greenship bulk trust and its subsidiaries - otc.nfmf.nootc.nfmf.no/public/news/14582.pdf ·...

Registration No. 2013003

Greenship Bulk Trust and its subsidiaries

Annual Financial Statements31 December 2013

Building a betterworking world


General Information

Trustee-Manager Registered/Business Office

Greenship Bulk Manager Pte. Ltd. 23 Church Street23 Church Street #14-06 Capital Square#14-06 Capital Square Singapore 049481Singapore 049481

Board of directors Unit Registrar/Unit Transfer Office

Jacques d'Armand de Chateauvieux (Chairman) Stamford Law CorporationFabian Raga Chrobrog (appointed 6 September 2013) Nordea Bank Norge ASA (as registrar

Lee Keen Whye (appointed 6 September 2013) for units registered in the Norwegian

Eric Borgen (appointed 6 September 2013) Central Securities Depositing

Trond Kyrkjeboe (appointed 6 September 2013) (Verdipapirsentralen ASA)

Vidula Verma (appointed 6 September 2013)Philippe Rene Georges Rochet(appointed 21 October 2013)

AuditorTom Preststulen (resigned on 6 September 2013)Teo Soon Chye (resigned on 6 September 2013) Ernst &Young LLPFarid Khan Bin Kaim Khan(resigned on 6 September 2013)David Picard (resigned on 6 September 2013) Company secretaries

Yap Wai Ming(appointed on 8 February 2013)Ng Joo Khin(resigned on 8 February 2013)

Executive Officer Principal Bankers

Philippe Rene Georges Rochet (Chief Executive Officer) Banque Degroof LuxembourgDVB Group Merchant Bank (Asia) Ltd.DBS BankCEXIM Bank

Audit Committee HSH NordbankNordea Bank Finland PLC

Vidula Verma (Chairperson) (appointed 6 September 2013) Credit du NordLee Keen Whye (appointed 6 September 2013) BNP ParibasEric Borgen (appointed 6 September 2013)Trond Kyrkjeboe (appointed 6 September 2013)

Teo Soon Chye (resigned on 6 September 2013)Farid Khan Bin Kaim Khan (resigned on 6 September 2013)David Picard (Chairperson) (resigned on 6 September 2013)

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General Information

Index

Page

Report of the Trustee-Manager 1

Statement and Certificate by the Trustee-Ma 3

Statement by the Chief Executive Officer of the Trustee-Manager 4

Independent Auditor's Report to the Unitholders of Greenship Bulk Trust 5

Statements of Financial Position 7

Consoiiciatea Statement o1 Comprehensive income ~

Consolidated Statement of Changes in Unitholders' Funds 9

Consolidated Statement of Cash Flows 10

Notes to the Financial Statements 11


Report of the Trustee-Manager

The Directors of Greenship Bulk Manager Pte. Ltd., the Trustee-Manager of Greenship Bulk Trust

(the "Trust') are pleased to present their report to the unitholders of the Trust, together with the

audited consolidated financial statements of Greenship Bulk Trust and its subsidiaries (collectively,

the "Group") for the financial year ended 31 December 2013 and the statement of financial position

of the Trust as at 31 December 2013.

Directors

The Directors of the Trustee-Manager in office at the date of this report are:

Jacques d'Armand de ChateauvieuxFabian Raga ChrobogErik BorgenLee Keen WhyeVidula VermaTrond KyrkjeboePhilippe Rene Georges Rochet

(appointed on 6 September 2013)(appointed on 6 September 2013)(appointed on 6 September 2013)(appointed on 6 September 2013)(appointed on 6 September 2013)(appointed on 21 October 2013)

Arrangements to enable Directors to acquire units and debentures

Neither at the end of nor at any time during the financial year was the Trust a party to any

arrangement whose objects are, or one of whose objects is, to enable the Directors of the Trustee-

Manager to acquire benefits by means of the acquisition of units in or debentures of the Trust.

Directors' interests in units and debentures

No director who held office at the end of the financial year had an interest in units, or debentures of

the Trust either at the beginning of the financial year, or date of appointment if later, or at the end of

the financial year.

Directors' contractual benefits

Except as disclosed in the financial statements, no Director of the Trustee-Manager has received

or become entitled to receive a benefit by reason of a contract made by the Trust or a related

corporation with the Director, or with a firm of which the Director is a member, or with a company in

which the Director has a substantial financial interest.

Options

During the financial year, there were:

(i) no options granted by the Trustee-Manager to any person to take up unissued units in the Trust;

and

(ii) no units issued by the virtue of any exercise of option to take up unissued units of the Trust.

As at the end of the financial year, there were no unissued units of the Trust under option.

- 1 -


Report of the Trustee-Manager

Audit Committee

The members of the Audit Committee at the end of the financial year were as follows

Vidula Verma (Chairperson)Lee Keen WhyeEric BorgenTrond Kyrkjeboe

All members of the Audit Committee are independent and non-executive Directors.

The Audit Committee carried out its functions in accordance with regulation 13(6) of the BusinessTrusts Regulations 2005.

In performing those functions, the Audit Committee reviewed the overall scope of external audit

and the assistance given by the Trustee-Manager's officers to the auditor. The Audit Committeemet with the Trust's external auditor to discuss the scope and results of annual audit. In addition,

the Audit Committee reviewed the financial statements of the Group and the Trust before theirsubmission to the Board of Directors of the Trustee-Manager.

The Audit Committee has recommended to the Board of Directors, the nomination of Ernst &Young LLP for re-appointment as auditors of the Trust at the forthcoming Annual General Meeting.

Auditor

Ernst &Young LLP have expressed their willingness to accept reappointment as auditor.

On behalf of the Board of Directors,

Philippe Rene Geo es RochetDirector

la VerDirector

Singapore30 April 2014

-2-


Statement and Certificate by the Trustee-Manager

STATEMENT AND CERTIFICATION

In our opinion:

(i) the accompanying statement of financial position of the Trust and the consolidated financial

statements of the Group are drawn up so as to give a true and fair view of the state of

affairs of the Trust and of the Group as at 31 December 2013 and of the results of the

business, changes in unitholders' funds and cash flows of the Group for the financial year

ended on that date in accordance with the provisions of the Singapore Business Trusts Act

and International Financial Reporting Standards, and

(ii) at the date of this statement, there are reasonable grounds to believe that the Trust will be

able to pay its debts as and when they fall due.

With respect to the statement of comprehensive income of 'the Group for the year ended 31

December 2013:

- fees or charges paid or payable out of the trust property to the Trustee-Manager are in

accordance with the Deed of Trust initially dated 16 February 2012 and amended on

11 December 2012 and 18 June 213;

- interested person transactions are not detrimental to the interests of the unitholders as a

whole based on the circumstances at the time of the transactions; and

- the Board is not aware of any violation of duties of the Trustee-Manager which would have

a materially adverse effect on the business of the Trust or on the interests of the

unitholders as a whole.

The Board of Directors has, on the date of this statement, authorised the above statement and

certification and these financial statements for issue.

On behalf of the Board of Directors,

--

Philippe Rene Georges Rochet

Director

n~'

viauia verrnaDirector


-3-


Statement By The Chief Executive Officer Of The Trustee-Manager

In accordance with Section 86 of the Singapore Business Trusts Act, I certify that I am not aware of

any violation of duties of the Trustee-Manager which would have a materially adverse effect on the

business of the Trust or on the interests of the unitholders of the Trust as a whole.

~---

Philippe Rene Georges RochetChief Executive Officer


-4-


Independent Auditor's ReportFor the financial year ended 31 December 2013

To the Unitholders of Greenship Bulk Trust

Report on the financial statements

We have audited the accompanying financial statements of Greenship Bulk Trust (the "Trust") and

its subsidiaries (collectively, the "Group") set out on pages 7 to 49, which comprise the

consolidated statement of financial position of the Group and the statement of financial position of

the Trust as at 31 December 2013, the consolidated statement of comprehensive income, the

consolidated statement of changes in unitholders' funds and the consolidated statement of cash

flows of the Group for the year then ended, and a summary of significant accounting policies and

other explanatory information.

Trustee-Manager's responsibility for the financial statements

The Trustee-fvlanager is responsible f~~ the preparation of financial statements that give a true end

fair view in accordance with iiie Ni u'viSiGi ~s vi ii is v.. ~^yU~7C~ ° ~?u'Slf1°cc Tri ictc Ar_.t (thP "ACt~~I and

International Financial Reporting Standards, and for such internal control as management

determines necessary to enable the preparation of financial statements that are free from material

misstatement, whether due to fraud or error.

Auditor's responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We

conducted our audit in a~~orclance with International Standards on Auditing. Those standards

require that we comply with ethical requirements and plan and perform the audit to obtain

reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and

disclosures in the financial statements. The procedures selected depend on the auditor's judgment,

including the assessment of the risks of material misstatement of the financial statements, whether

due to fraud or error. In making those risk assessments, the auditor considers internal control

relevant to the entity's preparation of the financial statements that give a true and fair view in order

to design audit procedures that are appropriate in the circumstances, but not for the purpose of

expressing an opinion on the effectiveness of the entity's internal control. An audit also includes

evaluating the appropriateness of accounting policies used and the reasonableness of accounting

estimates made by management, as well as evaluating the overall presentation of the financial

statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis

for our audit opinion.

-5-


Independent Auditor's ReportFor the financial year ended 31 December 2013

To the Unitholders of Greenship Bulk Trust

Opinion

In our opinion, the accompanying financial statements of the Group and the statement of thefinancial position of the Trust give a true and fair view of the financial position of Greenship BulkTrust and its subsidiaries as of 31 December 2013, and of their financial performance and cashflows for the year then ended, in accordance with International Financial Reporting Standards.

Report on other legal and regulatory requirements

In our opinion, the accounting and other records required by the Act to be kept by the Trustee-Manager have been properly kept in accordance with the provisions of the Act.

ti'~ S~~ PErnst &Young LLF~~Public Accountants and Chartered AccountantsSingapore30 April 2014

-6-


Statements of Financial Position as at 31 December 2013

Group Tr~igf

Note 2013 2012 2013 2012

US$ US$ US$ US$ASSETS

Non-current assets

Vessels 5 431,450,454 246,360,550 — —Other fixed assets 6 330,747 357,773 — —Investments in subsidiaries ~ — — 216,458,258 117,892,989Goodwill $ 1,682,385 1,682,385 — —Other non-current assets 9 877,541 819,798 — —

434,341,127 249,220,506 216,458,258 117,892,989

Current assets

Inventories ~~ 11,854,861 4,284,435 — —Trade receivables and other receivables 11 24,756,855 19,040,580 18,565 —Amounts due from related companies 11 x,531,775 6,583,42Q 23,049,OQ1 50?Tax recoverable 150 3~.5 1 444 q44 — -

Prepayments 12 8,465,773 6,527,398 — —Cash and bank balances 13 64,199,723 25,702,730 18,599,680 140

116,959,292 63,583,507 41,667,246 641

Total assets 551,300,419 312,804,013 258,125,504 117,893,630

LIABILITIES

Current liabilities

Trade payables and accruals

Deferred income

A~pnL!IIfS ~!!? to rglatg~l ~nrppa!?Igc

Loans and borrowings

Provisions

Income tax payable

Net current assets/(liabilities)

Non-current liabilities


Other liabilities

Provisions

Employee benefit obligations

Total liabilities

Net assets

Unitholders' funds

Uniis in issue

Other reserve

Retained earnings/(accumulated losses)

Total unitholders' funds

14 34,777,214 34,122,870 207,744 206,033

14 11,951,565 10,833,833 — —

1~ ~,n8~ ng° Q" ~3? JL~JJJ~LL~ 752,51915 18,111, 661 9, 724, 010 - -16 592,060 584,581 - -

12,946 7,835 - -

70,512,945 56,085,766 33,140,973 958,552

46,446,347 7,497,741 8,526,273 (857,911)

15 239,368,519 128,476,386 - -

14 33,862,268 - 33,862,268 -

16 4,240,837 5,430,889 - -

17 299.939 320,297 - -

277,771,563 134,227,572 33,862,268 -

348,284,508 190,313,338 67,003,241 958,552

203,015,911 122,490,675 191,122,263 116,935,078

18 192.160.982 117,892,982 192.160,982 117.892.982

3, 774 - - -

10,851,155 4,597,693 (1,038,719) (957,904)

203,015, 911 122,490, 675 191,122,263 116,935, 078

The accompanying accounting policies and explanatory notes form an integral part of the financial~iaiCil~cui~.

- 7 -


Consolidated Statement of Comprehensive IncomeFor the financial year ended 31 December 2013

Revenue

Cost of salesRentalsDepreciation of vesselsVessel operating expenses

Gross profit

Other incomeInterest income

Other expensesGeneral and administrative expensesOther expenses

Profit before tax

Income tax expense

Profit net of tax

Other comprehensive income

Item that may be reclassified to profit and loss:

Foreign currency translation reserve

Total comprehensive income for the financialyear/period

Note

19

20

21

22

Group16.2.2012

1.1.2013 (date ofto constitution)

31.12.2013 to 31.12.2012US$ US$

312,139,109 238, 418,145

(112,470,447) (118,076,417)(16,521,166) (6,259,598)(155,813,436) (94,925,302)

27,334,060 19,156,828

308, 732 143, 950

(12,600,522) (10,336,550)(7,728,638) (3,210,831)

7,313,632

(1,060,170)

6,253,462

3, 774

6,257,236

~./~l VJ~J~/I

(1,155,704)

4, 597,693

4,597,693

The accompanying accounting policies and explanatory notes form an integral part of the financial

statements.

~:~


Consolidated Statement of Changes in Unitholders' FundsFor the financial year ended 31 December 2013

GroupUnits in issue Retained(Note 18) earnings

US$ US$

2013At 1 January 2013 117,892,982 4,597,693

Profit for the year

Foreign currency translation

Foreigncurrency

translationreserve TotalUS$ US$

— 122,490,675

— 6,253,462 — 6,253,462

— — 3,774 3,774

Total comprehensive incomefor the year — 6,253,462 3,774 6,257,236

Units issued during the year 74,268,000 — — 74,268,000

AL 7A 1'1~~~.VL~_ nAA9hl .l 1 ✓V1.C111YC1 LV 1 J

Ann Ann nnn .1 rrI .`7L~ I VV~.70L I U~OJ I ~ I X7.7 J~ / / ~F LUJ~U I .7~.`~

2012At 16 February 2012(date of constitution) 1 — — 1

Total comprehensive incomefor the period — 4,597,693 — 4,597,693

Units issued during the period 117,892,981 — — 117.892,981

At 31 December 2012 117,892,982 4,597,693 — 122,490,675

The accompanying accounting policies and explanatory notes form an Integra! part of the financialstatements.

~~


Consolidated Statement of Cash FlowsFor the financial year ended 31 December 2013

Group16.2.2102


31.12.2013 to 31.12.2012US$ US$

Cash flows from operating activities:Profit before tax 7,313,632 5,753,397

Adjustments forInterest expense 8,226,942 2,991,956

Interest income (308,732) (143,950)

Depreciation 16,610,821 6,342,845

Provisions (139,675) (81,170)

Operating cash flows before changes in working capital 31,702,988 14,863,078

Total changes in working capitalIncrease in inventories (7,570,426) (4,284,435)

(Increase)/decrease in trade receivables, other receivablesand amounts due from related companies (6,664,630) 3,990,180

Increase in prepayments (1,938,375) (1,229,597)

Increase in trade and other payables and accruals andamounts due to related companies 4,433,013 3,505,454

Decrease in provisions (1,042,898) (276,456)

(Decrease)/increase in employee benefit obligations (20,358) 58,817

Cash flows from operations 18,899,314 16,627,041

Interest paid (6,633,017) (2,464,854)

Interest received 308,732 143,950

Income tax refunded/(paid) 239,580 (3,927,474)

Net cash flows generated from operating activities 12,814,609 10,378,663

Cash flows from investing activities:Purchase of vessels (187,748,802) (252,620,148)

Purchase of other fixed assets (62,629) (203,688)

Increase in non-current assets (57,743) (71,140)

Discounts received for purchase of vessels 20,000,000 —

Proceeds from disposal of other fixed assets — 57,253

Net cash inflow on acquisition of a subsidiary — 12,068,412

Net cash used in investing activities (167,869,174) (240,769,311)

Cash flows from financing activities:Proceeds from issuance of units 74,268,000 117,892,982

Proceeds from loans 129,000,000 141,900,000

Repayment of loans (9,724,010) (3,699,604)

Increase in bank balances charged to banks (3,200,000) —

Net cash flows generated from financing activities 190,343,990 256,093,378

Net increase in cash and cash equivalents 35,289,425 25,702,730

Effect of exchange rate changes on cash and cash equivalents 3,774 —

Cash and cash equivalents at beginning of year/period(Note 13) 25,702,730 —

Cash and cash equivalents at end of year/period (Note 13) 60,995,929 25,702,730

Bank balances charged to banks at end of year/period 3,200,000 —

Bank overdraft at end of year/period 3,794 —

Cash and bank balances at end of year/period (Note 13) 64,199,723 25,702,730

The accompanying accounting policies and explanatory notes form an integral part of the financial

statements.

- 10 -


Notes to the Financial StatementsFor the financial year ended 31 December 2013

General information

Greenship Bulk Trust (the "Trust') is a Singapore business trust constituted on 16 February2012 under the Business Trusts Act, Chapter 31A of Singapore. The Trust was registeredby the Monetary Authority of Singapore pursuant to section 4 of the Singapore BusinessTrusts Act on 14 January 2013. The Trust is managed by Greenship Bulk Manager Pte.Ltd. (the "Trustee-Manager"). The address of its registered office is 23 Church Street, #14-06 Capital Square, Singapore 049481.

The principal activity of the Trust is that of investment holding. The principal activities of thesubsidiaries are set out in Note 4.

Greenship Holdings Manager Pte. Ltd., in its capacity as trustee-manager of GreenshipHoldings Trust, constituted in Singapore, is the major unitholder of Greenship Bulk Trustholding 50.14% units issued by the Trust (2012: 100%). Mortimer Pte. Ltd., incorporated inSingapore, is the sole unitholder of Greenship Holdings Trust. Mortimer Pte. Ltd. is solelyowned by Jaccar Holdings (the "Jaccar") incorporated in Luxembourg. The Company'sultimate holding company is Cana Tera S.A.S., incorporated in France. Related companiesreferred to in the financial statements relate to the Jaccar group of companies.

2. Summary of significant accounting policies

2.1 Basis of preparation

Thsse financial statements have been rrepared in accordance with International FinancialReporting Standards ("IFRS"). The financial statements have been prepared under thehistorical cost convention, except as disclosed in the accounting policies below.

The preparation of financial statements in conformity with IFRS requires management toexercise its judgement in the process of applying the Group's accounting policies. It alsorequires the use of certain critical accounting estimates and assumptions.

2.2 Changes in accounting policies

The accounting policies adopted are consistent with those of the previous financial yearexcept in the current financial year, the Group has adopted all the new and revisedstandards which are effective for annual financial periods beginning on or after 1 January2013. The adoption of these standards did not have any effect on the financial performanceor position of the Trust.

2.3 Standards that are issued but not yet effective and have not been early adopted bythe Group

The standards and interpretations that are issued, but not yet effective, up to the date ofissuance of the Group's financial statements are disclosed below. The Group intends toadopt these standards, if applicable, when they become effective.



2. Summary of significant accounting policies (cont'd)

2.3 Standards that are issued but not yet effective and have not been early adopted by

the Group (cont'd)

IFRS 9 Financial Statements

IFRS 9, as issued, reflects the IASB's work on the replacement of IAS 39 and applies to

classification and measurement of financial instruments and hedge accounting. The

effective date of the standard has not been determined. In subsequent phases, the IASB

will address impairment of financial assets. The adoption of IFRS 9 will have an effect on

the classification and measurement of the Group's financial assets, but will not have an

impact on classification and measurement of the Group's financial assets. The Group will

quantify the effect in conjunction with the other phases, when the final standard including

all phases is issued.

2.4 Revenue recognition

The Group recognises revenue when the amount of revenue and related costs can bereliably measured, it is probable that future economic benefits will flow to the entity andwhen the specific criteria for each of the Group's activities are met as follows:

(a) Charter income

Charter income is calculated on a time apportionment basis in accordance to theterms and conditions of the charter agreement. Charter income is deferred to theextent that conditions necessary for its recognition as revenue have yet to befulfilled.

(b) Interest income

Interest income is recognised using the effective interest method.

2.5 Group accounting

Subsidiaries

Subsidiaries are entities (including special purpose entities) over which the Group haspower to govern the financial and operating policies, generally accompanied by ashareholding giving rise to the majority of the voting rights. The existence and effect ofpotential voting rights that are currently exercisable or convertible are considered whenassessing whether the Group controls another entity.

The purchase method of accounting is used to account for the acquisition of subsidiaries.The cost of an acquisition is measured as the fair value of the assets given, equityinstruments issued or liabilities incurred or assumed at the dates of exchange and includesthe fair value of any asset or liability resulting from a contingent consideration arrangement.Acquisition-related costs are expensed as incurred. Identifiable assets acquired andliabilities and contingent liabilities assumed in a business combination are measuredinitially at their fair value on the date of acquisition. On an acquisition-by-acquisition basis,the Group recognises any non-controlling interest in the acquiree either at fair value or atthe non-controlling interests proportionate share of the acquiree's net assets. Please referto Note 2.7 for the accounting policy on goodwill on acquisition of subsidiaries.

- 12




2.5 Group accounting (cont'd)

Subsidiaries (cont'd)

Subsidiaries are consolidated from the date on which control is transferred to the GroupThey are de-consolidated from the date on which control ceases.

In preparing the consolidated financial statements, transactions, balances and unrealisedgains on transactions between group entities are eliminated. Unrealised losses are alsoeliminated but are considered an impairment indicator of the asset transferred. Accountingpolicies of subsidiaries have been changed where necessary to ensure consistency withthe policies adopted by the Group.

Please refer to Note 2.8 for the accounting policy on investments in subsidiaries in thefinancial statements of the Trust.

2.6 Vessels

(a) Measurement

Vessels are initially recognised at cost and subsequently carried at cost lessaccumulated depreciation and accumulated impairment losses. Vessel costconsists of the contract purchase price and any material expenses incurred uponacquisition (improvements and delivery expensesl.

The vessels that are acquired are treated as a business combination to the extentthat SUGh ?r~iiigitinng !nrliirig hiicinPSg Cha(~ctaricticc~ otherwiS? w^ uC^~L~lSItIG'!? ~fa vessel is treated as a purchase of assets and recorded at cost.

Where any intangible assets or liabilities associated with the acquisition of a vesselare identified, they are recorded at fair value. Fair value is determined by referenceto market data and the revenue stream associated with the charters.

(b) Depreciation

Depreciation of an asset begins when it is available for use and is calculated on astraight-line basis, after taking into account the residual value, over its estimateduseful life. The estimated useful lives of the vessels are 20 years.

The residual values are reviewed, and adjusted as appropriate, at the end of eachfinancial year. The effects of any revision are recognised in profit or loss when thechanges arise.

Included in the value of vessels acquired are costs relating to dry-docking. Thesecosts are depreciated on a straight-line basis over the period to the next scheduleddry-docking, which is generally 5 years.

(c) Subsequent expenditure

Subsequent expenditure relating to vessels, including dry-docking, that has alreadybeen recognised is added to the carrying amount of the asset when it is probablethat future economic benefits, in excess of the originally assessed standard ofperformance of the existing asset will flow to the Group and the cost can be reliablymeasured. Other subsequent expenditures are recognised as expenses daring thefinancial year in which they are incurred.

- 13 -



2. Summary of significant accounting policies (conYd)

2.6 Vessels (cont'd)

(d) Disposal

On disposal of vessels, the difference between the net disposal proceeds and the

carrying amount is recognised in profit or loss.

2.7 Goodwill on acquisitions

Initially, goodwill is measured at cost and represents the excess of the cost of an

acquisition over the fair value of the Group's share of identifiable net assets and contingent

liabilities of the acquired subsidiaries or businesses at the date of acquisition.

Subsequently, goodwill on acquisitions of subsidiaries or businesses is measured at cost

less any accumulated impairment losses.

Gains and losses on the disposal of subsidiaries or businesses include the carrying amount

of goodwill relating to the entity or business sold.

Negative goodwill represents the excess of the fair value of the identifiable net assets of

subsidiaries or businesses when acquired over the cost of acquisition. Negative goodwill is

recognised immediately in profit or loss.

2.8 Investments in subsidiaries

Investments in subsidiaries are carried at cost less accumulated impairment losses in the

Trusts statement of financial position.

On disposal of investments in subsidiaries, the difference between disposal proceeds and

the carrying amounts of the investments are recognised in profit or loss.

2.9 Impairment ofnon-financial assets

(a) Goodwill

Goodwill is tested for impairment annually and whenever there is indication that thegoodwill may be impaired.

For the purpose of impairment testing of goodwill, goodwill is allocated to each ofthe Group's cash-generating-units ("CGU") expected to benefit from synergiesarising from the business combination.

An impairment loss is recognised when the carrying amount of a CGU, includingthe goodwill, exceeds the recoverable amount of the CGU. Recoverable amount ofa CGU is the higher of the CGU's fair value less costs to sell and value-in-use.

The total impairment loss of a CGU is allocated first to reduce the carrying amountof goodwill allocated to the CGU and then to the other assets of the CGU pro-rataon the basis of the carrying amount of each asset in the CGU. An impairment losson goodwill is recognised in profit or loss and is not reversed in a subsequentperiod.

- 14 -




2.9 Impairment ofnon-financial assets (cont'd)

(b) Vessels and investments in subsidiaries

Vessels and investments in subsidiaries are reviewed for impairment wheneverthere is any objective evidence of indication that these assets may be impaired.

For the purpose of impairment testing, the recoverable amount (i.e. the higher ofthe fair value less costs to sell and the value in-use) is determined on an individualasset basis unless the asset does not generate cash flows that are largelyindependent of those from other assets. If this is the case, the recoverable amountis determined for the CGU to which the asset belongs.

If the recoverable amount of the asset (or CGU) is estimated to be less than itscarrying amount, the carrying amount of the asset (or CGU) is reduced to itsrecoverable amount. The difference between the carrying amount and recoverableamount is recognised as an impairment loss in profit or loss.

An impairment loss for an asset other than goodwill is reversed if, and only if, therehas been a change in the estimates used to determine the assets recoverableamount since the last impairment loss was recognised. The carrying amount of anasset other than goodwill is increased to its revised recoverable amount, providedthat this amount does not exceed the carrying amount that would have beendetermined (net of any accumulated amortisation or depreciation) had there beenno impairment loss recognised for the asset in prior years. A reversal of impairmentloss for an asset other than goodwill is recognised in profit or loss.

2.10 Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinablepayments that are not quoted in an active market. They are presented as current assets,except for those maturing later than 12 months after the end of the financial year which arepresented as non-current assets.

These financial assets are initially recognised at fair value plus transaction costs andsubsequently carried at amortised cost using the effective interest method.

The Group assesses at the end of each financial year whether there is objective evidencethat these financial assets are impaired and recognises an allowance for impairment whensuch evidence exists.

Significant financial difficulties of the debtor, probability that the debtor will enterbankruptcy, and default or significant delay in payments are objective evidence that thesefinancial assets are impaired.

The carrying amount of these assets is reduced through the use of an impairmentallowance account which is calculated as the difference between the carrying amount andine preseni value or esiimaiea Tuiure cash riows, discounted at the original effective interestrate. When the asset becomes uncollectible, it is written off against the allowance account.Subsequent recoveries of amounts previously written off are recognised against the sameline item in profit or loss.

- 1.5 -




2.10 Loans and receivables (cont'd)

The allowance for impairment loss account is reduced through profit or loss in asubsequent period when the amount of impairment loss decreases and the related

decrease can be objectively measured. The carrying amount of the asset previously

impaired is increased to the extent that the new carrying amount does not exceed theamortised cost had no impairment been recognised in prior period.

2.11 Borrowings

Borrowings are presented as current liabilities unless the Group has an unconditional right

to defer settlement for at least 12 months after the end of the reporting period.

Borrowings are initially recognised at fair value, net of transaction costs incurred.

Borrowings are subsequently carried at amortised cost. Any difference between theproceeds (net of transaction costs) and the redemption value is recognised in profit or loss

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

Fees paid on the establishment of loan facilities are recognised as transaction costs of the

loan to the extent that it is probable that some or all of the facility will be drawn down. In

this case, the fee is deferred until the drawdown occurs. To the extent there is no evidence

that it is probable that some or all of the facility will be drawn down, the fee is capitalised as

a prepayment for liquidity services and amortised over the period of the facility to which it

relates.

2.12 Trade and other payables

Trade and other payables represent liabilities for goods and services provided to the Group

prior to the end of financial year which are unpaid. They are classified as current liabilities if

payment is due within one year or less (or in the normal operating cycle of the business if

longer). If not, they are presented as non-current liabilities.

Trade and other payables are initially recognised at fair value, and subsequently carried atamortised cost using the effective interest method.

2.13 Derivative financial instruments and hedging activities

The Group uses derivative financial instruments to hedge its exposure to risks arising from

operational activities, specifically the purchase of bunkers in the course of carrying out

fixed freight rate transportation contracts. The Group does not hold or issue derivative

financial instruments for trading purposes.

A derivative financial instrument is initially recognised at its fair value on the date the

contract is entered into and is subsequently carried at its fair value. The method of

recognising the resulting gain or loss depends on whether the derivative is designated as ahedging instrument, and if so, the nature of the item being hedged.

The carrying amount of a derivative designated as a hedge is presented as anon-current

asset or liability if the remaining maturity of the hedged item is more than 12 months, and

as a current asset or liability if the remaining maturity of the hedged item is less than 12

months.

- 16 -




2.14 Related parties

A related party is defined as follows:

a) A person or a close member of that person's family is related to the Group andTrust if that person:

(i) has control or joint control over the Trust;

(ii) has significant influence over the Trust; or

(iii) is a member of the key management personnel of the Group or Trust or ofa parent of the Trust.

b) An entity is related to the Group and the Trust if any of the following conditionsapplies

(i) the entity and the Trust are members of the same group (which means thateach parent, subsidiary and fellow subsidiary is related to the others);

(ii) one entity is an associate or joint venture of the other entity (or anassociate or joint venture of a member of a group of which the other entityis a member);

(iii) both entities are joint ventures of the same third party;

(iv) one entity is a joint venture of a third entity and the other entity is anassociate of the third entity;

(v) the entity is apost-employment benefit plan for the benefit of employees ofeither the Trust or an entity related to the Trust. If the Trust is itself such aplan, the sponsoring employers are also related to the Trust;

(vi) the entity is controlled or jointly controlled by a person identified in (a);

(vii) a person identified in (a) (i) has significant influence over the entity or is amember of the key management personnel of the entity (or of a parent ofthe entity).

2.15 Leases

As lessor:

The Group owns dry bulk vessels and charters them to international customers in theglobal market of cargo transportation under fixed freight rate charters.

These charters are classified as operating leases as the Group retains substantially all riskand rewards incidental to ownership.

Rental income from operating leases of the vessels (net of any incentives and commissionsgiven to lessees) is recognised in profit or loss on a straight-line basis over the lease term.Initial direct costs incurred by the Group in negotiating and arranging an operating leaseare added to the carrying amount of the leased asset and recognised as an expense inprofit or loss over the lease term on the same basis as the lease income.

Contingent rents are recognised as income in profit or loss when earned.

- 17 -




2.15 Leases (cont'd)

As lessee:

Leases of vessels where a significant portion of the risks and rewards of ownership are

retained by the lessors are classified as operating leases.

Rental expenses under operating leases are charged to profit or loss on a straight-line

basis over the term of the relevant lease. Benefits received as an incentive to enter into an

operating lease are also spread on a straight-line basis over the lease term.

2.16 Inventories

Inventories are bunkers for the vessels. Inventories are carried at lower of cost and net

realisable value. Cost is determined using the weighted average method. Bunkers are used

for the operation of the vessels, therefore inventories are not written down when market

price falls below cost if the overall shipping activity is expected to be profitable.

2.17 Taxes

(a) Current income tax

Current income tax for current and prior period is recognised at the amount

expected to be paid to or recovered from the tax authorities, using the tax rates and

tax laws that have been enacted or substantively enacted at the end of the financial

year.

(b) Deferred tax

Deferred tax is recognised for all temporary differences arising between the tax

bases of assets and liabilities and their carrying amounts in the financial

statements, except when the deferred tax arises from the initial recognition of an

asset or liability in a transaction that is not a business combination, and at the time

of the transaction, affects neither accounting nor taxable profit or loss.

A deferred tax liability is recognised on temporary differences arising on

investments in subsidiaries, except where the Group is able to control the timing of

the reversal of the temporary difference and it is probable that the temporary

difference will not reverse in the foreseeable future.

A deferred tax asset is recognised to the extent that it is probable that future

taxable profit will be available against which the deductible temporary differences

and tax losses can be utilised.

Deferred tax is measured:

(i) at the tax rates that are expected to apply when the related deferred tax

asset is realised or the deferred tax liability is settled, based on tax ratesand tax laws that have been enacted or substantively enacted at the end of

the financial year; and

(ii) based on the tax consequence that will follow from the manner in which the

Group expects, at the end of the financial year, to recover or settle the

carrying amounts of its assets and liabilities.

- 18 -




2.17 Taxes (conYd)

(b) Deferred tax (cont'd)

Current and deferred taxes are recognised as income or expense in profit or loss,except to the extent that the tax arises from a business combination or atransaction which is recognised directly in equity. Deferred tax arising from abusiness combination is adjusted against goodwill on acquisition.

The Group's activities are subject to taxation under different tax schemes inseveral countries. The Group's main shipping activities are located in France,where the income from shipping operations is taxable in accordance with Article206 of the French Income Tax Act. In France, the activities are both subject tonormal company tax scheme, which implies a corporate tax rate of 33.333%, andthe French Tonnage Tax Scheme, which has been applicable since 1 JanuaryLUU:i.

Part of the Group's shipping activity is located in Singapore, where the incomederived by the Group's entities from respective bareboat charter agreementsqualifies for tax exemption under Section 13S of the Singapore Income Tax Act,with effective from 1 January 2013 or other dates for certain subsidiaries asindicated in a letter of approval by Maritime and Port Authority of Singapore (MPA)dated 1 August 2013 granting relevant Group's entities the status of the MaritimeSector Incentive — Maritime Leasing("MSI-ML") (Ship) award, for a period of 5 years, which ends on 31 December2017, provided that the Group meets the requirements of the MSI-ML(Ship) award.The Group is subject to tax on its income from non-n~~alifyinn arti~lt!?5 a# theprevailing Singapore corporate income tax rate.

2.18 Currency translation

(a) Functional and presentation currency

Items included in the financial statements of each entity in the Group are measuredusing the currency of the primary economic environment in which the Groupoperates ("functional currency"). The financial statements are presented in UnitedStates Dollar ("USD" or "US$"), which is the Trust's functional currency.

(b) Transactions and balances

Transactions in a currency other than the functional currency ("foreign currency")are translated into the functional currency using the exchange rates at the dates ofthe transactions. Currency translation differences from the settlement of suchtransactions and from the translation of monetary assets and liabilitiesdenominated in foreign currencies at the closing rates as at the end of the financialyear are recognised in profit or loss.



Summary of significant accounting policies (conYd)

2.19 Cash and cash equivalents

For the purpose of presentation in the consolidated statement of cash flows, cash and cash

equivalents include deposits with financial institutions.

2.20 Units in issue

Units in issue are classified as equity.

Expenses, which are directly attributable to the issuance of units, are deducted directly

from net assets attributable to unitholders. Expenses, which are not directly attributable to

the issuance of units, are recognised in profit or loss.

2.21 Distributions to unitholders

Distributions to unitholders are recorded in the period in which they are declared payable

by the Trustee-Manager in accordance with the Trust deed.

2.22 Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of an

asset that necessarily takes a substantial period of time to get ready for its intended use or

sale are capitalised as part of the cost of the asset. All other borrowing costs are expensed

in the period in which they occur. Borrowing costs consist of interest and other costs that

an entity incurs in connection with the borrowing of funds.

2.23 Provisions

Provisions are recognised when the Group has a present obligation (legal or constructive)

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 the amount of the obligation can be

estimated reliably.

Provisions are reviewed at the end of each reporting period and adjusted to reflect the

current best estimate. If it is no longer probable that an oufiFlow of resources embodying

economic benefits will be required to settle the obligation, the provision is reversed. If the

effect of the time value of money is material, provisions are discounted using a current pre

tax rate that reflects, where appropriate, the risks specific to the liability. When discounting

is used, the increase in the provision due to the passage of time is recognised as a finance

cost.

2.24 Pensions and post employment benefits

The Group participates in the national pension schemes as defined by the laws of the

countries in which it has employment. The cost of providing benefits under the defined

benefit plan is determined on the basis of actuarial evaluations. These evaluations are

based on hypotheses regarding rate of updating, rate of increase of salaries, mortality rate

and probability of presence in the Group during the retirement.

The rates are determined on the basis of global indications such as Reuters. Due to the

long-term nature of these plans, the uncertainty bound to these estimations is not

significant.

-20-


Notes to the Financial StatementsFor the financial year ended 31 December 201 ~


2.24 Pensions and post employment benefits (cont'd)

The main assumptions used in the valuation of pensions are as follows:

2013 2012

Discount rate 4.20% 4.10%Inflation rate 1.50% 1.70%Turnover 8.88% 8.88%Wage increase rate 2.00% 1.50%

3. Significant accounting judgments and estimates

Estimates. assumptions concerning the future anci ~iitinamPntc ara ma~ig in tnP nranaratinnof the financial statements. They affect the application of the Group's accounting policies,reported amounts of assets, liabilities, income and expenses, and disclosures made. Theyare assessed on an on-going basis and are based on experience and relevant factors,including expectations of future events that are believed to be reasonable under thecircumstances.

Key sources of estimation uncertainty

The key assumptions concerning the fut;:r~ and other key sour:,es of estimation urc~rtaintyat the end of each reporting period, that have a significant risk of causing a materialadjustment to the carrying amounts of assets and liabilities within the next financial yearafE ~IS~uSS2d ucivVJ. ~i hE vi~ii~7 ua58u itS dSSUill~'~IOiIS c1~1C7 eSflfTlaL65 on parametersavailable when the financial statements were prepared. Existing circumstances andassumptions about future developments, however, may change due to market changes orcircumstances arising beyond the control of the Group. Such changes are reflected in theassumptions when they occur.

a. Impairment of vessels

An impairment exists when the carrying value of an asset or cash generating unitexceeds its recoverable amount, which is the higher of its fair value less costs tosell and its value in use. The fair value less costs to sell calculation is based onavailable data from binding sales transactions in an arm's length transaction ofsimilar assets or observable market prices less incremental costs for disposing theasset. The value in use calculation is based on a discounted cash flow model. Thecash flows are derived from the budget for the remaining useful life of the vesselsand do not include restructuring activities that the Group is not yet committed to orsignificant future investments that will enhance the assets performance of the cashgenerating unit being tested. The recoverable amount is most sensitive to thediscount rate used for the discounted cash flow model as well as the expectedfuture cash inflows and the growth rate used for extrapolation purposes.

The carrv~ng amo~.~nt and ke, assumptien~ used to determine the recorerablcamount are further explained in Note 5. The carrying amount of the Group'svessels as at 31 December 2013 was US$431,450,454 (2012: US$246,360,500).

- 21 -



Significant accounting judgments and estimates (cont'd)

Key sources of estimation uncertainty (cont'd)

b. Impairment of goodwill

Goodwill is tested for impairment at the end of each reporting period and when

circumstances indicate that the carrying value may be impaired.

Impairment is determined for goodwill by assessing the recoverable amount ofeach CGU (or group of CGUs) to which the goodwill relates. When the recoverableamount of the CGU is less than its carrying amount, an impairment loss isrecognised. Impairment losses relating to goodwill cannot be reversed in futureperiods.

The key assumptions applied in the determination of the recoverable amountincluding a sensitivity analysis, are disclosed and further explained in Note 8. Thecarrying amount of the Group's goodwill as at 31 December 2013 wasUS$1,682,385 (2012: US$1,682,385).

c. Impairment of loans and receivables

The Group assesses at the end of each reporting period whether there is anyobjective evidence that a financial asset is impaired. To determine whether there isobjective evidence of impairment, the Group considers factors such as theprobability of insolvency or significant financial difficulties of the debtor and defaultor significant delay in payments.

Where there is objective evidence of impairment, the amount and timing of futurecash flows are estimated based on historical loss experience for assets with similarcredit risk characteristics. The carrying amount of the Group's loans andreceivables at the end of the reporting period is disclosed in Note 11 to the financialstatements.

d. Taxes

Uncertainties exist with respect to the interpretation of complex tax regulations,changes in tax laws, and the amount and timing of future taxable income. Giventhe wide range of international business relationships and the long-term nature andcomplexity of existing contractual agreements, differences arising between theactual results and the assumptions made, or future changes to such assumptions,could necessitate future adjustments to tax income and expense already recorded.The Group establishes provisions, based on reasonable estimates, for possibleconsequences of audits by the tax authorities of the respective countries in which itoperates. The amount of such provisions is based on various factors, such asexperience of previous tax audits and differing interpretations of tax regulations bythe taxable entity and the responsible tax authority. Such differences ofinterpretation may arise on a wide variety of issues depending on the conditionsprevailing in the respective domicile of the Group companies.

The carrying amount of the Group's tax payables and recoverables as at 31December 2013 were US$12,946 (2012: US$7,835) and US$150,305 (2012:US$1,444,944), respectively.

e. Contingent liabilities

Significant judgement is required in assessing the potential claims fromcounterparties for demurage, shortage of cargo, damages to hull and delays duringvoyagers. The claims are subject to legal arbitration and only expected to befinalised in the next 5 years. The determination is further explained in Note 16.

-22-



4. Subsidiary companies

Details of the subsidiary companies of the Trust at 31 December 2013 and 2012 are asfollows:

Name of Company Principal(Country of activities Proportion ofincorporation) Cost interest

2013 2012 2013 2012US$ US$

Held by the Trust:Greenship Bulk 1 Pte. Ltd. Ship owning 12,437,320 12,437,320 100 100(Singapore) activities

Greenship Bulk 2 Pte. Ltd. Ship owning 12,437,083 12,437,083 100 100(Singapore) activities

Vreenship 13u1k 3 Pte. Ltd. Ship owning 12,487,133 12,487,133 100 100(Singapore) activities


Greenship Bulk 5 Pte. Ltd. Ship owning 13,371,309 13,371,309 100 X00(Singapore) activities




Greenship Bulk 9 Pte. Ltd. Ship owning 10,736,724 — 100 —(Singapore) activities


Greenship Bulk 11 Pte. Ltd. Ship owning 10,701,902 — 100 —(Singapore) activitiesGreenship Bulk 12 Pte. Ltd. Ship owning 10,685,232 — 100 —(Singapore) activities




Greenship Bulk 16 Pte. Ltd. Ship owning 10,334,305 -- 100 —(Singapore) activities



Sc i Hr Luxembourg investment 1:i,ti(i2,Ut~4 1:3,ti6L,084 100 100(Luxembourg) holding

Total 216,458, 258 117,892,989

-23-



4. Subsidiary companies (cont'd)

Name of Company(Country ofincorporation) Principal activities Proportion of interest

2013 2012

Held through SETAFLuxembourg:

SASU SETAF (France) Maritime transport 100 100

SASU STCO (France) Maritime transport 100 100

SASU GESTAF (France) Maritime transport 100 100

SASU SETAF SAGET Maritime transport 100 100

(France)SASU PSC (France) Maritime transport 100 100

SASU SESAC (France) Maritime transport 100 100

Handy Bulk Ltd Maritime transport 100 100

(Switzerland)

5. Vessels

GroupUS$

CostAt 16 February 2012 (date of constitution) —

Additions 252,620,148

At 31 December 2012 and 1 January 2013 252,620,148

Additions 221,611,070

Adjustment for purchase price discounts received (20,000,000)

At 31 December 2013 454,231,218

Accumulated depreciation and impairmentAt 16 February 2012 (date of constitution) —

Depreciation expense for the period 6,259,598

At 31 December 2012 and 1 January 2013 6,259,598

Depreciation expense for the year 16,521,166

At 31 December 2013 22,780,764

Net carrying amountAt 31 December 2013 431,450,454

At 31 December 2012 246,360,550

Capitalisation of borrowing costs

The Group's vessels include borrowing costs arising from bank loans borrowed specially

for the purpose of the construction of the vessels. During the financial year, the borrowing

costs capitalised as cost of vessels amounted to US$1,330,000 (2012: US$2,249,018).

-24-



5. Vessels (cont'd)

Assets pledged as security

The Group's vessels with a carrying amount of US$431,450,454 (2012: US$246,360,550)are mortgaged to secure the Group's bank loans (Note 15).

Seller's credit arrangement

During the year, the cash outflow on acquisition of vessels amounted to US$187,748,802(2012: US$252,620,148). A further US$40,000,000 measured at fair value ofUS$33,862,268 (2012: Nil) was financed by means of a seller's credit arrangement (Note14). The aggregate cost of vessels acquired during the year amounted to US$221,611,070(2012: US$252,620,148).

Impairment of assets

1 he Group carried out reviews of the recoverable amount of its vessels. No impairmentloss was recognised during the financial year. For financial year 2013 the recoverableamount of the vessels were based on the independent valuation of a reputable ship broker.For financial year 2012 the recoverable amount of the vessels were based on their value inuse and the pre-tax discount rate used was 8.4%.

6. Other fixed assets

OfficeGroup equipment

US$Cos±At 16 February 2012 (date of constitution) —Acquisition of subsidiary 1,011,066Additions 203,688Disposals (149,421)

At 31 December 2012 and 1 January 2013 1,065,333Acquisition of subsidiaryAdditions 62,629Write-off (14,233)

At 31 December 2013 1,113,729

Accumulated depreciation and impairmentAt 16 February 2012 (date of constitution) —Acquisition of subsidiary 716,481Depreciation expense for the period 83,247Disposals (92,168)

At 31 December 2012 and 1 January 2013 707,560Depreciation expense for the year 89,655Write-off (14,233)

At 31 Gecembei Ll7~J 782,982

Net carrying amountAt 31 December 2013 330,747

At 31 December 2012 357,773

- 2.5 -



Investments in subsidiaries

Unquoted shares, at cost

Details of the subsidiary companies are set out in Note 4.

Investments pledged as security

Trust2013 2012US$ US$

216, 458, 258 117, 892, 989

The entirety of the shares held by the Group in Greenship Bulk 1 Pte. Ltd., Greenship Bulk

2 Pte. Ltd., Greenship Bulk 3 Pte. Ltd., Greenship Bulk 4 Pte. Ltd., Greenship Bulk 5 Pte.

Ltd., Greenship Bulk 6 Pte. Ltd., Greenship Bulk 7 Pte. Ltd., Greenship Bulk 8 Pte. Ltd.,

Greenship Bulk 9 Pte. Ltd., Greenship Bulk 10 Pte. Ltd., Greenship Bulk 11 Pte. Ltd.,

Greenship Bulk 12 Pte. Ltd., Greenship Bulk 13 Pte. Ltd., Greenship Bulk 14 Pte. Ltd.,

Greenship Bulk 15 Pte. Ltd. and Greenship Bulk 16 Pte. Ltd. are pledged as security for

the Group's bank loans (Note 15). Under the terms and conditions of the loans, the Group

is prohibited from disposing of the investments or subjecting them to further charges

without furnishing a replacement security of similar kind.

Acquisition of subsidiary company in 2012 — SETAF Luxembourg

The Group acquired SETAF Luxembourg and its subsidiaries with effect from 1 January

2012. SETAF Luxembourg is a company registered in Luxembourg, whose principal

activity is investment holding of bulk shipping companies.

The fair values of the identifiable assets and liabilities of the subsidiary as at the date of

acquisition were:

Recognisedon

acquisitionUS$

Other fixed assets 294,585

Other non-current assets 748,658

Deferred tax assets 129,010

Trade and other receivables 29,614,180

Tax recoverable 170

Prepayments 5,297,801

Cash and cash equivalents 25,710,756

61, 795,160

Trade and other payables 40,569,944

Income tax payable 1,463,841

Provisions 6,373,096

Employee benefit obligations 261,480

Dividends payable 1,166,840

49,835,201

-26-



7. Investments in subsidiaries (cont'd)

Acquisition of subsidiary company in 2012 — SETAF Luxembourg (conYd)

Recognisedon

acquisitionUS$

Net identifiable assets acquired 11,959,959Goodwill arising from acquisition 1,682,385

Total purchase consideration, settled in cash 13,642,344

effect of the acquisition of SETAF Luxembourg on cash flows: Total~~TUJy

Total purchase consideration, settled in cash 13,642,344Less: Cash and cash equivalents of subsidiary acquired 25,710,756

Net cash inflow on acquisition 12,068,412

8. Goodwill

GroupUS$

Cost and carrying amountAt 16 February 2012 (date of constitution) —Acquisition of a subsidiary 1,682,385

At 31 December 2012, 1 January 2013 and 31 December 2013 1,682,385

The goodwill has been allocated to the SETAF Luxembourg group of companies, being theGroup's cash generating unit.

assumptions used in the value in use calculations

The recoverable amount of the cash generating unit is determined based on value-in-usecalculations. Value in use was determined by discounting the future cash flows generatedfrom the continuing use of the cash-generating units and was based on the followingassumptions:

— Cash flows were projected based on actual operating results and financial budgetsapproved by management covering a five year period.

— i ne aniicipatea annual revenue growth included in the cash flow protections was2% per annum from the financial years 2014 to 2019.

— A discount rate of 8.7% was applied in determining the recoverable amount of theunits.

— The terminal value was estimated using a growth rate of 2%.

The values assigned to the key assumptions represent managements assessment offi iti ira trantiS in tha varini is hi icinacc canmPntc that tha (~rni it n~aratac in.

-2~-



8. Goodwill (cont'd)

Kev assumptions used in the value in use calculations (conYd

The Group believes that any reasonably possible changes in the above key assumptions

applied are not likely to materially cause the recoverable amounts to be lower than their

carrying amounts as at 31 December 2013.

Profit margins are based on historical performance adjusted for future expectations.

9. Other non-current assets

Security depositsOther long-term receivables

Security deposits are deposits made for office premises.

10. Inventories

Bunkers at cost

-28-

Group2013 2012US$ US$

389,941 353,305487,600 466,493

877, 541 819, 798


11,854,861 4,284,435



11. Trade receivables, other receivables and amounts due from related companies

Trade receivablesOther receivables

AddAmounts due fromimmediate holdingcompany (non-trade)

Amounts due from relatedcompanies (non-trade)

Amounts due fromsubsidiary (non-trade)

Cash and bank balances(Note 13)

Other non-current assets(Note 9)

Total loans andrPr_.eiv~bles

Group Trust2013 2012 2013 2012US$ US$ US$ US$

24,125,085 18,738,014 — —631,770 302,566 18,565 —

24,756,855 19,040,580 18,565 —

— 1 — 1

7,531,775 6,583,419 182,589 —

— — 22,866,412 500

32,288,636 25,624,000 23,067,565 X01

64,199,723 25,702,730 18,599,680 140

877, 541 819, 798 — —

g7,3g5,~ga 52, ~ a~, 52~ 41,~~?, ~4E 6~ 1

Trade receivables are non-interest bearing and are generally on 30 to 120 days' terms.They are recognised at their original amounts which represent their fair values on initialrecognition.

As at 31 December 2013, the Group's amounts due from related companies includeUS$6,379,099 (2012: US$6,319,400), comprising US$5,000,000 (2012: US$5,000,000)and Euro1,000,000 (2012: Euro1,000,000), due from Blake Maritime Limited, a fellowsubsidiary of the Jaccar Group. These amounts pertain to deposits paid for an option to beexercisable to purchase a vessel under construction which was to be exercised between 19October 2011 and 18 April 2013. The option has lapsed and the deposits are repayable ondemand no later than 18 June 2014 to the Group, bearing interest at a rate of 1 %abovethe prevailing LIBOR rate.

Other amounts due from related companies pertain to payments on behalf and areunsecured, interest free and repayable on demand.

- 2 9 -



11. Trade receivables, other receivables and amounts due from related companies

(cont'd)

Trade and other receivables denominated in foreign currencies at 31 December are as

follows:

EuroIndian RupeeSouth African Rand


1,432,710 4,254,735362, 679 —267, 529 166,135

Receivables that are past due but not impaired

The Group has trade receivables amounting to US$3,693,356 (2012: US$8,593,245) that

are past due at the end of the reporting period but not impaired. These receivables are

unsecured and the analysis of their aging at the end of the reporting period is as follows:


Trade receivables past due but not impaired:Less than 30 days 1,723,947 6,832,188

30 to 60 days 763,422 1,129,719

61 to 90 days 613,221 130,552

91 to 120 days 592,766 500,786

3,693,356 8,593,245

Receivables that are impaired

The Group's trade receivables that are impaired at the end of the reporting period and the

movement of the allowance accounts used record the impairment are as follows:


Trade receivables — nominal amounts 2,977,082 3,345,682

Less: Allowance for impairment (2,977,082) (3,345,682)

-30-



11. Trade and other receivables and amounts due from related companies (cont'd)

Movement in allowance account

Cost and carrying amountAt 16 February 2012 (date of constitution)Acquisition of a subsidiary

At 31 December 2012 and 1 January 2013Decrease

At 31 December 2013

GroupUS$

3,345,682

3,345,682(368,600}

2,977,082

i raue receivaUies ii~ai are individuaiiy determined to oe impaired ai [ne end of the reportingperiod relate to debtors that are in significant financial difficulties and have defaulted onpayments. These receivables are not secured by any collateral or credit enhancements.

12. Prepayments

Prepayment for bunkersPrepaid rentalPrepaid vessel operating expensesPrepaid insurance premiumOthers

13. Cash and bank balances


Cash and bank balances 60,999,723 25,702,730Bank balances chargedto banks 3,200,000 —

64,199,723 25,702,730Less:Bank ~vPrclraft (Nntp 1 Sl (~ 7Adl —

Bank balances chargedto banks

Cash and cashequivalents

.-~- - ~.

(3,200,000) —


1,351,380 1,971,4703,176,403 2,719,2132,663,072 1,086,8381,201,268 581,454

73,650 168,423

8,465,773 6,527,398

Trust2013 2012US$ US$

18, 599, 680

18,599,680

60,995,929 25,702,730 18,599,680

- 31 -

140

140

140



13. Cash and bank balances (cont'd)

Cash at banks earns interest at floating rates based on daily bank deposit rates. The bank

accounts of the vessel-owning companies, amounting to US$11,345,763 (2012:

US$2,498,549) are subject to account security deeds entered into with the respectivebanks to secure the Group's term loans (Note 15). As at 31 December 2013, the Group is

in compliance with the minimum bank balance requirement of US$3,200,000 (2012: Nil)

required by the respective banks.

Cash and cash equivalents denominated in foreign currencies are as follows:


Euro 14,092,445 9,248,406 — —

Swiss Franc 65,662 162,575 — —

14. Trade payables, accruals and amounts due to related companies


Current:Trade payables 27,750,943 12,231,050 — —

Other accounts payables 4,536,980 20,813,496 — —

Interest payable 2,121,027 527,102 — —

Accruals 368,264 551,222 207,744 206,033

Deferred income 11,951,565 10,833,833 — —

46, 728, 779 44, 956, 703 207, 744 206, 033

Amounts due toimmediate holdingcompany (non-trade) 5,001,718 1,719 4,999,999 —

Amounts due tosubsidiaries(non-trade) — — 27,933,230 8

Amounts due to otherrelated companies(non-trade) 65,781 810,918 — 752,511

51,796,278 45,769,340 33,140,973 958,552

Non-current:Other liabilities 33,862,268 — 33,862,268 —

Total trade payables,accruals, amounts dueto related companiesand other liabilities 85,658,546 45,769,340 67,003,241 958,552

Add: Loans andborrowings (Note 15) 257,480,180 138,200,396 — —

Less: Deferred income (11,951,565) (10,833,833) — —

Total financial liabilitiescarried at amortisedcost 331,187,161 173,135, 903 67,003, 241 958, 552

-32-



14.

15.

Trade payables, accruals and amounts due to related companies (cont'd)

Trade payables are normally settled on 60-day terms and are non-interest bearing. Tradepayables and accruals are primarily denominated in United States Dollars.

Amounts due to related parties are unsecured, interest-free and repayable on demand.These amounts are to be settled in cash.

Other liabilities (non-current) are unsecured and non-interest bearing seller's creditrepayable at the earlier of five years upon delivery of relevant vessels or upon theoccurrence of certain market conditions.

Deferred income pertains to charter income deferred to the extent that conditionsnecessary for its recognition as revenue have yet to be fulfilled.

Trade payables and accruals denominated in foreign currencies are as follows:

EuroSingapore DollarSwiss Franc


Current portion of long term loans, secured- USD bank loan at LIBOR + 3.60% p.a.- USD bank loan at LIBOR + 3.75% p.a.- USD bank loan at LIBOR + 3.30% p.a.- USD bank loan at LIBOR + 3.55% p.a.

Bank overdraft

Non-current portion of long term loans, secured- USD bank loan at LIBOR + 3.60% p.a.- USD bank loan at LIBOR + 3.75% p.a.- USD bank loan at LIBOR + 3.30% p.a.USD bank loan at LIBOR + 3.55% p.a.

Total loans and borrowings

-33-


4,102,114 2,995,815129,380 1,89989,675 18,856

Group2013US$

5,422,2244,907,1432,140,0005,638,500

18,107,8673, 794

18,111,661

58,966,66259,180,35730,411,00090:810.500

239, 368, 519

257,480,180

2012US$

5,422,2244, 301, 786

9,724,010

9,724,010

64,388,88664,087,500

128,476,386

138, 200, 396



15. Loans and borrowings (cont'd)

(A) USD bank loan at LIBOR + 3.60% p.a.

This loan is secured by a first mortgage over the 4 vessels (Note 5), JS AMAZON,

JS COLORADO, JS DANUBE and JS GARONNE, of the Group with a net carrying

amount of US$106,312,554 (2012: US$121,656,017) as at 31 December 2013 and

the principal amount outstanding is repayable in 19 fixed consecutive quarterly

repayment installments beginning from 6 months after the drawdown date of the

respective tranche for each tranche, with a balloon repayment together with the

final installment on the earlier of:

(a) 3 May 2017; and

(b) the date falling 60 months after the drawdown date of each respectivetranche.

The loan includes financial covenants for Greenship Holdings Trust (which

guarantees 100% of the loan):

(a) available cash shall at no time be less than US$10,000,000;

(b) equity shall at all times be at least US$125,000,000;

(c) equity shall at no time be less than 30% of total assets; and

(d) its working capital shall be greater than its current liabilities.

As of 31 December 2013, the Group has complied with all the covenants under thisbank loan.

(B) USD bank loan at LIBOR + 3.75% p.a.

This loan is secured by a first mortgage over the 4 vessels (Note 5), JS LOIRE, JS

MEUSE, JS RHIN and JS RHONE, of the Group with a net carrying amount of

US$109,120,754 (2012: US$124,704,533) as at 31 December 2013 and the

principal amount outstanding under each tranche is repayable in 22 fixed

consecutive quarterly repayment installments beginning from 6 months after the

drawdown date of the respective tranche for each tranche, with a balloon

repayment together with the final instalment on 28 June 2018.

The loan includes financial covenants as follows:

(a) Jaccar (which guarantees 50.14% of the loan, corresponding to itseffective shareholding in Greenship Bulk Trust as of 31 December 2013)shall at all times maintain:

(i) the ratio of its net debt to its equity shall not exceed 2:1;

(ii) its net debt shall not exceed its net asset value; and

(iii) its available cash shall not be less than US$15,000,000.

-34-


Notes to the Financial StatementsFor the financial year ended 31 December 20'! 3


(B) USD bank loan at LIBOR + 3.75% p.a. (cont'd)

(b) Greenship Holdings Trust (which guarantees 100% of the loan) shall at alltimes maintain:

(i) its equity shall not:

from the date of the guarantee up to and including 31December 2012, be less than US$50,000,000; andfrom 31 December 2012, be less than US$125,000,000;

(ii) its working capital shall be greater than current liabilities; and

(c) Greenship Bulk Trust (which guarantees 100% of the loan) shall at alltimes maintain:

(i) its available cash shall be equal to or greater than the higher of:

US$10,000,000; andthe sum equivalent to US$1,500,000 multiplied by thenumber of vessels directly or indirectly wholly owned by theGreenship Bulk Trust.

(ii) its equity shall not be less than 30% of its total assets'

(iii) its equity shall not be less than US$50,000,000.

In October 2013, Jaccar had applied to the financial institutions providing the loan,to request for a change in its financial covenants of (a)(i) and (a)(ii) to be based onJaccar's standalone financial statements instead of Jaccar's consolidated financialstatements. Subsequent to the year-end, the request has been approved byrelevant lenders with retroactive effect from 31 December 2013. As of 31December 2013, the Group has complied with all the covenants under this bankloan.

(C) USD bank loan at LIBOR + 3.30% p.a.

This loan is secured by a first mortgage over the 2 vessels (Note 5), JS NARMADAand JS SANAGA of the Group with a net carrying amount as at 31 December 2013of US$54,234,352 and the principal amount outstanding under each tranche isrepayable in consecutive semi-annually equal installments at 1/30th of the amountadvanced under that tranche, together with a balloon installment equal to theamount of that tranche outstanding on the final repayment date. The firstrepayment instalment in respect of each tranche shall be repaid on the date falling6 months after the drawdown date in respect of that tranche.




(C) USD bank loan at LIBOR + 3.30% p.a. (conYd)



(i) the ratio of its net debt to its equity shall not exceed 200%;

(ii) its net debt to its value adjusted equity shall not exceed 100%; and



(i) its equity shall not be less than USD100,000,000 from31 December 2012 and thereafter; and:

(ii) its working capital shall be positive;

(c) Greenship Bulk Trust (which guarantees 100% of the loan) shall at alltimes maintain:

(i) its available cash shall be equal to or greater than the higher of:

A. US$10,000,000; andB. the sum equivalent to US$1,500,000 per ship owned, directly or

indirectly by the Greenship Bulk Trust.

(ii) its equity shall not be less than 30% of its total assets:

(iii) its equity shall not be less than US$50,000,000.

In October 2013, Jaccar had applied to the financial institutions providingthe loan, to request for a change in its financial covenants of (a)(i) and (a)(ii)to be based on Jaccar's standalone financial statements instead ofJaccar's consolidated financial statements. Subsequent to the year-end,the request has been approved by relevant lenders with retroactive effectfrom 31 December 2013. As of 31 December 2013, the Group hascomplied with all the covenants under this bank loan.

(D) USD bank loan at LIBOR + 3.55% p.a.

This loan is secured by a first mortgage over the 6 vessels (Note 5), JS CONGO,JS MEKONG, JS MISSISSIPPI, JS MISSOURI, JS VOLGA and JS YANGSTE ofthe Group with a net carrying amount as at 31 December 2013 of US$161,782,794and the principal amount outstanding under each tranche is repayable in

consecutive semi-annually equal installments at 3.5% of the amount advancedunder that tranche, together with a balloon installment equal to the amount of thattranche outstanding on the final repayment date. The first repayment installment in

respect of each tranche shall be repaid on 21 January 2014 (for the first fourvessels) and 21 July 2014 (for the last two vessels) in respect of that tranche withthe final repayment date falling 114 months after the first repayment date.

-36-



15. Loans and borrowings (conYd)

(D) USD bank loan at LIBOR + 3.55% p.a. (cont'd)



(i) the ratio of its net debt to its equity shall not exceed 200%;

(ii) its net debt shall not exceed its value adjusted equity exceed by100%; and



(i) its equity shall be not less than US$100,000,000 from 31December 2012 and thereafter; and:

(ii) its working capital shall be positive;

(c) Greenship Bulk Trust (which guarantees 100% of the loam shall at alltimes maintain:

(il its av~il~hle r_.ash sha11 he equ21 to nr greater than the h~~~er of:

A. US$10,000,000; andB. the sum equivalent to US$1,500,000 per ship owned, directly

or indirectly by the Greenship Bulk Trust.

(ii) its value equity shall not be less than 30% of its total assets:

(iii) its value equity shall not be less than US$50,000,000.

In October 2013, Jaccar had applied to the financial institutions providing the loan,to request for a change in its financial covenants of (a)(i) and (a)(ii) to be based onJaccar's standalone financial statements instead of Jaccar's consolidated financialstatements. Subsequent to the year-end, the request has been approved byrelevant lenders with retroactive effect from 31 December 2013. As of 31December 2013, the Group has complied with all the covenants under this bankloan.

In addition to the mortgage over the vessel (for which a collateral maintenance ratio ofbetween 70% and 140% is required and complied with as at 31 December 2013), all of theinterest bearing loan facilities above are secured through the earnings and retentionaccounis (ivote ~~j, general assignments of the vessel's rights and interests includinginsurance and the vessel manager's undertaking.

Subsequent to the year end, Jaccar has applied to and obtained approval from the financialinstitutions providing the loans of (B), (C) and (D) for a removal of the financial covenantsas disclosed under (B)(a), (C)(a) and (D)(a) for the respective loans.

_ ~ 7 _



16. Provisions

Contingent Excess Totalliabilities costs from

charter hireUS$ US$ US$

Current

At 16 February 2012 (date of constitution) — — —

Acquisition of a subsidiary — 276,456 276,456

Arising during the period — 584,581 584,581

Utilised during the period — (276,456) (276,456)

At 31 December 2012 and 1 January 2013 — 584,581 584,581

Arising during the year — 592,060 592,060

Utilised during the year — (584,581) (584,581)

At 31 December 2013 — 592,060 592,060

Non-current

At 16 February 2012 (date of constitution)Acquisition of a subsidiary 6,096,640 — 6,096,640

Arising during the period 76,616 — 76,616

Unused amounts reversed (742,367) — (742,367)

At 31 December 2012 and 1 January 2013 5,430,889 — 5,430,889

Utilised during the year (458,317) — (458,317)

Unused amounts reversed (731,735) — (731,735)

At 31 December 2013 4,240,837 — 4,240,837

Contingent liabilities

The claims are subject to legal arbitration and only expected to be finalised in the next 5

years. These mainly relate to claims from counterparties for demurrage, shortage of cargo,

damages to hull and delays during voyages. As at 31 December 2013, the provision was

reassessed and has been reduced to US$4,240,837 (2012: US$5,430,889).

Excess costs from charter hire

The provision is based on profit and loss analysis of undergoing charter hires using market

information as at 31 December. It is expected that that excess costs will be incurred during

completion of charter hires within one year.

-38-



17. Employee benefit obligations

Pensions

18. Units in issue


299,939 320,297

Ordinary units AmountNo. of units US$

At 16 February 2012 (date of constitution) 1 1Issuance of units durir~y the ~eriou i 17,892,981 i i7,zsy~,y8 i

At 31 December 2012 and 1 January 2013 117,892,982 117,892,982

Issuance of units during the year 68,076,222 74,268,000

At 31 December 2013 185,969,204 192,160,982

The unitholders are entitled to receive distribution as a~nci when rler_.~~rec~ by the Tr~!stee-Manager. All issued units are fully paid.

19. Revenue

Charter income

20. Other expenses

Interest expense —bank loansForeign exchange (gain)/loss, net

- 3 9 -

Group16.2.2012


31.12.2013 to 31.12.2012US$ US$

312,139,109 238,418,145

Group'I 6.2.2012


31.12.2013 to 31.12.2012US$ US$

8,226,942 2,991,956(498,304) 218,875

7,728,638 3,210,831



21. Profit before tax

The following items have been included in arriving at profit before tax:

Group16.2.2012


31.12.2013 to 31.12.2012US$ US$

Base fee charged by Trustee-Manager 2,000,000 130,482

Depreciation of vessels (Note 5) 16,521,166 6,259,598

Depreciation of other fixed assets (Note 6) 89,655 83,247

Personnel and related costs comprising:Salaries and bonuses 7,597,929 6,575,886

Office lease rental 718,577 678,307

Legal and professional service fees 821,450 1,326,616

Taxes other than income tax 260,920 —

22. Income tax expense

A reconciliation between the tax expense and the product of accounting profit before tax

multiplied by the applicable tax rate for the financial year ended 31 December 2013 and

financial period ended 31 December 2012 is as follows:

Profit before tax

Taxation at statutory tax rates of each nationaljurisdiction

AdjustmentsIncome not subject to taxationNon-deductible expensesOthers

Income tax expense

Group16.2.2012


31.12.2013 to 31.12.2012US$ US$

7,313,632

2,434,632

(1,378,782)

4,320

5,753,397

2,118,775

(1,207,144)234, 694

9, 379

1,060,170 1,155,704

The above reconciliation is prepared by aggregating separate reconciliations for each

national jurisdiction.

No provision is made for taxation on qualifying shipping income derived from the operation

of the Group's vessels which is exempt from taxation under Section 13A of the Singapore

Income Tax Act and the Singapore's Maritime Sector Incentive — Maritime Leasing ("MSI-

ML") (Ship) Award which was granted to the Trust and its vessel-owning subsidiaries on 1

August 2013 by the Maritime and Port Authority of Singapore (`MPA"). In certain other

countries in which the Group operates, income arising from shipping activities is subject to

a tonnage-based tax system under which the computation of taxable income is based on

the tonnages of the qualifying vessel fleet.

-40-



23. Commitments

(a) Capital commitments

At 31 December 2013, the Group has capital commitments of US$53,460,000(2012: Nil) relating to two bulk carriers currently under construction.

(b) Operating lease commitments — As lessee

At the end of the reporting period, the Group has the following minimum leasepayments under non-cancellable operating leases with initial or remaining term ofone year or more:


Not later than one year 151,696 151,696Later than one year but not later than five years — 151,696

151,696 303,392

The Group leases its office premise under operating leases. The lease runs for aninitial tenure of three years with option to renew every three years. Lease paymentsunder these leases are fixed for the entire initial tenure. The leases generally donot contain escalation clauses. There are no restrictions placed upon the Group orthe Trust by entering into the lease.

24. Related party transactions

(a) Related party transactions

In addition to the related party information disclosed elsewhere in the financialstatements, the following significant transactions between the Group and relatedparties took place at terms agreed between the parties during the year/period:

With related companies:Rental costsTechnical supervision costs chargedBase fee charged by Trustee-ManagerAviv̂i:̂ cic,yc :,viiiiiiiSSivii aiiu iiiai~ayc~iiciii

T@2 f@C@IV@O

Interest received

- 41 -

Group16.2.2012(date of

1.1.2013 to constitution)31.12.2013 to 31.12.2012

US$ US$

5,672,905 1,541,6171,149,585 503,9492,000,OOG 130,482

2i,:~y~ z5z,yyz82,199 163,145



24. Related party transactions (cont'd)

(b) Compensation of key management personnel

Group Trust Group16.2.2012(date of

1.1.2013 to 1.1.2013 to constitution)31.12.2013 31.12.2013 to 31.12.2012

US$ US$ US$

Directors' fees of theTrustee-Manager 166,309 166,309 73,427

25. Financial risk management objectives and policies

Trust16.2.2012(date of

constitution)to 31.12.2012

US$

73,427

The Group is exposed to financial risks arising from its operations and the use of financial

instruments. The key financial risks include credit risk, interest rate risk, liquidity risk andforeign currency risk.

The Group's overall risk policy is to minimise potential adverse effects on the Group's

financial performance.

The management reviews and agrees policies for managing these risks and they are

summarised below:

a) Credit risk

Credit risk is the risk of loss that may arise on outstanding financial instrumentsshould a counterparty default on its obligations. The carrying amounts ofreceivables and cash and cash equivalents represent the Group's maximumexposure to credit risk.

It is the Group's policy to provide credit terms to creditworthy and reputablecustomers. These receivables are continually monitored on an ongoing basis toensure that issues arising from non-collectibility are minimised. Therefore, theGroup does not expect material credit losses on its debts with customers.

For other financial assets, the Group minimises credit risk by dealing exclusivelywith high credit rating counterparties.

Exposure to credit risk

The Group's maximum exposure to credit risk in the event that counterparties fail toperform their obligations as of 31 December 2013 and 2012 in relation to eachclass of recognised financial assets is the carrying amount of those assets asindicated in the statement of financial position.

As at 31 December 2013 and 2012, the Group does not have significant

concentration of credit risk.

Cash and cash equivalents are placed with reputable financial institutions.

Management believes that the financial institutions that hold the Company's assets

are financially sound and accordingly, minimum credit risk exists with respect to

these assets.

- 42 -



25. Financial risk management objectives and policies (cont'd)

a) Credit risk (cont'd)

Financial assets that are neither past due nor impaired

Trade and other receivables that are neither past due nor impaired are creditworthyreceivables with good payment record with the Group.

Financial assets that are either past due or impaired

Information regarding financial assets that are either past due or impaired isdisclosed in Note 11.

b) Interest rate risk

Interest rate risk is the risk that the future cash flows of the Group's financialinstruments will fluctuate because of changes in market interest rates. The Group'sexposure to interest rate risk arises primarily from their loans and borrowings,interest-bearing deposits given to related companies and bank deposits. TheGroup's financial assets and liabilities at floating rates are contractually repriced atintervals of less than 6 months from the end of the reporting period.

The Group's policy is to manage interest cost using floating rate debts.

Sensitivity analysis for interest rate risk

At the end of the reporting period, if interest rates had been 1 %higher with all othervariables held constant, the Groin's nr~fit hefore tax ~vo~!Ir~ have beenUS$1,998,818 (2012: US$779,260) lower, arising mainly as a result of higherinterest expenses after netting off interest income. The assumed movement forinterest rate sensitivity analysis is based on the currently observable marketenvironment.

c) Liquidity risk

Liquidity risk is the risk that the Group or the Trust will encounter difficulty inmeeting financial obligations due to shortage of funds. The Group's and the Trustsexposure to liquidity risk arises primarily from mismatches of the maturities offinancial assets and liabilities. The Group's and the Trusts objective is to maintaina balance between continuity of funding and flexibility through the use of stand-bycredit facilities.

- 4 3 -

Greenship Bulk Tru

st and its sub

sidi

arie

s

Notes to the Financial Statements

For the fin

anci

al year ended 31 December 2013

25.

Fina

ncia

l risk management objectives and policies (

cont'd)

c)

Liqu

idit

y risk (cont'd)

The table bel

ow summarises the maturity

profile of the

Gro

up's

and

the

Trusts financial

liab

ilit

ies at

the

end of the reporting pe

riod

bas

ed

on con

trac

tual

und

isco

unte

d repayment obligations.

Group

Trus

t2013

2013

1 year

1 to

Over 5

1 year

1 to

Over 5

or les

s 5 yea

rs

years

Total

or less

5 yea

rs

years

US$

US$

US$

US$

US$

US$

US$

Trad

e payables and

accr

uals

34,7

77,2

14

—

Amounts due to related

companies

5,06

7,49

9

—

Othe

r non-current li

abil

itie

s

—

40,0

00,0

00

Loans and

bor

rowi

ngs

27,503,058

182,700,110

67, 347, 771

222, 700,110

Trad

e payables and

accr

uals

Amounts due to related

companies

Loans and

bor

rowi

ngs

—

34,7

77,2

14

—

5,06

7,49

9—

40,0

00,0

0097,605,562

307,808,730

97,605,562

387,653,443

207, 744

—

32,9

33,2

99

--

40,0

00,0

00

33,1

41,0

43

40,0

00,0

00

Group

Trust

2012

2012

1 year

1 to

Over 5

1 ye

ar

1 to

Over 5

or less

5 years

years

Total

or less

5 years

years

US$

US$

US$

US$

US$

US$

US$

34,122,870

—

812, 637

—15,185, 296

100,

595,186

50,1

20, 803

100, 595,186

—

34,122,870

—

812,637

45,490,263

161,270,745

45, 490, 263

196, 206, 252

-44-

206,033

—

752, 519

—

958,552

40,0

00,0

00

Total

US$

207, 744

32,933,299

40,0

00,0

00

73,141,043

Total

US$

—

206,033

—

752,159

—

958,552



25. Financial risk management objectives and policies (cont'dj

d) Foreign currency risk

The Group has transactional currency exposures arising from sales or purchasesthat are denominated in a currency, primarily Euro ("EUR"), other than therespective functional currency of the entities within the Group. Approximately 99%(2012: 99%) of the Group's sales are denominated in the functional currency of theentities within the Group whilst approximately 96% (2012: 91 %) of costs aredenominated in the respective functional currency of the entities within the Group.The Group's trade receivables and trade payables at the end of the reportingperiod have similar exposures with 88% (2012: 98%) and 90% (2012: 89%)denominated in the respective functional currency.

The Group also holds cash and cash equivalents denominated in foreigncurrencies for working capital purposes. At the end of the reporting period, suchforeign currency balances are mainly in Eurc.

Sensitivity analysis for foreign currency risk

The following table demonstrates the sensitivity of the Group's profit net of tax to a1 %change in Euro against the USD, with all other variables held constant.

GroupProfit after Profit after

tax tax2013 Lu1LUS$ US$

CURIliSU 5irengtheneci 114,230 105,073Weakened (114,230) (105,073)

26. Financial instruments

Fair value

Fair value is defined as the amount at which the financial instrument could be exchanged ina current transaction between knowledgeable willing parties in an arm's length transaction,other than in a forced or liquidation sale.

The following methods and assumptions are used to estimate the fair value of each class offinancial instruments:

(a) Fair value hierarchy

The Group categories fair value measurements using a fair value hierarchy that isdependent on the valuation inputs used as follows:

- Levei i — quoted prices (unadjustecij in active market for identical assets orliabilities that the Group can access at the measurement date,

- Level 2 — Inputs other that quoted prices included within Level 1 that areobservable for the asset or liability, either directly or indirectly, and

- Level 3 — Unobservable inputs for the asset or liability.

-45-



26. Financial instruments (cont'd)

(a) Fair value hierarchy (cont'd)

Fair value measurements that use inputs of different hierarchy levels are

categorised in its entirety in the same level of the fair value hierarchy as the lowest

level input that is significant to the entire measurement.

(b) Assets and liabilities not carried at fair value but for which fair value is

disclosed:

The following table shows an analysis of the Group's assets and liabilities not

measured at fair value at 31 December 2013 but for which fair value is disclosed:

Group2013

Fair value measurements at the end of the

reporting period using

Quotedprices in Significantactive observable

markets for inputs other Significantidentical than quoted unobservable Carrying

instruments prices inputs Total amount

(Level 1) (Level 2) (Level 3)

US$ US$ US$ US$ US$

Assets

Other non-currentassets —

Liabilities

Other liabilities

(non-current) —

-46-

— 776,856 776,856 877,541

— 33,241,131 33,241,131 33,862,268



26. Financial instruments (cont'd}

(b) Assets and liabilities not carried at fair value but for which fair value isdisclosed: (cont'd)

Trust

2013

Fair value measurements at the end of thereporting period using

Quotedprices in Significantactive observable

markets for inputs other Significantidentical than quoted unobservable Carrying

instruments prices inputs Total amountno,gi~~~~~.~I ~ n i~~ ii i~~~~°V~~ ~ ~Ll^.VGI J~

US$ US$ US$ US$ US$

Liabilities

Other liabilities(non-current) —

~eterminati~~ ~ of fair value

— 33,241,131 33,241,131 33,862,268

Other non-current assets and other liabilities

The fair values as disclosed in the table above are estimated by discountingexpected future cash flows at market incremental lending rate or similar types oflending, borrowing or leasing arrangements at the end of the reporting period.

-4~r-



26. Financial instruments (cont'd)

(c) Fair value of financial instruments by classes that are not carried at fair value

and whose carrying amounts are not reasonable approximation of fair value

The fair value of financial assets and liabilities by classes that are not carried at fair

value and whose carrying amounts are not reasonable approximation of fair value

are as follows:

Group

Note 2013 2012

Carrying Fair Carrying Fairamount value amount value

US$ US$ US$ US$

Financial assets:

Other non-current 9 877,541 776,856 819,798 719,769assets

Financial liabilities:Other liabilities

(non-current) 14 33,862,268 33,241,131 — —

Trust

Note 2013 2012

Carrying Fair Carrying Fairamount value amount value

US$ US$ US$ US$

Financial liabilities:

Other liabilities(non-current) 14 33,862,268 33,241,131 — —

27. Events occurring after the end of the reporting period

On 28 January 2014, the Trustee-Manager declared a cash distribution determined based

on 90% of the net distributable amount of the Trust, which is a distribution of US$0.0428

per unit and a total of US$7,959,482 was paid to unitholders in early February 2014.

-48-



28. Comparative figures

The comparative figures for the Consolidated Statement of Comprehensive Income,Consolidated Statement of Changes in Unitholders' Funds, Consolidated Statement ofCash Flows and their related notes are less than 12 months as the Trust was constitutedon 16 February 2012.

Certain comparatives have been reclassified to better reflect the nature of the balances andto conform with current year's presentation.

Note 2012 2012US$ US$

As As previouslyreclassified reported

(a) Brokerage revenue and costpreviously reported on a net basis

Consolidated Statement ofComprehensive Income

Revenue 238,418,145 143, 797,221Rentals (118,076,417) (46,240,029)Vessel operating expenses (94,925,302) (72,140,766)

(b) Inventories previously reportedag n~e~~iri gX~gncac

Statement of Financial Position

Inventories 10 4,284,435 —Prepayments 12 6,527,398 10,811,833

29. Authorisation of financial statements for issue

The financial statements for the year ended 31 December 2013 were authorised for issuein accordance with a resolution of the Directors of the Trustee-Manager on 30 April 2014.

_ag_

greenship bulk trust and its subsidiaries - otc.nfmf.nootc.nfmf.no/public/news/14582.pdf ·...

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