GPRT.L Regulatory News (GPRT)

14 Mar 2007 07:01

Goldenport Holdings Inc14 March 2007 Goldenport Holdings Inc. Athens, 14th March 2007 Final results for the year ended 31 December 2006 The Board of Directors of Goldenport Holdings Inc. ("Goldenport" or "the Company") is pleased to announce the full year results for the year ended 31 December, 2006. Financial Highlights: • Revenue of US$ 90.7m (2005: US$ 83.6m)• EBITDA of US$ 54.9m (2005: US$ 53.8m)• Net income of US$ 45.2m (2005: US$ 43.3m) • Final dividend of 11.9 pence per share (£ 8.3m payout) proposed• Total dividend for 2006 (including interim dividend) of 17.5 pence share• 67% of the net IPO proceeds have been utilised in accordance with the strategy outlined in the IPO prospectus• Strong free cash flow generation from the business and unutilised proceeds from the IPO, provide cash reserves of US$81.4 million for further fleet expansion Operational Highlights: • Our proactive chartering policy has enabled us to weather the weaker dry-bulk market of the first six months of 2006 and take advantage of the subsequent strengthening of rates• The chartering of the dry-bulk fleet in the second half of the year outperformed the weak first half, bringing balance to the full year results in terms of organic growth• The pro-active chartering of the container segment of the fleet with most vessels fully fixed throughout the year, allowed the Company to maintain profitability in an environment of weakening rates• The two new vessels acquired in the second half of the year, namely 'MSC Scotland' and 'Vasos', have contributed to 2006 earnings. The container vessel 'West Gate Bridge' acquired in late 2006 will be delivered in March 2007 and will further enhance this year's profitability • The acquisition of the fire damaged container vessel 'Fortune' is a project with a potential high return after her delivery in early 2008• The Joint Venture with Glencore International AG on 13 March 2007, illustrates our strategy to establish strong relationships with first-class charterers and provides a healthy way of further expansion CEO Statement: Commenting on these results, Captain Paris Dragnis, founder and Chief ExecutiveOfficer of the Company stated: "The recovery in the dry-bulk market in the second half of the year, combinedwith our long-standing and extensive relationships with top tier chartercounterparties and our enlarged fleet have enabled us to take on bulk-carrier charters at rates significantly improved from those prevailing during the firsthalf of the year and balanced the profitability for the year. This wassupplemented by the long-term chartering of the container segment of the fleet, which allowed the Company to maintain profitability in a weakening ratesenvironment. Consistent with the strategy outlined at the time of our Initial Public Offeringin April 2006 we have enlarged our fleet through the acquisition of three largecontainer vessels and one cape-size bulk carrier, thus improving the mix andrevenue capacity. The post-panamax container 'Fortune', which was acquired in afire-damaged condition in June, currently is in COSCO Zhouzhan yard in Chinafor the final reconstruction phase of the project and will be ready to contribute to profitability in the early part of 2008. Since April 2006, the fleet has grown to 21 vessels with double the TEU capacityin the container segment and increased DWT capacity in the dry-bulk by 25%. The strong free cash flow generated from the business in 2006 and the balance ofthe proceeds of our IPO provide resources for the continued expansion of thefleet and the increase in the revenue capacity whilst maintaining an appropriate balance between dry-cargo and containers sectors. With the second-hand vessel prices of dry-bulk vessels at record levels,strategic partnerships with first class partners provide a healthier way forstable growth and weathering the cycle. New building vessels acquired at reasonable prices under such a partnership arrangement, strengthen the fleet andcreate a sound base for healthy expansion irrespective of market conditions. We remain confident on the outlook of the dry-bulk and container markets for2007. The employment status of the majority of our dry-bulk fleet is favourablypositioned to take advantage of the current booming dry markets and to stronglysupport our 2007 financial performance. As far as our fleet expansion program is concerned we continue to evaluate andconsider a number of sensible opportunities to enhance our fleet mainly in thecontainers segment. Finally, we must remain cautious against the currentprevailing dry-bulk vessel sales prices and grow selectively."Enquiries: Goldenport:Christos Varsos, Chief Financial Officer: Today: +30 694 429 4839 Thereafter: +30 210 8910 500John Dragnis, Commercial Director Today: +30 694 668 8180 Thereafter: +30 210 8910500Smithfield:John Kiely / Will Swan: +44 (0)20 7360 4900 Operational Review: 2006 market conditions: The dry bulk market during the first six months of 2006 declined on average by39% compared to the same period in 2005 (source: Baltic Dry Index). However,the effect of this decline on the Company's results was mitigated by our charterstrategy, which resulted in approximately half of our dry-bulk fleet being fixedfor most of the period at previously prevailing higher rates. The remainder of the bulk carrier fleet was employed on short term timecharters, in order to maintain some flexibility. This allowed the Company totake advantage of the recovering dry-bulk freight market since June, by contracting charters for longer periods at increasingly attractive rates. Overall the Baltic Dry Index average for 2006 was 6% lower compared to theaverage of 2005 (BDI 2006: 3,180 units, BDI 2005: 3,371 units). The mix of longand shorter term charters and the addition of one cape-size vessel under time charter allowed the Company to weather the low market and increase itsprofitability both in terms of revenue and EBITDA. The 2006 container market declined on average by 32% compared to 2005 (source:Howe Robinson Containers Index). Again this did not affect the results of theCompany as the entire container fleet had previously been fixed on long-term charters, with some contracts extending out to 2009. In the second half of theyear the vessel 'MSC Scotland' was acquired and a three year time charter wasagreed contributing to the profitability of the year. Current Market outlook: The dry-bulk market is presently experiencing a strong recovery in the rateenvironment. As of the second week of March 2007 the dry-bulk rates are 58%higher than 2006 average (12 March 2007 BDI 5,041 units, 2006 average BDI 3,180units). Goldenport is well placed to benefit from this recovery, as a largepercentage of the bulk-carrier fleet becomes available for re-chartering withinthe year. This advantageous position has already been illustrated through therecent fixtures of both of our cape-size vessels 'Samos' and 'Vasos' which arecurrently trading at much higher rates than previously. The container market is currently showing signs of slight recovery. However,even if this recovery is not maintained, Goldenport is not at significant riskdue to the fact that the current fleet with the exception of one vessel is already fixed for the full year. The vessel not yet fixed for the remainder ofthe year is one of the smallest vessels in terms of size and revenue capacity.The newly acquired vessel 'West Gate Bridge' which will be delivered in March 2007 has been chartered for US$16,500 per day for three years from delivery. Fleet expansion: Since the Initial Public Offering in April 2006, Goldenport expanded the fleetwith four additional vessels, of which three were containers and one was a bulkcarrier. The vessel acquisitions were completed by 31 December 2006 with onevessel to be delivered in March 2007. Currently Goldenport controls 21 vesselsand has doubled the TEU capacity in the container segment and increased by 25%the DWT capacity in the dry-bulk segment, compared to the IPO fleet. On 13th March 2007 Goldenport entered into a Joint Venture agreement withGlencore International AG, for the acquisition of two new-build 53,800 DWT bulkcarriers (to be delivered in 2008). This is an illustration of our strategy toestablish strong relationships with key charterers and to expand the existingfleet. The fleet expansion in 2006 is described below: In June 2006, Goldenport acquired two vessels. • The first vessel, the MV 'Bengal Sea', has 47,120 deadweight, with nominal intake of 3,007 TEU. The vessel was delivered in 1992 to HDW shipyards Germany, and was acquired for a total consideration of US$ 29.1 million. At the time of acquisition the vessel was employed until September 2006, with Zim Lines at a daily rate of US$ 22,500. Since September the vessel entered into a three year time charter contract for a daily rate of US$ 20,770 and was renamed to MSC Scotland. • Goldenport has also successfully participated in the tender process, invited by Hyundai Marine & Fire and Insurance Co. Ltd., for the acquisition of the fire damaged 'Hyundai Fortune' 68,537 deadweight with nominal intake of 5,551 TEU. The vessel was built in 1996 at Hyundai Ulsan, Korea and suffered cargo fire damage on March 21st, 2006. The bid for the acquisition of the damaged vessel was US$ 13 million. After intermediary repairs was towed from Dubai to China and is currently in COSCO Zhouzhan yard for the final repairs and reconstruction phase of the project. The repairs in accordance with our initial plan should be concluded in late 2007 or early 2008 so the vessel is expected to contribute to 2008 profitability. In July 2006, Goldenport acquired one cape-size bulk carrier. • The acquired vessel was the cape-size bulk carrier MV 'Orient Alliance', 152,065 deadweight. The vessel was delivered in 1990 to Mitsui Tamano Shipyards Japan and was acquired for an aggregate purchase price of US$ 27.3 million. Upon delivery, the 'Orient Alliance' was immediately renamed to 'Vasos' and employed under the existing time-charter with Bocimar NV at a daily rate of US$16,000 until February 2007. A time charter agreement was agreed with Glencore International AG for a period of forty-five to fifty-one months at a daily rate of US$ 23,950 commencing in May 2007. In the interim the vessel is employed under short term time charters benefiting from the current strong spot market conditions. In December 2006, Goldenport agreed to acquire one more container vessel. • The acquired vessel was the West Gate Bridge, a sub-panamax container vessel, with 40,928 MT deadweight and nominal intake of 3,032 TEU. The vessel was first delivered in 1986 to Kawasaki Heavy Industries, Japan and was acquired for an aggregate purchase price of US$ 17.0 million. The vessel will be delivered to Goldenport in mid-March 2007 and has been chartered for three years from delivery at a daily rate of US$16,500. The vessel will be renamed to MSC Finland. Final dividend: The Board of Directors has today proposed a final dividend of 11.9 pence pershare, (making a final payout of £ 8.3 million). In total, including theinterim dividend already paid in October 2006, the total dividend for 2006 is17.5 pence per share (or £ 12.2 million), representing approximately 52% of theCompany's net income for the year. The dividend payment will be approved by theshareholders in the AGM to be held on 17 May 2007 and subsequently will be payable on 21 May, 2007 to shareholders of record as of 20 April 2007. The ex-dividend date is 18 April 2007. Summary of Selected Financial and Operating Data: Year endedINCOME STATEMENT DATA (in US$ 31 December 31 Decemberthousand): 2006 2005 ___________ ___________Revenue 90,651 83,649EBITDA 54,888 53,815EBIT 41,747 45,156Net Income 45,188 43,256 FLEET DATA:Average number of vessels 18 17Number of vessels at end of period 20 17Number of vessels in operation at end of period 19 17Ownership days 6,558 (1) 6,205Available days 6,355 (1) 5,986Operating days 6,249 (1) 5,951Fleet utilisation 98.3% 99.4% AVERAGE DAILY RESULTS (in US$):Time Charter Equivalent (TCE) rate 13,243 (2) 13,009Average daily vessel operating expenses 3,791 (1) 3,311 (1): Ownership days and average daily vessel operating expenses exclude thevessel 'Fortune' which was not operating within the period and the vessel 'WestGate Bridge' which will be delivered to the Company in mid-March 2007 (2): TCE rate excludes other income of US$457 relating to income from insurance claim for the vessel 'Alex D' See Appendices, for Notes on the Summary of Selected Financial and OperatingData and for full Fleet Employment profile as of 13th March 2007. Time and Voyage Charter Revenues: Revenues increased by US$ 7.0 million or 8.4%to US$ 90.7 million for the year ended 31 December 2006 (2005: US$ 83.7million). The main reasons for this increase were: (i) the revenue generatedfrom the newly acquired vessels 'Vasos' and 'MSC Scotland' in the second halfof the year; (ii) the strengthening of the dry-bulk market in the second halfof the year, which Goldenport took advantage off through a mix of short andmedium charters especially of the vessels 'Alex D', 'Limnos' and 'Gianni D'.The strong second half in the dry-bulk segment outperformed the weak first halfand brought a balance to the year's profitability. Voyage expenses: The voyage expenses, including related party voyage expenses,increased by US$ 0.2 million or 4.4% to US$ 6.0 million for the year ended 31December 2006 (2005: US$ 5.8 million) mainly due to increased revenue figure to which these expenses apply. Vessel operating expenses and general and administrative expenses: Vesseloperating expenses increased by US$ 3.8 million or 18.4% to US$ 24.8 millionfor the year ended 31 December 2006 (2005: US$ 21.0 million). The main reasonsfor the increase were: (i) the addition of two vessels which operated in thesecond half of the year, (ii) both vessels acquired were of a larger size thanthe vessels previously in the fleet, affecting the mix of the operatingexpenses, in all categories; (iii) a stepped increase in crew wages of theUkrainian crew, that became effective in early 2006; (iv) the increase in costof lubricants mainly due to the movement of oil prices; (v) the increase ininsurance premiums for the newly acquired vessels, due to higher vessels'prices. General and administrative expenses increased by US$ 1.5 millionreflecting incremental listing related expenses. Depreciation and amortisation of dry-docking: The depreciation charge increasedfor the year to 31 December 2006 by US$ 2.3 million to US$ 7.5 million (2005:US $5.2 million), due to the impact of the depreciation of the newly acquired vessels. Depreciation of dry-docking costs increased by US$ 2.2 million or 63%to US$ 5.7 million for the year ended 31 December 2006 (2005: US$ 3.5 million)mainly due to: (i) the dry-docking of five vessels in 2006 and (ii) in thesecond part of 2005 six vessels underwent dry-docking and the amortisation ofthis expense is affecting 2006 numbers. In the first half of 2005 no vesselunderwent scheduled dry-docking. Financing costs: Finance expense increased by US$ 0.6 million or 18% to US$ 4.1million for the year ended 31 December 2006 (2005: US$ 3.5 million), mainly dueto the increased debt utilised for the expansion of the fleet. During the yearthe Company achieved lower margins on the loans for new ships and reduced themargins for the existing loans, controlling the Company's interest rateexposure. Finance income increased significantly by US$ 2.2 million to US$ 3.1million due to higher interest rates on a higher level of deposits generatedfrom operations and the residual proceeds of the initial public offering. Free cash flow: The Company as of December 31st 2006 has a marginal net cashposition (2005: net debt position). From the initial public offering netproceeds of US$ 107 million, US$ 25.8 were utilised to repay debt, US$ 36.1million were utilised as equity participation in the acquisition of the threevessels acquired in the year and for the deposit to secure the acquisition ofthe 'West Gate Bridge' and finally US$ 10 million were paid for thereconstruction of the vessel 'Fortune'. As of December 31st, 2006 Goldenporthad US$ 81.4 million of cash which includes the balance of the proceeds fromthe IPO, cash generated through operations and interest income and the secondtrance of US$ 10 million of the loan for the reconstruction of 'Fortune' thatwas drawn in late December 2006. Events after the reporting date: Waiver of increase in management fee: On 5 January 2007 GoldenportShipmanagement agreed with the Group to waive the right to a 5% increase in themanagement fee. Therefore, the management fee for 2007 will remain at US$ 15,750per vessel per month. Sale of vessel: In February 2007, Goldenport entered into firm negotiations forthe sale of the 1977-built Handymax vessel Vana, for a gross consideration ofUS$ 5.5 million. The vessel was fully depreciated to scrap value and the net carrying amount in the financial statements as of December 31st, 2006 was US$1.6 million. Joint Venture with Glencore International AG: On 13 March 2007, Goldenportentered into a 50:50 Joint Venture Agreement with Glencore International AGwith the objective to construct two 53,800 DWT bulk carrier vessels in JiangsuEastern Shipyard of China, which are expected to be delivered in the secondpart of 2008. The construction price for each vessel is US$ 32 million each(US$ 64 million in total). The first vessel will be chartered to first-classSouth Korean charterers for a three year period starting from delivery at adaily rate of US$ 18,000. The second vessel, upon delivery, will becommercially managed by Glencore. Overview of Goldenport: Goldenport is an international shipping company that owns and operates a fleetof dry bulk and container vessels that transport cargo worldwide. The fleetconsists of ten dry bulk carriers and eleven container vessels, (including thevessel West Gate Bridge to be delivered in March 2007). Goldenport is listed onthe London Stock Exchange under the ticker GPRT. Goldenport's strategy: Goldenport's primary objective is to manage its fleet in a manner that allows itto maximise returns for shareholders and maintain profitability across theshipping cycles. To accomplish this objective, Goldenport has identified thefollowing strategies, which build upon its existing strengths: • Employment of vessels in a manner that provides stable cash flows • Effective management of the size and nature of the fleet with a view to expansion of the company • Maintain exposure to both the dry bulk and container sectors • Attraction and retention of blue-chip customers • Capitalise on established reputation • Maintenance of a strong balance sheet with low leverage Goldenport Holdings Inc. Consolidated Financial Statements 31 December 2006 The consolidated financial statements are presented in US dollars and allfinancial values are rounded to the nearest thousand ($000) except the per share information. Independent Auditors' Reportto the Shareholders of Goldenport Holdings Inc. We have audited the accompanying financial statements of Goldenport HoldingsInc. and its subsidiaries ('the Group'), which comprise the consolidated balancesheet as at 31 December 2006 and the consolidated income statement, consolidatedstatement of changes in equity and consolidated cash flow statement for the yearthen ended, and a summary of significant accounting policies and otherexplanatory notes. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of thesefinancial statements in accordance with International Financial ReportingStandards. This responsibility includes: designing, implementing and maintaininginternal control relevant to the preparation and fair presentation of financialstatements that are free from material misstatement, whether due to fraud orerror; selecting and applying appropriate accounting policies; and makingaccounting estimates that are reasonable in the circumstances. Auditors' Responsibility Our responsibility is to express an opinion on these financial statements basedon our audit. We conducted our audit in accordance with International Standardson Auditing. Those standards require that we comply with ethical requirementsand plan and perform the audit to obtain reasonable assurance whether thefinancial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about theamounts and disclosures in the financial statements. The procedures selecteddepend on the auditors' judgment, including the assessment of the risks ofmaterial misstatement of the financial statements, whether due to fraud orerror. In making those risk assessments, the auditor considers internal controlrelevant to the entity's preparation and fair presentation of the financialstatements in order to design audit procedures that are appropriate for thecircumstances, but not for the purpose of expressing an opinion on theeffectiveness of the entity's internal control. An audit also includesevaluating the appropriateness of accounting policies used and thereasonableness of accounting estimates made by management, as well as evaluatingthe overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion. Opinion In our opinion, the consolidated financial statements give a true and fair viewof the financial position of the Group as of 31 December 2006, and of itsfinancial performance and its cash flows for the year then ended in accordancewith International Financial Reporting Standards. Ernst & Young (Hellas) Certified Auditors - Accountants S.A.13 March 2007 CONSOLIDATED INCOME STATEMENTFor the year ended 31 December 2006 Notes 2006 2005 U.S.$'000 U.S.$'000 Revenue Expenses 90,651 83,649 _________ _________ Voyage expenses 3 (4,221) (4,105)Voyage expenses - related party 3,21 (1,813) (1,673)Vessel operating expenses 3 (24,860) (20,996)Management fees - related party 21 (3,393) (3,060)Depreciation 9 (7,488) (5,198)Depreciation of dry-docking costs 9 (5,653) (3,461)General and administrative expenses 6 (1,476) - _________ _________Operating profit 41,747 45,156Finance expense 4 (4,145) (3,502)Finance income 5 3,158 922Foreign currency gain, net 4,428 680 _________ _________Profit for the year attributable to Goldenport Holdings Inc. shareholders 45,188 43,256 ========= =========Earnings per share (U.S.$): - Basic and diluted EPS for the year 7 0.72 1.03 Weighted average number of shares 62,533,312 41,800,000 CONSOLIDATED BALANCE SHEETAs at 31 December 2006 Notes 2006 2005 U.S.$'000 U.S.$'000 ASSETSNon-current assetsVessels 9 131,720 84,421Vessel under reconstruction 11 23,068 -Advances for vessel acquisition 10 1,700 -Other non-current assets 14 185 184 _________ _________ 156,673 84,605 _________ _________Current assetsInventories - 324Trade receivables 12 1,275 320Insurance claims 13 1,305 259Due from related parties 21 811 9,860Prepaid expenses and other assets 887 458Unpaid share capital 17 - 418Restricted Cash 16 1,166 1,396Cash and cash equivalents 15 81,372 - _________ _________ 86,816 13,035 _________ _________TOTAL ASSETS 243,489 97,640 ========= ========= EQUITY AND LIABILITIESEquity attributable to shareholdersof Goldenport Holdings Inc.Issued share capital 17 699 418Share premium 17 106,991 -Retained earnings 41,838 4,492 _________ _________Total equity 149,528 4,910 _________ _________ Non-current liabilitiesLong-term debt 18 60,727 52,538 _________ _________ 60,727 52,538 _________ _________Current liabilitiesTrade payables 6,941 5,057Current portion of long-term debt 18 19,900 23,150Accrued liabilities and other payables 19 3,754 2,310Deferred revenue 2,639 3,175Dividends payable 8 - 6,500 _________ _________ 33,234 40,192 _________ _________Total Liabilities 93,961 92,730 _________ _________TOTAL EQUITY AND LIABILITIES 243,489 97,640 ========= ========= CONSOLIDATED STATEMENT OF CHANGES IN EQUITYFor the year ended 31 December 2006 Number of Par Issued Share Retained Total shares value share premium earnings equity U.S.$ capital U.S.$'000 U.S.$'000 U.S.$'000 U.S.$'000 At 1 January 2005 41,800,000 0.01 418 - - 418 Profit for the year - - - - 43,256 43,256 Dividends declared and approved to equityshareholders - - - - (38,764) (38,764) __________________________________________________________________At 31 December 2005 41,800,000 0.01 418 - 4,492 4,910 __________________________________________________________________ Pulling of interest adjustment - - - - (418) (418) Proceeds from initial public offering,gross (note 17) 28,085,106 0.01 281 115,184 - 115,465 Transaction costs on initial publicoffering, (note 17) - - - (8,193) - (8,193) Profit for the year - - - - 45,188 45,188 Dividends declared, approved and paid to equity shareholders - - - - (7,424) (7,424) __________________________________________________________________At 31 December 2006 69,885,106 0.01 699 106,991 41,838 149,528 ================================================================== CONSOLIDATED CASH FLOW STATEMENTFor the year ended 31 December 2006 Notes 2006 2005 U.S.$'000 U.S.$'000Operating activities Profit for the year 45,188 43,256 _________ _________Adjustments to reconcile profit to net cash flows:Depreciation 7,488 5,198Depreciation of dry-docking costs 5,653 3,461Finance expense 4,145 3,502Finance income (3,158) (922)Foreign currency gain, net (4,428) (680 _________ _________) 54,888 53,815Inventories 324 (324)(Increase)/ decrease in trade receivables, prepaid expenses and other assets (1,274) 271(Increase)/ decrease in insurance claims (1,046) 207Increase in trade payables, accrued liabilities and other payables 3,221 216Decrease in deferred revenue (536) (377) _________ _________Net cash flows from operating activities before movement in amounts due from related parties 55,577 53,808Due from related parties 9,049 (9,195) _________ _________Net cash flows from operating activities 64,626 44,613 Investing activitiesAcquisition/ improvement of vessels (56,475) (39)Dry-docking costs (3,965) (5,937)Advances for vessel under reconstruction 11 (22,975) -Advances for vessel acquisition (1,700) -Interest received 3,036 922 _________ _________Net cash flows used in investing activities (82,079) (5,054) Financing activitiesProceeds from issue of long -term debt 54,707 59,803Repayment of long-term debt (49,925) (45,485)Proceeds from initial public offering 115,465 -Issuance costs (8,193) -Restricted cash 230 (638)Interest paid (3,471) (3,777)Dividends paid (13,924) (49,462) _________ _________Net cash flows provided by/ (used in) financing activities 94,889 (39,559) _________ _________ Net increase in cash and cash equivalents 77,436 -Net foreign exchange difference 3,936 -Cash and cash equivalents at 1 January - - _________ _________Cash and cash equivalents at 31 December 15 81,372 - ========= ========= NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 1. Formation, Basis of Presentation and General Information Goldenport Holdings Inc. ('Goldenport' or the 'Company') was incorporated underthe laws of Marshall Islands, as a limited liability company, on 21 March 2005.On April 5, 2006 Goldenport Holdings Inc. was admitted in the Official List andstarted trading at the London Stock Exchange ("LSE") at a price of GBP 2.35 pershare. On 11 April 2006 the over allotment option was exercised at a price ofGBP 2.35 per share. In total, the Company, received from its listing in the LSEan amount of GBP 66million (or U.S.$115.5 million) with the intention topartially repay debt and to fund further fleet expansion. The address of the registered office of the Company is Trust Company Complex,Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960. The addressof the head office of the Company is Status Center, 41 Athinas Avenue, 166-71Vouliagmeni, Greece. Goldenport as of 31 December 2006 is the holding Company for twenty (20)intermediate holding companies, each in turn owning a vessel-owning company, aslisted in the table below. Goldenport is also the holding Company of one moreintermediate holding company, owning Cierzo Maritime Co., which will be thevessel-owning company of M/V West Gate Bridge, upon delivery of the vessel(expected to take place within March 2007). Each of the vessel-owning companies, listed below, operate dry bulk carriers andcontainer vessels that transport cargo worldwide. The annual consolidated financial statements were authorised for issue inaccordance with a resolution of the Board of Directors on 13 March 2007 and isexpected to be approved by the Annual General Meeting of the shareholders. Itincludes the financial statements of the Company and the following wholly ownedsubsidiaries (altogether the "Group"): Intermediate Vessel - owning Country of Name of Year of Type ofholding company company Incorporation Vessel acquisition Vessel of owned by of vessel vessel-owning Subsidiary companyMarta Trading Superb Maritime Panama Glory D 1997 ContainerCo. S.A.Daphne Marine Dancing Waves Malta Tuas 1998 ContainerCorp. Co. Ltd. ExpressOates Trading Risa Maritime Malta Vana 1999 BulkCorp. Co. Ltd. CarrierPortia Borealis Malta MSC 1999 ContainerNavigation Co. Shipping Co. Himalaya Ltd.Aloe Navigation Karana Ocean Malta Alex D 1999 BulkInc. Shipping Co. Carrier Ltd.Dumont Black Rose Malta Beauty 2001 ContainerInternational Shipping Ltd.Inc.Royal Bay Opal Maritime Malta Achim 2001 ContainerMarine Ltd LimitedAudrey Marine Wild Orchid Malta MSC 2001 ContainerCorp. Shipping Ltd. EmiratesSicuro Hampton Trading Liberia MSC 2002 ContainerShipmanagement S.A. SocotraSAPlatinum Coral Sky Malta Gianni D 2002 BulkShipholding SA Marine Ltd. CarrierNemesis Samos Maritime Malta Samos 2002 BulkMaritime Inc. Ltd. CarrierMeredith Guilford Marine Panama Ios 2002 BulkTrading S.A. CarrierCorporationRawlins Trading Fairland Panama Athos 2002 BulkLtd Trading S.A. CarrierBlaze Nilwood Comp. Panama Howrah 2003 ContainerNavigation Inc. BridgeCorp.Carrier Black Diamond Malta Lindos 2003 BulkMaritime Co, Shipping Ltd. CarrierMedina Trading Carina Maritime Malta Tilos 2004 BulkCo. Co. Ltd. CarrierSavannah Marine Serena Malta Limnos 2004 BulkInc. Navigation Ltd. CarrierSirene Maritime Alvey Marine Liberia MSC 2006 ContainerCo Inc. Scotland (ex.Bengal Sea)Kariba Shipping Kosmo Services Marshall Fortune 2006 ContainerSA Inc. IslandsMuriel Maritime Ipanema Marshall Vasos 2006 BulkCo. Navigation Islands (ex.Orient Carrier Corp. Alliance)Baydream Cierzo Maritime Marshall West Gate 2007* ContainerShipping Inc. Co. Islands Bridge * The vessel West Gate Bridge is expected to be delivered by March 2007. 2. Summary of significant accounting policies (a) Basis of preparation: The Group's financial statements havebeen prepared on a historical cost basis, except for derivative financialinstruments that have been measured at fair value. The consolidated financialstatements are presented in US dollars and all financial values are rounded tothe nearest thousand ($000) except the per share information. (b) Statement of compliance: The consolidated financialstatements have been prepared in accordance with International FinancialReporting Standards (IFRS) as adopted by the European Union. (c) Basis of Consolidation: The consolidated financialstatements comprise the financial statements of the Company and its subsidiarieslisted in note 1. The financial statements of the subsidiaries are prepared forthe same reporting date as the Company, using consistent accounting policies.All material inter-company balances and transactions have been eliminated uponconsolidation. Subsidiaries are consolidated from the date on which control istransferred to the Group and cease to be consolidated from the date on whichcontrol is transferred out of the Group. (d) Transactions between companies under common control:Transactions between companies under common control are excluded from the scopeof IFRS 3. (e) Use of Estimates: The preparation of consolidated financialstatements requires management to make estimates and assumptions that affect thereported amounts of assets and liabilities and disclosure of contingent assetsand liabilities at the date of the consolidated financial statements and thereported amounts of revenues and expenses during the year. Actual results coulddiffer from those estimates. The estimates and assumptions that have the most significant effect on theamounts recognised in the consolidated financial statements, are estimations inrelation to useful lives of vessels (vessels have a carrying amount ofU.S.$131,720 and U.S.$84,421 as at 31 December 2006 and 2005, respectively),provision for doubtful trade receivables (trade receivables have a carryingamount of U.S.$1,275 and U.S.$320 as at 31 December 2006 and 2005, respectively)and estimations about the result of insurance claims (insurance claims have acarrying amount of U.S.$1,305 and U.S.$259 as at 31 December 2006 and 2005,respectively). (f) Revenues and Related Expenses: The Group generates itsrevenues from charterers for the charter hire of its vessels. Vessels arechartered using either voyage charters, where a contract is made in the spotmarket for the use of a vessel for a specific voyage for a specified charterrate; or time charters, where a contract is entered into for the use of a vesselfor a specific period of time and a specified daily charter hire rate. If acharter agreement exists and collection of the related revenue is reasonablyassured, revenue is recognised as it is earned, rateably over the duration ofthe year of each voyage or time charter. A voyage is deemed to commence upon thecompletion of discharge of the vessel's previous cargo and is deemed to end uponthe completion of discharge of the current cargo. Deferred revenue represents cash received prior to the balance sheet date whichrelates to revenue earned after such date. On time-charters, the charterer perindustry practice pays the revenue related to the specific agreement in advance.Therefore, as of balance sheet date, the amount of revenue relating to the nextfinancial year that was paid by the charterer is presented in deferred revenue. Vessel voyage expenses primarily consisting of port, canal and bunker expensesthat are unique to a particular charter are paid for by the charterer under timecharter arrangements or by the Group under voyage charter arrangements.Furthermore, voyage expenses include commission on income. This commission ispaid by the Group. The Group defers bunker expenses under voyage charteragreements and amortises them over the related voyage charter year to the extentrevenue has been recognised. Port and canal costs are accounted for on an actualbasis. Other operating expenses are accounted on an accrual basis. (g) Foreign Currency Translation: The functional currency of theCompany is the U.S. dollar which is also the presentation currency of the Groupbecause the Group's vessels operate in international shipping markets, wherebythe U.S. dollar is the currency used for transactions. Transactions involvingother currencies during the year are converted into U.S. dollars using theexchange rates in effect at the time of the transactions. At the balance sheetdates, monetary assets and liabilities, which are denominated in currenciesother than the U.S. dollar, are translated into the functional currency usingthe year-end exchange rate. Gains or losses resulting from foreign currencytransactions are included in foreign currency gain or loss in the consolidatedincome statements. (h) Cash and Cash Equivalents: The Group considers highly liquidinvestments such as time deposits and certificates of deposit with an originalmaturity of three months or less to be cash equivalents. (i) Restricted Cash: Certain of the Group's loan agreementsrequire the Group to deposit funds into a loan retention account in the name ofthe borrower. The amount deposited is equivalent to the monthly portion of thenext capital and interest payment. The amount is not freely available to theGroup, and it is used for repaying interest and principal on the loan. (j) Inventories: Inventories consist of bunkers and are statedat the lower of cost or net realisable value. Cost is determined by the first-infirst-out method. Since all vessels were under time-charter agreements nobunkers inventory is shown as of 31 December 2006. Within 2006 the amount ofU.S$ 324 of bunker inventories as at 31 December 2005, was expensed in theincome statement. (k) Trade Receivables: The amount shown as trade receivables ateach balance sheet date includes estimated recoveries from charterers for hire,freight and demurrage billings, net of an allowance for doubtful accounts. Tradereceivables are recognised and carried at the lower of their original invoicedvalue and recoverable amount. At each balance sheet date, all potentiallyuncollectible accounts are assessed individually for the purpose of determiningthe appropriate allowance for doubtful accounts. (l) Insurance Claims: The Group recognises insurance claimrecoveries for insured losses incurred on damage to vessels. Insurance claimrecoveries are recorded, net of any deductible amounts, at the time the Group'svessels suffers insured damages. They include the recoveries from the insurancecompanies for the claims, provided the amounts are certain to be received.Claims are submitted to the insurance company, which may increase or decreasethe claim amount. Such adjustments are recorded in the year they become knownand have not been material to the Group's financial position or results ofoperation in 2006 and 2005. (m) Vessels: The vessels are stated at cost, net of accumulateddepreciation and accumulated impairment. Vessel cost consists of the contractprice for the vessel and any material expenses incurred upon acquisition of thevessel (initial repairs, improvements, delivery expenses and other expendituresto prepare the vessel for its initial voyage). Subsequent expenditures for majorimprovements are also capitalised when it is probable that future economicbenefits associated with the improvement will flow to the entity and the cost ofthe improvement can be measured reliably. The cost of each of the Group'svessels is depreciated beginning when the vessel is ready for its intended use,on a straight-line basis over the vessels' remaining economic useful life, afterconsidering the estimated residual value. Management estimates the useful lifeof new vessels at 25 years, which is consistent with industry practice. Acquiredsecond-hand vessels are depreciated from the date of their acquisition overtheir remaining estimated useful life. The remaining useful life of the Group'svessels, other than those fully depreciated, is between 1 and 17 years. A vesselis derecognized upon disposal or when no future economic benefits are expectedfrom its use. Any gain or loss arising on derecognition of the vessel(calculated as the difference between the net disposal proceeds and the carryingamount of the vessel) is included in the income statement in the year the vesselis derecognized. (n) Impairment of vessels: The Group's vessels are reviewed forimpairment in accordance with IAS 36, "Impairment of Assets." Under IAS 36, theGroup assesses at each reporting date whether there is an indication that avessel may be impaired. If such an indication exists, the Group makes anestimate of vessels recoverable amount. Any impairment loss of the vessel isassessed by comparison of the carrying amount of the asset to its recoverableamount. Recoverable amount is the higher of the vessel's fair value less coststo sell and its value in use. If the recoverable amount is less than the carrying amount of the vessel, theasset is considered impaired and an expense is recognised equal to the amountrequired to reduce the carrying amount of the vessel to its then recoverableamount. Fair value of vessels is determined by independent marine appraisers. Ifon receipt of valuation from appraiser impairment is indicated, the Groupproceeds to prepare impairment analysis. The impairment analysis is made at the individual vessel level since separatelyidentifiable cash flow information is available for each vessel. In developingestimates of future cash flows, the Group makes assumptions about future charterrates, vessel operating expenses, and the estimated remaining useful lives ofthe vessels. These assumptions are based on historical trends as well as futureexpectations. The Group regularly reviews its vessels for impairment on a vesselby vessel basis. No impairment loss was recognised by the Group for the yearsended 31 December 2006 and 2005. (o) Deferred Dry-Docking Costs: From time to time the Group'svessels are required to be dry-docked for inspection and re-licensing at whichtime major repairs and maintenance that cannot be performed while the vesselsare in operation are generally performed. The Group defers the costs associatedwith dry-docking as they occur by capitalising them together with the cost ofthe vessel and depreciates these costs on a straight-line basis over the yearuntil the next scheduled dry-docking, generally 2.5 years. In the cases wherebythe dry-docking takes place earlier than 2.5 years since the previous one, thecarrying amount of the previous dry-docking is derecognised. In the event of avessel sale, the respective carrying values of dry-docking costs are written-offat the time of sale. At the date of acquisition of a second-hand vessel, management estimates thecomponent of the cost that corresponds to the economic benefit to be deriveduntil the first scheduled dry-docking of the vessel under the ownership of theGroup, and this component is depreciated on a straight-line basis over theremaining period to the estimated dry-docking date. (p) Long-term debt: Long-term debt is initially recognised atthe fair value of the consideration received net of issue costs directlyattributable to the borrowing. After initial recognition, long-term debt issubsequently measured at amortised cost using the effective interest ratemethod. Amortised cost is calculated by taking into account any issue costs, andany discount or premium on settlement.Gains and losses are recognized in net profit or loss when the liabilities arederecognized or impaired, as well as through the amortization process. (q) Borrowing costs: The borrowing costs are expensed to theincome statement, except from borrowing costs on loans specifically used tofinance the construction, or reconstruction of vessels which are capitalisedduring the construction period. (r) Derivative financial instruments and hedging. The Groupuses derivative financial instruments such as interest rate swaps to hedge itsrisks associated with interest rate fluctuations. Such derivative financialinstruments are initially recognised at fair value on the date on which aderivative contract is entered into and are subsequently remeasured at fairvalue. Derivatives are carried as assets when the fair value is positive and asliabilities when the fair value is negative.The fair value of forward currency contracts is calculated by reference tocurrent forward exchange rates for contracts with similar maturity profiles. Thefair value of interest rate swap contracts is determined by reference to marketvalues for similar instruments.Any gains or losses arising from changes in the fair value of derivatives thatdo not qualify for hedge accounting are taken to the income statement. (s) Segment Reporting: The Group reports financial informationand evaluates its operations by charter revenues and not, for example, by (i)the length of ship employment for its customers, i.e. spot or time charters; or(ii) type of vessel. Management, including the chief operating decision maker,reviews operating results solely by revenue per day and operating results of thefleet and thus the Group has determined that it operates under one reportablesegment. Furthermore, when the Group charters a vessel to a charterer, thecharterer is free to trade the vessel worldwide and, as a result, the disclosureof geographic information is impracticable. (t) Accounting for joint ventures (see note 24): A jointventure is an entity jointly controlled by the Group and one or more otherventures in terms of a contractual arrangement. The Group's interest in jointlycontrolled entities is accounted for by the proportional consolidation method ofaccounting. The Group combines its share of the joint ventures' individualincome and expenses, assets and liabilities and cash flows on a line-by-linebasis with similar items in the Group's financial statements. The Grouprecognises the portion of gains or losses on the sale of assets by the Group tothe joint venture that is attributable to the other ventures. (u) IFRS and IFRIC Interpretations not yet effective: The Grouphas not applied the following IFRS and IFRIC Interpretations that have beenissued but are not yet effective: - IFRS 7, Financial Instruments: Disclosures, and a complementaryamendment to IAS 1, Presentation of Financial Statements - Capital Disclosures(effective for financial years beginning on or after 1 January 2007). The Groupassessed the impact of IFRS 7 and the amendment to IAS 1 and concluded that themain additional disclosures will be the sensitivity analysis to market risk andthe capital. - IFRS 8, Operating Segments (effective for financial years beginningon or after 1 January 2009). It is not relevant to the Group's operations. ThisStandard has not yet been endorsed by the EU. - IFRIC 7, Applying the Restatement Approach under IAS 29 FinancialReporting in Hyperinflationary Economies (effective for financial yearsbeginning on or after 1 March 2006).It is not relevant to the Group'soperations. - IFRIC 8, Scope of IFRS 2 (effective for financial years beginning onor after 1 May 2006). It is not relevant to the Group's operations. - IFRIC 9, Reassessment of Embedded Derivatives (effective forfinancial years beginning on or after 1 June 2006). It is not relevant to theGroup's operations. - IFRIC 10, Interim Financial Reporting and Impairment (effective forfinancial years beginning on or after 1 November 2006). This Interpretation hasnot yet been endorsed by the EU. It is not expected to affect the Group'sfinancial position.. - IFRIC 11, IFRS 2-Group and Treasury Share Transactions (effective forfinancial years beginning on or after 1 March 2007). It is not relevant to theGroup's operations. This Interpretation has not yet been endorsed by the EU. - IFRIC 12, Service Concession Arrangements (effective for financialyears beginning on or after 1 January 2008). It is not relevant to the Group'soperations. This Interpretation has not yet been endorsed by the EU. (v) IFRS and IFRIC Interpretations that became effective in theyear ended 31 December 2006: The following Standards and Interpretations becameeffective within the year ended 31 December 2006. None of the Standards andInterpretations (other than IFRIC 4) had an impact in the consolidated financialstatements. - IAS 1 and IAS 19 Amendment - Actuarial Gains and Losses, Group Plansand Disclosures - IAS 21 Amendment - The Effects of Changes in Foreign Exchange Rates - IAS 39 Amendment - Cash Flow Hedge Accounting of Forecast Intra-groupTransactions - IAS 39 Amendment - The Fair Value Option - IAS 39 and IFRS 4 Amendment - Financial Guarantee Contracts - IFRS 6 - Exploration for and Evaluation of Mineral Resources - IFRIC 4 - Determining whether an Arrangement Contains a Lease: TheGroup adopted IFRIC Interpretation 4 as of 1 January 2006, which providesguidance in determining whether arrangements contain a lease to which leaseaccounting must be applied. - IFRIC 5 - Rights to Interests arising from Decommissioning,Restoration, and Environmental Rehabilitation Funds - IFRIC 6 - Liabilities arising from Participating in a Specific Market- Waste Electrical and Electronic Equipment 3. Voyage & vessel operating expenses The amounts in the accompanying consolidated income statement are analysed asfollows: Voyage expenses 2006 2005 U.S.$'000 U.S.$'000 Voyage expenses (4,221) (4,105)Voyage expenses- related party (1,813) (1,673) _________ _________ (6,034) (5,778) ========= =========Voyage expenses consist of:Port charges (52) (197)Bunkers (fuel costs) (227) (110)Commissions (5,755) (5,471) _________ _________Total voyage expenses: (6,034) (5,778) ========= ========= Vessel operating expenses 2006 2005 U.S.$'000 U.S.$'000Vessel Operating ExpensesCrew wages & related costs (8,360) (6,790)Other crew expenses (376) (344)Deck stores (668) (576)Travelling (532) (427)Crew victualling (949) (824)Repairs & maintenance (1,127) (840)Spares (2,155) (1,706)Engine stores (651) (497)Lubricants (3,182) (2,072)Insurance (4,418) (3,995)Other operating expenses (2,144) (2,622)Taxes (other than income tax) (298) (303) _________ _________Total vessel operating expenses: (24,860) (20,996) ========= ========= 4. Finance Expense The amounts in the accompanying consolidated income statement are analysed asfollows: 2006 2005 U.S.$'000 U.S.$'000 Interest payable on long-term borrowings (3,999) (3,563)Amortisation of debt discount (147) (187)Gain on fair value of derivatives 1 248 _________ _________Total (4,145) (3,502) ========= ========= 5. Finance Income Finance income is earned from the Group's short term deposits. Finance incomeincreased in the year ended 31 December 2006, because of the cash received anddeposited from the registration of the Company's shares in the London StockExchange. 6. General and administrative expenses 2006 2005 U.S.$'000 U.S.$'000 Directors and Management team Remuneration (940) -Audit fees (233) -Legal fees (85) -Other (218) - _________ _________Total general and administrative expenses (1,476) - ========= ========= The above amounts of remunerations cover the period since the official listingof the Company and up to 31 December 2006. 7. Earnings per share Basic earnings per share ("EPS") are calculated by dividing the profit for theyear attributable to Goldenport Holdings Inc. shareholders (U.S.$45,188 andU.S.$43,256 for the years ended 31 December 2006 and 2005, respectively) by theweighted average number of shares outstanding (62,533,312 for the year ended 31December 2006 and 41,800,000 for the year ended 31 December 2005). The weightedaverage number of shares outstanding reflects the issuance of shares for theContributed Companies in the reorganisation described in note 17 as if they hadbeen issued at the beginning of the earliest year presented. Diluted EPS reflects the potential dilution that could occur if share options orother contracts to issue shares were exercised or converted into shares. Sinceno such options or contracts existed as at 31 December 2006 and 2005 thenumerators and denominators used to calculate Diluted EPS are the same withthose used to calculate basic EPS, as disclosed above. 8. Dividends declared The Board of Directors of the Company will declare to the Annual General Meetingfor approval, a final dividend for 2006 of 11.9 pence per share (GBP 8,316). Dividend rights: Under the Company's by-laws, each ordinary share is entitled todividends if and when dividends are declared by the Board of Directors. Thereare no restrictions on the Company's ability to transfer funds (other than fundsdenominated in Marshall Islands dollars) in and out of Marshall Islands. Thepayment of dividends is subject to the approval of the Annual General Meeting ofShareholders. The proposed by the Board of Directors dividend, is expected to beapproved by the AGM to be held on 17 May 2007. The payment of dividends wasU.S.$13,924 in 2006 (15.6 cents per share before the admission of the Company'sshares in the London Stock Exchange and 10.6 cents per share or 5.6 pence pershare as interim dividend for 2006) and U.S.$38,764 (93 cents per share) in 2005. 9. Vessels Vessels consisted of the following at 31 December: 2006 2005 U.S.$'000 U.S.$'000CostAt 1 January 94,260 94,221Additions 56,475 39 _________ _________At 31 December 150,735 94,260DepreciationAt 1 January (18,051) (12,853)Depreciation charge for the year (7,488) (5,198) _________ _________Accumulated depreciation (25,539) (18,051) Net carrying amount of vessels 125,196 76,209 Net carrying amount of deferred dry-docking costs 6,524 8,212Net carrying amount 131,720 84,421 ========= ========= U.S.$'000Net carrying amount as at 1 January 2005 87,104 ========= Acquisitions On 26 June 2006, the Group acquired the M/V MSC Scotland (ex. Bengal Sea), acontainer vessel of 3,007 TEU and 47,120 DWT built in 1992 for U.S.$29,100(including U.S.$208 of unamortised dry-docking component). On 19 July 2006, the Group acquired the M/V Vasos (ex. Orient Alliance), a152,200 DWT cape size bulk carrier built in 1990 for a purchase price ofU.S.$27,300 (including U.S.$337 of unamortised dry-docking component). Vessel additions include the cost of acquisition of the vessels (net ofunamortised dry-docking component), capitalised initial costs associated withthe acquired vessels of U.S.$ 184 and capital improvements on existing vesselsof U.S.$ 435. The gross carrying amount of vessels, which have been fully depreciated to theirresidual value and are still in use, was U.S.$15,844 (2005: U.S.$12,841). Dry-docking costs During 2006 dry-docking and special survey costs were carried out for fivevessels of the Group with total cost U.S.$3,420. In addition, the dry-dockingcomponent for the two new vessels amounted to U.S.$545. Net carrying amount ofdeferred dry-docking costs consists of cost of U.S.$15,786, U.S.$11,821, andaccumulated depreciation of U.S.$9,262, U.S.$3,609 each for the years ended 31December 2006 and 2005, respectively. Depreciation of dry-docking costs isU.S.$5,653 and U.S.$3,461, for each of the years ended 31 December 2006 and 2005respectively. 10. Advances for vessel acquisition On 29 November 2006 the Group entered into an agreement to acquire M/V West GateBridge, a 42,000 DWT container type vessel built in 1986 that is expected to bedelivered to the Group in March 2007 for a total consideration of U.S.$17,000.On 30 November 2006, under the terms of the agreement, the Group paid U.S.$1,700representing the 10% deposit on the purchase price of the vessel. 11. Vessel under reconstruction The balances as at 31 December were as follows: 2006 2005 U.S.$'000 U.S.$'000 Purchase Price 13,000 -Capital expenditure for reconstruction 9,975 -Capitalised interest and other borrowing costs 93 - _________ _________Total cost and expenditure for vessel under construction 23,068 - ========= ========= On 16 June 2006, the Group acquired the M/V Fortune, a container vessel of 5,551TEU and 68,537 DWT built in 1996, for U.S.$13,000. The vessel was damaged in afire on 21 March 2006. The vessel is expected to become operational by the endof 2007 or early 2008 (see also note 20). Depreciation on the vessel will commence upon the completion of thereconstruction. All of the Group's vessels, and vessels under construction having a totalcarrying value of U.S.$154,788 (U.S.$84,421 at 31 December 2005), have beenprovided as collateral to secure the loans discussed in note 18. 12. Trade receivables 2006 2005 U.S.$'000 U.S.$'000 Charterers 1,275 320 _________ _________Total 1,275* 320 ========= ========= *Out of the above amount, U.S.$967 was collected within January 2007. 13. Insurance Claims 2006 2005 U.S.$'000 U.S.$'000 Claim Alex D 457 -Claim Msc Emirates 547 -Other Claims (H&M, P&I, Hire and Crew Claims) 301 259 _________ _________Total 1,305 259 ========= ========= M/V Alex D - Grounding at Trombetas River: On 17 November 2005, M/V Alex D wentaground at Bacabal Passage in Trombetas River tributary to Amazon River inBrazil whilst proceeding outbound from the Port of Trombetas River with pilotsaboard in loading condition with cargo.The re-floating of the vessel was effected by means of discharging part of thecargo into barges and then reloading it. The Group has appointed claim adjustersto handle the claim. The claim adjuster is preparing his report to submit to theunderwriters in order to have the claim reimbursed to Owners. M/V Msc Emirates-Main Engine damage: On 8 April 2006, M/V MSC Emirates whilst onpassage from Singapore to Laem Chabang sustained damage on main enginecrankshaft. The vessel was towed to a shipyard for repairs. The Group hasappointed claim adjusters to handle the claim. The claim adjuster is preparinghis report to submit to the underwriters in order to have the claim reimbursedto Owners. 14. Other non-current assets The amounts in the accompanying balance sheets at 31 December are analysed asfollows: 2006 2005 U.S.$'000 U.S.$'000 _________ _________Fair value of derivative instruments 185 184 ========= ========= Variability can appear in floating rate assets, floating rate liabilities orfrom certain types of forecasted transactions, and can arise from changes ininterest rates or currency exchange rates. During 2003, the Group entered intoan interest rate swap for one of its bank loans representing approximately 26%of its outstanding bank loans. The notional amount of this contract amounted toU.S.$10,400. Under the swap agreement, the Group exchanges variable to fixedinterest rates at 3.60%. The swap agreement requires the Group to pay additionalinterest when LIBOR exceeds 6.00% in any twelve-month year until 2009. It isnoted that the bank loan for which the interest rate swap agreement was enteredinto, was repaid in full in 2005, however, the Group chose to keep the swap.The Group did not designate the swap agreement as an accounting hedge andaccordingly, gains or losses resulting from changes in the fair value of thisderivative instrument, which approximated U.S.$1 and U.S.$248 gain for the yearsended 31 December 2006 and 2005 respectively, are recorded in interest expensein the consolidated income statement. The fair value of the derivative financialinstruments at 31 December 2006 and 2005 was an asset of U.S.$185 and U.S.$184respectively, which was included in other non-current assets in the accompanyingconsolidated balance sheets. 15. Cash and cash equivalents 2006 2005 U.S.$'000 U.S.$'000 Cash at bank 303 -Short term deposits 81,069 - _________ _________ 81,372 - ========= ========= Cash at banks earns interest at floating rates based on daily bank depositrates. Short term deposits are made for varying periods of between one day andthree months, depending on the immediate cash requirements of the Group, andearn interest at the respective short-term deposit rates. 16. Restricted Cash 2006 2005 U.S.$'000 U.S.$'000 Restricted cash 1,166 1,396 _________ _________ The restricted cash concerns the amounts held in bank accounts of the managementcompany that were retained for the future instalment of Group's loans. See alsonote18. 17. Share capital Share capital consisted of the following at 31 December: 2006 2005 U.S.$'000 U.S.$'000AuthorisedShares of $0.01 each 1,000 1,000Issued and unpaidShares of $0.01 each - 418Issued and paidShares of $0.01 each 699 - _________ _________Total issued share capital 699 418 _________ _________ Formation: The Company was formed on 21 March 2005, and prior to thereorganisation analysed below, its share capital consisted of 500 sharesauthorised, issued and outstanding, without par value. On 30 March 2006,conditional on admission to the Official List of the London Stock Exchange, theCompany amended its Articles of Incorporation. Under the Company's Amended andRestated Articles of Incorporation, the Company has an authorised share capitalof 100,000,000 shares (all in registered form) consisting 100,000,000 shareswith a par value of U.S.$0.01 per share. The Company has cancelled the existing500 shares with no par value. Prior to the reorganisation, seventeen holdingcompanies (the "Contributed Companies"), each in turn owning a vessel-owningcompany, were wholly- owned by Captain Paris Dragnis. The reorganization was atransaction between companies under common control, and has been accounted forin a manner akin to a pooling of interests for the years prior to thereorganisation. Accordingly, the financial statements of the Group have beenpresented using historical carrying costs of the Contributed Companies. Theconsolidated financial statements have also been prepared on the basis thatGoldenport existed for all years prior to the reorganisation and was the parentcompany of the Contributed Companies in all such years. The reorganisation that took place on 30 March 2006 as well and involved thefollowing steps: a. Captain Paris Dragnis contributed all of the shares held by him in theseventeen intermediate holding companies to Goldenport, in exchange for sharesin Goldenport, fulfilling his obligation for the Company's share capital , inaccordance with the share for share exchange agreement dated 30 March 2006; andb. Captain Paris Dragnis transferred all of the shares in Goldenport toStarla Shipholding Corporation (Starla), a company wholly owned by Captain ParisDragnis; as a result Starla was, prior to admission to the Official List of theLondon Stock Exchange, the sole shareholder of the Company beginning of theearliest year presented. Starla is the ultimate holding company of the Group.c. Following completion of the reorganisation, the Contributed Companieswere wholly-owned subsidiaries of Goldenport.d. On April 5 the Company was admitted to the Official List of LondonStock Exchange, issuing 25,531,915 shares of U.S.$0.01 each. On 11 April 2006the over allotment option was exercised for 2,553,191 shares at GBP 2.35 pershare bringing the total offer to GBP 66,000 (or U.S.$115,500). The analysis of the share premium is as follows: U.S.$'000 Proceeds from Initial Public Offering, gross 115,465Issuance costs (8,193) _________Proceeds from Initial Public Offering, net 107,272Nominal share capital cost (281) _________Share premium 106,991 =========18. Long-term Debt The amounts in the accompanying balance sheets are analysed as follows: 2006 2005 U.S.$'000 U.S.$'000Bank Loan Vessel(s) Amount Rate % Amount Rate % a. Issued 1 November Tuas Express, - - 1,080 5.43%2000, maturing 30 Msc Himalaya,August 2006 Glory Db. Issued 12 July Samos - - 2,940 5.66%2002, maturing 18 July2007c. Issued 31 October Ios, Athos - - 3,155 5.78%2002, maturing 4February 2007d. Issued 13 February Lindos 3,150 6.13% 3,850 5.75%2003, maturing 30 May2009e. Issued 31 March Tilos, 7,400 6.09% 18,600 5.63%2004, maturing 30 LimnosSeptember 2010f. Issued 17 May 2005, Vana, Beauty, 17,000 6.09% 46,250 5.70%maturing 17 May 2009 Msc Emirates, Achim, Alex D, Gianni D, Msc Socotra, Howrah Bridgeg. Issued 26 June Msc Scotland 15,900 6.42% - -2006, maturing 26 (ex.Bengal sea)September 2011h. Issued 19 July Vasos (ex.Orient 17,500 6.49% - -2006, maturing 16 July Alliance)2011.i. Issued 14 November See below* 2006, maturing 28November 2009. 20,000 6.38% - - _______ _______Total 80,950 75,875Less: current portion 19,900 23,150Less: debt discount 323 187 _______ _______Long-term portion 60,727 52,538 ======= ======= * The vessels included in this loan agreement are Fortune, Tuas Express, Athos,Ios, Msc Himalayia, Glory D and Samos. The upcoming repayment terms of loans with balances outstanding at 31 December2006 are: Loan d: This loan is repayable in five six-monthly instalments of U.S.$350 each,the first one being due on 30 May 2007 and the final one being due on 30November 2008 plus a balloon payment of U.S.$1,400, being due on 30 May 2009. Loan e: This loan is repayable in eight six-monthly instalments of U.S.$700each, the first one being due on 31 March 2007 and the final one being due on 31March 2010, plus a balloon payment of U.S.$1,800 being due on 30 September 2010. Loan f: This loan is repayable by eleven quarterly instalments of U.S.$1,300each, the first one being due on 17 November 2006 and the final one being due on17 August 2009 along with a balloon payment of U.S.$2,700. Loan g: On 26 June 2006 the Group signed an agreement for a secured term loanfacility of U.S.$17,500 (out of which an amount of U.S.$ 1,600 was repaid within2006) in order to acquire the new vessel MSC Scotland (ex. Bengal Sea). Thisloan is repayable by ten quarterly instalments of U.S.$800 each, the first onepaid on 26 September 2006 and the tenth on 26 September 2009, eight quarterlyinstalment of U.S.$600 each, the first one being due on 26 September 2009 andthe final one being due on 26 September 2011 along with a balloon payment ofU.S.$3,100. Loan h: On 19 July 2006 the Group signed an agreement for a secured term loanfacility of U.S.$17,500 in order to acquire the new vessel M/V Vasos (ex.OrientAlliance). This loan is repayable by one semi-annual instalment of U.S.$950 on16 January 2007, nine semi-annual instalments of U.S.$1,450 each, the first onebeing due on 16 July 2007 and the final one being due on 16 July 2011 along witha balloon payment of U.S.$3,500. Loan i: On 14 November 2006 the Group signed an agreement for a secured termloan facility of U.S.$30,000. The Group will utilise the U.S.$25,000 in order toreconstruct the M/V Fortune and the rest was used for repayment of existingloans (the vessels involved in the agreement were used as collateral to theloan).U.S$20,000 have already been drawn (U.S.$ 10,000 in November 2006 andU.S.$10,000 in late December 2006). The remaining U.S.$10,000 will be drawn in2007. The amount of U.S.$ 10,000 drawn in November 2006, was partially utilisedto repay existing loans and partially to finance the reconstruction of M/VFortune. The amount of U.S.$ 10,000 drawn in late December 2006, was notutilised as of 31 December 2006 and is included in cash at bank. The total loanis repayable by eight quarterly instalments of U.S.$1,750 each, the first onebeing due on 28 February 2007 and the last one to be due on 30 November 2008 andfour quarterly instalments of U.S.$1,000 each with the first one being due on 28February 2009 and the last one to be due on 28 November 2009 along with aballoon payment of U.S.$12,000. All loans are denominated in U.S. dollars. The bank loans denominated in U.S.dollars bear interest at LIBOR plus a margin payable quarterly. During 2003, the Group entered into interest rate swap for one of its loans thatin 2005 was fully repaid. Under the swap agreements, the Group exchangesvariable to fixed interest rates at 3.60% (see also note 14). All loans are secured by a first preferred mortgage on the respective vessel aswell as general assignment of the earnings, insurances and requisitioncompensation of the respective vessel. The Group weighted average interest ratefor the years ended 31 December 2006 and 2005 was 6.25% and 4.35%, respectively.Total interest paid was U.S.$3,471 and U.S.$3,777 for the years ended 31December 2006 and 2005 respectively. The loan agreements contain covenants including restrictions as to changes inmanagement and ownership of the vessels, additional indebtedness and mortgagingof vessels without the bank's prior consent as well as minimum requirementsregarding hull cover ratio. The restricted net assets of the vessel-owningsubsidiary companies at 31 December 2006 and 2005 consisted of restricted cashand amounted to U.S.$1,166 and U.S.$1,396 respectively. 19. Accrued liabilities and other payables The amounts in the accompanying balance sheets at 31 December are analysed asfollows: 2006 2005 U.S.$'000 U.S.$'000 Accrued interest 783 173Accrual for supplementary calls 663 610Accrued wages 90 -Accrued audit fee 185 -Other accrued expenses 668 186Other payables 1,365 1,341 _________ _________ 3,754 2,310 ========= ========= 20. Commitments and contingencies a. Various claims, suits, and complaints, including those involvinggovernment regulations and product liability, arise in the ordinary course ofthe shipping business. In addition, losses may arise from disputes withcharterers, agents, insurance providers and from other claims with suppliersrelating to the operations of the Group's vessels. Currently, management is notaware of any such claims or contingent liabilities, which should be disclosed,or for which a provision should be established in the consolidated financialstatements. b. The Group has paid an advance of 10%, of the purchase price, for theacquisition of M/V West Gate Bridge and upon delivery in March 2007, iscommitted to pay the remaining 90% of the agreed price, amounting to U.S.$15,300(including U.S.$11,000 of debt as mentioned in note 24). c. As explained in note 11, on 16 June 2006, the Group acquired the M/VFortune, a container vessel of 5,551 TEU and 68,537 DWT built in 1996, forU.S.$13,000. The vessel was damaged in a fire on 21 March 2006. The vessel isexpected to become operational by the end of 2007 or early 2008. The totalestimated cost of reconstruction, excluding the initial acquisition cost ofU.S.$ 13,000, is approximately U.S.$ 30,000. As of 31 December 2006, theexpenditure incurred for reconstruction amounted to U.S.$9,975. The remainingamount of approximately U.S.$ 20,000, to reach the total estimatedreconstruction cost of U.S.$ 30,000, is to be incurred periodically until thedelivery of the vessel. The main component of the remaining reconstruction costs of U.S.$ 20,000, is thecost of the yard that will undertake the major repairs. The Group has entered tothis respect, into an agreement with COSCO Zhouzhan yard for an amount ofU.S.$12,490, which will be payable based on the progress of the repairs. Theremaining estimated cost mainly concerns spare parts for the vessel, for whichthe Group has not yet entered into any contractual agreement with suppliers. As described in note 18, at 31 December 2006, the Group had availableU.S.$10,000 of committed but not drawn borrowing facility in respect of loan i.,for the reconstruction of the vessel 'Fortune'. The Group has entered into time charter arrangements on some of its vessels.These arrangements have remaining terms between 1-36 months as of 31 December2006 (2-38 months as of 31 December 2005). Future minimum charters receivable upon time charter arrangements as at 31December 2006, are as follows (it is noted that the vessel off-hires anddry-docking days that could occur but are not currently known are not taken intoconsideration; in addition early delivery of the vessels by the charterers arenot accounted for): 2006 2005 U.S.$'000 U.S.$'000 Within one year 67,602 57,189After one year but not more than five years 84,968 46,955More than five years - - _________ _________ 152,570 104,144 ========= =========21. Related party transactions Transactions with related parties consisted of the following for the year ended31 December: 2006 2005 U.S.$'000 U.S.$'000Voyage expenses - related partyGoldenport Shipmanagement Ltd (a) 1,813 1,673Management fees - related partyGoldenport Shipmanagement Ltd (a) 3,393 3,060 _________ _________ 5,206 4,733 ========= ========= Balances due from related parties as at 31 December comprise the following: 2006 2005 U.S.$'000 U.S.$'000Due from related partiesGoldenport Shipmanagement Ltd (a) 811 9,860 _________ _________Total 811 9,860 ========= ========= (a) Goldenport Shipmanagement Ltd. (GSL): All vessel-operatingcompanies included in the consolidated financial statements have a managementagreement with GSL, a Liberian corporation directly controlled by Captain ParisDragnis, to provide, in the normal course of business, a wide range of shippingmanagerial and administrative services, such as commercial operations,chartering, technical support and maintenance, engagement and provision of crew,financial and accounting services and cash handling in exchange for a managementfee of U.S.$15.75 per vessel per month (2005: U.S.$15). In addition GSL chargedthe Group, U.S.$ 115, for the services rendered for the reconstruction of M/VFortune. This amount is included in the capital expenditure for reconstruction(see note 11). On 1 January 2005 the management agreements with GSL were amended, and inaddition to the monthly management fee GSL charged a commission equal to 2% oftime and voyage revenues relating to charters it organises. For the year ended31 December 2006 commission charged by GSL amounted to U.S.$1,813 (2005:U.S.$1,673) and was included in Voyage expenses- related party. GSL has a branchoffice registered in Greece under the provisions of Law 89/1967. The amounts receivable from GSL, shown in the table above, represent thevessel-operating companies' cash surplus handled by GSL. The cash surplushandled by GSL was U.S.$9,860 as at 31 December 2005, as GSL held on behalf ofthe Group a significant portion of funds raised through operations andfinancing. In 2006 since bank accounts were opened in the name of GoldenportHoldings Inc., significant transactions, like payments for acquisitions ofvessels and for reconstruction were performed by the Company directly. As aresult the cash surplus handled by GSL was kept to minimum amounting to U.S.$811relating to the working capital requirements of the vessels. (b) The Company during 2006 paid the following amounts to Directors andmanagement team (which include remunerations and annual cash bonus): 2006 U.S.$'000 Short term employee benefits 940 ========= Although two incentive plans: 'The Goldenport Discretionary Share Option Plan'and the 'Goldenport Share Award Plan' were approved prior to official admittanceto the London Stock Exchange, none of them was activated in 2006. The Goldenport Discretionary Share Option Plan (DSOP): The DSOP allows the Company to grant options to acquire shares to eligibleemployees, which become exercisable on the third anniversary of the date of thegrant, subject to the satisfaction of any performance conditions and remainexercisable until 10 years after the date of grant. The Board has discretionunder the plan to allow the exercise of options following the cessation ofemployment. The use of new issue or treasury shares under the DSOP is limited to10% of the issued share capital of the Company from time to time, taking intoaccount shares issued or to be issued under all employee share schemes adoptedby the Company over the previous ten year period. The Goldenport Group Share Award Plan (GSAP): The Plan provides for the grant of performance share awards. An Award may notgenerally vest before the third anniversary of its date of grant nor unless anyspecified performance targets have been met at the end of the three year period,beginning on the first day of the financial year in which the Award is made. Anyperformance targets will be objective and stated at the day of the grant, If aparticipant ceases employment or office with the Company before an Award hasvested at the end of the relevant period, his Award(s) will generally lapse. NoAward may be granted after 10 years from the adoption of the Plan. Under theterms of the Plan, in any 10 year period the use of new issue or treasury sharesunder the Plan and any employees' share scheme established by the Company islimited to 10% of the issued share capital of the Company from tome to time, ofwhich not more than 5% may be used for the Plan and those employees' shareschemes operated on a selective basis. (c) Annual cash bonus Each executive director is entitled to participate in an annualperformance-based bonus scheme. The remuneration committee reviews and setsbonus targets and eligibility annually. 50% of the bonus is based on financialtargets derived from the strategic and annual plan and 50% of the bonus is basedon individual achievements and personal objectives. The financial targets are measured with the growth of EBITDA (defined as theGroup's operating profit before depreciation and depreciation of dry-dockingcosts). The Board believes that EBITDA is the proper indicator to measure theGroup performance as this drives predominantly the free cash flow of thebusiness. Especially during the growth phase of the Group with the continuousexpansion, EBITDA is considered to be the main driver of free cash flowgeneration, fuelling further vessel acquisitions. The maximum level of bonus that could be earned by an executive director for2006 was 40% of base salary. The amounts included in (b) above include theAnnual cash bonus. (d) The Interests of the Directors, the Senior Management and theirrespective immediate families in the share capital of the Company (all of whichare beneficial unless otherwise stated), were as at 31 December 2006 as follows: Name Number of Percentage Number of Percentage shares at of shares at shares as at of shares admission(after admission 31 Dec 2006 as at 31 overallotment) Dec 2006 Captain Paris Dragnis(1) 41,800,000 59.812 % 41,800,000 59.812 % Chris Walton(2) 2,128 0.003% 2,128 0.003 % (1) Through Starla (see also note 17)(2) Chris Walton is a non-executive member of the Board of Directors As at 31 December 2005, Captain Paris Dragnis was the sole owner of the sharecapital of the Company. 22. Income Taxes Under the laws of the Republic of Marshall Islands and the respectivejurisdictions of the Consolidated Companies in the Group is not subject to taxon international shipping income, however, the Consolidated Companies aresubject to registration and tonnage taxes, which have been included in vesseloperating expenses in the accompanying consolidated statement of income. Pursuant to the United States Internal Revenue Code of 1986, as amended (the''Code''), U.S. source income derived by a foreign corporation from theinternational operation of ships generally is exempt from U.S. tax if thecompany operating the ships meets both of the following requirements, (a) thecompany is organized in a foreign country that grants an equivalent exception tocorporations organized in the United States and (b) either (i) more than 50% ofthe value of the company 's shares is owned, directly or indirectly, byindividuals who are ''residents'' of the company's country of organization or ofanother foreign country that grants an ''equivalent exemption'' to corporationsorganized in the United States (50% Ownership Test) or (ii) the company's sharesare ''primarily and regularly traded on an established securities market'' inits country of organization, in another country that grants an ''equivalentexemption'' to United States corporations, or in the United States(Publicly-Traded Test). Under the regulations, company's shares will beconsidered to be ''regularly traded'' on an established securities market if (i)one or more classes of the its shares representing more than 50% of itsoutstanding shares, by voting power and value, is listed on the market and istraded on the market, other than in minimal quantities, on at least 60 daysduring the taxable year; and (ii) the aggregate number of shares traded duringthe taxable year is at least 10% of the average number of shares outstandingduring the taxable year. Notwithstanding the foregoing, the regulations provide,in pertinent part, that each class of the company's shares will not beconsidered to be ''regularly traded'' on an established securities market forany taxable year in which 50% or more of the vote and value of the outstandingshares of such class are owned, actually or constructively under specified stockattribution rules, on more than half the days during the taxable year by personswho each own 5% or more of the value of such class of the company's outstandingshares, (''5 Percent Override Rule''). The Group in 2006 has filed for 2003, 2004 and 2005 tax years and Managementbelieves that based on current legislation the Group will be exempt from U.S.source income tax. 23. Financial instruments Risk management objectives and policies The Group's principal financial instruments are bank loans. The main purpose ofthese financial instruments is to finance the Group's operations. The Group hasvarious other financial instruments such as cash and cash equivalents,restricted cash, trade receivables and trade payables, which arise directly fromits operations. From time to time, the Group also uses derivative financial instruments,principally interest rate swaps. It is the Group's policy that no trading infinancial instruments shall be undertaken, other the one explained in note 14. The main risks arising from the Group's financial instruments are interest raterisk and credit risk. The majority of the Group's transactions are denominatedin U.S. dollars therefore its exposure to foreign currency risk is minimal. Cash flow interest rate risk Cash flow interest rate risk arises from the possibility that changes ininterest rates will affect the future cash outflows of the Group's long-termdebt. The interest rate profile of the financial liabilities of the Group as at31 December 2006 is as follows (figures are stated gross of debt discount): 2006 2005 U.S.$'000 U.S.$'000Financial liabilities - term loansWithin 1 year 19,900 23,1501 to 2 years 20,400 17,7752 to 3 years 21,450 12,7003 to 4 years 8,500 16,2504 to 5 years 10,700 6,000 _________ _________ 80,950 75,875 ========= ========= 2006 2005 U.S.$'000 U.S.$'000Interest rate swap2 to 3 years 185 184 ========= ========= Credit risk The Group's maximum exposure to credit risk in the event the counterparties failto perform their obligations as of 31 December 2006 in relation to each class ofrecognised financial assets, other than derivatives, is the carrying amount ofthose assets as indicated in the balance sheet. Concentration of Credit Risk Financial instruments, which potentially subject the Group to significantconcentrations of credit risk, consist principally of cash and cash equivalents,and trade accounts receivables. The Group places its cash and cash equivalents,consisting mostly of deposits, with financial institutions. The Group performsannual evaluations of the relative credit standing of those financialinstitutions. Credit risk with respect to trade accounts receivable is generallymanaged by the chartering of vessels to major trading houses (includingcommodities traders), established container-line operators, major producers andgovernment-owned entities rather than to more speculative or undercapitalisedentities. The vessels are normally chartered under time-charter agreements whereas per the industry practice the charterer pays for the transportation servicein advance, supporting the management of trade receivables. Fair Values The historical cost carrying values of financial assets and financialliabilities in the consolidated balance sheet of the Group approximate fairvalues both as at 31 December 2006 and 2005. Fair values of financial assets and financial liabilities Financial assets and financial liabilities of the Group are carried at fairvalues in the balance sheet, unless otherwise disclosed in the consolidatedfinancial statements. Foreign currency risk The majority of the Group's transactions are denominated in U.S. dollarstherefore its exposure to foreign currency risk from operations is minimal.However, following the admission of the Company's shares to the London StockExchange, part of the proceeds (in GBP) were placed in short term depositaccounts. As at 31 December 2006 an amount of GBP 17,947 (U.S.$35,137) was heldin short term time deposits. Liquidity risk The Group aims to mitigate liquidity risk by managing cash generation by itsoperations, applying cash collection targets throughout the Group. The vesselsare normally chartered under time-charter agreements where as per the industrypractice the charterer pays for the transportation service in advance,supporting the management of cash generation. Investment is carefullycontrolled, with authorisation limits operating up to Group's board level andcash payback periods applied as part of the investment appraisal process. Inthis way the Group aims to maintain a good credit rating to facilitate fundraising. In its funding strategy, the Group objective is to maintain a balance betweencontinuity of funding and flexibility through the use of bank loans. The Group'spolicy in new investments is that not more than 70% of the value of eachinvestment will be funded through borrowings. In all the acquisitions within2006 the bank financing was kept below 65% of the total investment cost. Excess cash used in managing liquidity is only invested in financial instrumentsexposed to insignificant risk of changes in market value, being placed oninterest-bearing deposit with maturities fixed at no more than 3 months. Shortterm flexibility is achieved if required by overdraft facilities. 24. Events after the balance sheet date Waiver of increase in management fee: On 5 January 2007 GoldenportShipmanagement agreed with the Group to waive the right to a 5% increase in themanagement fee. Therefore, the management fee for 2007 will remain at U.S.$15.75per vessel per month. Loan repayments: On 16 January 2007 the Group paid U.S.$950 in relation to theoutstanding balance of loan (h). On 20 February 2007 U.S.$1,300 in relation toloan (f) and on 28 February 2007 the Group paid U.S.$1,750 in relation to theoutstanding balance of loan (i) (see also note 18). Loan agreements: On 28 February 2007 a new loan agreement was signed for a totalamount of U.S.$11,000 for the partial finance of the acquisition of M/V WestGate Bridge. The loan will be fully drawn within March 2007 upon delivery of thevessel.The repayment will be effected by twenty quarterly instalments, the first twelvebeing equal to U.S$600 each, followed by eight equal quarterly instalments ofU.S.$470 each. The first instalment will be repaid three months after drawdownbut not later than 31 July 2007. Sale of vessel: On 8 February 2007 the Group entered into a Memorandum ofAgreement with an unaffiliated party to sell the 1977 built vessel 'Vana' for agross consideration of U.S.$5,500. Under the terms of the agreement the buyer,on 16 February 2007, deposited a 15% of the consideration in a joint accountwith a bank selected by the Group. The deposit was transferred to the jointaccount on the same date and the remaining of the agreed price is to be paid tothe Group, upon completion, before the delivery of the vessel in April 2007. Joint Venture agreement: On 13 March 2007 the Group entered into a joint venturewith an unaffiliated third party with the objective to construct two 53,800 DWTbulk carrier vessels in Jiangsu Eastern Shipyard of China, which are expected tobe delivered in the second part of 2008. The construction price for each vesselis U.S.$32,000 (U.S.$64,000 in total). The construction of the vessels will befinanced by a mixture of cash reserves and specifically allocated to the jointventure bank financing. Payments will be done to the yard based on theconstruction progress schedule on trances of 20% of the total value. The last20% will be paid upon delivery of the vessels. Dividends: On 13th March 2007 the Company proposed a dividend of 11.9 pence pershare, amounting to £8,316. The dividend is expected to be approved by the AGMto be held in Athens on 17 May 2007. As a result the total dividend for 2006will become 17.5 pence per share, amounting to total of £12,230. APPENDICES 1. Fleet Employment Profile: As of 13th March Goldenport's fleet is employed as follows: Vessel Type Capacity Rate Charter Expiration (US$) per dayContainers TEU Earliest Latest(1) Fortune Post 5,551 Under reconstruction PanamaxWest Gate Bridge Sub 3,032 16,500 Feb-10 Apr-10(2) PanamaxMSC Scotland Sub 3,007 20,770 Sep-09 Nov-09 PanamaxMSC Socotra Sub 2,258 8,000 Jan-08 Mar-08 PanamaxHowrah Bridge Sub 2,257 14,180 Jul-09 Sep-09 PanamaxMSC Himalaya Sub 2,108 12,700 Dec-08 Jan-09 PanamaxAchim Handy 930 9,600 Feb-09 Apr-09Beauty(6) Handy 962MSC Emirates Handy 934 7,000 Jan-09 Feb-09Glory D Handy 946 9,600 Feb-09 Apr-09Tuas Express Feeder 485 8,900 Dec-07 Dec-08 Dry Bulk DWT Vasos (3) Capesize 152,065 50,000 May-07 May-07 23,950 Feb-11 Aug-12Samos Capesize 136,638 22,750 May-07 Jun-07Ios Panamax 69,737 12,500 Sep-07 Sep-07Gianni D Panamax 69,100 26,000 Sep-07 Nov-07Athos Panamax 67,515 16,750 Jun-07 Sep-07New Building 1(4) Supramax 53,800 To be delivered in 2008New Building 2 (4) Supramax 53,800 To be delivered in 2008Vana (5) Handymax 53,522 17,000 Mar-07 Mar-07Alex D (6) Handymax 52,315 25,000 Mar-07 Mar-07Limnos (6) Handymax 52,266 30,000 Apr-07 Apr-07Lindos Handymax 52,266 14,500 Jul-09 Nov-09Tilos Handymax 52,266 26,000 Apr-07 Apr-07 27,750 Aug-07 Nov-07 (1) Represents last day on which the charter may redeliver the vesselassuming exercise of all additional hire periods under charter(2) To be renamed to MSC Finland(3) Charterer has an option to extent for another 12 months after theinitial period of 45 to 51 months(4) 50% owned through a joint venture(5) Goldenport is in firm negotiations to sell the vessel Vana, to anunaffiliated third party after the completion of the current charter(6) Goldenport is in advanced negotiations to extend or re-charter thevessels Beauty, Alex D and Limnos Forward Charter Coverage: The percentage of available days of the fleet already fixed under contracts (assuming latest charter expiration and exercise of all additional hire periods under charter) is as follows as of 13 March: 2007(1) (2) 2008(1) (2) 2009(2)Total Fleet 83% (75%) 60% (60%) 37% (37%)Containers 91% (90%) 91% (91%) 54% (54%)Bulk Carriers 75% (58%) 25% (25%) 24% (24%) (1) Percentage of available days of the fleet fixed under contract as reported on 11 January 2007 is given in brackets(2) The percentages above do not include the vessel 'Fortune' which is under repairs and the two new-building bulk carriers which will be delivered in 2008 2. 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. - ENDS - This information is provided by RNS The company news service from the London Stock Exchange