. Deferred tax assets are recognized when it is probable that the Group will have a suﬃcient profit for tax purposes in subsequent periods to utilize the tax asset. The Group recognize previously unrecognized deferred tax assets to the extent it has become probable that the Group can utilize the deferred tax asset. Similarly, the Group will reduce a deferred tax asset to the extent that the Group no longer regards it as probable that it can utilize the deferred tax asset. Deferred tax and deferred tax assets are measured on the basis of tax rates that have been enacted or substantially enacted at the reporting date. Deferred tax and deferred tax assets are recognized at their nominal value and classified as non-current assets (long-term liabilities) in the balance sheet. Notes to the consolidated financial statements 2021 Hunter Group ASA - 2021 30 Note 1 - Significant accounting principles cont. Taxes payable and deferred taxes are recognized directly in equity to the extent that they relate to equity transactions. The Group offsets deferred tax assets and deferred tax liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realize the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered. The subsidiary Hunter Tankers AS is part of the shipping tax rules in Norway, which in all material aspects results in the company being taxable only for part of the net financial result. 1.14 Contingent liabilities and assets Contingent liabilities are not recognized in the annual accounts. Significant contingent liabilities are disclosed, with the exception of contingent liabilities that are remote to be incurred. Contingent assets are not recognized in the annual accounts but are disclosed if it is probable that a benefit will be added to the Group. 1.15 Leases In the financial statement of lessees, the standard requires recognition of all contracts that qualify under its definition of a lease as right-of-use assets and lease liabilities in the balance sheet, while lease payments are to be reflected as interest expense and reduction of lease liabilities. The right-of-use assets are to be depreciated in accordance with IAS 16 Property, Plant and Equipment over the shorter of each contract’s term and the assets’ useful life. Borrowings are subsequently measured at amortized cost using the EIR method. Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through the EIR amortization process. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included as finance costs in the statement of profit or loss. 1.16 Equity Cost of equity transactions Transaction costs directly related to an equity transaction are recognized directly in equity after deducting tax expenses. 1.17 Events after the reporting period New information on the Group’s financial position at the end of the reporting period which becomes known after the reporting period is reflected in the annual accounts. Events after the reporting period that do not aﬀect the Group’s financial position at the end of the reporting period but which will aﬀect the Group’s financial position in the future are disclosed if significant. 1.18 Segments For management purposes, the Group is organized into one business unit based on its products and services, and has a reportable segment which first developed the VLCC construction contracts and options, and then operates these vessels. No operating segments have been aggregated to form the reportable operating segment. The management monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on profit or loss and is measured consistently with profit or loss in the consolidated financial statements. Notes to the consolidated financial statements 2021 Hunter Group ASA - 2021 31 Note 1 - Significant accounting principles cont. 1.19 Share-based payment Employees of HUNT receive remuneration in the form of share-based payments, whereby employees render services as consideration for equity instruments (equity-settled transactions). The cost of equity-settled transactions is determined by the fair value at the date when the grant is made using an appropriate valuation model, further details of which are given in note 20. That cost is recognized in employee benefits expense, together with a corresponding increase in equity (other capital reserves), over the period in which the service and, where applicable, the performance conditions are fulfilled (the vesting period). The cumulative expense recognized for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Group’s best estimate of the number of equity instruments that will ultimately vest. The expense or credit in the statement of profit or loss for a period represents the movement in cumulative expense recognized as at the beginning and end of that period. No expense is recognized for awards that do not ultimately vest because non-market performance and/or service conditions have not been met. Where awards include a market or non-vesting condition, the transactions are treated as vested irrespective of whether the market or non-vesting condition is satisfied, provided that all other performance and/or service conditions are satisfied. When the terms of an equity-settled award are modified, the minimum expense recognized is the grant date fair value of the unmodified award, provided the original terms of the award are met. An additional expense, measured as at the date of modification, is recognized for any modification that increases the total fair value of the share- based payment transaction, or is otherwise beneficial to the employee. Where an award is cancelled by the entity or by the counterparty, any remaining element of the fair value of the award is expensed immediately through profit or loss. 1.20 Changes in accounting policies and disclosures The accounting policies adopted are consistent with those of the previous financial year, except for the new and amended standards and interpretations to IFRS which have been implemented by the Group during the current financial year. Several other amendments and interpretations apply for the first time in 2021, but do not have an impact on the consolidated financial statements of the Group. The Group has not early adopted any standards, interpretations or amendments that have been issued but are not yet effective. The following new and amended standards and interpretations have been implemented for the first time in 2021: Interest Rate Benchmark Reform – Phase 2: Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 The amendments provide temporary reliefs which address the financial reporting effects when an interbank offered rate (IBOR) is replaced with an alternative nearly risk-free interest rate (RFR). The amendments include the following practical expedients: • A practical expedient to require contractual changes, or changes to cash flows that are directly required by the reform, to be treated as changes to a floating interest rate, equivalent to a movement in a market rate of interest • Permit changes required by IBOR reform to be made to hedge designations and hedge documentation without the hedging relationship being discontinued • Provide temporary relief to entities from having to meet the separately identifiable requirement when an RFR instrument is designated as a hedge of a risk component These amendments had no impact on the consolidated financial statements of the Group. The Group intends to use the practical expedients in future periods if they become applicable. Notes to the consolidated financial statements 2021 Hunter Group ASA - 2021 32 Note 1 - Significant accounting principles cont. Covid-19-Related Rent Concessions beyond 30 June 2021 Amendments to IFRS 16 On 28 May 2020, the IASB issued Covid-19-Related Rent Concessions - amendment to IFRS 16 Leases. The amendments provide relief to lessees from applying IFRS 16 guidance on lease modification accounting for rent concessions arising as a direct consequence of the Covid-19 pandemic. As a practical expedient, a lessee may elect not to assess whether a Covid-19 related rent concession from a lessor is a lease modification. A lessee that makes this election accounts for any change in lease payments resulting from the Covid-19 related rent concession the same way it would account for the change under IFRS 16, if the change were not a lease modification. The amendment was intended to apply until 30 June 2021, but as the impact of the Covid-19 pandemic is continuing, on 31 March 2021, the IASB extended the period of application of the practical expedient to 30 June 2022. The amendment applies to annual reporting periods beginning on or after 1 April 2021. However, the Group has not received Covid-19-related rent concessions but plans to apply the practical expedient if it becomes applicable within allowed period of application. Amendments to standards and interpretations with a future effective date Amendments to IAS 1: Classification of Liabilities as Current or Non-current In January 2020, the IASB issued amendments to paragraphs 69 to 76 of IAS 1 to specify the requirements for classifying liabilities as current or non-current. The amendments clarify: • What is meant by a right to defer settlement • That a right to defer must exist at the end of the reporting period • That classification is unaffected by the likelihood that an entity will exercise its deferral right • That only if an embedded derivative in a convertible liability is itself an equity instrument would the terms of a liability not impact its classification The amendments are effective for annual reporting periods beginning on or after 1 January 2023 and must be applied retrospectively. The Group is currently assessing the impact the amendments will have on current practice and whether existing loan agreements may require renegotiation. Reference to the Conceptual Framework – Amendments to IFRS 3 In May 2020, the IASB issued Amendments to IFRS 3 Business Combinations - Reference to the Conceptual Framework. The amendments are intended to replace a reference to the Framework for the Preparation and Presentation of Financial Statements, issued in 1989, with a reference to the Conceptual Framework for Financial Reporting issued in March 2018 without significantly changing its requirements. The Board also added an exception to the recognition principle of IFRS 3 to avoid the issue of potential ‘day 2’ gains or losses arising for liabilities and contingent liabilities that would be within the scope of IAS 37 or IFRIC 21 Levies, if incurred separately. At the same time, the Board decided to clarify existing guidance in IFRS 3 for contingent assets that would not be affected by replacing the reference to the Framework for the Preparation and Presentation of Financial Statements. The amendments are effective for annual reporting periods beginning on or after 1 January 2022 and apply prospectively. Notes to the consolidated financial statements 2021 Hunter Group ASA - 2021 33 Note 1 - Significant accounting principles cont. Onerous Contracts – Costs of Fulfilling a Contract – Amendments to IAS 37 In May 2020, the IASB issued amendments to IAS 37 to specify which costs an entity needs to include when assessing whether a contract is onerous or loss-making. The amendments apply a “directly related cost approach”. The costs that relate directly to a contract to provide goods or services include both incremental costs and an allocation of costs directly related to contract activities. General and administrative costs do not relate directly to a contract and are excluded unless they are explicitly chargeable to the counterparty under the contract. The amendments are effective for annual reporting periods beginning on or after 1 January 2022. The Group will apply these amendments to contracts for which it has not yet fulfilled all its obligations at the beginning of the annual reporting period in which it first applies the amendments. Notes to the consolidated financial statements 2021 Hunter Group ASA - 2021 34 Note 2 – Significant acquisitions and disposals Hunter Freya was delivered on 6 March 2020 and Hunter Disen was delivered on 5 June 2020. Furthermore, Hunter Idun was delivered on 3 July 2020 and Hunter Frigg was delivered on 21 August 2020. All VLCC were completed and delivered by end of 2020. Hunter Saga and Hunter Laga were sold in 2020 for an en-bloc price of USD 168.4 million, with a gain of USD 2.5 million. Furthermore, Hunter Atla was sold in April 2021 for an en-bloc price of USD 84.5 million, with a gain of USD 2.6 million. Note 3 - Segment information Based on the nature of the vessels, processes and type of customers it has been concluded that the Group has one segment and information on segment performance is found in the consolidated statements of income and financial position. As the financial statement is consistent with the internal financial reporting for the tanker vessel segment and thus is equal to the Income Statement, Statement of Financial Position and Cash flow statement, no further disaggregation is provided. The Group does not consider the domicile of its customers as a relevant decision-making guideline and hence does not consider it meaningful to allocate vessels and related income to specific geographical locations. Note 4 - Property, plant and equipment Notes to the consolidated financial statements 2021 (Figures in USD 1 000) Per 31 D ecember 2021 IFRS 16 PP&E Other tangible assets VLCC vessels Total Cost price at 1 January 349 10 439 102 439 461 Additions 223 8 0 231 Sale -101 0 -88 867 -88 968 Transfer to VLCC in operation 0 0 0 0 Cost price at 31 December 471 18 350 235 350 724 Accumulated depreciations at 31 December -159 -14 -17 712 -17 886 Book value at 31 December 312 3 332 523 332 839 Depreciation (straight-line method) 93 8 13 653 13 754 Estimated useful life 3-5 years 3-10 years 25 years (Figures in USD 1 000) Per 31 D ecember 2020 IFRS 16 PP&E Other tangible assets VLCC under construction VLCC vessels Total Cost price at 1 January 259 10 79 664 256 098 336 030 Additions 152 0 270 919 2 909 273 980 Sale -62 0 0 -170 486 -170 548 Transfer to VLCC in operation 0 0 -350 582 350 582 0 Cost price at 31 December 349 10 0 439 102 439 462 Accumulated depreciations at 31 December -142 -6 0 -11 853 -12 002 Book value at 31 December 207 3 0 427 249 427 459 Depreciation (straight-line method) 94 3 0 16 227 16 325 Estimated useful life 3-5 years 3-10 years N/A 25 years Hunter Group ASA - 2021 35 Notes to the consolidated financial statements 2021 Note 4 - Property, plant and equipment cont. As 2021 saw a drop in the average daily rates for the Group’s vessels, a valuation of the four vessels were performed at the end of 2021. Based on assumptions as average daily rates of TUSD 37 and WACC of 10 %, the net present value was significantly above book value as per 31.12.2021. The valuations are supported by independent broker estimates. Note 5 - Leases (figues in USD 1 000) 2021 2020 Right of use assets 1.1 207 211 Additions 223 152 Sale -25 -62 Depreciation -93 -94 Right of use assets 31.12 313 207 Other interest-bearing debt 1.1 208 211 Addition 223 152 Sale 25 -62 Installments -94 -93 Other interest-bearing debt 31.12 362 208 Interest 9 10 Less than Between More than Remaining rental-payments as per 31.12.21 1 year 2 - 5 years 5 years Total Office rent, gas bottles (5 years), liferafts (5 years) and VSAT (3 years) 121 224 0 345 Hunter Group ASA - 2021 36 Notes to the consolidated financial statements 2021 Note 6 – Trade and other receivables Trade receivables are non-interest bearing and the payment terms are generally net 30 days. Fair value of the receivables approximates the nominal values, less provision for doubtful receivables, which was NOK 0 million per 31 December 2020 and 31 December 2021. The largest customers has in 2021 been Tankers International (pool revenues), Trafigura Maritime Logistics Pte Ltd, ST Shipping and Transport Pte Ltd and Vitol. Note 7 - Other short-term assets Note 8 - Cash and cash equivalents Note 9 - Current interest-bearing loans and borrowings (Figures in USD 1 000) 31.12.2021 31.12.2020 Performed work earned, not invoiced (contract assets) 5 513 5 416 Other 0 0 Total trade and other receivables 5 513 5 416 Age distribution of trade receivables As at 31 December, the ageing analysis of trade receivables is as follows: Neither past due nor Past due but not impaired Total impaired >30 days 30-60 days 60-90 days 90-120 days >120 days 2021 5 513 5 513 0 0 0 0 0 2020 5 416 5 416 0 0 0 0 0 (Figures in USD 1 000) 31.12.2021 31.12.2020 Prepaid expenses 3 878 1 539 Total other receivables 3 878 1 539 (Figures in USD 1 000) 31.12.2021 31.12.2020 Cash at bank 29 639 95 146 Total cash at bank 29 639 95 146 Restricted bank deposits for employee withholding taxes 39 39 (Figures in USD 1 000) 31.12.2021 31.12.2020 Current portion of interest-bearing debt 13 500 16 605 Current portion of interest-bearing debt 13 500 16 605 Hunter Group ASA - 2021 37 Notes to the consolidated financial statements 2021 Note 9 - Current interest-bearing loans and borrowings cont. Reconciliation of liabilities arising from financing activities: Note 10 - Other interest-bearing debt Average interest rate on interest-bearing debt was 2.91 % in 2021. Book value of interest-bearing debt approximately equal fair value. Please see note 13 for the maturity analysis for short-term liabilities. No significant borrowing cost were capitalized as per 31 December 2021. The Group was in compliance with all debt covenants as per year-end 2021. Note 11 - Trade payables Trade payables are generally non-interest bearing and the payment terms are net 30 days. Fair value of the payables equals the nominal value. Non-cash changes Cash FX Fair value 2021 31.12.2020 flows IFRS 16 movement chng. & other 31.12.2021 Other interest-bearing debt (long-term) 237 954 -58 677 -114 0 1 350 180 514 Short-term liabilities 16 605 -3 125 20 0 0 13 500 Total liabilities from financing activities 254 559 -61 802 -94 0 1 350 194 013 Non-cash changes Cash FX Fair value 2020 31.12.2019 flows IFRS 16 movement chng. & other 31.12.2020 Other interest-bearing debt (long-term) 174 494 63 477 -17 0 0 237 954 Short-term liabilities 5 932 10 659 14 0 0 16 605 Total liabilities from financing activities 180 426 74 136 -3 0 0 254 559 (Figures in USD 1 000) 31.12.2021 31.12.2020 Other interest-bearing debt (long-term) 180 514 237 954 Other interest-bearing debt (long-term) 180 514 237 954 Maturity of long-term and short-term interest-bearing debt 31.12.2021 31.12.2020 Maturity 0-1 year (classified as short-term debt) 13 770 16 937 Maturity 2-4 years 191 507 252 446 Maturity 5 years and after 0 0 Total long-term and short-term interest-bearing debt 205 277 269 383 Book value of assets securing the interest-bearing debt 31.12.2021 31.12.2020 VLCC vessels 332 521 427 249 Trade and other receivables 5 513 5 416 Total Book value of assets securing the interest-bearing debt 338 034 432 665 Hunter Group ASA - 2021 38 Notes to the consolidated financial statements 2021 Note 12 - Other current liabilities Note 13 - Financial instruments risk management objectives and policies HUNT is subject to market risks (foreign currency exchange risk and interest rate risk), credit risk and liquidity risk. The Group’s management oversees the management of these risks and assures that HUNT’s financial risk-taking activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Group’s policies. It is the Group’s policy that no trading in derivatives for speculative purposes shall be undertaken. The Board of Directors reviews and agrees on policies for managing each of these risks, which are summarized below. Foreign currency risk The Group’s cash reserves of USD 29.6 million are deposited in the Norwegian bank DNB. A 10 per cent change in the NOK/USD currency rate would result in an agio effect in the profit before tax of +/- USD 3.0 million. The main transactions for the Group are in USD. As commercial operations are in a large scale, a foreign currency exchange risk policy has been introduced. Interest rate risk The Group’s financial income and financial costs in the statement of profit or loss are inﬂuenced by changes in interest rates as the interest with DNB is on a ﬂoating basis. The Group had USD 8.4 million in interest expense and no interest income in 2021. A 100 basis points increase/decrease in the interest rate would result in a decrease/increase in the profit before tax of USD 1.9 million. The interest rate in the sale- & leaseback agreements for the three delivered VLCC vessels was fixed for the leasing period up until the refinancing in 2020. Credit risk HUNT only trades with recognized, creditworthy third parties. It is the Group’s policy that all customers that wish to trade on credit terms are subject to credit verification procedures. All cash in the Group is deposited in the Norwegian bank DNB. Credit risk is managed through a framework that sets out policies and procedures covering the measurement and management of credit risk. Liquidity risk HUNT monitors its liquidity on a regular basis and produces rolling liquidity forecasts on a monthly basis in order to identify liquidity requirements in future periods. The target for HUNT’s management of liquidity risk is to minimum maintain a liquidity corresponding to its net liquidity requirements for 12 months. The interest-bearing debt is due in Q1 2023 and the Company has initiated refinancing discussions with its lenders, and expect to receive binding commitments during 2022. The cash position of Hunter Group at year end 2021 was USD 29.6 million, compared to USD 95.1 million in 2020. The management will continue to focus on eﬃcient operations, good planning and close monitoring of the liquidity situation and maintaining a clear business development strategy. Climate risk The Group assesses where climate risks could have a significant impact. These risks in relation to climate-related matters are included as key assumptions where they materially impact the measure of recoverable amount. These assumptions have been included in the cash-flow forecasts in assessing value-in-use amounts. Compliance with climate regulations and other changes in laws, regulations and obligations relating to climate change could increase our costs related to acquiring new vessels, operating and maintaining our existing vessels and require us to install new emission controls, acquire allowances or pay taxes related to our greenhouse gas emissions or administer and manage a greenhouse gas emissions program. (Figures in USD 1 000) Other current liabilities 31.12.2021 31.12.2020 Unpaid vacation pay 74 56 Other accrued costs 248 115 Interest payable 748 1 024 Total other current liabilities 1 070 1 195 Hunter Group ASA - 2021 39 Notes to the consolidated financial statements 2021 Note 13 - Financial instruments risk management objectives and policies cont. The table below shows a maturity analysis for HUNT’s total short-term liabilities: Please see note 10 for the maturity analysis for long-term liabilities. Capital management HUNT’s main objective for the management of its capital structure is to maximize value creation for shareholders, while at the same time maintaining a sound financial position and a good credit rating. HUNT manages its capital structure and makes adjustments to it in light of changes in economic conditions. As part of managing the capital structure, the Group monitors the covenant related to equity ratio of 30 %. (Figures in USD 1 000) within within within 31.12.2021 3 months 3-9 months 9-12 months Accounts payable 195 0 0 Public duties payables 68 0 0 Current portion of interest-bearing debt 3 375 6 750 3 375 Other short-term liabilities 892 178 0 within within within 31.12.2020 3 months 3-9 months 9-12 months Accounts payable 2 124 0 0 Public duties payables 68 0 0 Current portion of interest-bearing debt 4 151 8 302 4 151 Other short-term liabilities 1 139 56 0 (Figures in USD 1 000) 31.12.2021 31.12.2020 Long-term debt financial institutions 180 514 237 954 Short-term debt financial institutions 13 500 16 605 Trade and other payables 1 333 3 387 Bank deposits -29 639 -95 146 Net debt (asset) 165 708 162 800 Equity 176 521 271 614 Total capital Capital and net debt 342 229 434 414 Gearing ratio 48,4 % 37,5 % Equity ratio 47,5 % 51,3 % Hunter Group ASA - 2021 40 Notes to the consolidated financial statements 2021 Note 13 - Financial instruments risk management objectives and policies cont. Set out below is a comparison by category of carrying amounts and fair values of all of the Company’s financial instruments: All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole: • Level 1: Quoted (unadjusted) market prices in active markets for identical assets or liabilities • Level 2: Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable • Level 3: Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable The Group does not use hedge accounting. The sale- & leaseback debt entered into at the end of 2019 was refinanced in 2020. There has not occurred significant changes in the Group’s credit rating or underlying interest rates after delivery of the vessels that indicates that the fair value deviates materially from the carrying value. The Group has used the services of the law firm Ro Sommernes DA for legal advice in 2020 and 2021. Ro Sommernes DA has invoiced the Company USD 38 thousand in 2020 and USD 14 in 2021. The Company’s chairman Henrik Christensen is a partner in Ro Sommernes DA. The Group renewed its renting of office space from Dronningen Eiendom AS in October 2021. The renewed rental agreement is for 36 months. One of the Company’s shareholder is also a shareholder of Dronningen Eiendom AS. In April 2021 Hunter Group entered into a sale & leaseback agreement for a handysize dry cargo vessel, which was sold to Apollo Asset Ltd. shortly thereafter with a gain of USD 0.1 million. Furthermore, Hunter Group has served as a manager for several other similar agreements where Apollo pays NOK 1,500 per hour and a fee of USD 5 thousand per transaction. Apollo Asset Ltd. Is 100% owned by Mr. Arne Fredly, board member and largest shareholder of Hunter Group ASA. Note 14 - Transactions with related parties The following table provides the total amount of transactions that have been entered into with related parties controlled by members of executive management of HUNT for the relevant financial year. The purchases from related parties are made at terms equivalent to those that prevail in arm's length transactions. Fair value (Figures in USD 1 000) measurement Carrying Fair Carrying Fair Financial assets hierarchy amount value amount value Cash and cash equivalents Level 1 29 639 29 639 95 146 95 146 Trade receivables Level 3 5 513 5 513 5 416 5 416 Other short-term receivables Level 3 3 878 3 878 1 539 1 539 Carrying Fair Carrying Fair Financial liabilities amount value amount value Other interest-bearing debt (long-term) Level 3 180 514 180 514 237 954 237 954 Current interest-bearing loans and borrowings Level 3 13 500 13 500 16 605 16 605 Trade payables Level 3 195 195 2 124 2 124 31.12.2020 31.12.2021 31.12.2021 31.12.2020 Transcations with related parties (figures in USD 1 000) 2021 2020 Purchased services 76 91 Hunter Group ASA - 2021 41 Notes to the consolidated financial statements 2021 Note 15 – Revenue from contracts with customers Pool revenues are day rates received from the pool Tankers International, and is considered earned per day. Time charter revenue is recognized straight-line over the lease term. The service component of time charter revenue, is recognized per day as the service is performed. Future minimum lease payments in relation to non-cancellable operating leases of VLCCs where Hunter Tankers is a lessor relates to time charter revenue and amounts to USD 6.49 million within 2022. Please see note 6 for contract assets as per 31.12.2020 and 31.12.2021. Note 16 – Specification of Vessel operating expenses and Other operating expenses Vessel operating expenses primarily consists of crewing related costs, in addition to insurance costs and various spare parts. Other operating expenses (Figures in USD 1 000) 2021 2020 Payroll expenses 1 151 962 IT and office-related expenses 75 15 Audit, audit-related services and accounting fees 301 222 Various legal fees 182 364 Insurance, car, travel, tonnage tax and other expenses 105 86 Totalt 1 815 1 649 (Figures in USD 1 000) Year 2021 2020 Type of goods or services Pool revenues 7 438 48 567 Time charter revenues 29 722 60 037 Total revenues 37 160 108 605 Hunter Group ASA - 2021 42 Notes to the consolidated financial statements 2021 Note 17 - Finance income and finance expenses This section provides additional information about individual line items of finance income and finance expense in the statement of profit or loss by type. Interest income on cash & cash equivalents consist of earned interest on the Group's cash & cash equivalents placements. Note 18 - Income tax Finance income (Figures in USD 1 000) 2021 2020 Interest income related to cash, cash equivalents & other financial investments 4 270 Other financial income 105 0 Currency gain 0 235 Total finance income 108 505 Finance expenses (Figures in USD 1 000) 2021 2020 Interest expense related to debt to financial institutions 8 430 15 074 Other financial expences 34 154 Currency losses 1 039 0 Total finance expenses 9 503 15 228 Total finance income (loss) -9 394 -14 723 Income tax expense (Figures in USD 1 000) 2021 2020 Payable tax 0 0 Changes in utilized tax asset 0 0 Total tax expense 0 0 Calculation of basis for tax (Figures in USD 1 000) 2021 2020 Earnings before tax 3 776 63 083 Permanent differences -93 4 Currency adjustments due to NOK as tax basis -10 341 -8 Adjustment related to shipping tax rules 6 830 -63 793 Changes in temporary differences 0 -4 Use of tax loss brought forward -173 718 Total basis for tax 0 0 Summary of temporary differences: 2021 2020 Fixed assets -23 -25 Loss carried forward -38 186 -38 359 Total -38 209 -38 383 Calculated deferred tax asset (22 %) -8 406 -8 444 Hunter Group ASA - 2021 43 Notes to the consolidated financial statements 2021 Note 18 - Income tax cont. The tax loss brought forward is related to Norway, and there exist no restrictions of the possibility to bring forward these tax losses (no maturity date). Note 19 - Earnings per share Earnings per share is calculated as net profit (loss) for the year attributable to equity holders of the Company divided by the weighted 'average number of shares outstanding over the year. Diluted earnings per share is calculated as net profit (loss) for the year attributable to equity holders of the Company divided by the weighted average number of share outstanding over the year plus the weighted average number of dilutive potential shares. 1 750 000 options were awarded in 2020 and 2 000 000 were awarded in 2021. Statement of financial position Deferred tax asset (Figures in USD 1 000) 2021 2020 Loss carried forward -8 401 -8 439 Fixed assets -5 -5 Total deferred tax asset -8 406 -8 444 Not recognized deferred tax asset 8 406 8 444 Total deferred tax asset recognised in the statement of financial position 0 0 Loss carried forward as of 31 December 2021 2020 Unlimited carrying forward -38 186 -38 359 Effective tax rate 2021 2020 Profit / (loss) before tax 3 776 63 083 22% tax of earnings before tax 831 13 878 Permanent differences and other -21 1 Currency effect due to NOK as tax basis -2 275 -2 Adjustment related to shipping tax rules 1 503 -14 034 Changes in deferred tax asset not recognised in the statement of financial position and other -38 157 Calculated tax cost 0 0 Effective tax rate 0 % 0 % (Amounts and shares in 1 000) 2021 2020 Net profit (loss) 3 776 63 083 Weighted average number of outstanding ordinary shares during the year 575 362 575 362 Treasury shares (held by the issuing entity itself) -11 208 -7 691 Effect of dilution - warrents 560 0 Effect of dilution - share options 5 0 Weighted average outstanding diluted shares 564 719 567 671 Earnings (loss) per share 2021 2020 Earnings per share 0.01 0.11 Earnings per share diluted 0.01 0.11 Hunter Group ASA - 2021 44 Notes to the consolidated financial statements 2021 Pension scheme The Company has a defined contribution pension scheme that complies with the Norwegian occupational pension legislation (called “OTP”). The pension contributions range from 4 % 0 - 7.1 G to 7 % 7.1 -12 G of the employee’s salary - maximized to a percentage of 12 G (NOK 1,276,788). The National Insurance scheme basic amount for 2021 is NOK 106,399. The retirement age for all employees, including the management, is 67 years. The Group is obliged to have an occupational pension scheme pursuant to the Act on Occupational Pensions. The Group's pension plans meet the requirements of this Act. Note 20 - Payroll and related expenses Remuneration to management (amounts in USD) The total remuneration for the members of the management was USD 364 thousand in 2021, compared to USD 310 thousand in 2020. Executive management of HUNT consists of CEO and CFO. Payroll and related expenses (figures in USD 1 000) 2021 2020 Salaries and vacation pay 683 484 Social security tax 107 73 Pension expense (“OTP”) 33 30 Employee share option program expense (incl. national insurance contributions) 285 339 Remuneration to the Board of Directors and the Nomination Committee 38 28 Other benefits 5 8 Total payroll an related expenses 1 151 962 2021 2020 Average work years 3 3 2021 2020 Contributions expensed during the year 33 30 Total remuneration to management during the year ended 31 December is as follows: 2021 2020 Other Other Salary remuneration Pension cost Salary remuneration Pension cost Erik Frydendal, (CEO) 209 528 166 311 10 952 188 449 244 849 6 750 Lars M. Brynildsrud (CFO)* 135 405 61 011 7 050 108 710 89 282 5 176 Hunter Group ASA - 2021 45 Notes to the consolidated financial statements 2021 Note 20 - Payroll and related expenses cont. Shares and options held directly or indirectly by the management group as of 31 December 2021 are as follows: See the section “Remuneration policy for members of executive management” for further information. Remuneration to the Board of Directors and the Nomination Committee The allocation of remuneration to the members of the Board and Nomination Committee is paid as follows in 2020 and 2021: Employee share option program The number of employees share options and average exercise prices for HUNT and development during the year: Number of Exercise price shares % shares Options (USD) Lars M . Brynildsrud, CFO 15 400 0,00 % 1 250 000 0,35 Erik Frydendal, CEO 1 650 000 0,29 % 3 000 000 0,35 Total 1 665 400 0 4 250 000 - Changes in share options held by the management group are as follows: Options Options for- Options as of Options of 1 granted in feited in the 31 December January 2021 the period period 2021 Lars M . Brynildsrud, CFO 750 000 500 000 0 1 250 000 Erik Frydendal, CEO 2 000 000 1 000 000 0 3 000 000 Total 2 750 000 1 500 000 0 4 250 000 (amounts in USD) 2021 2020 Kristin Hellebust - Board member from April 2018 14 525 11 122 Henrik A. Christensen - Chairman of the Board from April 2018 21 788 16 682 Total remuneration 36 313 27 804 Weighted Weighted Share average Share average Summary of oustanding options: options exercise price options exercise price Balance at 1 january 3 750 000 - 2 000 000 - Granted during the year 2 000 000 0,35 1 750 000 0,38 Cancelled during the year 0 - 0 - Forfeited during the year 0 - 0 - Balance at 31 December 5 750 000 - 3 750 000 - Vested options 0 - 0 - Weighted Average Fair Value of options granted during the period 5 750 000 - 3 750 000 - 2021 2020 Hunter Group ASA - 2021 46 Notes to the consolidated financial statements 2021 Note 20 - Payroll and related expenses cont. Fair value of the options granted was measured using the Black-Scholes model. Measurement inputs included share price on measurement date, exercise price of the instrument, expected volatility, weighted average expected life of the instruments, expected dividends, and the risk-free interest rate. At the end of 2021, the Company revised its estimates of the number of options that were expected to vest. Mr. Frydendal was through his controlled company Sagittarius Capital Ltd, granted 1,000,000 LTI Options, with a strike price per share equal to the closing price on 28 March 2019 (NOK 3.23). They have a 12 month vesting period on terms set out in the Company's LTI rules, as adopted by the Company’s annual general meeting (AGM) as per 25 April 2019, with effect from the commencement date of employment. The expiration date is 25 April 2024, and has a volatility in the calculation of approximately 45 %. Furthermore, Mr. Frydendal was through his controlled company Sagittarius Capital Ltd, granted 1,000,000 LTI Options, with a strike price per share equal to the closing price on 30 April 2020 (NOK 3.95). They have a 12 month vesting period on terms set out in the Company's LTI rules, as adopted by the Company’s annual general meeting (AGM) as per on 30 April 2020, with effect from 30 April 2020. The expiration date is 30 April 2026, and has a volatility in the calculation of approximately 44 %. 12 May 2021 Mr. Frydendal was through his controlled company Sagittarius Capital Ltd, granted additional 1,000,000 LTI Options, with a strike price per share of NOK 3.00. They have a 12 month vesting period on terms set out in the Company's LTI rules. The expiration date is 12 May 2026, and has a volatility in the calculation of approximately 51 %. Mr. Brynildsrud was granted 500,000 LTI Options, with a strike price per share equal to the subscription price in the Private Placement completed on 23 May 2019, i.e. NOK 3.65 per share, and with a 12 month vesting period on terms set out in the Company's LTI rules, as adopted by the Company's AGM as per 25. April 2019, with effect from the commencement date of employment. The expiration date is 12 August 2024, and has a volatility in the calculation of approximately 42 %. Furthermore, Mr. Brynildsrud was granted 250,000 LTI Options, with a strike price per share equal to the closing price on 30 April 2020 (NOK 3.95), and with a 12 month vesting period on terms set out in the Company's LTI rules, as adopted by the Company's AGM as per 30 April 2020, with effect from 30 April 2020. The expiration date is 30 April 2026, and has a volatility in the calculation of approximately 44 %. 12 May 2021 Mr. Brynildsrud was granted 500,000 LTI Options, with a strike price per share of NOK 3.00, and with a 12 month vesting period on terms set out in the Company's LTI rules. The expiration date is 12 May 2026, and has a volatility in the calculation of approximately 51 %. Implemented remuneration policy for members of executive management for 2021: The fixed salary for each member of the management shall be competitive and based on the individual’s experience, responsibilities as well as the results achieved during the previous year. Salaries as well as other benefits shall be reviewed annually and adjusted as appropriate. In addition to their base salary, the Company’s management may be granted additional remuneration in the form of a bonus. The assessment criteria of such bonus will be based on both the Company’s performance and the individual’s performance. The targets to be reached by the CEO are to be determined by the Company’s Board of Directors. The CEO will set relevant targets for the other members of the management, based on principles defined by HUNT’s Board of Directors. No provision for bonus has been recognized for 2020 or 2021. The Company’s management will receive payment in kind such as cell phone expenses and payment of IT and telecommunication expenses. The CEO and CFO have a 6-month notice period with salaries, where they retain options then granted. Hunter Group ASA - 2021 47 Notes to the consolidated financial statements 2021 Note 20 - Payroll and related expenses cont. Remuneration policy for members of executive management - Guidelines for 2022: The main principle of the Company’s remuneration policy for HUNT’s management is to offer competitive terms in an overall perspective taking into account salary, payments in kind, bonuses, pension plans and other benefits, to retain key staff. In addition to their base salary, the Company’s management may be granted additional remuneration in the form of a bonus. The assessment criteria of such bonus will be based on both the Company’s performance and the individual’s performance. The targets to be reached by the CEO are to be determined by the Company’s Board of Directors. The CEO will set relevant targets for the other members of the management, based on principles defined by HUNT’s Board of Directors. The Company’s management will receive payment in kind such as cell phone expenses and payment of IT and telecommunication expenses. Auditor's fee The following table shows remuneration related to professional services rendered by the Company’s principal auditor, Ernst & Young AS, for fiscal year 2021 and 2020. The amounts shown are exclusive of value added tax. Note 21 - Share capital and shareholder information Share capital as of 31 December 2021 was USD 82.6 million, being 575,362,013 ordinary shares at a nominal value of USD 0.144 each (NOK 1.25). All shares carry equal voting rights. (Amounts in USD 1 000) 2021 2020 Audit fee 105 87 Assurance services 0 0 Other assistance 0 0 Total 105 87 Number of ordinary shares 2021 2020 Ordinary shares issued at 1 January 575 362 013 575 362 013 Treasury shares (held by the issuing entity itself) -11 208 404 -7 691 404 Ordinary shares at 31 December 564 153 609 567 670 609 Hunter Group ASA - 2021 48 Notes to the consolidated financial statements 2021 Note 21 - Share capital and shareholder information cont. The 20 largest shareholders held 60.7 % of the outstanding shares. As at 31 December 2021, the 20 largest shareholders were as follows: The following members of the Board of Directors and member of executive management held shares as of 31 December 2021: Shareholders Number of shares % shares 1 Apollo Asset Limited 168 500 000 29,3 % 2 Sundt As 40 310 829 7,0 % 3 Songa Capital AS 35 941 632 6,2 % 4 Swap Invest AS 15 613 718 2,7 % 5 BNP Paribas Securities Services 14 383 500 2,5 % 6 Hunter Group ASA 11 243 196 2,0 % 7 DnB Luxembourg S.A. 11 039 688 1,9 % 8 State Street Bank and Trust Comp 7 042 952 1,2 % 9 BNP Paribas 5 642 128 1,0 % 10 Nordnet Livsforsikring AS 4 930 543 0,9 % 11 Argentum Fondsinvesteringer AS 4 920 697 0,9 % 12 Stavanger Forvaltning AS 4 800 000 0,8 % 13 Surfside Holding AS 4 000 000 0,7 % 14 Cam AS 3 845 901 0,7 % 15 Caceis Bank Spain SA 3 376 479 0,6 % 16 Feen Marine AS 3 101 700 0,5 % 17 Barclays Capital Sec. Ltd firm 2 794 618 0,5 % 18 Nordnet Bank AB 2 715 519 0,5 % 19 Verdipapirfondet Storebrand Verdi 2 556 840 0,4 % 20 Ola Rustad AS 2 500 000 0,4 % Total shares for top 20 shareholders 349 259 940 60,70 % Total shares for other shareholders 226 102 073 39,30 % Total shares 575 362 013 100,0 % 2021 2020 August AS (Henrik Christensen - Chairman) 750 000 400 000 Apollo Asset Ltd (Arne Fredly - Board member) 168 500 000 168 500 000 Lars Brynildsrud (CFO) 15 400 15 400 Sagittarius Capital Ltd (Erik Frydendal - CEO) 1 650 000 1 650 000 Ordinary shares 170 915 400 170 565 400 % of total shares 29,7 % 29,6 % Hunter Group ASA - 2021 49 Notes to the consolidated financial statements 2021 Note 22 - Events after the reporting date Entered into a 4+4 month time charter for Hunter Disen, which commenced on 27 January 2022. The first four month is for USD 18,000 per day, while the charterer has the option to extend for another four months as USD 25,000 per day. Entered into a two 12-month index-based linked charters for Hunter Idun. Hunter Idun commenced on this charter on January 26th, immediately following the redelivery of the vessel from charterers to owners. Entered into a 12-month index-based charter for Hunter Frigg. The charter will commence immediately upon completion of its current charter. As of the date of this report, 93% of days in the first quarter of 2022 have been booked at an average estimated dayrate of USD 20,200. • 84% of spot days booked at an avg. est. dayrate of USD 15,400 • Average Q1 TC dayrates of USD 23,900 The recent Ukraine-situation has affected the global economy. The Group is monitoring the development of the situation but is at the current not significantly exposed (receivables, the Pool, crew etc.). However, the indirect effects of the situation is difficult to estimate as of today. Hunter Group ASA - 2021 50 Statement of profit and loss – Hunter Group ASA (Figures in USD 1 000) Note 2021 2020 Revenues Revenues 10 945 1 494 Total Revenues 945 1 494 Operating expenses Depreciation and amortisation expense 2, 3 63 54 General and administrative expenses 11, 14 1 674 1 325 Total operating expenses 1 737 1 379 Operating profit (loss) -792 114 Net financial income (loss) 12 25 2 874 Profit (loss) before taxes -767 2 989 Tax on ordinary result 13 0 0 Net profit (loss) -767 2 989 (Figures in USD 1 000) 2021 2020 Total comprehensive income Profit (loss) for the period -767 2 989 Translation differences 0 0 Comprehensive income for the period -767 2 989 Total comprehensive income attributable to: Equity holders of the parent -767 2 989 Non-controlling interest 0 0 Total comprehensive income -767 2 989 Hunter Group ASA - 2021 51 Statement of financial positions – Hunter Group ASA Oslo, 23 March 2022 Henrik A. Christensen Chairman of the board (Figures in USD 1 000) Note 31.12.2021 31.12.2020 NON-CURRENT ASSETS Property, plant & equipment 2, 3 224 54 Total tangible assets 224 54 Investment in subsidiaries 2, 17 38 869 38 869 Long-term receivable subsidiaries 18 53 917 154 733 Total finacial long-term assets 92 785 193 601 TOTAL NON-CURRENT ASSETS 93 009 193 655 CURRENT ASSETS Other short-term receivables 4 29 63 Total current receivables 29 63 Cash and cash equivalents 5 6 934 5 663 TOTAL CURRENT ASSETS 6 963 5 726 TOTAL ASSETS 99 972 199 381 (Figures in USD 1 000) Note 31.12.2021 31.12.2020 EQUITY Share capital 15 82 625 82 625 Own shares -1 660 -1 121 Share premium 18 569 50 100 Other equity 0 1 039 TOTAL EQUITY 99 534 132 644 LIABILITIES Long-term liabilities (IFRS 16) 3 150 0 Total non-current liabilities 150 0 Trade creditors 59 34 Accrued public charges and indirect taxes 68 68 Short-term liabilities (IFRS 16) 3, 6 69 50 Other current liabilities 7, 19 93 66 585 Total current liabilities 288 66 737 TOTAL LIABILITIES 439 66 737 TOTAL EQUITY AND LIABILITIES 99 972 199 381 Hunter Group ASA - 2021 52 Statement of cash flows – Hunter Group ASA (Figures in USD 1 000) Note 2021 2020 Profit (loss) attributable to equity holders of the parent -767 2 989 Depreciation 63 54 Financial income -1 061 -2 689 Financial expenses 109 10 Change in accounts receivables and accounts payables 25 2 Change in other receivables and payables and other 345 404 Net cash flow from operating activities -1 287 771 Change in long-term interest bearing receivable subsidiaries 100 816 2 722 Net cash flow from investment activities 100 816 2 722 Interest received 12 1 061 2 689 Interest paid 12 -109 -10 Installment leasing-debt (IFRS 16) 3 -57 -52 Purchase of own shares Equity -1 267 -3 010 Dividend paid Equity -97 888 0 Net cash flow from financing activities -98 259 -383 Total net changes in cash flow 1 270 3 109 Currency effect on cash 0 0 Cash and cash equivalents beginning of period 5 663 2 554 Cash and cash equivalents end of period 5 6 933 5 663 Hunter Group ASA - 2021 53 Statement of changes in equity – Hunter Group ASA Share Own Share Currency Retained Total (Figures in USD 1 000) Note Capital shares premium transl. adj. earnings equity Equity as of 01.01.2020 82 625 0 118 519 -2 289 0 198 855 Net profit (loss) 0 0 2 989 2 989 Total comprehensive income 2020 0 0 2 989 2 989 Dividend payable (approved 1 February 2021) 19 -66 530 0 0 -66 530 Purchase of own shares -1 121 -1 889 0 0 -3 010 Option plan payment 0 0 339 339 Equity as of 31.12.2020 82 625 -1 121 50 100 -2 289 3 328 132 644 Net profit (loss) 0 0 -767 -767 Total comprehensive income 2021 0 0 -767 -767 Dividends payable 19 -28 513 0 -2 845 -31 358 Purchase of own shares -539 -728 0 0 -1 267 Option plan payment 0 0 285 285 Equity as of 31.12.2021 82 625 -1 660 20 858 -2 289 0 99 534 Hunter Group ASA - 2021 54 Note 1 - Accounting principles Hunter Group ASA (HUNT) is the parent company of the Hunter Group, consisting of Hunter Group ASA and its subsidiaries Indicator AS and Hunter Tankers AS. Hunter Group ASA's main activities are shareholding in group companies and corporate functions. The financial statements of Hunter Group ASA are prepared in accordance with simplified IFRS pursuant to the Norwegian Accounting Act § 3-9 and regulations regarding simplified application of IFRS issued by the Norwegian Ministry of Finance on 3 November 2014. These parent company financial statements should be read in connection with the Consolidated financial statements of Hunter Group, published together with these financial statements. With the exceptions described below, Hunter Group ASA applies the accounting policies of the group, as described in Hunter Group’s disclosure note 2 Significant Accounting Policies, and reference is made to the Hunter Group note for further details. Subsidiaries Shareholdings in subsidiaries are accounted for using the cost method. It is annually evaluated if there exist indicators for impairment. Dividends and group contributions Dividends will be reflected as Dividends payable within current liabilities. Group contributions to other entities within Hunter Group are reflected in the balance sheet as current liabilities within Liabilities to group companies. Under simplified IFRS the presentation of dividends payable and payable group contributions would differ from the presentation under full IFRS, as it would also include dividend and group contributions payable which at the date of the balance sheet would be subject to a future general assembly approval before distribution. Notes to the financial statements 2021 - Hunter Group ASA Note 2 - Property, plant and equipment The Company has recognized the following assets in the statement of financial position (including internal built-up assets such as development costs). Property, Property, plant & equip. plant & equip. (Figures in USD 1 000) 2021 2020 Cost price at 1 January 10 10 Additions 10 0 Cost price at 31 December 21 10 Accumulated depreciations at 31 December -14 -6 Booked value at 31 December 5 3 Depreciation 8 3 Impairment charges 0 0 Estimated useful life 3-5 years 3-5 years Depreciation method straight-line straight-line Hunter Group ASA - 2021 55 Notes to the financial statements 2021 - Hunter Group ASA Note 3 - IFRS 16 IFRS 16 requires that all leases, except for short-term and low-value leases are reflected in the balance sheet as a lease liability and a Right of Use (RoU) asset. The weighted average discount rate used to calculate the IFRS 16 opening balance lease liability was 5 %. Note 4 - Other receivables Note 5 - Cash and cash equivalents (Figures in USD 1 000) 2021 2020 Right of use assets 01.01 51 102 Additions 223 0 Depreciation -55 -51 Right of use assets 31.12 219 51 Other interest-bearing debt 01.01 50 102 Additions 223 0 Installments -55 -52 Other interest-bearing debt 31.12 218 50 Interest expense 4 5 (Figures in USD 1 000) 2021 2020 Earned, not yet invoiced income 0 0 Prepaid expenses 29 63 Total other receivables 29 63 (Figures in USD 1 000) 2021 2020 Cash at bank 6 934 5 663 Total cash at bank 6 934 5 663 Restricted bank deposits for employee withholding taxes 39 39 Less than Between More than Remaining rental-payments as per 31.12 1 year 2 - 5 years 5 years Total Office rent 2021 80 0 0 80 Office rent 2020 53 0 0 53 Hunter Group ASA - 2021 56 Notes to the financial statements 2021 - Hunter Group ASA Note 7 - Other current liabilities Note 8 - Financial instruments risk management objectives and policies HUNT is subject to market risks (foreign currency exchange risk and interest rate risk), credit risk and liquidity risk. The Company’s management oversees the management of these risks and assures that HUNT’s financial risk-taking activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company’s policies. It is the Company’s policy that no trading in derivatives for speculative purposes shall be undertaken. The Board of Directors reviews and agrees on policies for managing each of these risks, which are summarized below. Foreign currency risk The Company’s cash reserves of USD 6,934 thousand are deposited in the Norwegian bank DNB. The main transactions for the Company has been in USD. As commercial operations are in a large scale, a foreign currency exchange risk policy has been introduced. Interest rate risk The Company’s financial income and financial costs in the statement of profit or loss are inﬂuenced by changes in interest rates as the interest on debit facility with DNB is on a ﬂoating basis. The Company had USD -109 thousand in interest expense and USD 1,061 thousand in interest income in 2021 whereof USD 3 thousand related to cash and cash equivalents and USD 1,058 thousand related to long-term interest-bearing receivable from subsidiaries. Credit risk HUNT only trades with recognized, creditworthy third parties. It is The Company’s policy that all customers that wish to trade on credit terms are subject to credit verification procedures. All cash in the Company is deposited in the Norwegian bank DNB. Credit risk is managed through a framework that sets out policies and procedures covering the measurement and management of credit risk. Liquidity risk HUNT monitors its liquidity on a regular basis, and produces rolling liquidity forecasts on a monthly basis in order to identify liquidity requirements in future periods. The target for HUNT’s management of liquidity risk is to maintain a liquidity corresponding to its net liquidity requirements for 12 months. The cash position of HUNT at year end 2021 was USD 6,934 thousand, compared to USD 5,663 thousand in 2020. Note 6 - Short-term liabilities (Figures in USD 1 000) 2021 2020 Short-term liabilities (IFRS 16) 69 50 Short-term liabilities (IFRS 16) 69 50 (Figures in USD 1 000) 2021 2020 Unpaid vacation pay 74 56 Dividend payable 0 66 530 Other accrued costs 19 0 Total other short-term liabilities 93 66 585 Hunter Group ASA - 2021 57 Notes to the financial statements 2021 - Hunter Group ASA Capital management HUNT’s main objective for the management of its capital structure is to maximize value creation for shareholders, while at the same time maintaining a sound financial position and a good credit rating. HUNT manages its capital structure and makes adjustments to it in light of changes in economic conditions. To maintain or adjust the capital structure, the Company may issue new shares. No changes were made in the objectives policies or processes during the financial year. Furthermore Hunter Group ASA has guaranteed for the continued operation of the wholly-owned subsidiary Indicator AS, which is an empty company with negligible debt to Hunter Group ASA. There is no external debt in Indicator AS as of 31 December 2021. Note 8 - Financial instruments risk management objectives and policies cont. The management will continue to focus on eﬃcient operations, good planning and close monitoring of the liquidity situation and maintaining a clear business development strategy. The table below shows a maturity analysis for HUNT’s total short-term liabilities: within within within 2021 (figures in USD 1 000) 3 months 3-9 months 9-12 months Accounts payable 59 0 0 Public duties payables 68 0 0 Other short-term liabilities (including dividend payable) 93 0 0 within within within 2020 (figures in USD 1 000) 3 months 3-9 months 9-12 months Accounts payable 34 0 0 Public duties payables 68 0 0 Other short-term liabilities (including dividend payable) 66 585 0 0 (Figures in USD 1 000) 2021 2020 Trade and other payables (including dividend payable) 220 66 687 Bank deposits -6 934 -5 663 Net debt -6 714 61 024 Equity 99 534 132 644 Capital and net debt 92 820 193 668 Gearing ratio -7,2 % 31,5 % Equity ratio 99,6 % 66,5 % Hunter Group ASA - 2021 58 Notes to the financial statements 2021 - Hunter Group ASA Note 9 - Transactions with related parties Please see note 18 below, and note 14 in the consolidated financial statements for further information. Interest income related to the interest-bearing loan to the subsidiary Hunter Tankers AS was USD 1,058 thousand in 2021 and USD 2,672 thousand in 2020. Furthermore Hunter Group ASA invoiced Hunter Tankers USD 470 thousand in 2020 for the follow-up of the VLCC shipbuilding contracts (no fees in 2021), and USD 665 thousand for management services in 2021 (1,024 in 2020). Note 10 - Revenue Note 8 - Financial instruments risk management objectives and policies cont. Carrying Fair Carrying Fair Financial assets (figures in USD 1 000) amount value amount value Cash and cash equivalents 6 934 6 934 5 663 5 663 Current receivables 29 29 63 63 Carrying Fair Carrying Fair Financial liabilities (figures in USD 1 000) amount value amount value Long-term debt financial institutions 0 0 0 0 Short-term debt financial institutions 69 69 50 50 Trade and other payables 220 220 66 687 66 687 2020 2021 2021 2020 Type of goods or service (figures in USD 1 000) 2021 2020 Follow-up VLCC contracts 0 470 Other income 945 1 024 Total revenues 945 1 494 Geographical market (figures in USD 1 000) 2021 2020 Sales in Norway 945 1 024 Sales abroad 0 470 Total revenues 945 1 494 Timing of revenue recognition 2021 2020 Goods transferred at a point in time 0 0 Services transferred over time 945 1 494 Total revenues 945 1 494 Hunter Group ASA - 2021 59 Notes to the financial statements 2021 - Hunter Group ASA Note 11 – Other operating expenses Note 12 - Finance income and finance expenses This section provides additional information about individual line items of finance income and finance expense in the statement of profit and loss by type. TUSD 1,057 of interest income in 2021 relates to an internal loan to Hunter Tankers AS. Note 13 - Income tax (Figures in USD 1 000) 2021 2020 Payroll expenses 1 151 962 IT and office-related expenses 75 8 Audit, audit-related services and accounting fees 158 158 Various legal fees 230 99 Insurance, car, travel and other expenses 60 98 Total 1 674 1 325 Finance income (figures in USD 1 000) 2021 2020 Interest income 1 061 2 689 Other financial income 101 0 Currency gain 0 210 Total finance income 1 163 2 898 Finance expenses (figures in USD 1 000) 2021 2020 Interest expense related to debt to financial institutions -109 -10 Other financial expenses -29 -3 Currency losses -1 001 -11 Total finance expenses -1 138 -24 Total finance income (loss) 25 2 874 Income tax expense (figures in USD 1 000) 2021 2020 Payable tax 0 0 Change in utilized tax asset 0 0 Total tax expense 0 0 Hunter Group ASA - 2021 60 Notes to the financial statements 2021 - Hunter Group ASA Note 13 - Income tax cont. The company has not recognized a deferred tax asset in the statement of financial position for 2021 and 2020 as the Company has limited taxable income stemming from intercompany interest from loans that will be reduced in connection with sale of VLCC vessel in Hunter Tankers AS.. Calculation of basis for tax 2021 2020 Earnings before tax -767 2 989 Permanent differences -93 4 Currency adjustments due to NOK as tax basis -2 220 -144 Changes in temporary differences 0 -4 Use of tax loss brought forward 3 081 -2 845 Total basis for tax 0 0 Summary of temporary differences: 2021 2020 Fixed assets -23 -25 Accruals 0 0 Loss carried forward -33 131 -34 834 Total -33 154 -34 859 Calculated deferred tax asset (22 %) -7 294 -7 669 Statement of financial position Deferred tax asset (figures in USD 1 000) 2021 2020 Loss carried forward -7 289 -7 663 Accruals 0 0 Fixed assets -5 -5 Total deferred tax asset -7 294 -7 669 Not recognized deferred tax asset 7 294 7 669 Total deferred tax asset recognised in the statement of financial position 0 0 Loss carried forward as of 31 December 2021 2020 Unlimited carrying forward 33 131 34 834 Hunter Group ASA - 2021 61 Notes to the financial statements 2021 - Hunter Group ASA Note 13 - Income tax cont. Note 14 - Payroll and related expenses Pension scheme The Company has a defined contribution pension scheme that complies with the Norwegian occupational pension legislation (called “OTP”). The pension contributions range from 4 % 0 - 7.1 G to 7 % 7.1 -12 G of the employee’s salary - maximized to a percentage of 12 G (NOK 1,276,788). The National Insurance scheme basic amount for 2021 is NOK 106,399. The retirement age for all employees, including the management, is 67 years. Please refer to note 20 in the consolidated financial statements for further information about remuneration and option program for the management and board of directors. Effective tax rate 2021 2020 Profit / (loss) before tax -767 2 989 22% tax of earnings before tax -169 658 Permanent differences and other -21 1 Changes in deferred tax asset not recognised in the statement of financial position 678 -627 Currency effect due to NOK as tax basis -488 -32 Calculated tax cost 0 0 Effective tax rate 0 % 0 % Payroll and related expenses (figures in USD 1 000) 2021 2020 Salaries and vacation pay 683 484 Social security tax 107 73 Pension expense (“OTP”) 33 30 Employee share option program expense (incl. national insurance contributions) 285 339 Other benefits 43 36 Total payroll an related expenses 1 151 962 2021 2020 Number of employees (average work years) 3 3 (Figures in USD 1 000) 2021 2020 Contributions expensed during the year 33 30 Hunter Group ASA - 2021 62 Notes to the financial statements 2021 - Hunter Group ASA Auditor's fee The following table shows remuneration related to professional services rendered by the Company’s principal auditor, EY, for fiscal year 2021 and 2020. The amounts shown are exclusive of value added tax. Note 15 - Share capital and shareholder information Please see note 21 in the consolidated financial statements. Note 16 - Provisions, commitments and contingent liabilities/assets There do not exist any material provisions or contingent liabilities/assets for Hunter Group ASA. Note 17 - Investment in subsidiaries Note 18 - Intercompany receivables/payables (Figures in USD 1 000) 2021 2020 Audit fee 101 84 Assurance services 0 0 Other assistance 0 0 Total 101 84 (Figures in USD 1000) Voting Book value Equity at Net Company Location Share rights Cost 31.12.2021 31.12.2021 income 2021 Indicator AS Stavanger 100 % 100 % 91 0 -37 -2 Hunter Tankers AS Oslo 100 % 100 % 38 869 38 869 131 587 -7 958 Receivables (figures in USD 1 000) 2021 2020 Long-term receivable subsidiaries 53 917 154 733 Short-term receivable subsidiaries 0 0 Payables (figures in USD 1 000) 2021 2020 Other current liabilities subsidiaries 0 0 Hunter Group ASA - 2021 63 Notes to the financial statements 2021 - Hunter Group ASA Note 19 - Events after the reporting date Entered into a 4+4 month time charter for Hunter Disen, which commenced on 27 January 2022. The first four month is for USD 18,000 per day, while the charterer has the option to extend for another four months as USD 25,000 per day. Entered into a two 12-month index-based linked charters for Hunter Idun. Hunter Idun commenced on this charter on January 26th, immediately following the redelivery of the vessel from charterers to owners. Entered into a 12-month index-based charter for Hunter Frigg. The charter will commence immediately upon completion of its current charter. As of the date of this report, 93% of days in the first quarter of 2022 have been booked at an average estimated dayrate of USD 20,200. • 84% of spot days booked at an avg. est. dayrate of USD 15,400 • Average Q1 TC dayrates of USD 23,900 The recent Ukraine-situation has affected the global economy. The Group is monitoring the development of the situation but is at the current not significantly exposed (receivables, the Pool, crew etc.). However, the indirect effects of the situation is difficult to estimate as of today. Hunter Group ASA Org. no. 985 955 107 Address: Dronningen 1, 0287 OSLO E-mail: Erik A. S. Frydendal, CEO, [email protected] Lars Brynildsrud, CFO, [email protected] 5967007LIEEXZXHLAW342021-01-012021-12-315967007LIEEXZXHLAW342020-01-012020-12-315967007LIEEXZXHLAW342021-12-315967007LIEEXZXHLAW342020-12-315967007LIEEXZXHLAW342019-12-315967007LIEEXZXHLAW342019-12-31ifrs-full:IssuedCapitalMember5967007LIEEXZXHLAW342020-12-31ifrs-full:IssuedCapitalMember5967007LIEEXZXHLAW342019-12-31ifrs-full:TreasurySharesMember5967007LIEEXZXHLAW342020-01-012020-12-31ifrs-full:TreasurySharesMember5967007LIEEXZXHLAW342020-12-31ifrs-full:TreasurySharesMember5967007LIEEXZXHLAW342019-12-31ifrs-full:SharePremiumMember5967007LIEEXZXHLAW342020-01-012020-12-31ifrs-full:SharePremiumMember5967007LIEEXZXHLAW342020-12-31ifrs-full:SharePremiumMember5967007LIEEXZXHLAW342019-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember5967007LIEEXZXHLAW342020-01-012020-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember5967007LIEEXZXHLAW342020-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember5967007LIEEXZXHLAW342019-12-31ifrs-full:RetainedEarningsMember5967007LIEEXZXHLAW342020-01-012020-12-31ifrs-full:RetainedEarningsMember5967007LIEEXZXHLAW342020-12-31ifrs-full:RetainedEarningsMember5967007LIEEXZXHLAW342021-12-31ifrs-full:IssuedCapitalMember5967007LIEEXZXHLAW342021-01-012021-12-31ifrs-full:TreasurySharesMember5967007LIEEXZXHLAW342021-12-31ifrs-full:TreasurySharesMember5967007LIEEXZXHLAW342021-01-012021-12-31ifrs-full:SharePremiumMember5967007LIEEXZXHLAW342021-12-31ifrs-full:SharePremiumMember5967007LIEEXZXHLAW342021-01-012021-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember5967007LIEEXZXHLAW342021-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember5967007LIEEXZXHLAW342021-01-012021-12-31ifrs-full:RetainedEarningsMember5967007LIEEXZXHLAW342021-12-31ifrs-full:RetainedEarningsMemberiso4217:USDiso4217:USDxbrli:shares

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