Asset Buyout Partners Annual Report 2019

The Group’s operating costs are divided in two categories, property operating expenses and administrative expenses. Expenses directly related to the operation of existing properties are recognized as property operating expenses. Other expenses are included as administrative expenses, including salaries and costs related to Group functions. The fair value of the property portfolio at year end 2019 was NOK 8,448 million (2018: NOK 7,066 million). The increase is related to purchases of new properties of NOK 607 million but also includes a net change of fair value of NOK 691.5 million (2018: NOK 952.4 million). The fair value adjustments are impacted by value changes and tax discounts from transactions as this is not initially recognized in accordance with IFRS. The Group has a strong cash flow from operating activities, and free cash flow is mainly used for reinvestments or repayments on interest bearing debt. Otherwise the cash flow statement reflects the investment activities during the year. The Group’s activities are financed with a combination of equity from owners and interest-bearing debt with different maturities. At year- end, the Group’s current liabilities constituted 10% of total liabilities, compared to 18% as of 31 December 2018. The loan to value ratio at year end was 53% (2018: 61%). Total assets at year-end amounted to NOK 8,525 million, compared to NOK 7,291 million last year. The equity ratio was 39% at year-end, compared to 35% as of 31 December 2018. This is consistent with ABP’s capital management policies and the Group’s financial strategy. Parent company financials The Group’s parent company, Asset Buyout Partners Invest AS (“The Parent Company”), is a holding company with limited activity. Costs are related to the Group’s administrative functions which are financed with group contributions from its subsidiaries. The net profit for 2019 was NOK 0 (2018: NOK 1,775 thousand). The equity at year-end was NOK 1,510 million (2018: NOK 1,510 million) and the equity ratio was 99.9% at year-end (2018: 100.0%). 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 Company’s long- term profit forecasts. The Group’s economic and financial position is sound. Risk management Overall view on objectives and strategy The Group is exposed to both financial and non-financial risk. ABP’s main risk factors include market risk (including interest rate risk), credit risk and liquidity risk. The risk policies are continuously being assessed by the Board of Directors (“the Board”) and the appro- priate policies and procedures to identify, measure and manage the financial risks have been implemented. The Group’s overall risk management strategy is targeted to protect the value of ABPs investments. ABP’s risk factors are further described in Note 3. The working environment and the employees ABP has 15 employees and the Board believes that the working environment is satisfactory. There have been no injuries, accidents or sick leave during 2019. The Parent Company has no employees. Equal opportunities ABP aims to be a workplace with equal opportunities and manage- ment has incorporated a policy that aims to prevent discrimination based on gender, religion or other circumstances. ABP intends to carry forward the implemented initiatives as described above regarding equal opportunities. ABP’s employees consist of twelve men and three women. The Board consists of six male Board members. Environmental report In the Board’s opinion, the external environment is to a very limited extent directly affected by the Group’s activities. The Board encour- ages tenants to secure operations according to approved plans and government requirements. Asset Buyout Partners | Annual Report 2019 11