GPRT.L Regulatory News (GPRT)

Goldenport Holdings Inc.

Athens, 6 May 2014

Interim Results for the Three Months Ended 31 March 2014

Goldenport Holdings Inc. ("Goldenport" or "the Company"), (LSE: GPRT) the international shipping company that owns and operates a fleet of dry bulk and container vessels, announces its Quarterly Results for the three months ended 31 March, 2014.

Financial Highlights (amounts in US$ '000 except per share data):

§ Revenue of US$ 12,420, -16.2% decrease (2013: US$ 14,826)

§ EBITDA of US$ 4,429, -15.8% decrease (2013: US$ 5,260)

§ Net Loss of US$ 1,845 (2013: Net Loss of US$ 2,425)

§ Loss per Share of US$ 0.02 (2013: Loss per share US$ 0.03)

§ Total cash at 31 March 2014 of US$ 15,949 (31 December 2013: US$ 16,859)

§ Debt repayment of US$4,225 (2013: US$5,376)

§ Net debt to book capitalisation as of 31 March 2014, 48% (31 December 2013: 47%)

§ No impairment loss during the period ended 31 March 2014

§ In compliance with all financial covenants

CEO Statement (amounts in US$'000):

John Dragnis, Chief Executive Officer of the Company commented:

Trading during the first quarter of 2014 was weaker than in the last quarter of 2013 due to weak demand in the Far East, seasonal effects (Chinese New Year) and a weak South American grain season. At the same time, three of our vessels (Ermis, Golden Trader and MSC Fortunate) underwent dry docking for the purposes of their Special Survey, whilst our Post Panamax vessel (D Skalkeas) was repositioned from the Pacific to the Atlantic Ocean, resulting in a drop in utilisation rate from 96% in the previous comparable period to 92%.

For the period ended 31 March 2014, the Company reported a 16.2% decline in revenues, reflecting a decrease in the average number of vessels that was partly offset by an increase in time charter equivalent rates. The company reported a 15.8% drop in EBITDA to US$ 4,429 and a net loss of US$ 1,845 or US$ 0.02 per share. It should be noted that starting from 1 January 2014, our 50% interest in Sentinel JV (vessels Ermis and Alpine Trader) with Glencore International is accounted for under the equity method.

Dry bulk asset prices remained broadly stable quarter-on-quarter, notwithstanding a correction in rates. That said, Supramax rates have been higher than Capesize and Panamax rates in absolute terms for several weeks, reflecting their versatility and reduced earnings volatility. We evidenced a single-digit recovery in containership rates but earnings remain at levels close to all time lows.

In anticipation of a recovery, we have continued to employ our fleet on a short term basis under 3-6 month time charter agreements, but we are witnessing increased appetite for 6-12 month time charters which we may choose to selectively enter into at profitable levels. Notwithstanding the weak first quarter, we continue to expect that 2014 will allow us to employ our vessels on better terms than 2013 and this is supported by the Supramax FFA for the remainder of 2014, which is currently trading at US$ 12,875 per day compared to a BSI average TC rate of US$ 10,328 for 2013.

On 28 March 2014, we agreed the sale of MSC Socotra for US$11,150, taking advantage of high scrap prices to continue our strategy of fleet renewal by disposing of older tonnage. The disposal resulted in a gain of US$3,077 that will be booked in Q2 2014 and we have subsequently agreed with the financing bank to replace the mortgage on MSC Socotra with a mortgage on Paris Jr that was previously debt-free, thereby allowing us to retain the total of the net cash consideration on our balance sheet.

We believe that the outlook for the dry bulk sector for the remainder of the year is positive, especially in light of recent news flow regarding increased Indian coal exports, the lifting of the ban on Indonesian bauxite and coal exports and the upcoming US grain season. The outlook for the containership sector is also positive but less clear due to a lack of obvious catalysts. We are therefore planning to further increase our exposure to small- and medium-sized dry bulk carriers and reduce our exposure to older containerships, while maintaining a competitive operating cost base.

Fleet Developments:

Disposals:

On 28 March 2014, the Company agreed the sale of the 4,953 TEU, 1995-built vessel "MSC Socotra", to an unaffiliated third party. The sale was concluded at a net consideration of US$11,150 cash and the vessel was delivered to the new owners on 30 April 2014. On the delivery date, M/V MSC Socotra had a net carrying value US$8,073. A commission of 3% on the gross consideration was paid for this disposal. The gain resulting from the sale of the vessel was US$3,077.

Today the fleet consists of 14 vessels, of which seven are dry bulk carriers and seven are containers.

Operational Fleet Forward Coverage:

The percentage of available days of the fleet already fixed under contracts as of 5 May 2014, assuming the earliest charter expiration, is as follows:

(1) Percentage of available days of the fleet fixed under contract as reported on 3 April 2014, being the date of the previous trading update, is given in brackets

Conference call and webcast:

The Company's management will hold a conference call today Tuesday 6 May at 3:00 P.M. (BST), 5:00 P.M. (Athens), 10:00 A.M. (EDT), to discuss the results.

Conference Call details: 

Time: 15:00 London Time/ 10:00 am NY Time/ 17:00 Athens Time

DIAL IN DETAILS

Participants should dial into the call 10 minutes before the scheduled time using the following numbers: + 44 (0) 800 368 1063 (from the UK), + 1 866 288 9315 (from the US) or + 44 (0) 20 7075 3205 (all other callers). Please quote "Goldenport Holdings" to the operator.

REPLAY

If you are unable to participate, a recording of the conference will be available one hour after the conclusion of the conference call until end of business day of 13th May 2014.

To access the recording, please dial the following numbers:

UK and international: + 44 (0) 203 0595874

US: + 1 866 288 9317

Access code: 47475#

Summary of Selected Financial and Operating Data:

See Appendices, for Notes on the Summary of Selected Financial and Operating Data, for forward looking statements, for detailed Fleet Employment profile and for Financial Statements.

Financial review (amounts in US$ '000, except the per day Opex data):

Time and Voyage Charter Revenues: Revenues decreased by US$ 2,406 or 16.2% to US$ 12,420 for the three months ended 31 March 2014 (2013: US$ 14,826). The 16.2% decrease was principally due to the decrease in the average number of vessels in our fleet from an average of 18 vessels in the three months ended March 31, 2013 to an average of 15 vessels in the three months ended March 31, 2014 (in both cases excluding Ermis and Alpine-Trader, which are owned by Sentinel Holdings Inc., our joint venture with Glencore, and accounted under the equity method), a decline in fleet utilization and longer vessel dry-docking time, with two vessel dry-dockings in the three months ended March 31, 2014 (one of which was completed by March 31, 2014), as compared to one vessel dry-docked in the three months ended March 31, 2013. The revenue decrease was partially offset by an increase of 6.2% in the average TCE rate, which increased to an average of US$ 9,197 in the three months ended March 31, 2014, from an average of US$ 8,664 in the three months ended March 31, 2013.

Voyage expenses total: Voyage expenses decreased by US$ 282 or 26.6% to US$ 777 for the period ended 31 March 2014 (2013: US$ 1,059) in line with the decrease in the revenues, since commissions are calculated as a percentage of revenue and represent the majority of the total voyage expenses.

Vessel operating expenses: Vessel operating expenses decreased by US$ 1,270 or 18.2% to US$ 5,712 for the three months ended 31 March 2014 (2013: US$ 6,982) as a result of the disposal of older tonnage vessels, which both reduced the total ownership days of the fleet and had a positive effect on operating expenses.

Depreciation: The vessels' depreciation charge decreased by 17.8% to US$ 4,303 for the three months ended 31 March 2014 (2013: US$ 5,232) principally due to the decrease of total fleet ownership days, due to the reduction in the average number of vessels in the fleet.

Depreciation of dry-docking costs: Depreciation of dry-docking costs decreased by 16.7% to US$ 305 for the three months ended 31 March 2014 (2013: US$ 366), reflecting a decrease in the number of vessels in our feet.

Financing costs: Interest expense decreased by US$ 26 or 1.9% to US$ 1.315 for the three months ended 31 March 2014 (2013: US$ 1,341), reflecting the decreased aggregate loan balance following the normal debt repayments as well as debt prepayments associated with the disposal of vessels.

Cash and cash equivalents: The Company as of 31 March 2014 had US$ 13,786 of cash and cash equivalents (31 December 2013: US$ 14,217). The decrease of cash is a result of the net cash flows provided by the operating activities, the net cash flows used in the investing and financing activities.

APPENDIX 1:

Notes on Summary of Selected Financial and Operating Data:

(1) Average number of vessels is the number of vessels that constituted our fleet for the relevant period, as measured by the sum of the number of days each vessel was a part of our fleet during the period divided by the number of calendar days in the period.

(2) Ownership days are the aggregate number of days in a period during which each vessel in our fleet has been owned by us. Ownership days are an indicator of the size of our fleet over a period and affect both the amount of revenues and the amount of expenses that we record during a period.

(3) Available days are the number of our ownership days less the aggregate number of days that our vessels are off-hire due to scheduled repairs or repairs under guarantee, vessel upgrades or special surveys and the aggregate amount of time that we spend positioning our vessels. The shipping industry uses available days to measure the number of days in a period during which vessels should be capable of generating revenues.

(4) Operating days are the number of available days in a period less the aggregate number of days that our vessels are off-hire due to any reason, including unforeseen circumstances. The shipping industry uses operating days to measure the aggregate number of days in a period during which vessels actually generate revenues.

(5) We calculate fleet utilisation by dividing the number of our operating days during a period by the number of our available days during the period. The shipping industry uses fleet utilisation to measure a company's efficiency in finding suitable employment for its vessels and minimising the amount of days that its vessels are off-hire for reasons other than scheduled repairs or repairs under guarantee, vessel upgrades, special surveys or vessel positioning.

(6) Daily vessel operating expenses, which include crew wages and related costs, the cost of insurance, expenses relating to repairs and maintenance, the costs of spares and consumable stores, tonnage taxes and other miscellaneous expenses, are calculated by dividing vessel operating expenses by ownership days for the relevant period.

(7) TCE rates are defined as our time and voyage charter revenues less voyage expenses during a period divided by the number of our available days during the period, which is consistent with industry standards. Voyage expenses include port charges, bunker (fuel oil and diesel oil) expenses, canal charges and commissions. TCE rate is a standard shipping industry performance measure used primarily to compare daily earnings generated by vessels on time charters with daily earnings generated by vessels on voyage charters, because charter hire rates for vessels on voyage charters are generally not expressed in per day amounts while charter hire rates for vessels on time charters are generally expressed in such amounts.

(8) Net debt to book capitalisation is defined as total debt minus cash over the carrying amount of vessels.

APPENDIX 2:

Forward-Looking Statement

Matters discussed in this release may constitute forward-looking statements. Forward-looking statements reflect the current views of Goldenport Holdings Inc. ("the Company") with respect to future events and financial performance and may include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts.

The forward-looking statements in this release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management's examination of historical operating trends, data contained in our records and other data available from third parties. Although the Company believes that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, the Company cannot assure you that it will achieve or accomplish these expectations, beliefs or projections.

Important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the strength of world economies and currencies, general market conditions, including changes in charter hire rates and vessel values, changes in demand that may affect attitudes of time charterers to scheduled and unscheduled dry-docking, changes in the Company's operating expenses, including bunker prices, dry-docking and insurance costs, or actions taken by regulatory authorities, potential liability from pending or future litigation, domestic and international political conditions, potential disruption of shipping routes due to accidents and political events or acts by terrorists. The Company does not assume, and expressly disclaims, any obligation to update these forward-looking statements.

This press release is not an offer of securities for sale in the United States. The Company's securities have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States or to a U.S. person absent registration pursuant to, or an applicable exemption from, the registration requirements under U.S. securities laws.

APPENDIX 3:

Fleet Employment Profile:

(2) Vessel owned under a 50:50 joint venture with Glencore International AG

APPENDIX 4:

Goldenport Holdings Inc.

Unaudited Interim Condensed Consolidated Financial Statements

31 March 2014

Report on review of interim condensed consolidated

financial statements to the shareholders of Goldenport Holdings Inc.

Introduction

We have reviewed the accompanying interim condensed consolidated financial statements of Goldenport Holdings Inc. and its subsidiaries ("the Group") as at 31 March 2014, comprising of the interim consolidated statement of financial position as at 31 March 2014 and the related interim consolidated statements of comprehensive income, changes in equity and cash flows for the three-month period then ended and explanatory notes. Management is responsible for the preparation and presentation of these interim condensed consolidated financial statements in accordance with IAS 34 Interim Financial Reporting (IAS 34). Our responsibility is to express a conclusion on these interim condensed consolidated financial statements based on our review.

Scope of review

We conducted our review in accordance with International Standards on Review Engagements 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity". A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing. Consequently, it does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim condensed consolidated financial statements are not prepared, in all material respects, in accordance with IAS 34.

2 May 2014

Ernst & Young (Hellas) Certified Auditors-Accountants S.A

Athens

* Certain amounts shown here do not correspond to the interim condensed consolidated financial statements as at 31 March 2013 and reflect adjustments made as detailed in Note 9.

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 31 March 2014

* Certain amounts shown here do not correspond to the consolidated financial statements as at 31 December 2013 and reflect adjustments made as detailed in Note 9.

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the three months ended 31 March 2014

Continued

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended 31 March 2014

1. FORMATION, BASIS OF PRESENTATION AND GENERAL INFORMATION:

Goldenport Holdings Inc. ('Goldenport' or the 'Company') was incorporated under the laws of the Marshall Islands, as a limited liability company, on 21 March 2005. On 5 April 2006 Goldenport Holdings Inc. was admitted in the Official List and its shares started trading on the London Stock Exchange ("LSE").

The address of the registered office of the Company is Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960. The address of the Head Office of the Company is Status Center, 41 Athinas Avenue, 166-71, Vouliagmeni, Greece.

Goldenport as at 31 March 2014 is the majority holding Company for fifteen intermediate holding companies, each in turn owning a vessel-owning company, and the 50% owner of another intermediate holding company, owning two vessel owning companies, been treated as joint venture as presented in table a) below and Note 9. Also, as at 31 March 2014 Goldenport is the holding Company of a fully owned subsidiary named Goldenport Marine Services, which provides the Company and its affiliates with a wide range of shipping services, such as insurance consulting, legal, financial and accounting services, quality and safety, information technology (including software licences) and other administrative activities in exchange for a daily fixed fee, per vessel. Goldenport Marine Services has been registered in Greece under the provisions of Law 89/1967.

On 24 October 2011, the Group sold 20% of the voting shares in Tuzon Maritime Company, the vessel owning company of Paris JR. This 20% is accounted for as non-controlling interest as at 31 March 2014 and 31 December 2013.

Goldenport and its subsidiaries will be hereinafter referred to as the 'Group'.

The interim condensed consolidated financial statements comprising the financial statements of the Company, its wholly owned subsidiaries and Tuzon Maritime Co, the 80% owned subsidiary (see (a) below) were authorised for issue in accordance with a resolution of the Board of Directors on 2 May 2014. The shareholders of the Company have the right to amend the financial statements at the Annual General Meeting to be held on 9 May 2014.

The subsidiaries of the Company are as at 31 March 2014:

The dormant companies that have been dissolved are no longer included in Note 1(a).

a) Joint Venture (Note 9)

Under IFRS 11, Joint Arrangements, effective January 1, 2014, it is required that the interest of the Company in a joint venture is accounted for using the equity method according to IAS 28 (Revised). The transition was applied retrospectively as required by IFRS 11 and previous years have been restated.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

(a) Basis of preparation: The Group's interim condensed consolidated financial statements for the three months ended 31 March 2014 have been prepared using the same accounting policies (refer also to section 2(f) below) and methods of computation used in the preparation of the Group's annual financial statements for the year ended 31 December 2013. The interim consolidated financial statements are presented in US dollars and all financial values are rounded to the nearest thousand ($000), except the per share information.

(b) Statement of compliance: The interim condensed consolidated financial statements for the three months ended 31 March 2014 have been prepared in accordance with International Financial Reporting Standards applicable to interim financial reporting as adopted by the European Union (IAS 34). The interim condensed consolidated financial statements do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Group's annual financial statements as at 31 December 2013.

(c) Use of judgements, estimates and assumptions: The preparation of the Group's consolidated financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities, at the reporting date. However, uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the asset or liability affected in future. The estimates and assumptions that have the most significant effect on the amounts recognised in the consolidated financial statements are the following:

Depreciation: Depreciation is computed using the straight-line method over the estimated useful life of the vessels, after considering the estimated residual value. Each vessel's residual value is equal to the product of its lightweight tonnage and estimated scrap rate, which until 31 December 2012, was estimated to be U.S.$180 per lightweight ton. In order to align the scrap rate estimates with the current historical average scrap rate, effective from 1 January 2013, the Company adjusted the estimated scrap rates used to calculate the vessels' residual value from U.S.$180 to U.S.$250 per lightweight ton and the impact is included in both periods ended 31 March 2014 and 2013.

Provisions for doubtful trade receivables:Provisions for doubtful trade receivables are recorded based on management's expected future collectability of the receivables. (Receivables as included in the statement of financial position in trade receivables, have a carrying amount of U.S. $2,749 and U.S. $2,102 as at 31 March 2014 and 31 December 2013, respectively). Provision for doubtful accounts as at 31 March 2014 amounted to U.S. $nil (U.S. $301 as at 31 December 2013).

Non-current assets classified as held for sale: By a board of directors' resolution on March 28, 2014, the Company decided to actively market for sale the vessel m/v MSC Socotra. The Company considered that the vessel met the criteria to be classified as held for sale at that date for the following reasons:

· The sale was considered to be highly probable and

· The vessel was available for immediate sale in its present condition.

(d) Impairment of vessels: The Group's vessels are reviewed for impairment in accordance with IAS 36, "Impairment of Assets." Under IAS 36, the Group assesses at each reporting date whether there is an indication that a vessel may be impaired. If such an indication exists, the Group makes an estimate of the vessel's recoverable amount. Any impairment loss of the vessel is assessed by comparison of the carrying amount of the asset to its recoverable amount. Recoverable amount is the higher of the vessel's fair value as determined by independent marine appraisers less costs to sell and its value in use.

If the recoverable amount is less than the carrying amount of the vessel, the asset is considered impaired and an expense is recognised equal to the amount required to reduce the carrying amount of the vessel to its then recoverable amount.

The calculation of value in use is made at the individual vessel level since separately identifiable cash flow information is available for each vessel. In developing estimates of future cash flows, the Group makes assumptions about future charter rates, vessel operating expenses, and the estimated remaining useful lives of the vessels (see also note 7).

The projected net operating cash flows are determined by considering:

i) the time charter equivalent revenues from existing time charters for the fixed fleet days and an estimated daily time charter equivalent for the unfixed days based on average historical 10 year rates for six months time charter for each type of our bulk carrier vessels and one year time charter for each type of our container vessels over the remaining estimated useful life of each vessel, considering the vessel's age and technical specifications.

ii) an average increase of 4% per annum on charter revenues,

iii) cash inflows are considered net of brokerage, and

iv) expected outflows for scheduled vessels' maintenance and vessel operating expenses were determined assuming an average annual inflation rate of 3%.

The net operating cash flows are discounted using the Weighted Average Cost of Capital of each vessel owning company to their present value as at the date of the financial statements. 

Historical average six-month and one-year time charter rates used in our impairment test exercise are in line with our overall chartering strategy, especially in periods/years of depressed charter rates. The historical averages reflect the full operating history of vessels of the same type and particulars with our operating fleet and they cover at least a full business cycle.

The average annual inflation rate applied for determining vessels' maintenance and operating costs approximates current projections for global inflation rate for the remaining useful life of our vessels.

Effective fleet utilization is assumed at 95%, after taking into consideration the periods each vessel is expected to undergo the scheduled maintenance (dry-docking and special surveys). These assumptions are in line with the Group's historical performance and the expectations for future fleet utilization under our current fleet deployment strategy.

The impairment test exercise is highly sensitive on variances in the time charter rates and fleet effective utilization. Consequently, a sensitivity analysis was performed by assigning possible alternative values to these two significant inputs.

No impairment loss was identified by the Group for the period ended 31 March 2014 and 2013.

(e) Non-current assets held for sale: Non-current assets and disposal groups classified as held for sale are measured at the lower of carrying amount and fair value less costs to sell. If the carrying amount exceeds fair value less costs to sell, the Company recognises an impairment loss in the income statement component of the consolidated statement of comprehensive income, if the non-current asset or disposal group is subsequently remeasured at fair value less costs to sell, any difference with the carrying amount is recognised under impairment gain/ (loss) in the income statement component of the consolidated statement of comprehensive income. Non-current assets and disposal groups are classified as held for sale if their carrying amounts will be recovered through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset or disposal group is available for immediate sale in its present condition. Management must be committed to the sale, which should be expected to qualify for recognition as a complete sale within one year from the date of classification. Events or circumstances may extend the period to complete the sale beyond one year. An extension of the period required to complete a sale does not preclude an asset from being classified as held for sale if the delay is caused by events or circumstances beyond the entity's control and there is sufficient evidence that the entity remains committed to its plan to sell the asset. Property, plant and equipment and intangible assets once classified as held for sale are not depreciated or amortized. Refer to note 7 (i.e. Vessels note).

(f) Changes in accounting policies and disclosures:

A. The accounting policies adopted are consistent with those of the previous financial year except for the following amended IFRSs which have been adopted by the Group as of 1 January 2014:

· New consolidation standards (IFRS 10, 11, 12 and Revised IAS 28) and Transition Guidance (Amendments to IFRS 10, IFRS 11 and IFRS 12)

· Investment Entities (Amendments to IFRS 10, IFRS 12 and IAS 27)

· Amendment to IAS 32 Financial Instruments: Presentation - Offsetting Financial Assets and Financial Liabilities

· Amendment to IAS 36 Impairment of Assets - Recoverable Amount Disclosures for Non-Financial Assets

· Amendment to IAS 39 Financial Instruments: Recognition and Measurement - Novation of Derivatives and Continuation of Hedge Accounting

When the adoption of the standard or interpretation is deemed to have an impact on the financial statements or performance of the Group, its impact is described below:

The Group has applied, for the first time, IFRS 11 Joint Arrangements that requires restatement of previous financial statements. As required by IAS 34, the nature and the effect of these changes are disclosed below. Several other new standards and amendments apply for the first time in 2014. However, they do not impact the annual consolidated financial statements of the Group or the interim condensed consolidated financial statements of the Group.

The nature and the impact of each new standard or amendment are described below:

· IAS 28 Investments in Associates and Joint Ventures (Revised)

As a consequence of the new IFRS 11 Joint arrangements and IFRS 12 Disclosure of Interests in Other Entities, IAS 28 Investments in Associates, has been renamed IAS 28 Investments in Associates and Joint Ventures, and describes the application of the equity method to investments in joint ventures in addition to associates. Management has assessed the impact from the adoption of the standard and is disclosed in Note 9.

· IAS 32 Financial Instruments: Presentation (Amended) - Offsetting Financial Assets and Financial Liabilities

These amendments clarify the meaning of "currently has a legally enforceable right to set-off". The amendments also clarify the application of the IAS 32 offsetting criteria to settlement systems (such as central clearing house systems) which apply gross settlement mechanisms that are not simultaneous. Management has assessed that there is no impact on the Group's financial position.

· IFRS 10 Consolidated Financial Statements, IAS 27 Separate Financial Statements

IFRS 10 replaces the portion of IAS 27 Consolidated and Separate Financial Statements that addresses the accounting for consolidated financial statements. It also addresses the issues raised in SIC-12 Consolidation - Special Purpose Entities.

IFRS 10 establishes a single control model that applies to all entities including special purpose entities. The changes introduced by IFRS 10 will require management to exercise significant judgment to determine which entities are controlled and therefore are required to be consolidated by a parent, compared with the requirements that were in IAS 27. The application of this new standard had no impact on the Company's financial position or performance since the new definition of control did not change the status of the subsidiaries.

· IFRS 11 Joint Arrangements

IFRS 11 replaces IAS 31 Interests in Joint Ventures and SIC-13 Jointly-controlled Entities - Non-monetary Contributions by Venturers. IFRS 11 removes the option to account for joint arrangements that are joint ventures using proportionate consolidation. Instead, joint arrangements that meet the definition of a joint venture must be accounted for using the equity method. Management has assessed the impact from the adoption of the standard and this is disclosed in Note 9.

· IFRS 12 Disclosures of Interests in Other Entities

IFRS 12 includes all of the disclosures that were previously in IAS 27 related to consolidated financial statements, as well as all of the disclosures that were previously included in IAS 31 and IAS 28. These disclosures relate to an entity's interests in subsidiaries, joint arrangements, associates and structured entities. A number of new disclosures are also required. The application of this new standard had no impact on the Company's financial position or performance. None of these disclosure requirements are applicable for interim condensed consolidated financial statements, unless significant events and transactions in the interim period require that they are provided. Accordingly, the Group has not made such disclosures.

· Transition Guidance (Amendments to IFRS 10, IFRS 11 and IFRS 12)

The IASB issued amendments to IFRS 10 Consolidated Financial Statements, IFRS 11 Joint Arrangements and IFRS 12 Disclosure of Interests in Other Entities. The amendments change the transition guidance to provide further relief from full retrospective application. The date of initial application' in IFRS 10 is defined as 'the beginning of the annual reporting period in which IFRS 10 is applied for the first time'. The assessment of whether control exists is made at 'the date of initial application' rather than at the beginning of the comparative period. If the control assessment is different between IFRS 10 and IAS 27/SIC-12, retrospective adjustments should be determined. However, if the control assessment is the same, no retrospective application is required. If more than one comparative period is presented, additional relief is given to require only one period to be restated. For the same reasons IASB has also amended IFRS 11 Joint Arrangements and IFRS 12 Disclosure of Interests in Other Entities to provide transition relief. Management has assessed the impact from the adoption of the amendments and is disclosed in Note 9.

· Investment Entities (Amendments to IFRS 10, IFRS 12 and IAS 27)

The amendment applies to a particular class of business that qualify as investment entities. The IASB uses the term 'investment entity' to refer to an entity whose business purpose is to invest funds solely for returns from capital appreciation, investment income or both. An investment entity must also evaluate the performance of its investments on a fair value basis. Such entities could include private equity organisations, venture capital organisations, pension funds, sovereign wealth funds and other investment funds. Under IFRS 10 Consolidated Financial Statements, reporting entities were required to consolidate all investees that they control (i.e. all subsidiaries). The Investment Entities amendment provides an exception to the consolidation requirements in IFRS 10 and requires investment entities to measure particular subsidiaries at fair value through profit or loss, rather than consolidate them. The amendment also sets out disclosure requirements for investment entities. Management has assessed that there is no impact on the Group's financial position since none of the entities in the Group qualifies to be an investment entity under IFRS 10.

· IAS 36 Impairment of Assets (Amended) - Recoverable Amount Disclosures for Non-Financial Assets

These amendments remove the unintended consequences of IFRS 13 on the disclosures required under IAS 36. In addition, these amendments require disclosure of the recoverable amounts for the assets or CGUs for which impairment loss has been recognised or reversed during the period. Management has assessed that there is no impact on the Group's financial position or performance.

· IAS 39 Financial Instruments (Amended): Recognition and Measurement - Novation of Derivatives and Continuation of Hedge Accounting

Under the amendment there would be no need to discontinue hedge accounting if a hedging derivative was novated, provided certain criteria are met. The IASB made a narrow-scope amendment to IAS 39 to permit the continuation of hedge accounting in certain circumstances in which the counterparty to a hedging instrument changes in order to achieve clearing for that instrument. Management has assessed that there is no impact on the Group's financial position or performance.

B. Standards issued but not yet effective and not early adopted

· IFRS 9 Financial Instruments: Classification and Measurement and subsequent amendments to IFRS 9 and IFRS 7-Mandatory Effective Date and Transition Disclosures; Hedge Accounting and amendments to IFRS 9, IFRS 7 and IAS 39

IFRS 9, as issued, reflects the first phase of the IASBs work on the replacement of IAS 39 and applies to classification and measurement of financial assets and financial liabilities as defined in IAS 39. The adoption of the first phase of IFRS 9 will have an effect on the classification and measurement of financial assets, but will not have an impact on classification and measurements of financial liabilities. In subsequent phases, the IASB will address hedge accounting and impairment of financial assets. The standard was initially effective for annual periods beginning on or after 1 January 2013 but amendments to IFRS 9 Mandatory Effective Date of IFRS 9 and Transition Disclosures, issued in December 2011, moved the mandatory effective date to 1 January 2015. The subsequent package of amendments issued in November 2013 initiate further accounting requirements for financial instruments. These amendments a) bring into effect a substantial overhaul of hedge accounting that will allow entities to better reflect their risk management activities in the financial statements; b) allow the changes to address the so-called 'own credit' issue that were already included in IFRS 9 Financial Instruments to be applied in isolation without the need to change any other accounting for financial instruments; and c) remove the 1 January 2015 mandatory effective date of IFRS 9, to provide sufficient time for preparers of financial statements to make the transition to the new requirements. These standard and subsequent amendments have not yet been endorsed by the EU. Management has assessed that there is no impact on the Group's financial position.

· IAS 19 Defined Benefit Plans (Amended): Employee Contributions

The amendment is effective from 1 July 2014. The amendment applies to contributions from employees or third parties to defined benefit plans. The objective of the amendment is to simplify the accounting for contributions that are independent of the number of years of employee service, for example, employee contributions that are calculated according to a fixed percentage of salary. This amendment has not yet been endorsed by the EU. Management is in the process of assessing the impact from the adoption of the standard.

· IFRIC Interpretation 21: Levies

The Interpretations Committee was asked to consider how an entity should account for liabilities to pay levies imposed by governments, other than income taxes, in its financial statements. This Interpretation is an interpretation of IAS 37 Provisions, Contingent Liabilities and Contingent Assets. IAS 37 sets out criteria for the recognition of a liability, one of which is the requirement for the entity to have a present obligation as a result of a past event (known as an obligating event). The Interpretation clarifies that the obligating event that gives rise to a liability to pay a levy is the activity described in the relevant legislation that triggers the payment of the levy. This interpretation has not yet been endorsed by the EU. 

Management has assessed that there is no impact on the Group's financial position.

· IFRS 14 Regulatory Deferral Accounts

The standard is effective for annual periods beginning on or after 1 January 2016. The IASB has a project to consider the broad issues of rate regulation and plans to publish a Discussion Paper on this subject in 2014. Pending the outcome of this comprehensive Rate-regulated Activities project, the IASB decided to develop IFRS 14 as an interim measure. IFRS 14 permits first-time adopters to continue to recognise amounts related to rate regulation in accordance with their previous GAAP requirements when they adopt IFRS. However, to enhance comparability with entities that already apply IFRS and do not recognise such amounts, the standard requires that the effect of rate regulation must be presented separately from other items. An entity that already presents IFRS financial statements is not eligible to apply the standard. This standard has not yet been endorsed by the EU. Management has assessed that the new standard will not have an impact on the Group's financial position.

The IASB has issued the Annual Improvements to IFRSs 2010 - 2012 Cycle, which is a collection of amendments to IFRSs. The amendments are effective for annual periods beginning on or after 1 July 2014. These annual improvements have not yet been endorsed by the EU. Management is in the process of assessing the impact from the adoption of these amendments.

Ø IFRS 2 Share-based Payments: This improvement amends the definitions of 'vesting condition' and 'market condition' and adds definitions for 'performance condition' and 'service condition' (which were previously part of the definition of 'vesting condition').

Ø IFRS 3 Business combinations: This improvement clarifies that contingent consideration in a business acquisition that is not classified as equity is subsequently measured at fair value through profit or loss whether or not it falls within the scope of IFRS 9 Financial Instruments.

Ø IFRS 8 Operating Segments: This improvement requires an entity to disclose the judgments made by management in applying the aggregation criteria to operating segments and clarifies that an entity shall only provide reconciliations of the total of the reportable segments' assets to the entity's assets if the segment assets are reported regularly.

Ø IFRS 13 Fair Value Measurement: This improvement in the Basis of Conclusion of IFRS 13 clarifies that issuing IFRS 13 and amending IFRS 9 and IAS 39 did not remove the ability to measure short-term receivables and payables with no stated interest rate at their invoice amounts without discounting if the effect of not discounting is immaterial.

Ø IAS 16 Property Plant & Equipment: The amendment clarifies that when an item of property, plant and equipment is revalued, the gross carrying amount is adjusted in a manner that is consistent with the revaluation of the carrying amount. The amendment to IAS 16, Par. 35(b) clarifies that the accumulated depreciation/amortisation is eliminated so that the gross carrying amount and carrying amount equal the market value.

Ø IAS 24 Related Party Disclosures: The amendment clarifies that an entity providing key management personnel services to the reporting entity or to the parent of the reporting entity is a related party of the reporting entity.

Ø IAS 38 Intangible Assets: The amendment clarifies that when an intangible asset is revalued the gross carrying amount is adjusted in a manner that is consistent with the revaluation of the carrying amount.

The IASB has issued the Annual Improvements to IFRSs 2011 - 2013 Cycle, which is a collection of amendments to IFRSs. The amendments are effective for annual periods beginning on or after 1 July 2014. These annual improvements have not yet been endorsed by the EU. Management is in the process of assessing the impact from the adoption of these amendments.

Ø IFRS 3 Business Combinations: This improvement clarifies that IFRS 3 excludes from its scope the accounting for the formation of a joint arrangement in the financial statements of the joint arrangement itself.

Ø IFRS 13 Fair Value Measurement: This improvement clarifies that the scope of the portfolio exception defined in paragraph 52 of IFRS 13 includes all contracts accounted for within the scope of IAS 39 Financial Instruments: Recognition and Measurement or IFRS 9 Financial Instruments, regardless of whether they meet the definition of financial assets or financial liabilities as defined in IAS 32 Financial Instruments: Presentation.

Ø IAS 40 Investment Properties: This improvement clarifies whether a specific transaction meets the definition of both a business combination as defined in IFRS 3 Business Combinations and investment property as defined in IAS 40 Investment Property requires the separate application of both standards independently of each other.

3. VOYAGE AND VESSEL OPERATING EXPENSES:

The amounts in the accompanying interim condensed consolidated statement of comprehensive income are analysed as follows:

Voyage expenses

Vessel operating expenses