GPRT.L Regulatory News (GPRT)

Goldenport Holdings Inc.

Athens, 30 April 2015

Final Results for the Year Ended 31 December 2014

Goldenport Holdings Inc. ("Goldenport" or "the Company"), (LSE: GPRT) the international shipping company that owns and operates a fleet of dry bulk and container vessels, announces today the results for the year ended 31 December 2014.

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

§ Revenue of U.S.$ 46,572, -22.1% decrease (2013 restated: U.S.$ 59,790)

§ EBITDA of U.S.$ 11,685, -42.7% decrease (2013 restated: U.S.$ 20,391)

§ Impairment Loss of U.S.$ 5,577 (2013 restated: nil)

§ Total non recurring loss from JV of U.S.$ 13,412 (2013 restated: nil)

§ Net Loss of U.S.$ 27,114 (2013 restated: Net Loss of U.S.$ 12,177)

§ Loss per Share of U.S.$ 2.90 (2013 restated: Loss per share U.S.$ 1.31)

§ Total cash at 31 December 2014 of U.S.$ 25,940 (31 December 2013 restated: U.S.$ 16,859)

§ Net debt to book capitalisation as of 31 December 2014, 44% (31 December 2013: 47%)

§ In compliance with debt covenants

CEO Statement:

For the year ended 31 December 2014, the Company reported a 22.1% decline in revenues, reflecting a decrease in the average number of vessels from 17 to 14, and a 7.4% reduction in the time charter equivalent rate for the fleet that was partly offset in dollar terms by a reduction in average daily operating expenses. The Company reported a 42.7% drop in EBITDA to U.S.$11,685 and a net loss of U.S.$27,114 or U.S.$2.90 per share. The large net loss is primarily as a result of the decision reached with our joint venture partners to wind up Sentinel Holdings Inc, in which we hold a 50% interest, through the sale of its two vessels. To prepare for this provisions and charges of U.S.$13,412 have been taken. The adjusted net loss excluding these and other provisions and charges and was U.S.$7,933 or U.S.$0.85.

The long-awaited recovery in the dry bulk sector is unlikely to materialize in the near term as the newbuilding orderbook continues to cast a shadow over demand. The early signs of recovery in the second half of 2013 and the beginning of 2014 and increased demand for "eco" fuel efficient new designs triggered a wave of newbuilding ordering which are due to be delivered between now and the end of 2016. The positive news is there have been few newbuilding orders over the last 12 months and historically low charter rates have fostered increased scrapping of older tonnage and the conversion, postponement or cancellation of several newbuilding orders.

Market expectations for China to meaningfully reduce domestic iron ore production in favor of imports proved to be overly optimistic, coal imports to China have continued to be affected by adverse policies and the Indonesian nickel export ban remains in place. In this environment, Supramax rates were once again more resilient than Capesize and Panamax rates, reflecting their versatility and reduced earnings volatility. On the whole, we remain cautiously optimistic about the dry bulk sector, but expect that 2015 will be more challenging than 2014, as demand lags net fleet growth. This is supported by the Supramax FFA (Forward Freight Agreement) for the remainder of 2015 which is currently trading at U.S.$6,810 per day compared to an average BSI TC rate of U.S.$9,820 for 2014.

In the containership sector, we have experienced a steady increase in time charter rates and vessel values for Panamax and Sub-Panamax vessels since the beginning of 2015, which is consistent with our expectation that these vessel categories that specialize in North-South routes will benefit from the overall growth in containerized shipping. Having said that, the outlook for the sector hinges on geopolitical uncertainties receding and global economic growth picking up, but at the same time, tonnage providers are being squeezed by liner companies that have formed themselves into alliances focused on increasing profitability and efficiency.

During 2014, we took advantage of high scrap prices to continue our strategy of fleet renewal by disposing of M/V MSC Socotra and we also sold the M/V Thasos for further trading. We recorded a U.S.$5,250 gain from the disposal of these vessels and utilized part of the cash proceeds to further reduce our debt. We have also continued to proactively manage our indebtedness and proceeded with the refinancing of one of our bank facilities that was due to mature in November 2015, extending its term until November 2017 and lowering the interest rate margin by 50bps. Last but not least, we have agreed a relaxation of the minimum asset cover ratios and financial covenants with our lenders, reflecting the adverse market conditions.

We are navigating through what is arguably the worst dry bulk market of the last 30 years, but we believe that we are well equipped to weather the storm, having proceeded with the sale of several older and less efficient vessels, restructured our bank facilities to reflect the current trading environment and de-levered our balance sheet, while maintaining a competitive operating cost base. We are confident that we have taken all appropriate steps to ensure that the Company will be well positioned to take advantage of the eventual dry cargo market recovery.

Fleet Developments (amounts in US$ '000):

Vessels disposals

On 28 March 2014, the Company agreed the disposal of vessel m/v MSC Socotra to an unaffiliated third party. The sale was concluded at a net cash consideration of U.S.$ 11,150 and the vessel was delivered to the new owners on 30 April 2014. As of delivery date, m/v MSC Socotra had a net carrying value of U.S.$ 8,073. The gain resulting from the sale of the vessel was U.S.$ 3,077 and is included in the consolidated statement of comprehensive income.

On 10 November 2014, the Company agreed the disposal of vessel m/v MSC Thasos to an unaffiliated third party. The sale was concluded at a net cash consideration of U.S.$ 7,554 and the vessel was delivered to the new owners on 1 December 2014. As of delivery date, m/v MSC Thasos had a net carrying value of U.S.$ 5,381. The gain resulting from the sale of the vessel was U.S.$ 2,173 and is included in the consolidated statement of comprehensive income.

Conference Call and Webcast:

The Company's management will hold a conference call today Thursday 30 April at 1:00 P.M. (BST), 3:00 P.M. (Athens), 08:00 A.M. (EDT), to discuss the results.

Conference Call details: 

Time: 13:00 London Time/ 08:00 am NY Time/ 15:00 Athens Time

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

REPLAY

If you are unable to participate, a recording of the conference will be available one hour after the conclusion of the conference call until the end of business day of 7th May 2015.

To access the recording, please dial the following numbers:

For further information, please contact:

Goldenport Holdings Inc.

Tavistock

Full Year 2014 Review and Current Market Outlook:

Dry Bulk Carriers:

Supply:

During 2014, deliveries reached approximately 48.2 million DWT (610 vessels) while demolition levels were approximately 16.2 million DWT (311 vessels). As a result there was a net increase in the fleet of approximately 32.0 million DWT or 4% in terms of capacity and approximately 300 units in terms of number of vessels.

New orders during 2014 showed a noticeable decrease and reached around 724 units of 14.5 million DWT compared to 1,252 units of 24.2 million DWT in 2013. The current orderbook stands at about 2,098 units representing about 20% of the world fleet in terms of number of vessels and about 23% in terms of carrying capacity.

During 2014 there have been 271 orders placed in the wider Handymax sector and the current orderbook of 712 units represents about 22% of the operating Handymax fleet.

Demand:

Demand for dry bulk commodities is affected by world and regional economic conditions, but is increasingly tied to industrial production trends in Asia, particularly China. Other factors that influence demand include changes to seaborne transportation patterns and regional raw material price variations. Generally, demand for larger vessels is affected by the demand for a small number of commodities and by the trade patterns of a few key routes. Demand for smaller dry bulk vessels is more diversified and is determined by trade in a larger number of commodities. Seaborne dry bulk trade grew from 1.7 billion tonnes in 1990 to an estimated 4.5 billion tonnes in 2014, at a CAGR of 4.1%. Between 2004 and 2014, this rate was 5.5%, driven largely by the accelerated development of the Chinese economy in general and steel industry in particular. Seaborne dry bulk trade is projected to grow a further 3.4% in 2015, reaching 4.7 billion tonnes.

The average TC rates during the year 2014 and Q1 2015 and FFAs for Q2, Q3 and Q4 2015, as of Thursday 23 April are as follows:

Containerships:

Supply:

During 2014, the world containership fleet increased by approximately 0.4% in terms of the number of vessels to 5,111 units and 5.8% in terms of capacity to 18.1 million TEU. This is the result of larger vessels being introduced into the market and utilised by the liner companies, and smaller vessels reaching the end of their economic life being scrapped.

During the same period, about 144 new building contracts were signed, equivalent to about 1.1 million TEU. This represents a 48% decrease from 2013 and it is mainly attributed to the increase in the price of newbuildings.

The current orderbook stands at about 422 vessels of about 3.3 million TEU and this represents approximately 18% of the world fleet in terms of capacity. The vast majority of the investment in the container segment is focused in the asset class of over 8,000 TEU, which represents about 53% of the current orderbook in terms of capacity.

Demand:

Trade grew by an estimated 6.0% in 2014, hitting 171 million TEU. Current projections suggest that growth will reach 6.6% in 2015, although this projection is subject to a wide range of risks from the global economy.

Despite the ongoing cascading effect, whereby larger vessels substitute smaller ones, and the delivery of more "eco" vessels throughout the year, the majority of standard feeder vessels continue to find employment at gradually improving rates.

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

Financial review for the year ended 31 December 2014:

Time and Voyage Charter Revenues: Revenues decreased by U.S.$ 13,218 or 22.1% to U.S.$ 46,572 (2013: U.S.$ 59,790). This decrease is mainly attributable to the decreased average number of vessels and the decrease on the TCE rates during 2014.

Voyage expenses total: Voyage expenses increased by U.S.$ 444 or 7.8% to U.S.$ 6,110 (2013: U.S.$ 5,666) mainly due to the increased cost of bunkers as a result of the fuel price fluctuation between the time of delivery to and redelivery from charterers of certain vessels in our fleet. This increase has been partially offset by the lower cost for commissions as a result of the decreased revenue during the year.

Vessel operating expenses: Vessel operating expenses decreased by U.S.$ 6,021 or 21.5% to U.S.$ 22,033 (2013: U.S.$ 28,054) as a result of the decreased average number of vessels as well as tight cost control.

General and administrative expenses: General and administrative expenses increased by U.S.$ 1,627 or 68.2% to U.S.$ 4,013 (2013: U.S.$ 2,386). The increase is mainly attributed to i) prior year's decreased cost due to the de-recognition of the provisional amount relating to the "one-off" awards granted to certain Directors in 2010 which lapsed in 2013 (the performance targets were not met due to the depressed state of both the world economy and the shipping markets) and ii) one off charges related to the share capital increase process, which was withdrawn by the management in the second quarter of 2014.

Depreciation: Vessels' depreciation charge decreased by U.S.$ 2,581 or 13.1% to U.S.$ 17,120 for 2014 (2013: U.S.$ 19,701). The decrease is mainly attributed to the decrease of total ownership days due to the reduction in the average number of vessels in the fleet.

Depreciation of dry-docking costs: Depreciation of dry-docking costs decreased by U.S.$ 311 or 22.3% to U.S.$ 1,084 for 2014 (2013: U.S.$ 1,395) mainly due to the decreased number of vessels which were dry-docked compared to the previous year.

Financing costs: Interest expense decreased by U.S.$ 741 or 12.7% to U.S.$ 5,105 for 2014 (2013: U.S.$ 5,846). This is mainly due to the decreased average amount of debt as compared to the previous year.

Cash and cash equivalents: As of 31 December 2014, the Company had U.S.$ 25,440 of unrestricted cash and cash equivalents (2013: U.S.$ 14,217). The increase of cash is a result of the increased proceeds from the disposal of vessels as compared to the previous year.

Restricted Cash: The restricted cash of U.S. $500 as at 31 December 2014 (U.S.$ 2,642 as at 31 December 2013) relates to cash restricted in use by the financing banks subject to the rectification and/or fulfilment of certain financial covenant ratios and/or other terms. The total amount of U.S.$ 500 was released subsequent to the year end and applied towards the outstanding loans' balance as well as settlement of interest accrued as at the date of the release.

APPENDIX 1:

Notes on Summary of Selected Financial and Operating Data:

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

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

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

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

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

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

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

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

(9) Adjusted Net Loss is defined as the Net loss for the period decreased by the total non recurring loss from the JV, the one-off non-cash impairment loss and the provision for doubtful trade receivables for the same year.

APPENDIX 2:

Forward-Looking Statement

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

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

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

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

APPENDIX 3:

Fleet Employment Profile:

Goldenport Holdings Inc.

Consolidated Financial Statements

31 December 2014

Independent Auditors' Report

To the Shareholders of Goldenport Holdings Inc.

We have audited the accompanying consolidated financial statements of Goldenport Holdings Inc. and its subsidiaries ("the Group"), which comprise the consolidated statement of financial position as at 31 December 2014 and the consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory notes.

Management's Responsibility for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards as adopted by the European Union and for such internal controls as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditors' Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

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

We read other information contained in the Annual Report and consider whether it is consistent with the audited financial statements. The other information consists only of the Chairman's Statement, the Chief Executive Officer Statement, the Report of Directors, the Directors' Remuneration Report, the Statement of Directors' Responsibilities and the Board, the Management Team, the Operational Fleet, the Renewal Program: Vessels sold, the Charterers and the Fleet Manager information pages. We consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies with the financial statements. Our responsibilities do not extend to any other information.

Opinion

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Group as at 31 December 2014, and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards, as adopted by the European Union.

30 April 2015

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

Athens

GOLDENPORT HOLDINGS INC.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the year ended 31 December 2014

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

The accompanying notes 1 to 24 are an integral part of these consolidated financial statements.

GOLDENPORT HOLDINGS INC.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 31 December 2014

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

The accompanying notes 1 to 24 are an integral part of these consolidated financial statements.

GOLDENPORT HOLDINGS INC.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the year ended 31 December 2014

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

The accompanying notes 1 to 24 are an integral part of these consolidated financial statements.

GOLDENPORT HOLDINGS INC.

CONSOLIDATED STATEMENT OF CASH FLOWS

For the year ended 31 December 2014

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

The accompanying notes 1 to 24 are an integral part of these consolidated financial statements.

1. FORMATION, BASIS OF PRESENTATION AND GENERAL INFORMATION:

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

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

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

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

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

The consolidated financial statements comprising the financial statements of the Company, its wholly owned subsidiaries, Tuzon Maritime Co, the 80% owned subsidiary (see (a) below) and the 50% interest in a Joint Venture accounted for using the equity method (see (b) below) were authorised for issue in accordance with a resolution of the Board of Directors on 29 April 2015. The shareholders of the Company have the right to amend the financial statements at the Annual General Meeting to be held in June 2015.

1. FORMATION, BASIS OF PRESENTATION AND GENERAL INFORMATION (continued):

(a) The subsidiaries of the Company are as at 31 December 2014:

1. FORMATION, BASIS OF PRESENTATION AND GENERAL INFORMATION (continued):

(b) Joint Venture (Note 9)

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

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

(a) Basis of preparation: The Group's financial statements have been prepared on a historical cost basis, except for derivative financial instruments and financial assets through profit and loss that are measured at fair value. The consolidated financial statements are presented in US dollars and all financial values are presented and rounded to the nearest thousand ($000), except for the per share information.

(b) Statement of compliance: The consolidated financial statements as at 31 December 2014 have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union.

(c) Basis of Consolidation: The consolidated financial statements comprise the financial statements of the Company and its subsidiaries and the interest of the Company in a joint venture accounted for using the equity method listed in Note 1. The financial statements of the subsidiaries are prepared for the same reporting date as the Company, using consistent accounting policies. All material inter-company balances and transactions have been eliminated upon consolidation. Subsidiaries are consolidated from the date on which control is transferred to the Group and cease to be consolidated from the date on which control is transferred out of the Group.

(d) Accounting for joint ventures: A joint venture is an entity whose economic activities are jointly controlled by the Group and one or more other venturers in terms of a contractual arrangement. Under IFRS 11, Joint Arrangements, effective January 1, 2014, it is required that the interest of the Company in a joint venture is accounted for using the equity method according to IAS 28 (Revised). The transition was applied retrospectively as required by IFRS 11 and previous years have been restated. (Note 9)

(e) Current versus non-current classification: The Group presents assets and liabilities in the statement of financial position based on current/non-current classification.

An asset is current when it is:

· Expected to be realised or intended to be sold or consumed in the normal operating cycle

· Held primarily for the purpose of trading

· Expected to be realised within twelve months after the reporting period, or

· Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period

All other assets are classified as non-current.

A liability is current when it is:

· Expected to be settled in the normal operating cycle

· Held primarily for the purpose of trading

· Due to be settled within twelve months after the reporting period, or

· There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period

The Group classifies all other liabilities as non-current.

(f) Fair value measurement: The Group measures financial instruments, such as, derivatives, and financial assets at fair value at each reporting date.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

· In the principal market for the asset or liability, or

· In the absence of a principal market, in the most advantageous market for the asset or liability.

The principal or the most advantageous market must be accessible to the Group.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities

Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable

Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable

For assets and liabilities that are recognised in the financial statements on a recurring basis, the Group determines whether transfers have occurred between Levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

External valuers are involved for valuation of significant assets, such as financial assets, and significant liabilities, such as contingent obligations. Involvement of external valuers is decided upon annually by management after discussion with and approval by the Company's audit committee. Selection criteria include market knowledge, reputation, independence and whether professional standards are maintained.

At each reporting date, Management analyses the movements in the values of assets and liabilities which are required to be re-measured or re-assessed as per the Group's accounting policies. For this analysis, management verifies the major inputs applied in the latest valuation by agreeing the information in the valuation computation to contracts and other relevant documents.

Management, in conjunction with the Group's external valuers, also compares the changes in the fair value of each asset and liability with relevant external sources to determine whether the change is reasonable.

For the purpose of fair value disclosures, the Group has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.

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

Depreciation: Depreciation is computed using the straight-line method over the estimated useful life of the vessels, after considering the estimated residual value. Management makes estimates in relation to useful lives of vessels considering industry practices. Estimated useful life of vessels is 25 years and estimated residual value is equal to a vessel's estimated scrap value. In order to align the scrap rate estimates with the current historical average scrap rate, effective from 1 January 2013, the Company adjusted the estimated scrap rates used to calculate the vessels' residual value from U.S.$180 to U.S.$250 per lightweight ton and the impact is included in both periods ended 31 December 2014 and 2013. Estimates and assumptions relating to the impairment of vessels are discussed in paragraph (q).

Provisions for doubtful trade receivables: Provisions for doubtful trade receivables are recorded based on management's views on the future collectability of the receivables. (Receivables as included in the consolidated statement of financial position in trade receivables, have a carrying amount of U.S.$2,000 and U.S.$2,102 as at 31 December 2014 and 2013, respectively). Provisions for doubtful trade receivables for the year ended 31 December 2014 amounted to U.S.$192 (U.S.$301 for the year ended 31 December 2013) as included in the consolidated statement of comprehensive income.

(h) Revenues and Related Expenses: The Group generates its revenues from charterers for the charter hire of its vessels. Vessels are chartered using either a) time charters, where a contract is entered into for the use of a vessel for a specific period of time and a specified daily charter hire rate; or b) voyage charters, where a contract is made in the spot market for the use of a vessel for a specific voyage for a specified charter rate per ton of a cargo. If a charter agreement exists and collection of the related revenue (operating lease income) is reasonably assured, revenue is recognised as it is earned, evenly over the duration of the period of each voyage or time charter. A voyage is deemed to commence upon the completion of discharge of the vessel's previous cargo and is deemed to end upon the completion of discharge of the current cargo. Time-charter revenues arising from chartering the vessels is accounted for on a straight line basis over the term of the charter. Certain time-charter agreements specify scheduled rate increases/decreases over the charter term("non-level charters"). As revenues from time chartering of vessels are accounted for on a straight line basis at the average charter hire rates over the charter periods of such charter agreements, as service is performed, an asset or liability is created.

Deferred revenue represents cash received prior to the reporting date which relates to revenue earned after such date. On time charters, the charterer as per industry practice pays the revenue related to the specific agreement in advance. Therefore, as at the reporting date the amount of revenue relating to the next financial year that was paid by the charterer is presented in deferred revenue in the consolidated statement of financial position.

Vessel voyage expenses included in the consolidated statement of comprehensive income primarily consisting of port, canal and bunker expenses that are unique to a particular charter are paid for by the charterer under time charter arrangements or by the Group under voyage charter arrangements. Furthermore, voyage expenses include commission on income including third party commissions, paid by the Group. The Group defers bunker expenses under voyage charter agreements and charges them to the statement of comprehensive income over the related voyage charter period to the extent revenue has been recognised. Port and canal costs are accounted for on an actual basis.

Operating expenses are accounted on an accrual basis and are included in the consolidated statement of comprehensive income.

(i) Foreign Currency Translation: The functional currency of the Group is the U.S. dollar which is also the presentation currency of the Group because the Group's vessels operate in international shipping markets, where the U.S. dollar is the currency used for transactions. Transactions involving other currencies during the year are converted into U.S. dollars using the exchange rates in effect at the time of the transactions. At the reporting dates, monetary assets and liabilities, which are denominated in currencies other than the U.S. dollar, are translated into the functional currency using the year end exchange rate. Gains or losses resulting from foreign currency transactions are included in foreign currency gain or loss in the consolidated statement of comprehensive income.

(j) Cash and Cash Equivalents: The Group considers highly liquid investments such as time deposits and certificates of deposit with an original maturity of three months or less to be cash equivalents included in the consolidated statement of financial position.

(k) Restricted Cash: Certain of the Group's loan agreements may require the Group to deposit funds into a loan retention account in the borrower's name. The amount is not freely available to the Group, and it is used solely for repaying interest and principal on the loan. Restricted cash in the consolidated statement of financial position amounts to U.S.$500 (related to the agreements of loans c and d, Note 15) as at 31 December 2014 (U.S.$2,642 as at 31 December 2013, amount U.S.$2,500 is related to the agreements of loans c and d, and amount U.S.$142 is related to the agreements of loans e, f and g and relates to cash restricted in use by the financing bank subject to fulfilment of certain financial covenant terms as provided by the agreements of loans c, d, e, f and g (Note 15).

(l) Inventories: Inventories in the consolidated statement of financial position consist of bunkers and are stated at the lower of cost or net realizable value. Cost is determined by the first-in first-out method. Any bunkers remaining on vessels which are laid up, are recognised as inventory. No inventory existed as at 31 December 2014 and 2013 as none of the vessels was laid up.

(m) Trade Receivables: The amount shown as trade receivables at each reporting date in the consolidated statement of financial position includes estimated recoveries from charterers for hire, freight and demurrage billings, net of the allowance for doubtful trade receivables. Subsequent to initial recognition, trade receivables are measured at the lower of their original invoiced value and recoverable amount. The carrying amount of receivables is reduced through an allowance account. Impaired debts are derecognized when they are assessed as uncollectible.

(n) Insurance Claims: The Group recognises insurance claim recoveries for insured losses incurred on damages to vessels as insurance claims and are shown in the consolidated statement of financial position. Insurance claim recoveries are recorded net of any deductible amounts, at the time the Group's vessels suffer insured damages. They include the recoveries from the insurance companies for the claims, provided the amounts are virtually certain to be received. Claims are submitted to the insurance company, which may increase or decrease the claim amount. Such adjustments are recorded in the year they become known. Insurance claims as included in the statement of financial position have a carrying amount of U.S.$380 and U.S.$253 as at 31 December 2014 and 31 December 2013 respectively.

(o) Financial assets: Financial assets at fair value through profit or loss include financial assets held for trading and financial assets designated upon initial recognition at fair value through profit or loss. Financial assets are classified as held for trading if they are acquired for the purpose of selling or repurchasing in the near term. Financial assets at fair value through profit or loss are carried in the statement of financial position at fair value with net changes in fair value presented as finance costs (negative net changes in fair value) or finance income (positive net changes in fair value) in the statement of comprehensive income. As at 31 December 2014 the Group has disposed all shares registered to the vessel owning companies, resulting in the de-recognition of the Financial assets (Note 11).

(p) Vessels: The vessels are stated in the statement of financial position at cost, net of accumulated depreciation and any accumulated impairment. Vessel cost consists of the contract price for the vessel and any material expenses incurred upon acquisition of the vessel (initial repairs, improvements, delivery expenses and other expenditures) to prepare the vessel for its initial voyage. Subsequent expenditures for major improvements are also capitalised when it is probable that future economic benefits associated with the improvement will flow to the entity and the cost of the improvement can be measured reliably.

For vessels acquired in the second-hand market, and where the vessel is subject to an operating lease which is reflected in the acquisition cost of that vessel, the amount of the lease is determined in accordance with the lease policy of the Group (also see Note 2 (w)) and this component is amortized over the remaining term of the lease. The amortization is included as revenue in the consolidated statement of comprehensive income.

The cost of each of the Group's vessels is depreciated beginning when the vessel is ready for its intended use, on a straight-line basis over the vessels' remaining economic useful life, after considering the estimated residual value. Management estimates the useful life of new vessels at 25 years, which is consistent with industry practice. Acquired second-hand vessels are depreciated from the date of their acquisition over their remaining estimated useful life. The remaining useful life of the Group's vessels is between 3 and 22 years. A vessel is derecognised upon disposal or when no future economic benefits are expected from its use. Any gain or loss arising on de-recognition of the vessel (calculated as the difference between the net disposal proceeds and the carrying amount of the vessel including any unamortised portion of dry-docking) is included in the statement of comprehensive income in the year the vessel is derecognised.

From time to time the Group's vessels are required to be dry-docked in line with vessel flag and international regulations and standards at which time major repairs and maintenance that cannot be performed while the vessels are in operation are generally performed. The Group capitalises the costs associated with dry-docking as they occur by adding them to the cost of the vessel and amortises these costs on a straight-line basis over 2.5 years, which is generally the period until the next scheduled dry-docking. In the cases where the dry-docking takes place earlier than 2.5 years since the previous one, the carrying amount of the previous dry-docking is derecognised. In the event of a vessel sale, the respective carrying value of dry-docking costs is derecognised together with the vessel's carrying amount at the time of sale.

At the date of acquisition of a second hand-vessel or upon completion of construction of a new built vessel, management estimates the component of the cost that corresponds to the economic benefit to be derived until the next scheduled dry-docking of the vessel under the ownership of the Group, and this component is depreciated on a straight-line basis over the remaining period to the next estimated dry-docking date.

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

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

The calculation of value in use is made at the individual vessel level since separately identifiable cash flow information is available for each vessel. In developing estimates of future cash flows, the Group makes assumptions about future charter rates, vessel operating expenses, and the estimated remaining useful lives of the vessels. (see also Note 8)

The projected net operating cash flows are determined by considering:

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

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

iii) cash inflows are considered net of brokerage, and

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

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

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

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

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

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

During 2014, an impairment loss of U.S.$5,577 was recognised by the Group for the year ended 31 December 2014 (U.S.$nil as at 31 December 2013) and is included in the consolidated statement of Comprehensive Income (Note 8).

(r) Long-term debt: Long-term debt is initially recognised at the fair value of the consideration received net of issue costs directly attributable to the borrowing. After initial recognition, long-term debt is subsequently measured at amortised cost using the effective interest method. Amortised cost is calculated by taking into account any issue costs, and any discount or premium on settlement.

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expired. Where an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognized as finance expense in the consolidated statement of comprehensive income.

(s) Borrowing costs: Borrowing costs on loans specifically used to finance the construction, or reconstruction of vessels are capitalised to the cost of that asset during the construction period.

(t) Derivative financial instruments and hedging: The Group uses derivative financial instruments such as interest rate swaps to hedge its risks associated with interest rate and foreign exchange rates fluctuations respectively. Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently remeasured at fair value. Derivatives are carried as assets when the fair value is positive and as liabilities when the fair value is negative.

The fair value of interest rate swap and foreign currency forward contracts is determined through valuation techniques.

No derivative financial instruments were held by the company as at 31 December 2014. As at 31 December 2013 the Group's derivatives have not been designated as hedging instruments, therefore gains or losses arising from changes in their fair values were taken to the consolidated statement of comprehensive income.

(u) Segment Reporting: The Group reports financial information and evaluates its operations by charter revenues and not by other factors such as (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 the fleet and thus, the Group has determined that it operates under one reportable segment. Furthermore, when the Group charters a vessel to a charterer, the charterer is free to trade the vessel worldwide and, as a result, the disclosure of geographic information is impracticable. Revenue from the Group's largest client amounted to U.S.$16,261 for the year ended 31 December 2014 (2013: U.S.$25,299).

(v) Finance income: Finance income included in the consolidated statement of comprehensive income is earned from the Group's short term deposits and the interest rate swap and is recognised on an accrual basis.

(w) Leases: Leases of vessels where the Group does not transfer substantially all the risks and benefits of ownership of the vessel are accounted for as operating leases. Lease income on operating leases is recognized on a straight line basis over the lease term and classified under revenue in the consolidated statement of comprehensive income (see also Note 2(p)).

(x) Annual incentive plan: All share based compensation provided to Directors and Senior Management for their service is included in 'General and administrative expenses' of the Consolidated Statement of Comprehensive Income. The shares vest upon grant. The fair value of the employees' services received in exchange for the Company's restricted shares is accrued and recognized as an expense in the year of grant. Upon issuance of the relevant shares the total number of shares and their value is separately reflected in the Consolidated Statement of Changes in Equity.

(y) Share-based payment transactions: Employees and Directors of the Group receive remuneration also in the form of share-based payment transactions, whereby employees and directors render services as consideration for equity instruments (equity-settled transactions).

The cost of equity-settled transactions is recognized, together with a corresponding increase in other capital reserves in equity, over the period in which performance and/or service conditions are fulfilled. The cumulative expense recognized for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Group's best estimate of the number of equity instruments that will ultimately vest. The income statement expense or credit for a period represents the movement in cumulative expense recognized as at the beginning and the end of that period and is recognized in administrative expenses of the consolidated statement of comprehensive income.

Any dilutive effect of outstanding options is reflected as additional share dilution in the computation of diluted earnings per share.

(z) Share Capital: Ordinary shares are classified as equity. Incremental costs directly attributed to the issue of new shares are recognized in equity as deductions from proceeds.

(aa) Treasury Stock: Own equity that is reacquired (treasury shares) is recognised at cost and deducted from equity. No gain or loss is recognised in the statement of comprehensive income on the purchase, sale, issue or cancellation of the Group's own equity instruments. Any difference between the carrying amount and the consideration, if reissued is recognised in share premium. Voting rights related to the treasury shares are nullified for the Group and no dividends are allocated to them respectively.

(ab) Provisions: Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Where the Group expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the statement of comprehensive income net of any reimbursement.

(ac) Changes in accounting policies and disclosures:

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

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

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

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

Ø IFRS 11 Joint Arrangements

Ø IFRS 12 Disclosures of Interests in Other Entities

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

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

Ø IFRIC Interpretation 21: Levies

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

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

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

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

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

IFRS 10 replaces the portion of IAS 27 Consolidated and Separate Financial Statements that addresses the accounting for consolidated financial statements. It also addresses the issues raised in SIC-12 Consolidation - Special Purpose Entities. IFRS 10 establishes a single control model that applies to all entities including special purpose entities. The changes introduced by IFRS 10 will require management to exercise significant judgment to determine which entities are controlled and therefore are required to be consolidated by a parent, compared with the requirements that were in IAS 27. Management has assessed that there is no impact on the Group's financial position.

· IFRS 11 Joint Arrangements

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

· IFRS 12 Disclosures of Interests in Other Entities

IFRS 12 includes all of the disclosures that were previously in IAS 27 related to consolidated financial statements, as well as all of the disclosures that were previously included in IAS 31 and IAS 28. These disclosures relate to an entity's interests in subsidiaries, joint arrangements, associates and structured entities. A number of new disclosures are also required. Management has assessed the impact from the adoption of the standard and is disclosed in Note 9.  

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

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

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

These amendments remove the unintended consequences of IFRS 13 on the disclosures required under IAS 36. In addition, these amendments require disclosure of the recoverable amounts for the assets or CGUs for which impairment loss has been recognised or reversed during the period.  Management has assessed the impact from the adoption of the standard and is disclosed in Note 8.

· IFRIC Interpretation 21: Levies

The Interpretations Committee was asked to consider how an entity should account for liabilities to pay levies imposed by governments, other than income taxes, in its financial statements. This Interpretation is an interpretation of IAS 37 Provisions, Contingent Liabilities and Contingent Assets. IAS 37 sets out criteria for the recognition of a liability, one of which is the requirement for the entity to have a present obligation as a result of a past event (known as an obligating event). The Interpretation clarifies that the obligating event that gives rise to a liability to pay a levy is the activity described in the relevant legislation that triggers the payment of the levy. Management has assessed that there is no impact on the Group's financial position.

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

· IAS 16 Property, Plant & Equipment and IAS 38 Intangible assets (Amendment): Clarification of Acceptable Methods of Depreciation and Amortization

The amendment is effective for annual periods beginning on or after 1 January 2016. This amendment clarifies the principle in IAS 16 Property, Plant and Equipment and IAS 38 Intangible Assets that revenue reflects a pattern of economic benefits that are generated from operating a business (of which the asset is part) rather than the economic benefits that are consumed through use of the asset. As a result, the ratio of revenue generated to total revenue expected to be generated cannot be used to depreciate property, plant and equipment and may only be used in very limited circumstances to amortise intangible assets. The amendment has not yet been endorsed by the EU. Management has assessed that there will be no impact on the Group's financial position.

· IAS 19 Employee benefits (Amended): Employee Contributions

The amendment is effective for annual periods beginning on or after 1 February 2015. The amendment applies to contributions from employees or third parties to defined benefit plans. The objective of the amendment is to simplify the accounting for contributions that are independent of the number of years of employee service, for example, employee contributions that are calculated according to a fixed percentage of salary. Management is in the process of assessing the impact from the adoption of the amendment.

· IFRS 9 Financial Instruments - Classification and measurement

The standard is applied for annual periods beginning on or after 1 January 2018 with early adoption permitted. The final phase of IFRS 9 reflects all phases of the financial instruments project and replaces IAS 39 Financial Instruments: Recognition and Measurement and all previous versions of IFRS 9. The standard introduces new requirements for classification and measurement, impairment, and hedge accounting. The standard has not yet been endorsed by the EU. Management is in the process of assessing the impact from the adoption of the standard.

IFRS 11 Joint arrangements (Amendment): Accounting for Acquisitions of Interests in Joint Operations

The amendment is effective for annual periods beginning on or after 1 January 2016. IFRS 11 addresses the accounting for interests in joint ventures and joint operations. The amendment adds new guidance on how to account for the acquisition of an interest in a joint operation that constitutes a business in accordance with IFRS and specifies the appropriate accounting treatment for such acquisitions. The amendment has not yet been endorsed by the EU. Management is in the process of assessing the impact from the adoption of the amendment.

· IFRS 15 Revenue from Contracts with Customers

The standard is effective for annual periods beginning on or after 1 January 2017. IFRS 15 establishes a five-step model that will apply to revenue earned from a contract with a customer (with limited exceptions), regardless of the type of revenue transaction or the industry. The standard's requirements will also apply to the recognition and measurement of gains and losses on the sale of some non-financial assets that are not an output of the entity's ordinary activities (e.g. sales of property, plant and equipment or intangibles). Extensive disclosures will be required, including disaggregation of total revenue; information about performance obligations; changes in contract asset and liability account balances between periods and key judgments and estimates. The standard has not been yet endorsed by the EU. Management is in the process of assessing the impact from the adoption of the standard.

· IAS 27 Separate Financial Statements (amended)

The amendment is effective from 1 January 2016. This amendment will allow entities to use the equity method to account for investments in subsidiaries, joint ventures and associates in their separate financial statements and will help some jurisdictions move to IFRS for separate financial statements, reducing compliance costs without reducing the information available to investors. This amendment has not yet been endorsed by the EU. Management is in the process of assessing the impact from the adoption of the amendment.

· Amendment in IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates and Joint Ventures: Sale or Contribution of Assets between an Investor and its Associate or Joint Venture

The amendments address an acknowledged inconsistency between the requirements in IFRS 10 and those in IAS 28, in dealing with the sale or contribution of assets between an investor and its associate or joint venture. The main consequence of the amendments is that a full gain or loss is recognized when a transaction involves a business (whether it is housed in a subsidiary or not). A partial gain or loss is recognized when a transaction involves assets that do not constitute a business, even if these assets are housed in a subsidiary. The amendments will be effective from annual periods commencing on or after 1 January 2016. The amendments have not yet been endorsed by the EU. Management is in the process of assessing the impact from the adoption of these amendments.

· The IASB has issued the Annual Improvements to IFRSs 2010 - 2012 Cycle, which is a collection of amendments to IFRSs. The amendments are effective for annual periods beginning on or after 1 February 2015. Management is in the process of assessing the impact from the adoption of the improvements.

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

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

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

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

Ø IAS 16 Property Plant & Equipment: The amendment clarifies that when an item of property, plant and equipment is revalued, the gross carrying amount is adjusted in a manner that is consistent with the revaluation of the carrying amount.

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

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

· The IASB has issued the Annual Improvements to IFRSs 2011 - 2013 Cycle, which is a collection of amendments to IFRSs. The amendments are effective for annual periods beginning on or after 1 January 2015. Management is in the process of assessing the impact from the adoption of the improvements.

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

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

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

· The IASB has issued the Annual Improvements to IFRSs 2012 - 2014 Cycle, which is a collection of amendments to IFRSs. The amendments are effective for annual periods beginning on or after 1 January 2016. These annual improvements have not yet been endorsed by the EU.  Management is in the process of assessing the impact from the adoption of the improvements.

Ø IFRS 5 Non-current Assets Held for Sale and Discontinued Operations: The amendment clarifies that changing from one of the disposal methods to the other (through sale or through distribution to the owners) should not be considered to be a new plan of disposal, rather it is a continuation of the original plan. There is therefore no interruption of the application of the requirements in IFRS 5. The amendment also clarifies that changing the disposal method does not change the date of classification.

Ø IFRS 7 Financial Instruments: Disclosures: The amendment clarifies that a servicing contract that includes a fee can constitute continuing involvement in a financial asset. Also, the amendment clarifies that the IFRS 7 disclosures relating to the offsetting of financial assets and financial liabilities are not required in the condensed interim financial report.

Ø IAS 19 Employee Benefits: The amendment clarifies that market depth of high quality corporate bonds is assessed based on the currency in which the obligation is denominated, rather than the country where the obligation is located. When there is no deep market for high quality corporate bonds in that currency, government bond rates must be used.

Ø IAS 34 Interim Financial Reporting: The amendment clarifies that the required interim disclosures must either be in the interim financial statements or incorporated by cross-reference between the interim financial statements and wherever they are included within the greater interim financial report (e.g. in the management commentary or risk report). The Board specified that the other information within the interim financial report must be available to users on the same terms as the interim financial statements and at the same time. If users do not have access to the other information in this manner, then the interim financial report is incomplete.

· IFRS 10, IFRS 12 and IAS 28: Investment Entities: Applying the Consolidation Exception (Amendments)

The amendments address three issues arising in practice in the application of the investment entities consolidation exception. The amendments are effective for annual periods beginning on or after 1 January 2016. The amendments clarify that the exemption from presenting consolidated financial statements applies to a parent entity that is a subsidiary of an investment entity, when the investment entity measures all of its subsidiaries at fair value. Also, the amendments clarify that only a subsidiary that is not an investment entity itself and provides support services to the investment entity is consolidated. All other subsidiaries of an investment entity are measured at fair value. Finally, the amendments to IAS 28 Investments in Associates and Joint Ventures allow the investor, when applying the equity method, to retain the fair value measurement applied by the investment entity associate or joint venture to its interests in subsidiaries. These amendments have not yet been endorsed by the EU. Management has assessed that there will be no impact on the Group's financial position.

· IAS 1: Disclosure Initiative (Amendment)

The amendments to IAS 1 Presentation of Financial Statements further encourage companies to apply professional judgment in determining what information to disclose and how to structure it in their financial statements. The amendments are effective for annual periods beginning on or after 1 January 2016. The narrow-focus amendments to IAS clarify, rather than significantly change, existing IAS 1 requirements. The amendments relate to materiality, order of the notes, subtotals and disaggregation, accounting policies and presentation of items of other comprehensive income (OCI) arising from equity accounted Investments. These amendments have not yet been endorsed by the EU. Management is in the process of assessing the impact from the adoption of the amendment.

3. VOYAGE AND VESSEL OPERATING EXPENSES:

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

Voyage expenses