Regulatory Story
Go to market news section View chart   Order free annual report   Print
Company Goldenport Holdings Inc
TIDM GPRT
Headline

Annual Financial Report

Released 07:00 21-Mar-2013
Number 5095A07

RNS Number : 5095A
Goldenport Holdings Inc
21 March 2013
 



 

 

 

Goldenport Holdings Inc.

Athens, 21 March 2013

 

Final Results for the Year Ended 31 December 2012

 

Goldenport Holdings Inc. ("Goldenport" or "the Company"), (LSE: GPRT) the international shipping company that owns and operates a fleet of container and dry bulk vessels, today announces the results for the year ended 31 December 2012.

 

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

 

§ Revenue of US$ 78,271, -27.1% decrease (2011: US$ 107,329)

§ EBITDA of US$ 24,285, -52.1% decrease (2011: US$ 50,673)

§ Adjusted Net Loss of US$ 16,826 (2011: Adjusted Net Profit of US$ 2,339)

§ Impairment loss of US$ 47,600 (2011: nil)

§ Net Loss of US$ 65,339 (2011: Net Profit of US$ 2,339)

§ Earnings per share of US$ (0.71) calculated on 92,306,453 shares (2011: US$ 0.03 calculated on 91,179,150 shares)

§ Total cash as 31 December 2012 of US$ 22,789 (31 December 2011: US$ 42,018)

§ Net debt to book capitalisation, including the effect of impairment, as at 31 December 2012, 49% (31 December 2011: 47%)

 

Debt Financing Update

 

The Company has entered into supplemental agreements with the majority of its lenders providing for the reduction of principal repayments and the relaxation of certain financial and security coverage ratio covenants for the period up to the end of 2014. The ability of the Company to successfully complete these negotiations was due to the credibility and financial stability established since its IPO seven years ago, the long established reputation of the management with all of its lenders and the continued successful operation of its fleet with the maintenance of high utilisation rates, despite the very challenging conditions in the shipping markets.

 

Overall upon completion of our debt modification plan, debt repayment requirements have been reduced by US$17,890 and US$9,250 for the years 2013 and 2014 respectively. Furthermore we have obtained a relaxation of financial covenants including minimum security cover ratio, maximum leverage, interest cover ratio and minimum net worth for more than 80% of our loan portfolio.

 

During 2012 we have effected loan repayments of US$ 67,955 representing 24% of the outstanding debt in the beginning of the year.

 

The loan modification agreements along with the accelerated repayments effected in 2012 decreases the Company's breakeven rates and provides an appropriate level of headroom within our banking covenants for the next two years providing for the fleet's efficient operation even with the current challenging market fundamentals.

 

 

Acquisition of a Container vessel

 

The Company has agreed the acquisition of M/V Gallia, a 2,500TEU geared container vessel, built in 1998 at Thyssen Shipyard.  The purchase price is US$ 6,010 and the vessel will be delivered ex Drydocking with estimated delivery in May 2013. The vessel has already been chartered for 6-8 months and will start her employment immediately after the completion of the scheduled repairs.

CEO Statement (amounts in US$'000):

 

John Dragnis, Chief Executive Officer of the Company commented:

 

For the year ended 31 December 2012 excluding all one-off non-cash items, the Company reported a net loss of US$ 16,826 or US$ 0.18 per share. Our EBITDA was US$ 24,285, while we reported a net loss of US$ 65,339, which was mainly due to a non-cash impairment loss of US$ 47,600, related to the write down of the carrying amounts of certain vessels to their estimated recoverable amount.

 

In 2012, the dry market has experienced the worst recorded year in quarter of a century (BDI average 920p), dropping by 40% compared to 2011 (66% compared to 2010). Asset Values in response to poor earnings have bottomed out as well (in inflation adjusted terms). The container market remained under severe pressure for a fourth year with earnings remaining at depressed levels and close to all time low's; asset values for second hand vessels reduced further over the course of 2012 offering investment opportunities for the future. We retain our cautious view on the short-term performance of the markets while being optimistic for a recovery in the medium to long term. Already we have seen asset prices and rates bottoming out with slight upward trends. We expect that 2013 will allow us to employ our vessels at better terms than 2012.

 

We are pleased to announce the completion of our debt modification plan, instigated by us, which accompanied the disposal of a major part of our older tonnage as part of our strategy to progressively deleverage the Company whilst preserving sufficient levels of liquidity and headroom within our banking covenants so that we can confidently trade through this difficult market. During 2012 we proceeded with accelerated loan repayments of US$ 67,955, which represent a 24% decrease in bank debt since the beginning of the year. 

 

Taking advantage of our liquidity headroom and the low asset prices prevailing at the market, we proceeded with the acquisition of MV Gallia, which is an EBITDA and cash flow accretive addition in our fleet.

 

As part of our current strategy of maximising available liquidity the Board has reviewed the Company's dividend policy and has decided that it is prudent not to pay a 2012 final dividend.  We will continue to closely monitor this position and remain committed to the maximisation of Shareholder Value. Management remains a large shareholder and a strong supporter in Goldenport which we feel guarantees its viability and future success.

 

Despite the prevailing market conditions we retain high vessel utilisation levels, with no vessel in our fleet currently idle. Our modified loan profile, the fact that we have no further capital commitments, the stabilisation of both charter rates and asset values and our tight control of operational costs will enhance our cash reserves and position us to take advantage of the eventual market recovery.

 

 

 

 



Fleet Developments:

 

Vessels disposals (amounts in US$ '000)

 

On 16 March 2012, the Company agreed the sale of the 52,315 DWT, 1989-built vessel "Alex D", to an unaffiliated third party. The sale was concluded at a net consideration of US$ 6,486 cash and the vessel was delivered to the new owners on 26 March 2012. The gain resulting from the sale of the vessel was US$ 3,397.

 

On 9 May 2012, the Company agreed the sale of the 3,032 TEU, 1986-built vessel "MSC Finland", to an unaffiliated third party. The sale was concluded at a net consideration of US$ 7,010 cash and the vessel was delivered to the new owners on 24 May 2012. The gain resulting from the sale of the vessel was US$ 4,223.

 

On 18 June 2012, the Company agreed the sale of the 52,266 DWT, 1990-built vessel "Lindos", to an unaffiliated third party. The sale was concluded at a net consideration of US$ 5,259 cash and the vessel was delivered to the new owners on 6 July 2012. The gain resulting from the sale of the vessel was US$ 1,502.

 

On 10 October 2012, the Company agreed the sale of the 52,266 DWT, 1991-built vessel "Tilos", to an unaffiliated third party. The sale was concluded at a net consideration of US$ 5,704 cash and the vessel was delivered to the new owners on 31 October 2012. The loss resulting from the sale of the vessel was US$ 2,183.

 

On 2 November 2012, the Company agreed the sale of the 3,720 TEU, 1988-built vessel "Pos Yantian", to an unaffiliated third party. The sale was concluded at a net consideration of US$ 7,619 cash and the vessel was delivered to the new owners on 14 November 2012. The gain resulting from the sale of the vessel was US$ 938.

 

On 25 November 2012, the Company agreed the sale of the 52,266 DWT, 1992-built vessel "Limnos", to an unaffiliated third party. The sale was concluded at a net consideration of US$ 5,507 cash and the vessel was delivered to the new owners on 6 December 2012. The loss resulting from the sale of the vessel was US$ 2,663.

 

On 30 November 2012, the Company agreed the sale of the 3,720 TEU, 1993-built vessel "Bosporus Bridge", to an unaffiliated third party. The sale was concluded at a net consideration of US$ 7,271 cash and the vessel was delivered to the new owners on 14 December 2012. The loss resulting from the sale of the vessel was US$ 3,803.

 

Operational vessel acquisition (amounts in US$ '000)

 

On 29 August 2012, the Company took delivery of the M/V 'Thira' (ex 'Conti Seattle'), a container vessel of 2,100 TEU built in 1997, which was acquired for US$ 5,162.

 

Impairment

 

As a result of the impairment testing performed, the Company concluded that an adjustment of the book value of its fleet was appropriate. An impairment loss of US$47,600 was recognised by the Group for the year ended 31 December 2012. This is a non-cash item and has no impact on our lending arrangements. The impairment loss for 2011 was US$ nil.

 

 

 



Fleet Forward Coverage: 

 

The percentage of available days of the fleet already fixed under contracts as of 20 March 2013 assuming the earliest charter expiration is as follows:

 

 

2013 (1)

2014 (1)

Total Fleet

51% (39%)

5% (5%)

Containers

60% (42%)

0% (0%)

Bulk Carriers

42% (36%)

10% (10%)

 

(1) Percentage of available days of the fleet fixed under contract as reported on 01 March 2013, being the date of the previous trading update, is given in brackets

 

2013 Financial Calendar:

 

Despatch Annual Report and AGM Documentation:

April 2013

Annual General Meeting

06 June 2013

 

Conference Call and Webcast:

 

The Company's management will hold a conference call today Thursday 21 March at 2:00 P.M. (BST), 4:00 P.M. (Athens), 10:00 A.M. (EDT), to discuss the results.

 Conference Call details: 

Participants should dial into the call 10 minutes prior to the scheduled time using the following numbers: 0800-953-0329 (from the UK), 1-866-819-7111 (from the US) or +44 (0)1452-542-301 (all other callers). Please quote "Goldenport Holdings" to the operator.

 A telephonic replay of the conference call will be available until 28 March 2013 by dialing 0800-953-1533 (from the UK), 1-866-247-4222 (from the US) or +44 (0)1452-550-000 (all other callers). Access Code: 6906584#

 Slides and Audio Webcast:

There will also be a live and then archived webcast of the conference call, accessible through the Goldenport Holdings website (www.goldenportholdings.com). Participants to the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.

Enquiries:

 

Goldenport Holdings Inc.:

 

John Dragnis, Chief Executive Officer                                                       +30 210 8910500

Konstantinos Kampanaros, Interim Chief Financial Officer                         +30 210 8910500

 

Investor Relations Coordinators:

 

Capital Link:

Ioanna Messini - London                                                                          +44 203 206 1322

Nicolas Bornozis - New York                                                                     +1 212 661 7566

 

E-mail:                                                                                      goldenport@capitallink.com

                                                                                                            info@goldenport.biz

 

 



Market Outlook:

 

Current Market Outlook:

 

Containers:

 

As of January 2013 the containership fleet comprised around 5,665 ships of about 16.6 million TEU capacity. In terms of TEU carrying capacity the container fleet increased by 5.5% last year whilst the number of vessels in the fleet increased by 0.5% which is indicative of the larger size of vessel now being deployed by the major liner companies. The average age of the container fleet, as at 31 December 2012, was around 11 years.

 

The new-building market remained active in 2012 with 85 new orders placed (477,000 TEU capacity). In February 2013 the orderbook stood at 2,785 million TEU / 420 vessels (around 16.8% of the existing fleet in TEU terms) for delivery within the next 1-2 years.   Based upon current schedules 2013 new-building deliveries are estimated at 1.8 million TEU or 10.8% of the existing fleet with 1.13m TEU (or 63% of 2013 scheduled deliveries) of the order-book representing vessels in excess of 8,000 TEU.

 

Demand as measured by port handling movements has increased at an average annual growth rate of 7.8% since 2000. Last year (2012) demand for containers only increased by 3.2%. Demand for containers is almost entirely reliant on the fortunes of the US and EU economies from which 65% of effective demand is derived.

 

With the estimated expansion of the container fleet in 2013 of 5.5% (after allowing for scrapping) expected to slightly exceed the estimated growth in demand in 2013 of 4.5% the outlook for freight rates in this sector will remain stable.  We are confident that the container sector will recover as a result of increasing demand, a reduced newbuilding orderbook and increased scrapping of older vessels but the timing of this recovery is difficult to predict.

 

Dry Cargo Market

 

As of January 2013, the worldwide dry bulk carrier fleet of vessels in excess of 15,000 DWT comprised 10,161 vessels representing approximately 693 million DWT. The average age of the dry bulk carrier fleet as at 31 December 2012 was approximately 11 years (by DWT).

 

In 2012 35.2 million DWT of dry cargo vessels were scrapped compared to newbuilding deliveries of 101 million DWT.  The number of new orders placed within the year was 22 million DWT compared to 60 million DWT in 2011.  The net result for the world dry cargo fleet was an increase amounting to about 11.5% (in DWT terms) and 13.5% in the number of vessels (14% in 2011). 

 

Newbuilding tonnage on order as at 31 December 2012 was approximately 1,270 vessels of about 95.7 million DWT which constitutes approximately 13.8% of the world's existing fleet by DWT.  There are 143 Capesize, 416 Panamaxes and Post-Panamaxes, 346 Supramax/Handymaxes and 365 Handysize scheduled for delivery between 2013 and 2015.

 

Dry bulk shipping demand is a "derived" demand (measured in tons x miles) depending upon the distance over which cargo is transported and determined by the underlying demand for commodities transported (mainly raw materials). Overall in 2012 about 3.6 Billion tons of dry bulk cargoes were shipped.  Three of the most important cargoes are iron ore, coal and grain.

 

As of 1st March 2013 the Forward market average rates for the balance of the year (March - December 2013) per sector were as follows:

                           S P O T               F F A

Capesize           US$4,236          US$10,100

Panamax          US$8,281          US$8,100

Supramax         US$8,170          US$9,300

 

With the large number of newbuildings scheduled for delivery this year and global industrial production still recovering, the outlook for the dry bulk market, is similar to that for the container sector.

 

Summary of Selected Financial and Operating Data:

 


Year ended

Income Statement Data (in US$ thousand):

31-Dec-12


31-Dec-11

Revenue

78,271


107,329

EBITDA

24,285


50,673





EBIT

             (59,198)


7,614

Net ( Loss) / Profit

             (65,339)


2,339

Adjusted Net (Loss)/ Profit

             (16,826)


2,339

Weighted average number of shares

92,306,453


91,179,150

Earnings per Share, basic and diluted

                (0.71)


0.03

Adjusted Earnings per Share, basic and diluted

                (0.18)


0.03









FLEET DATA:




Average number of vessels

24


24

Number of vessels at end of period

20


26

 -Operating

19


25

- Non-operating

1


Ownership days

8,782


8,870

Available days

8,264


8,727

Operating days

7,372


8,552

Fleet utilisation

89%


98%





AVERAGE DAILY RESULTS (in US$)




Time Charter Equivalent (TCE) rate

8,278


11,501

Average daily vessel operating expenses 

4,177


4,668

 

 

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

 



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

 

Timeand Voyage Charter Revenues:

 

Revenues decreased by US$ 29,058 or 27.1% to US$ 78,271 for 2012 (2011: US$ 107,329). The main reason for this was the significant decrease in average freight rates generated by the fleet (measured in daily time charter equivalent rates). TCE rates decreased by US$ 3,223 or 28% to US$ 8,278 (2011: US$ 11,501).

 

Voyage expenses total:

 

Voyage expenses increased by US$ 2,901 or 41.7% to US$ 9,859 for 2012 (2011: US$ 6,958) mainly due to the increased cost of bunkers consumed during idle or ballast days.

 

Vesseloperating expenses:

 

Vessel operating expenses decreased by US$ 4,723 or11.4% to US$ 36,679 for 2012 (2011: US$ 41,402). The decrease is mainly attributed to the disposal of older tonnage, consistent with the Company's fleet renewal strategy as well as to the Company's focus on cost control.

 

On a per day basis operating expenses decreasedby US$ 491 per day or 10.5% to US$ 4,177 per day (2011: US$ 4,668 per day).

 

General and administrative expenses:

 

The General and administrative expenses decreased by US$ 984 or 23.9% to US$ 3,127 (2011: US$ 4,111). The decrease is mainly attributed to the decrease of the total Directors remuneration expense driven by the cessation of employment of two board members within 2012 and control of general remuneration levels.

 

Depreciation:

 

The vessels' depreciation charge decreased by US$ 5,268 or 13.8% to US$ 32,844 for 2012 (2011: US$ 38,112) due to the impairment charge posted within 2012 decreasing the average daily depreciation rate of the fleet compared to previous years. In addition, vessel MSC Accra was fully depreciated within first half of 2012.

 

Depreciationof dry-docking costs:

 

Depreciation of dry-docking costs decreased by US$ 1,714 or 32.4% to US$ 3,582 for 2012 (2011: US$ 5,296) mainly due to decreased capitalised costs in 2012 as compared to the previous year as well as the disposal of seven vessels within 2012.

 

Gain from vessel disposals:

 

In 2012 the Company disposed of seven vessels, Alex D, MSC Finland, Lindos, Tilos, Pos Yantian, Limnos and Bosporus Bridge, realizing a net profit of US$ 1,411, while in 2011 the Company disposed one vessel, Grand Vision realizing a profit of US$ 349.

 

Financing costs:

 

Interest expense slightly increased by US$ 19 or 0.3% to US$ 7,449 for 2012 (2011: US$ 7,430). This is mainly due to the accelerated amortization of upfront financing costs due to early repayment of specific loans, which was counterbalanced by the reduction of interest costs due to the large loan repayments during the year.

 



Cash and cash equivalents:

 

As of 31 December 2012, the Company had US$ 16,775 of unrestricted cash and cash equivalents (2011: US$ 38,012). The cash balance as of 31 December 2012 includes the cash flows provided by the investing activities which include the net proceeds from the disposal of vessels as well as the cash flows used in financing activities such as repayment of long term debt.

 

Restricted Cash:

 

The Company as of 31 December 2012 had US$ 6,014 of restricted cash (2011: US$ 4,000) representing part of the amount drawn in 2011 for the delivery instalment of the vessel 'D Skalkeas' as well as cash restricted in use, subject to improvement of loan to value ratio by the bank.

 



APPENDIX 1:

 

Fleet Employment Profile

 

New charters arranged since the last update on 1 March 2013, are as follows:

 

 

Operational fleet






Vessel

Type

Capacity

Built

Rate (US$) per day

Earliest






Expiration (1)

Dry Bulk


DWT










D Skalkeas

Post Panamax

93,000

2011

9,500

Jun-13

Golden Trader

Handymax

48,170

1994

8,100

Apr-13

Eleni D

Supramax

59,000

2010

9,200

Apr-13

Vasos

Capesize

152,065

1990

7,500

Apr-13

Sofia

Supramax

57,000

2011

11,000

Apr-13

Marie Paule

Supramax

53,800

2009

12,500

Apr-13

Alpine Trader

Supramax

53,800

2009

8,000

Apr-13







Containers


TEU










MSC Socotra

Post Panamax

4,953

1995

6,500

Oct-13

MSC Anafi

Sub Panamax

2,420

1994

6,100

Dec-13

Thira

Sub Panamax

2,100

1997

6,000

Aug-13







(1) Represents earliest day on which the charterer may redeliver the vessel


 

  

APPENDIX 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.

(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 one-off non-cash impairment loss and the provision for doubtful trade receivables for the same year.

 



 

APPENDIX 3:

 

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 4:

 

 

 

 

 

 

 

Goldenport Holdings Inc.

 

Consolidated Financial Statements

 

31 December 2012

 

 



 

 

 

 

 

 

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 2012 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.

 

Opinion

 

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Group as at 31 December 2012, 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.

 

 

 

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

 

20 March 2013


GOLDENPORT HOLDINGS INC.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the year ended 31 December 2012

 


Notes


2012
U.S.$ '000


2011
U.S.$ '000

Revenue



78,271


107,329







Expenses:






Voyage expenses

3


(9,859)


(6,958)

Vessel operating expenses

3


(36,679)


(41,402)

Management fees - related party

21


(4,321)


(4,185)

Depreciation

8


(32,844)


(38,112)

Depreciation of dry-docking costs

8


(3,582)


(5,296)

General and administrative expenses

4


(3,127)


(4,111)

Impairment Loss

8


(47,600)


-

Operating (loss)/ profit before disposal of vessels and provisions for doubtful trade receivables



(59,741)


7,265







Provision for doubtful trade receivables



(913)


-

Gain from disposal of vessels, net

8


1,411


349

Operating (loss) / profit including disposal of vessels and provision for doubtful trade receivables



(59,243)


7,614







Finance expense

5


(7,449)


(7,430)

Finance income



996


585

Foreign currency gain, net



312


1,570







(Loss)/Profit for the year



(65,384)


2,339







Total comprehensive income for the year



(65,384)


2,339







Attributable to:






Goldenport Holdings Inc. Shareholders



(65,339)


2,339

Non-controlling interest



(45)


-




(65,384)


2,339







Earnings per share (U.S.$):












- Basic and diluted

7


(0.71)


0.03







Weighted average number of shares, basic and diluted

7


92,306,453


91,179,150

 

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 2012

 


Notes


2012

U.S.$ '000


2011

U.S.$ '000

ASSETS






Non-current assets






Vessels at cost, net

8


387,762  


508,807  

Other non-current assets



-    


238  




387,762


509,045







Current assets






Inventories



97


403

Trade receivables



3,913


3,055

Insurance claims

11


445


571

Due from related parties

21


4,560


1,373

Prepaid expenses and other assets

12


2,895


6,598

Other current assets

10


238


1,435

Restricted cash

14


6,014


4,000

Cash and cash equivalents

13


16,775


38,018




34,937


55,453







TOTAL ASSETS



422,699


564,498







SHAREHOLDERS' EQUITY AND LIABILITIES






Equity attributable to equity holders of the parent






Issued share capital

15


935


912

Share premium

15


148,307


145,419

Other capital reserves



531


339

Retained earnings



42,819


113,980

Treasury Stock

6


(486)


(486)




192,106


260,164







Non-Controlling Interest

15


955


1,000

TOTAL EQUITY



193,061


261,164







Non-current liabilities






Long-term debt

16


188,553


245,640

Other non-current liabilities

10


159


1,060




188,712


246,700

Current liabilities






Trade payables



7,282


8,437

Current portion of long-term debt

16


24,115


34,983

Accrued liabilities and other payables

18


6,911


7,933

Other current liabilities

10


1,644


3,070

Deferred revenue

17


974


2,211




40,926


56,634







TOTAL LIABILITIES



229,638


303,334

TOTAL EQUITY AND LIABILITIES



422,699


564,498

 

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 2012


Number of shares


Par value U.S.$


Issued share capital U.S.$ '000


Share premium U.S.$ '000


Other capital reserves U.S.$ '000


Retained earnings U.S.$'000


Non-controlling interest

U.S.$'000


Treasury stock

U.S.$'000


Total Equity U.S.$'000

As at 1 January 2011

91,170,473


0.01


911


145,204


84


119,981


-


-


266,180



















Profit for the year











2,339






2,339



















Total Comprehensive Income

-


-


-


-


-


2,339


-


-


2,339



















Share based payments- AIP (Annual Incentive Plan) shares

111,965


0.01


1


204


-


-


-


-


205



















Share based payment transactions

-


-


-


-


255


-


-


-


255



















Dividends to equity shareholders

6,116


0.01


-


11


-


(8,340)


-


-


(8,329)



















Treasury Stock

(427,887)


0.01


-


-


-


-


-


(486)


(486)



















Non- controlling interest

-


-


-


-


-


-


1,000


-


1,000



















As at 31 December 2011

90,860,667


0.01


912


145,419


339


113,980


1,000


(486)


261,164



















Loss for the year

-


-


-


-


-


(65,339)


-


-


(65,339)



















Total Comprehensive Income

-


-


-


-


-


(65,339)


-


-


(65,339)



















Share based payment transactions

-


-


-


-


192


-


-


-


192



















Dividends to equity shareholders

2,331,091


0.01


23  


2,888


-


(5,822)


-


-


(2,911)



















Non- controlling interest

-


-


-


-


-


-


(45)


-


(45)



















As at 31 December 2012

93,191,758


0.01


935


148,307


531


42,819


955


(486)


193,061

 

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 2012


Notes


2012 U.S.$'000


2011 U.S.$'000

Operating activities






(Loss) / Profit for the year



(65,339)


2,339

Adjustments to reconcile (loss)/profit  for the year to net cash inflow from operating activities:






Depreciation

8


32,844


38,112

Depreciation of dry-docking costs

8


3,582


5,296

Impairment Loss

8


47,600


-

Gain from disposal of vessels

8


(1,411)


(349)

Finance expense

5


7,449


7,430

Finance income



(996)


(585)

Loss for the year attributable to Non-controlling interest

15


(45)


-

Share-based payment transactions

21


192


255

Foreign currency gain, net



(312)


(1,570)







Operating profit before working capital changes



23,564


50,928







Working capital adjustments:






Decrease/(Increase) in inventories



306


(403)

Decrease/(Increase) in trade receivables, prepaid expenses & other assets



4,280


(4,369)

Decrease/(Increase) in insurance claims

11


126


(138)

(Decrease)/Increase in trade payables, accrued liabilities & other payables



(4,082)


2,723

Decrease in deferred revenue

17


(1,237)


(3,036)







Net cash flows from  operating activities before movement in amounts due from related parties



22,957


45,705

Due from related parties

21


(3,187)


2,295

Net cash flows provided by operating activities



19,770


48,000

Investing activities






Acquisition/improvements of vessels

8


(5,162)


(10,616)

Proceeds from disposal of vessels net of commissions

8


44,856


6,168

Dry-docking costs



(1,197)


(2,884)

Advances for vessels under construction



-


(98,991)

Interest received



84


187

Net cash flows provided by / (used in) investing activities



38,581


(106,136)







Financing activities






Treasury stock



-


(486)

Proceeds from issue of long - term debt



-


101,200

Proceeds from Non-controlling interest



-


1,000

Repayment of long-term debt

16


(67,666)


(49,261)

Restricted cash

14


(2,014)


6,100

Interest paid

16


(7,349)


(7,181)

Dividends paid to equity holders of the parent

19


(2,911)


(8,329)

Net cash flows (used in) / provided by financing activities



(79,940)


43,043

Net decrease in cash and cash equivalents



(21,589)


(15,093)

Exchange gains on cash and cash equivalents



346


428

Cash and cash equivalents at beginning of year



38,018


52,683

Cash and cash equivalents at end of year



16,775


38,018







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


GOLDENPORT HOLDINGS INC.

NOTES TO THE FINANCIAL STATEMENTS

 

1.       FORMATION, BASIS OF PRESENTATION AND GENERAL INFORMATION:

 

Goldenport Holdings Inc. ('Goldenport' or the 'Company') was incorporated under the laws of 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 started trading at 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 2012 is the holding Company for eighteen intermediate holding companies, each in turn owning a vessel-owning company, as listed in the table below. Also, as at 31 December 2012 Goldenport is the holding Company of a fully owned subsidiary named Goldenport Marine Services, which provides the Company and its affiliates 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.

 

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

 

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 2012 and 2011.

 

The annual consolidated financial statements comprising the financial statements of the Company, its wholly owned subsidiaries, Tuzon Maritime Co, an 80% owned subsidiary (see (a) below) and the proportionally consolidated financial statements of the jointly controlled entity (see (b) below) were authorised for issue in accordance with a resolution of the Board of Directors on 14 March 2013.  The shareholders of the Company have the right to amend the financial statements at the Annual General Meeting to be held on 6 June 2013.

 



GOLDENPORT HOLDINGS INC.

NOTES TO THE FINANCIAL STATEMENTS

 

a)       The subsidiaries of the Company are as at 31 December 2012:

 


Intermediate holding company

Vessel - owning company

Country of Incorporation of vessel-owning company

Name of Vessel owned by Subsidiary

Year of acquisition of vessel

Type of Vessel

Sirene Maritime Inc.

Alvey Marine Inc.

Liberia

MSC Scotland

2006

Container

Kariba Shipping S.A.

Kosmo Services Inc.

Marshall Islands

MSC Fortunate

2006

Container

Muriel Maritime S.A.

Ipanema Navigation Corp.

Marshall Islands

Vasos

2006

Bulk Carrier

Knight Maritime S.A.

Mona Marine S.A.

Liberia

MSC Anafi

2007

Container

Foyer Marine Inc.

Ginger Marine Company

Marshall Islands

MSC Accra

2007

Container

Jaxon Navigation Ltd.

Hampson Shipping Ltd.

Liberia

Gitte

2007

Container

Tuscan Navigation Corp.

Longfield Navigation S.A.

Liberia

Brilliant

2007

Container

Oceanrace Maritime Limited

Seasight Marine Company

Marshall Islands

MSC Socotra

2009

Container

Aleria Navigation Company

Melia Shipping Limited

Liberia

Golden Trader

2010

Bulk Carrier

Alacrity Maritime Inc.

Giga Shipping Ltd.

Marshall Islands

Milos

2010

Bulk Carrier

Seaward Shipping Co.

Valaam Incorporated

Liberia

Sifnos

2010

Bulk Carrier

Lativa Marine Inc.

Dionysus Shipholding Carrier Co.

Liberia

Eleni D

2010

Bulk Carrier

Abyss Maritime Ltd.

Moonglade Maritime S.A.

Liberia

Pisti

2011

Bulk Carrier

Clochard Maritime Limited

Shila Maritime Corp.

Marshall Islands

D. Skalkeas

2011

Bulk Carrier

Jubilant Marine Company

Cheyenne Maritime Company

Marshall Islands

Sofia

2011

Bulk Carrier

Chanelle Shipping Company

Loden Maritime Co.

Marshall Islands

Erato

2011

Container

Accalia Navigation Limited

Tuzon Maritime Company

Liberia

Paris JR

2011

Container

Kamari Shipping  Corp.

Venetian Corporation

Liberia

Conti Seattle

2012

Container

Goldenport Marine Services

-

Marshall Islands

-









Dormant Companies


Baydream Shipping Inc.

Sycara Navigation S.A.

Nemesis Maritime Inc.

Platinum Shipholding S.A

Moyet Marine Ltd.

Hinter Marine S.A.

Prunella Shipholding S.A.

Guilford Marine S.A.

Superb Maritime S.A.

Hampton Trading S.A.

Fairland Trading S.A.

Nilwood Comp. Inc.

Platax Shipholding Carrier S.A.

Anemone Maritime S.A.

Bacaro Services Corp.

 



























 

Companies of disposed vessels not yet dissolved



 

 

Intermediate holding company

Vessel-owning company

Country of incorporation of vessel-owning company

 

 

Aloe Navigation Inc.

Karana Ocean Shipping Co. Ltd.

Malta

 

 

Carrier Maritime Co.

Black Diamond Shipping Ltd.

Malta

 

 

Medina Trading Co.

Carina Maritime Ltd.

Malta

 

 

Shavannah Marine Inc.

Serena Navigation Ltd.

Malta

 

 

Genuine Marine Corp.

Breaport Maritime S.A

Panama

 

 

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



GOLDENPORT HOLDINGS INC.

NOTES TO THE FINANCIAL STATEMENTS

 

b)       Proportionally consolidated the 50% Joint Venture (Note 9)

 

Intermediate holding company


Vessel-owning company


Country of Incorporation of vessel-owning company


Name of Vessel owned by Subsidiary


Year of acquisition of vessel


Type of Vessel

Sentinel Holdings Inc.


Citrus Shipping Corp.


Marshall Islands


Marie-Paule


2009


Bulk Carrier

Sentinel Holdings Inc.


Barcita Shipping S.A.


Marshall Islands


Alpine Trader


2009


Bulk Carrier

 

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 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 2012 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 proportionally consolidated financial statements of the jointly controlled entity, 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. The Group's interest in jointly controlled entities is accounted for by the proportional consolidation method of accounting. Jointly controlled entities have the same reporting date as the Group and apply common accounting policies. The Group combines its share of the joint venturers' individual income and expenses, assets and liabilities and cash flows on a line-by-line basis with similar items in the Group's financial statements.

 

(e)     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:



GOLDENPORT HOLDINGS INC.

NOTES TO THE FINANCIAL STATEMENTS

 

2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued):

 

Vessels: 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 based on an amount per ton of U.S.$0.18 applied on vessels' Light Weight Tonnage. (Vessels have a carrying amount of U.S.$387,762 and U.S.$508,807 as at 31 December 2012 and 2011, respectively). Estimates and assumptions relating to the impairment of vessels are discussed in paragraph (n).

 

Provisions for doubtful trade receivables: Provisions for doubtful trade receivables are recorded based on management's expected future collectability of the receivables. (Receivables as included in the statement of financial position in trade receivables, have a carrying amount of U.S.$3,913 and U.S.$3,055 as at 31 December 2012 and 2011, respectively). Provisions for doubtful trade receivables as at 31 December 2012 amounted to U.S.$913 (U.S.$ nil as at 31 December 2011).

 

Insurance Claims: Amounts for insurance claims are provided when amounts are virtually certain to be received, based on the Company's judgement and estimates of independent adjusters as to the amount of the claims. (Insurance claims have a carrying amount of U.S.$445 and U.S.$571 as at 31 December 2012 and 2011, respectively). 

 

(f)      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.  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.

 

Vessel voyage expenses 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.



GOLDENPORT HOLDINGS INC.

NOTES TO THE FINANCIAL STATEMENTS

 

2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued):

 

(g)     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.

 

(h)     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.

 

(i)      Restricted Cash: Certain of the Group's loan agreements may require the Group to deposit funds into a loan retention account in the name of the borrower.  The amount deposited is equivalent to the monthly portion of the next capital and interest payment.  The amount is not freely available to the Group, and it is used for repaying interest and principal on the loan. Restricted cash amounts to U.S.$ 6,014 (Note 14) as at 31 December 2012 (U.S.$ 4,000 as at 31 December 2011) and concerns a) part of the amount drawn for the delivery instalment of M/V D Skalkeas, which remains restricted in use from the financing bank and b) cash restricted in use, subject to improvement of loan to value ratio by the bank.

 

(j)      Inventories: Inventories consist of bunkers and are stated at the lower of cost or net realisable value. Cost is determined by the first-in first-out method. Any bunkers remaining on vessels which are laid up, are recognised as inventory. One vessel was laid up as at 31 December 2012.

 

(k)     Trade Receivables: The amount shown as trade receivables at each reporting date 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 recognised and carried 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.

 

(l)      Insurance Claims: The Group recognises insurance claim recoveries for insured losses incurred on damages to vessels. 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 and have not been material to the Group's financial position or results of operation in 2012 and 2011.

 

(m)    Vessels: The vessels are stated 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.



GOLDENPORT HOLDINGS INC.

NOTES TO THE FINANCIAL STATEMENTS

 

2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued):

 

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 (t)) and this component is amortized over the remaining term of the lease. The amortization is included in the income statement component of 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, other than those fully depreciated, is between 1 and 24 years. A vessel is derecognised upon disposal or when no future economic benefits are expected from its use. Any gain or loss arising on derecognition 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 for inspection and re-licensing 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 estimated dry-docking date.

 

(n)     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)



GOLDENPORT HOLDINGS INC.

NOTES TO THE FINANCIAL STATEMENTS

 

2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued):

 

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/years of depressed charter rates.  The historical averages reflect the full operating history of vessels of the same type and particulars with our operating fleet and they cover at least a full business cycle.

 

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

 

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

 

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

 

During 2012, an impairment loss of U.S.$ 47,600 was recognised by the Group for the year ended 31 December 2012 (U.S.$ nil as at 31 December 2011) and is included in the consolidated statement of Comprehensive Income.

 

The recoverable amount of the vessels impaired was based on their fair value, as determined by independent marine appraiser less costs to sell with the exception of one vessel for which the recoverable amount was based on its value in use. The recoverable amount of this vessel was determined based on a value in use calculation using cash flow projections for the remaining life of the vessel. The discount rate (WACC) applied to the cash flow projections is 5.68%.

 

(o)     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.



GOLDENPORT HOLDINGS INC.

NOTES TO THE FINANCIAL STATEMENTS

 

2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued):

 

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 in profit or loss.

 

(p)     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.

 

(q)     Derivative financial instruments and hedging: The Group uses derivative financial instruments such as interest rate swaps and foreign currency forwards 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.

 

None of the Group's derivatives have been designated as hedging instruments, therefore gains or losses arising from changes in the fair value of the derivatives are taken to the statement of comprehensive income.

 

(r)      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.$31,050 for the year ended 31 December 2012 (2011: U.S. $36,888).

 

(s)      Finance income: Finance income is earned from the Group's short term deposits and the interest rate swaps and is recognised on an accrual basis.

 

(t)      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 (see also note 2(f)).

 

(u)     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.



 

GOLDENPORT HOLDINGS INC.

NOTES TO THE FINANCIAL STATEMENTS

 

2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued):

 

(v)     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.

 

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

 

(w)     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.

 

(x)     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.

 

(y)     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.

 

(z)      Changes in accounting policies and disclosures

 

A) Changes in accounting policies and disclosures

 

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 2012:

 

Ø  IFRS 7 Financial Instruments: Disclosures (Amended) - Enhanced Derecognition Disclosure Requirements

Ø  IAS 12 Income Taxes (Amended)  -Recovery of Underlying Assets 



 

GOLDENPORT HOLDINGS INC.

NOTES TO THE FINANCIAL STATEMENTS

 

2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued):

 

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

 

·        IFRS 7 Financial Instruments: Disclosures - Enhanced Derecognition Disclosure Requirements (Amendment)

The amendment requires additional disclosure about financial assets that have been transferred but not derecognised to enable the user of the financial statements to understand the relationship with their associated liabilities. In addition, the amendment requires disclosures about continuing involvement in derecognised assets to enable the user to evaluate the nature of, and risks associated with such involvement. Management has assessed that there is no impact on the Group's statement of financial position.

 

Ø  IAS 12 Income Taxes (Amended)  -Recovery of Underlying Assets 

 

The amendment clarifies the determination of deferred tax on investment property measured at fair value. The amendment introduces a rebuttable presumption that deferred tax on investment property measured using the fair value model in IAS 40 should be determined on the basis that its carrying amount will be recovered through sale. Furthermore, it introduces the requirement that deferred tax on non-depreciable assets that are measured using the revaluation model in IAS 16 always be measured on a sale basis of the asset. Management has assessed that there is no impact on the Group's statement of financial position.

 

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

 

·        IAS 1 Financial Statement Presentation (Amended) - Presentation of Items of Other Comprehensive Income

The amendment is effective for annual periods beginning on or after 1 July 2012. The amendments to IAS 1 change the grouping of items presented in OCI. Items that could be reclassified (or 'recycled') to profit or loss at a future point in time (for example, net gain on hedge of net investment, exchange differences on translation of foreign operations, net movement on cash flow hedges and net loss or gain on available-for-sale financial assets) would be presented separately from items that will never be reclassified (for example, actuarial gains and losses on defined benefit plans and revaluation of land and buildings). The amendment affects presentation only and has no impact on the Group's financial position or performance. Management has assessed that there is no impact on the Group's statement of comprehensive income.

 

·        IAS 19 Employee Benefits (Revised)

The amendment is effective for annual periods beginning on or after 1 January 2013. The IASB has issued numerous amendments to IAS 19. These range from fundamental changes such as removing the corridor mechanism and the concept of expected returns on plan assets to simple clarifications and re-wording. Management has assessed that there is no impact on the Group's financial position.



GOLDENPORT HOLDINGS INC.

NOTES TO THE FINANCIAL STATEMENTS

 

2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued):

 

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

The Standard is effective for annual periods beginning on or after 1 January 2013. As the Group applies IFRS as adopted by the EU, the effective date is 1 January 2014.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 is in the process of assessing the impact from the adoption of the standard.

 

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

The amendment is effective for annual periods beginning on or after 1 January 2014. 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 7 Financial Instruments: Disclosures (Amended) - Offsetting Financial Assets and Financial Liabilities

The amendment is effective for annual periods beginning on or after 1 January 2013. These amendments require an entity to disclose information about rights to set-off and related arrangements (e.g. collateral agreements). The disclosures would provide users with information that is useful in evaluating the effect of netting arrangements on an entity's financial position. The new disclosures are required for all recognized financial instruments that are set off in accordance with IAS 32 Financial Instruments: Presentation. The disclosures also apply to recognized financial instruments that are subject to an enforceable master netting arrangement or similar agreement, irrespective of whether they are set off in accordance with IAS 32. Management has assessed that there is no impact on the Group's financial position.

 

·        IFRS 9 Financial Instruments: Classification and Measurement

The new standard is effective for annual periods beginning on or after 1 January 2015. IFRS 9, as issued, reflects the first phase of the IASBs work on the replacement of IAS 39 and applies to classification and measurement of financial assets and financial liabilities as defined in IAS 39. The standard was initially effective for annual periods beginning on or after 1 January 2013, but amendments to IFRS 9 Mandatory Effective Date of IFRS 9 and Transition Disclosures, issued in December 2011, moved the mandatory effective date to 1 January 2015. In subsequent phases, the IASB will address hedge accounting and impairment of financial assets. The adoption of the first phase of IFRS 9 will have an effect on the classification and measurement of financial assets, but will not have an impact on classification and measurements of financial liabilities. The Group will quantify the effect in conjunction with the other phases, when the final standard including all phases is issued. This standard has not yet been endorsed by the EU. Management is in the process of assessing the impact of the new standard on the financial position or performance of the Group.



GOLDENPORT HOLDINGS INC.

NOTES TO THE FINANCIAL STATEMENTS

 

2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued):

 

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

The new standard is effective for annual periods beginning on or after 1 January 2013. As the Group applies IFRS as adopted by the EU, the effective date is 1 January 2014. 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

The new standard is effective for annual periods beginning on or after 1 January 2013. As the Group applies IFRS as adopted by the EU, the effective date is 1 January 2014.   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 is in the process of assessing the impact of the new standard on the financial position or performance of the Group.

 

·        IFRS 12 Disclosures of Interests in Other Entities

The new standard is effective for annual periods beginning on or after 1 January 2013. As the Group applies IFRS as adopted by the EU, the effective date is 1 January 2014.  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 is in the process of assessing the impact of the new standard on the financial position or performance of the Group.

 

·        IFRS 13 Fair Value Measurement

The new standard is effective for annual periods beginning on or after 1 January 2013. IFRS 13 establishes a single source of guidance under IFRS for all fair value measurements.  IFRS 13 does not change when an entity is required to use fair value, but rather provides guidance on how to measure fair value under IFRS when fair value is required or permitted. Management is in the process of assessing the impact of the new standard on the financial position or performance of the Group.

 

·        The IASB has issued the Annual Improvements to IFRSs - 2009 - 2011 Cycle, which contains amendments to its standards and the related Basis for Conclusions. The annual improvements project provides a mechanism for making necessary, but non-urgent, amendments to IFRS. The effective date for the amendments is for annual periods beginning on or after 1 January 2013. This project has not yet been endorsed by the EU. Management is in the process of assessing the impact of the project on the financial position or performance of the Group.



GOLDENPORT HOLDINGS INC.

NOTES TO THE FINANCIAL STATEMENTS

 

2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

 

Ø  IAS 1 Presentation of Financial Statements: This improvement clarifies the difference between voluntary additional comparative information and the minimum required comparative information. Generally, the minimum required comparative period is the previous period.

Ø  IAS 16 Property, Plant and Equipment: This improvement clarifies that major spare parts and servicing equipment that meet the definition of property, plant and equipment are not inventory.

Ø  IAS 32 Financial Instruments, Presentation: This improvement clarifies that income taxes arising from distributions to equity holders are accounted for in accordance with IAS 12 Income Taxes.

Ø  IAS 34 Interim Financial Reporting: The amendment aligns the disclosure requirements for total segment assets with total segment liabilities in interim financial statements. This clarification also ensures that interim disclosures are aligned with annual disclosures.

 

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

The guidance is effective for annual periods beginning on or after 1 January 2013. The IASB issued amendments to IFRS 10 Consolidated Financial Statements, IFRS 11 Joint Arrangements and IFRS 12 Disclosure of Interests in Other Entities. The amendments change the transition guidance to provide further relief from full retrospective application. The date of initial application' in IFRS 10 is defined as 'the beginning of the annual reporting period in which IFRS 10 is applied for the first time'. The assessment of whether control exists is made at 'the date of initial application' rather than at the beginning of the comparative period. If the control assessment is different between IFRS 10 and IAS 27/SIC-12, retrospective adjustments should be determined. However, if the control assessment is the same, no retrospective application is required. If more than one comparative period is presented, additional relief is given to require only one period to be restated. For the same reasons IASB has also amended IFRS 11 Joint Arrangements and IFRS 12 Disclosure of Interests in Other Entities to provide transition relief. This guidance has not yet been endorsed by the EU. Management is in the process of assessing the impact of the guidance on the financial position or performance of the Group.

 

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

The amendment is effective for annual periods beginning on or after 1 January 2014. The amendment applies to a particular class of business that qualify as investment entities. The IASB uses the term 'investment entity' to refer to an entity whose business purpose is to invest funds solely for returns from capital appreciation, investment income or both. An investment entity must also evaluate the performance of its investments on a fair value basis. Such entities could include private equity organisations, venture capital organisations, pension funds, sovereign wealth funds and other investment funds. Under IFRS 10 Consolidated Financial Statements, reporting entities were required to consolidate all investees that they control (i.e. all subsidiaries). The Investment Entities amendment provides an exception to the consolidation requirements in IFRS 10 and requires investment entities to measure particular subsidiaries at fair value through profit or loss, rather than consolidate them.  The amendment also sets out disclosure requirements for investment entities. This project has not yet been endorsed by the EU.Management has assessed that there is no impact on the Group's financial position.



GOLDENPORT HOLDINGS INC.

NOTES TO THE FINANCIAL STATEMENTS

 

3.       VOYAGE AND VESSEL OPERATING EXPENSES:

 

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

 

Voyage expenses


2012 U.S.$'000


2011 U.S.$'000

Port charges

(872)


(573)

Bunkers (fuel costs), net

(4,369)


(172)

Commissions

(3,114)


(4,162)


(8,355)


(4,907)





Voyage expenses - related party




Commissions (note 21(a))

(1,504)


(2,051)





Total voyage expenses

(9,859)


(6,958)

 

Vessel operating expenses


2012 U.S.$'000


2011 U.S.$'000

Crew expenses

(18,956)


(19,710)

Stores & Consumables

(932)


(1,381)

Spares

(2,499)


(2,526)

Repairs & Maintenance

(1,387)


(2,098)

Lubricants

(4,459)


(6,476)

Insurance

(4,077)


(4,501)

Taxes (other than income tax)

(674)


(636)

Other operating expenses

(3,695)


(4,074)

Total vessel operating  expenses

(36,679)


(41,402)

 

4.       GENERAL AND ADMINISTRATIVE EXPENSES:

 


2012 U.S.$'000


2011 U.S.$'000

Directors and Management team Remuneration

(1,163)


(1,289)

Share-based payment transactions (Note 21(b))

(192)


(255)

Payroll cost (Goldenport Marine Services)

(829)


(1,099)

Rents

(314)


(322)

Audit fees

(239)


(270)

Legal fees

(24)


(36)

Other

(366)


(840)


(3,127)


(4,111)



GOLDENPORT HOLDINGS INC.

NOTES TO THE FINANCIAL STATEMENTS

 

5.       FINANCE EXPENSE:

 


2012 U.S.$'000


2011 U.S.$'000

Interest expense

(7,052)


(7,210)

Finance charges amortisation

(397)


(220)


(7,449)


(7,430)

 

6.       TREASURY STOCK - LIMITED SHARE BUY BACK PROGRAMME:

 

On 26 September 2011, the Group commenced a limited share buy-back programme, which was conducted in accordance with the resolution passed at the fifth Annual General Meeting on 11 May 2011, providing the Company a general authorisation to make purchases of up to 9,128,243 shares of U.S.$0.01 each, representing approximately 10% of the Company's issued share capital at the Annual General Meeting. During the period from 26 September 2011 to 31 December 2011, 427,887 shares of U.S.$0.01 par value each, were purchased under the buy-back share programme. The purchase cost amounted to U.S.$486 and is separately reflected in the accompanying Consolidated Statement of Changes in Equity. During 2012, there were no share purchases under the buy-back programme.

 

7.       EARNINGS PER SHARE:

 

Basic and diluted earnings per share ("EPS") of U.S.$(0.71) (2011: U.S.$0.03) are calculated by dividing the (loss)/profit for the year attributable to Goldenport Holdings Inc. shareholders ((U.S.$ 65,339) and U.S.$2,339 for the years ended 31 December 2012 and 31 December 2011, respectively), by the weighted average number of shares outstanding (92,306,453 and 91,179,150 for the years ended 31 December 2012 and 31 December 2011, respectively). The weighted average number of shares outstanding reflects the weighted average number of shares existed on 31 December 2011 and the shares issued on 18 May 2012 relating to the share dividend programme (as approved by the AGM on 11 May 2012).

 

Diluted EPS reflects the potential dilution that could occur if share options or other contracts to issue shares were exercised or converted into shares.



GOLDENPORT HOLDINGS INC.

NOTES TO THE FINANCIAL STATEMENTS

 

8.       VESSELS:

 

Vessels consisted of the following at 31 December:

 


2012 U.S.$'000


2011 U.S.$'000

Cost




At 1 January

648,849


468,605

Additions

5,162


10,616

Transfer from advances for vessel acquisition

-


2,432

Transfer from vessels under construction

-


173,957

Disposals

(109,324)


(6,761)

At 31 December

544,687


648,849

Depreciation




At 1 January

(145,065)


(108,098)

Depreciation charge for the year

(32,844)


(38,112)

Impairment loss

(47,600)


 -

Disposals

67,020


1,145

Accumulated depreciation

(158,489)


(145,065)





Net carrying amount of vessels

386,198


503,784





Cost of dry-dockings




At 1 January

47,096


44,651

Additions

1,264


2,865

Disposals

(2,624)


(420)

At 31 December

45,736


47,096

Depreciation




At 1 January

(42,073)


(36,994)

Depreciation charge for the year

(3,582)


(5,296)

Disposals

1,483


217

Accumulated depreciation

(44,172)


(42,073)





Net carrying amount of dry-docking costs

1,564


5,023





Total net carrying amount at 31 December

387,762


508,807

 

The gross carrying amount of vessels, which have been fully depreciated to their residual value and were still in use as at 31 December 2012, was U.S.$1,534 (U.S.$2,787 as at 31 December 2011).

 

All of the Company's vessels, except for vessels Paris JR, Conti Seattle, MSC Accra and MSC Socotra (see also note 16) having an aggregate carrying value of U.S.$19,877 as at 31 December 2012, have been provided as collateral to secure the loans discussed in note 16.



GOLDENPORT HOLDINGS INC.

NOTES TO THE FINANCIAL STATEMENTS

 

8.       VESSELS (continued):

 

Operational vessel acquisition

 

On 29 August 2012, the Company took delivery of the M/V 'Conti Seattle', a container vessel of 2,100 TEU built in 1997, which was acquired for U.S.$5,162.

 

Disposals

 

On 16 March 2012, the Company agreed the sale of the 52,315 DWT, 1989-built vessel "Alex D", to an unaffiliated third party. The sale was concluded at a net consideration of U.S.$6,486 cash and the vessel was delivered to the new owners on 26 March 2012. As of delivery date, M/V Alex D had a net carrying value of U.S.$3,089. A commission of 3% on the gross consideration was paid for this disposal. The gain resulting from the sale of the vessel was U.S.$3,397 and is included in the consolidated statement of comprehensive income.

 

On 9 May 2012, the Company agreed the sale of the 3,032 TEU, 1986-built vessel "MSC Finland", to an unaffiliated third party. The sale was concluded at a net consideration of U.S.$7,010 cash and the vessel was delivered to the new owners on 24 May 2012. As of delivery date, M/V MSC Finland had a net carrying value U.S.$2,787. A commission of 3% on the gross consideration was paid for this disposal. The gain resulting from the sale of the vessel was U.S.$4,223 and is included in the consolidated statement of comprehensive income.

 

On 18 June 2012, the Company agreed the sale of the 52,266 DWT, 1990-built vessel "Lindos", to an unaffiliated third party. The sale was concluded at a net consideration of U.S.$5,259 cash and the vessel was delivered to the new owners on 6 July 2012. As of delivery date, M/V Lindos had a net carrying value U.S.$3,757. A commission of 3% on the gross consideration was paid for this disposal. The gain resulting from the sale of the vessel was U.S.$1,502 and is included in the consolidated statement of comprehensive income.

 

On 10 October 2012, the Company agreed the sale of the 52,266 DWT, 1991-built vessel "Tilos", to an unaffiliated third party. The sale was concluded at a net consideration of U.S.$5,704 cash and the vessel was delivered to the new owners on 31 October 2012. As of delivery date, M/V Tilos had a net carrying value U.S.$7,887. A commission of 3% on the gross consideration was paid for this disposal. The loss resulting from the sale of the vessel was U.S.$2,183 and is included in the consolidated statement of comprehensive income.

 

On 2 November 2012, the Company agreed the sale of the 3,720 TEU, 1988-built vessel "Pos Yantian", to an unaffiliated third party. The sale was concluded at a net consideration of U.S.$7,619 cash and the vessel was delivered to the new owners on 14 November 2012. As of delivery date, M/V Pos Yantian had a net carrying value U.S.$6,681. A commission of 3% on the gross consideration was paid for this disposal. The gain resulting from the sale of the vessel was U.S.$938 and is included in the consolidated statement of comprehensive income.

 

On 25 November 2012, the Company agreed the sale of the 52,266 DWT, 1992-built vessel "Limnos", to an unaffiliated third party. The sale was concluded at a net consideration of U.S.$5,507 cash and the vessel was delivered to the new owners on 6 December 2012. As of delivery date, M/V Limnos had a net carrying value U.S.$8,170. A commission of 3% on the gross consideration was paid for this disposal. The loss resulting from the sale of the vessel was U.S.$2,663 and is included in the consolidated statement of comprehensive income.



GOLDENPORT HOLDINGS INC.

NOTES TO THE FINANCIAL STATEMENTS

 

8.       VESSELS (continued):

 

On 30 November 2012, the Company agreed the sale of the 3,720 TEU, 1993-built vessel "Bosporus Bridge", to an unaffiliated third party. The sale was concluded at a net consideration of U.S.$7,271 cash and the vessel was delivered to the new owners on 14 December 2012. As of delivery date, M/V Bosporus Bridge had a net carrying value U.S.$11,074. A commission of 3% on the gross consideration was paid for this disposal. The loss resulting from the sale of the vessel was U.S.$3,803 and is included in the consolidated statement of comprehensive income.

 

Dry-docking costs

 

During 2012 six vessels of the Group completed scheduled dry-dockings at a cost of U.S.$1,264 (U.S.$ 1,865 as at 31 December 2011 for dry docking of three vessels as well as an amount of U.S.$1,000 related to the dry docking components of the new build vessels delivered in 2011).

 

Impairment

 

An impairment loss of U.S.$47,600 was recognised by the Group for the year ended 31 December 2012. The impairment loss for 2011 was U.S.$ nil. The Group's accounting policy regarding impairment of vessels is described in Note 2(n).

 

9.       JOINT VENTURE:

 

The Group's 50% portion in the consolidated financial statements of Sentinel Holdings Inc., as at 31 December and for the year then ended were as follows:

 

Consolidated Statement of Financial Position

2012

U.S.$'000

 

2011

U.S.$'000

ASSETS

 

 

 

Non-current assets

 

 

 

Vessels

27,667  

 

28,844  

 

27,667  

 

28,844  

Current assets

 

 

 

Prepaid expenses and other assets

1,058  

 

784  

Cash and cash equivalents

842  

 

669  

 

1,900  

 

1,453  

TOTAL ASSETS

29,567  

 

30,297  

 

 

 

 

SHAREHOLDERS' EQUITY AND LIABILITIES

 

 

 

Equity attributable to Goldenport Holdings Inc. shareholders

 

 

 

Retained earnings

2,850  

 

4,455  

TOTAL EQUITY

2,850  

 

4,455  

 

 

 

 

Non-current liabilities

 

 

 

Long-term debt

14,095

 

19,136  

 

14,095  

 

19,136  

Current liabilities

 

 

 

Current portion of long-term debt

4,762  

 

1,412  

Other liabilities

7,860  

 

5,294  

 

12,622  

 

6,706  

TOTAL LIABILITIES

26,717  

 

25,842  

TOTAL EQUITY AND LIABILITIES

29,567  

 

30,297  



GOLDENPORT HOLDINGS INC.

NOTES TO THE FINANCIAL STATEMENTS

 

9.       JOINT VENTURE (continued):

 

Consolidated Statement of Comprehensive Income

2012 U.S.$'000


2011 U.S.$'000

Revenue

3,059


5,090





Expenses




Voyage expenses

(371)


(263)

Vessel operating expenses

(2,336)


(1,449)

Management fees - related party

(256)


(256)

Depreciation

(1,206)


(1,203)

Depreciation of dry-docking costs

(27)


(79)

Operating profit 

(1,137)


1,840





Finance expense

(470)


(471)

Foreign currency loss, net

2


17

(Loss)/Profit for the year attributable to Goldenport Holdings Inc. shareholders

(1,605)


1,386

 

10.    OTHER ASSETS - LIABILITIES:

 

ASSETS

 

The amounts in the accompanying statement of financial position are analysed as follows:

 


2012 U.S.$'000


2011 U.S.$'000

Non current:




Non-level charters

-


238


-


238





Current:




Non-level charters

238


1,435


238


1,435

 

The amount of U.S.$238 as at 31 December 2012 (U.S.$ 1,673 as at 31 December 2011) relates to the asset created upon accounting for charter agreements with specified rate increases over the charter term (non-level charters).



GOLDENPORT HOLDINGS INC.

NOTES TO THE FINANCIAL STATEMENTS

 

10.    OTHER ASSETS - LIABILITIES (continued)

 

LIABILITIES

 

The amounts in the accompanying statement of financial position are analysed as follows:

 


2012 U.S.$'000


2011 U.S.$'000

Non current:




Fair value of interest rate swap- non current (1)

(159)


(360)

Shipyard credit- non current (2)

-


(700)









Fair value of interest rate swap- current(1)

(244)


(270)

Shipyard credit- current (2)

(1,400)


(2,800)

 

1) Interest rate swap

 

During 2007, the Group entered into an interest rate swap for the loan of vessel Bosporus Bridge. The initial notional amount of this contract amounted to U.S.$12,166 amortising in accordance with the initial loan repayment schedule. Under the swap agreement, the Group exchanged variable to fixed interest rate at 4.64%. The fair value of the specific derivative financial instrument as at 31 December 2012 and 31 December 2011 was a liability of U.S.$403 and U.S.$630 respectively, which is included in other non-current  and current liabilities in the accompanying consolidated statement of financial position and gains or losses arising from changes in the fair value of the interest rate swap are taken to the statement of comprehensive income as finance income or finance expense respectively. 

 

During 2009, the Group entered into an interest rate swap for the loan of vessels MSC Finland and MSC Socotra. The initial notional amount of this contract amounted to U.S.$11,900 amortising in accordance with the loan repayment schedule. Under the swap agreement, the Group exchanged variable to fixed interest rate at 3.23%. The specific derivative financial instrument matured in December 2011 and therefore no amount is included in the consolidated statement of financial position as at 31 December 2012 and as at 31 December 2011 respectively.

 

All financial instruments carried at fair value are categorised in three categories defined as follows:

Level 1 - Quoted market prices

Level 2 - Valuation techniques based on market observable inputs

Level 3 - Valuation techniques based on non-market observable inputs

 

Both of the interest rate swaps of the Group were assessed as Level 2.

 

As the Group did not designate the derivative agreements as accounting hedge, net gains resulting from these derivative instruments, which approximated U.S.$227 and U.S.$397 for the years ended 31 December 2012 and 2011, respectively, were recorded in finance income in the consolidated statement of comprehensive income.

 

Variability can appear in floating rate assets, floating rate liabilities or from certain types of forecasted transactions, and can arise from changes in interest rates or currency exchange rates.



 

GOLDENPORT HOLDINGS INC.

NOTES TO THE FINANCIAL STATEMENTS

 

10.    OTHER ASSETS - LIABILITIES (continued)

 

2) Shipyard credit

 

On 12 July 2011, the Group entered into an agreement with Cosco (Zhousan) Shipyard Co. Ltd. to defer part of the delivery instalment of vessel M/V Sofia, amounting to U.S.$4,200. The outstanding balance of the deferred amount as at 31 December 2012 is U.S.$1,400 and is repayable in two equal quarterly interest bearing instalments of U.S.$700 each. The first payment is due on 13th April 2013 and the last one on 13th July 2013.

 

11.     INSURANCE CLAIMS:

 


2012 U.S.$'000


2011 U.S.$'000

Balance as at 1 January

571


433

Additions

717


825

Collections

(672)


(687)

Amounts written off

(171)


-

Balance as at 31 December

445


571

 

12.     PREPAID EXPENSES AND OTHER ASSETS:

 

The amounts in the accompanying statement of financial position at 31 December are analysed as follows:

 


2012 U.S.$'000


2011 U.S.$'000

Antipiracy costs receivable from charterers

104


1,217

Prepaid insurance cost

144


247

Prepaid fuel cost

210


3,668

Other prepaid expenses

2,437


1,466


2,895


6,598

 

13.     CASH AND CASH EQUIVALENTS

 


2012 U.S.$'000


2011 U.S.$'000

Cash at banks

2,997


7,833

Short term deposits at banks

13,778


30,185


16,775


38,018

 

Cash at banks earns interest at floating rates based on daily bank deposit rates. Short term deposits are made for varying periods of between one day and three months, depending on the immediate cash requirements of the Group, and earn interest at the respective short-term deposit rates.

 

The Group's loan agreements contain minimum liquidity clauses requiring available cash balances of at least U.S.$10,666 (U.S.$14,076 in 2011) throughout the year.



 

GOLDENPORT HOLDINGS INC.

NOTES TO THE FINANCIAL STATEMENTS

 

14.     RESTRICTED CASH:

 

The restricted cash of U.S.$6,014 as at 31 December 2012 (U.S.$4,000 as at 31 December 2011) relates to a) an amount of U.S. $4,000: part of the amount drawn for the delivery instalment of M/V D Skalkeas which remains restricted in use from the financing bank in 2011 and 2012 and b) an amount of U.S.$ 2,014 restricted in use, subject to improvement of loan to value ratio by the bank.

 

On 1 March 2013, and subject to amendments on specific loan agreements and guarantees, the amount of U.S.$4,000 restricted as at 31 December 2012, was released and held in a new pledged account in order to be used proportionally for the repayment of the forthcoming eight instalments of both loan agreements of vessels D Skalkeas and Erato.

 

15.     SHARE CAPITAL, SHARE PREMIUM AND NON CONTROLLING INTEREST:

 

(a)     Share Capital:

 

Share capital consisted of the following at 31 December:

 


2012 U.S.$'000


2011 U.S.$'000

Authorised




Shares of $0.01 each

2,000


2,000





Issued and paid




Shares of $0.01 each

935


912

Total issued share capital

935


912

 

(b)     Annual Incentive Plan (AIP):

 

At its meeting on 6 December 2012 the Remuneration Committee proposed and the Board of Directors approved nil amount as Base Award under AIP for the current year.

 

(c)     Share Premium:

 

The analysis of the share premium is as follows:

 


U.S. $'000

Balance 31 December 2010

145,204

AIP Shares issued in 2011

204

Scrip dividend (2010)

11

Balance 31 December 2011

145,419

Scrip dividend (2011)

2,888

Balance 31 December 2012

148,307

 

(d)     Non-Controlling Interest:

 

Amount of U.S.$955 (U.S.$ 1,000 as at 31 December 2011) in the accompanying statement of financial position concerns the net consideration received for the disposal of 20% of the voting shares of Tuzon Maritime Co., the vessel owning company of Paris JR, reduced by the 20% portion of the loss attributable to Tuzon Maritime Co., for the year ended 31 December 2012, amounted to U.S.$45.



GOLDENPORT HOLDINGS INC.

NOTES TO THE FINANCIAL STATEMENTS

 

16.     LONG-TERM DEBT:

 

The amounts in the accompanying statement of financial position are analysed as follows:

 





31 December 2012
U.S.$'000


31 December 2011
U.S.$'000

Bank Loan


Vessel(s)


Amount


Rate %


Amount


Rate %

a. Issued 16 December 2008, maturing 15 November 2015


MSC Fortunate


12,805


2.81%


16,645


2.92%

b. Issued 19 July 2007, maturing 15 November 2015


MSC Anafi


6,950


2.82%


8,950


2.91%

c. Issued 17 August 2007, matured 17 August 2012


MSC Accra


-


-


1,215


2.97%

d. Issued 18 October 2007, prepaid 17 December 2012


Bosporus Bridge


-


-


7,160


2.65%

e. Issued 18 December 2009, maturing 6 May 2021


D Skalkeas


24,146


2.56%


26,952


2.69%

f. Issued 14 August 2009, maturing 25 July 2021


Erato


27,737


2.57%


30,910


2.66%

g. Issued 11 November 2007, maturing 15 November 2015


Gitte, Brillinat


7,250


2.81%


9,550


2.94%

h. Issued 16 January 2009, maturing 16 January 2019


Marie-Paule


9,303


2.08%


10,009


2.15%

i .Issued 26 October 2009, maturing 26 October 2019


Alpine Trader


9,600


2.35%


10,588


2.39%

j. Issued 6 March 2009, maturing 29 March 2019


Milos


21,479


2.07%


23,228


2.17%

k. Issued 22 April 2009, maturing 29 March 2019


Sifnos


21,672


2.06%


23,436


2.18%

l. Issued 2 August 2010, maturing 31 March 2020


Pisti


21,376


2.07%


23,225


2.15%

m. Issued 18 January 2011, maturing 31 March 2020


Sofia


20,440


2.09%


22,008


2.14%

n. Issued 16 December 2009, prepaid 21 November 2012


MSC Socotra



-


19,186


3.25%

o. Issued 10 May 2010, maturing 15 November 2015


Golden Trader


3,250


3.31%


16,100


3.44%

p. Issued 10 May 2010, maturing 1 December 2022


Eleni D


18,804


2.16%


20,252


2.38%

q. Issued 1 August 2011, maturing 19 September 2014


Vasos, MSC Scotland


8,500


3.11%


12,100


3.36%

Total




213,312




281,514



Less: initial financing costs




(644)




(891)



Less: current portion




(24,115)




(34,983)



Long-term portion




188,553




245,640



 

Interest rates included in the table above are based on last roll over statements received by the banks.



GOLDENPORT HOLDINGS INC.

NOTES TO THE FINANCIAL STATEMENTS

 

16.     LONG-TERM DEBT (continued):

 

Prepayments:

 

·        Loan o: During May 2012, the Group proceeded with a prepayment of loan of U.S.$6,550 to the financing bank subject to the disposal of vessel Alex D which had been provided as collateral under the loan agreement. In addition, following the disposal of vessel Lindos on 6 July 2012, the Group proceeded with a prepayment of loan of U.S.$5,300.

 

·        Loan n: During May 2012, the Group proceeded with a prepayment of loan of U.S.$2,969 to the financing bank subject to the disposal of vessel MSC Finland which had been provided as collateral under the loan agreement. During November 2012, following the disposal of vessel Tilos and Limnos, the Group proceeded with a prepayment of loan of U.S.$2,207. On 21 November 2012, the Group proceeded with the repayment in full of the outstanding amount as of that date proceeding with a payment of U.S.$10,737. Following the repayment, mortgage of vessel MSC Socotra was released and as at 31 December 2012 the vessel is considered debt free.

 

·        Loan d: During December 2012, the Group proceeded with a prepayment of loan of U.S.$5,825 to the financing bank subject to the disposal of vessel Bosporus Bridge which had been provided as collateral under the loan agreement.

 

·        Loan e and f: During December 2012, the Group proceeded with a prepayment of loan of U.S.$710 and U.S.$815 respectively, to the financing bank subject to the disposal of vessel Bosporus Bridge which had been provided in cross collateralisation with vessels D Skalkeas and Erato.

 

·        Loan j: During June 2012, the Group proceeded with the prepayment of the next two instalments due amounting to U.S.$437 each to the financing bank.

 

·        Loan k: During June 2012, the Group proceeded with the prepayment of the next two instalments due amounting to U.S.$441 each to the financing bank.

 

·        Loan l: During June 2012, the Group proceeded with the prepayment of the next instalment due amounting to U.S.$462 to the financing bank.

 

·        Loan i: During July 2012, the Group proceeded with the prepayment of the next instalment due amounting to US$ 176.5 to the financing bank as well as an additional amount of U.S.$ 282 which was applied in inverse order of maturity.

 

Maturity of loan agreement:

 

·        Loan c: During August 2012 and subject to the normal repayment schedule of the loan agreement, the Group proceeded with the payment of the final instalment amounting to U.S.$405 to the financing bank. Following the repayment, mortgage of vessel was released and the vessel MSC Accra is considered debt free as at 31 December 2012.



 

GOLDENPORT HOLDINGS INC.

NOTES TO THE FINANCIAL STATEMENTS

 

16.     LONG-TERM DEBT (continued):

 

Upcoming repayment terms/ Changes in existing repayment terms:

 

·        Loan a, b, g and o: On 21 January 2013, the Group signed a loan agreement between the vessel owning companies of vessels MSC Fortunate, MSC Anafi, Brilliant, Golden Trader and Conti Seattle for the refinancing of the outstanding balances of loans a, b, g and o respectively. On 22 January 2013 the Group proceeded with the drawdown of U.S.$30,255 as part of the aforementioned loan agreement and repaid the outstanding balance of loans a, b, g and o respectively. The new loan is repayable in four quarterly instalments of U.S.$1,300 each, the first one being due on 15 February 2013 and the final one on 15 November 2013 and eight quarterly instalments of U.S.$1,600 each the first one being due on 15 February 2014 and the final one on 15 November 2015  along with a balloon payment of U.S.$12,255. Under the new loan agreement vessel Conti Seattle was provided as collateral, while the mortgage on vessel Gitte was released.

 

·        Loan e: This loan is repayable in thirty- four quarterly instalments of U.S.$524 each, the first one being due on 6 February 2013 and the final one on 6 May 2021 along with a balloon payment of U.S.$6,330. Subsequent to year end MSC Socotra has been provided as collateral to the loan agreement.

 

·        Loan f: This loan is repayable in thirty- five quarterly instalments of U.S.$589.5 each, the first one being due on 25 January 2013 and the final one on 25 July 2021 along with a balloon payment of U.S.$7,105. Subsequent to year end MSC Socotra has been provided as collateral to the loan agreement.

 

·        Loan h: This loan is repayable in twenty-five quarterly instalments of U.S.$176.5 each, the first one being due on 16 January 2013 and the final one on 16 January 2019 along with a balloon payment of U.S.$4,890. A shortfall of the minimum security cover of U.S.$1,526.5 was identified as at 31 December 2012, for which the Company has been granted waiver expiring on 29 March 2013. The Company proposed to the financing bank to rectify this shortfall by providing one of its debt free vessels, Paris JR, as additional security. Final agreement is subject to approval of the revised term sheet and consequently the respective loan documentation. The amount of the shortfall was classified as a current liability in the accompanying 2012 consolidated statement of financial position.

 

·        Loan i: This loan is repayable in twenty-eight quarterly instalments of U.S.$176.5 each, the first one being due on 26 January 2013 and the final one on 26 October 2019 along with a balloon payment of U.S.$4,658. A shortfall of the minimum security cover of U.S.$1,823.5 was identified as at 31 December 2012, for which the Company has been granted waiver expiring on 29 March 2013. The Company proposed to the financing bank to rectify this shortfall by providing one of its debt free vessels, Paris JR, as additional security. Final agreement is subject to approval of the revised term sheet and consequently the respective loan documentation. The amount of the shortfall was classified as a current liability in the accompanying 2012 consolidated statement of financial position.



 

GOLDENPORT HOLDINGS INC.

NOTES TO THE FINANCIAL STATEMENTS

 

16.     LONG-TERM DEBT (continued):

 

·        Loan j: On 21 February 2013 the Company signed a Term Sheet for amendments to the loan facility for the 40% deferral of the next eight principal instalments effective from 21 February 2013. Subject to this amendment, the repayment schedule was amended and this loan is now repayable in one instalment of U.S.$437 being due on 25 January 2013, eight quarterly instalments of U.S.$262.2 each, the first one being due on 25 April 2013 and the final one on 25 January 2015, four quarterly instalments of U.S.$524.5 each, the first one being due on 25 April 2015 and the final one on 25 January 2016, eight quarterly instalments of U.S.$568.2 each, the first one being due on 25 April 2016 and the final one on 25 January 2018 and four quarterly instalments of U.S.$437 each, the first one being due on 25 April 2018 and the final one on 25 January 2019 and a balloon payment of U.S.$10,553 being due on 29 March 2019.

 

·        Loan k: On 21 February 2013 the Company signed a Term Sheet for amendments to the loan facility for the 40% deferral of the next eight principal instalments effective from 21 February 2013. Subject to this amendment, the repayment schedule was amended and this loan is now repayable in one instalment of U.S.$441 being due on 3 February 2013, eight quarterly instalments of U.S.$264.6 each, the first one being due on 3 May 2013 and the last one being due on 3 February 2015, four quarterly instalments of U.S.$529.2 each, the first one being due on 3 May 2015 and the final one on 3 February 2016, eight quarterly instalments of U.S.$573.3 each, the first one being due on 3 May 2016 and the final one being due on 3 February 2018 and four quarterly instalments of U.S.$441 each, the first one being due on 3 May 2018 and the final one on 3 February and a balloon payment of U.S.$10,647 being due on 29 March 2019.

 

·        Loan l: On 21 February 2013 the Company signed a Term Sheet for amendments to the loan facility for the 40% deferral of the next eight principal instalments effective from 21 February 2013. Subject to this amendment, the repayment schedule was amended and this loan is now repayable in one instalment of U.S.$462.4 being due on 18 January 2013, eight quarterly instalments of U.S.$277.5 each, the first one being due on 18 April 2013 and the final one on 18  January 2015, four quarterly instalments of U.S.$555 each, the first one being due on 18 April 2015 and the final one on 18 January 2016, eight quarterly instalments of U.S.$601.2 each, the first one being due on 18 April 2016 and the final one being due on 18 January 2018 and eight quarterly instalments of U.S.$462.4 each, the first one being due on 18 April 2018 and the final one on 18 January 2020 and  a balloon payment of U.S.$7,965 being due on31 March 2020.

 

·        Loan m: On 21 February 2013 the Company signed a Term Sheet for amendments to the loan facility for the 40% deferral of the next eight principal instalments effective from 21 February 2013. Subject to this amendment, the repayment schedule was amended and this loan is now repayable in one instalment of U.S.$392 being due on 12 January 2013, eight quarterly instalments of U.S.$235.2 each, the first one being due on 12 April 2013 and the final one on 12  January 2015, four quarterly instalments of U.S.$470.4 each, the first one being due on 12 April 2015 and the final one on 12 January 2016, eight quarterly instalments of U.S.$509.6 each, the first one being due on 12 April 2016 and the final one being due on 12 January 2018 and eight quarterly instalments of U.S.$392 each, the first one being due on 12 April 2018 and the final one on 12 January 2020 and a balloon payment of U.S.$9,072 being due on 31 March 2020.

 

·        Loan p: This loan is repayable in forty quarterly instalments of U.S.$362 each, the first one being due on 1 March 2013 and the final one on 1 December 2022  along with a balloon payment of U.S.$4,324.



 

GOLDENPORT HOLDINGS INC.

NOTES TO THE FINANCIAL STATEMENTS

 

16.     LONG-TERM DEBT (continued):

 

·        Loan q: This loan is repayable in three quarterly instalments of U.S.$900 each, the first one being due on 19 March 2013 and the final one on 19 September 2013 and four quarterly instalments of U.S.$700 each the first one being due on 19 December 2013 and the final one on 19 September 2014  along with a balloon payment of U.S.$3,000.

 

All loans discussed above are denominated in U.S. dollars, and bear interest at LIBOR plus a margin. In addition, the Company has entered into an interest rate swap agreement for loan (d) to exchange variable to fixed interest rate at 4.64%.

 

The remaining loans have margins between 1.60% and 3.00% above LIBOR.

 

Total interest paid was U.S.$7,349 and U.S.$7,181 for the year ended 31 December 2012 and 31 December 2011,  respectively.

 

The loans are secured with first priority mortgages over the borrowers' vessels. The loan agreements contain covenants including restrictions as to changes in management and ownership of the vessels; additional indebtedness and mortgaging of vessels without the bank's prior consent as well as minimum requirements regarding corporate liquidity and hull cover ratio and corporate guarantees of Goldenport Holdings Inc.

 

Certain amendments of loans e, f, j, k, l and m effected in 2013 provide for relaxation of basic financial covenants through 31 December 2013.

 

i) Minimum security cover has been restated to a range from 90%-100%

ii) Maximum leverage ratio has been restated to a range from 75%-85%.

iii) Interest Cover ratio has been restated to a maximum 2:1 ratio.

iv) Minimum net worth has been restated to U.S.$50 million in terms of market values of assets or U.S.$ 170 million in terms of book values of assets.

 

With regards to loans a, b, g and o and with effect from January 2013 the minimum security cover ratio and the maximum leverage ratio have been waived in full through 31 December 2013.

 

17.     DEFERRED REVENUE:

 

Deferred revenue as of 31 December 2012 amounted to U.S.$974 and represents cash received from charterers prior to year end, which relates to revenue earned after that date. As at 31 December 2011, deferred revenue amounted to U.S.$1,777 and the remaining amount of U.S.$434 represents the unamortized difference between the market value of the vessel charter free and the amount actually paid to acquire M/V Bosporus Bridge in the secondhand market in 2007. This amount was recognized to income through the remaining term of the charter period. The charter expired in February 2012. The amount of U.S.$434 was recognised to income in 2012 (U.S.$2,608 in 2011). 

 

18.     ACCRUED LIABILITIES AND OTHER PAYABLES:

 

The amounts in the accompanying statement of financial position at 31 December are analysed as follows:

 


2012 U.S.$'000


2011 U.S.$'000

Interest

894


1,191

Other accrued expenses

1,354


1,661

Other payables

4,663


5,081


6,911


7,933



GOLDENPORT HOLDINGS INC.

NOTES TO THE FINANCIAL STATEMENTS

 

19.     DIVIDENDS DECLARED:

 

The Board of Directors of the Company will propose to the Annual General Meeting for approval, the non payment of a dividend for 2012 (4 pence per share or total GBP 3,634 for 2011). The proposal for the dividend is expected to be approved by the AGM to be held in Athens on 6 June 2013.

 

Dividend rights: Under the Company's by-laws, each ordinary share, except for the company's treasury shares, is entitled to dividends if and when dividends are declared by the Board of Directors.  There are no restrictions on the Company's ability to transfer funds in and out of Marshall Islands. The payment of final dividends is subject to the approval of the Annual General Meeting ("AGM") of Shareholders. The final dividend proposed by the Board of Directors for 2011, was approved by the AGM held on 11 May 2012. The final dividend was 4 pence per share and included a share mandate scheme of 2 pence per share resulting in a total dividend amount of GBP 3,634 or U.S.$5,822. On 15 May 2012 the cash payment was made for the cash portion totalling GBP 1,817 or U.S.$2,911 and on 18 May 2012  2,331,091 shares with reference price of    77.95 pence were issued and admitted to the official list representing the share element of the dividend. On 31 August 2012 the Board of Directors having reviewed market fundamentals proposed and approved a zero interim dividend. The payment of dividends was U.S.$2,911 in 2012 (2.935 cents per share or 2 pence per share as the cash portion of the final dividend for 2011 and zero pence per share for the interim dividend for 2012). The payment of dividends in 2011 was U.S.$8,329.

 

20.     COMMITMENTS AND CONTINGENCIES:

 

a.       Various claims, suits, and complaints, including those involving government regulations and product liability, arise in the ordinary course of the shipping business. In addition, losses may arise from disputes with charterers, agents, insurance providers and from other claims with suppliers relating to the operations of the Group's vessels. Currently, management is not aware of any such claims or contingent liabilities, which should be disclosed, or for which a provision should be established in the consolidated financial statements.

 

b.      The Group has entered into time charter arrangements for all its vessels. These arrangements have remaining terms between 1-48 months as of 31 December 2012 (1-23 months as of 31 December 2011). Future minimum charters receivable (based on earliest delivery dates) upon time charter arrangements as at 31 December 2012, are as follows (it is noted that the vessel off-hires and dry-docking days that could occur but are not currently known are not taken into consideration; in addition early delivery of the vessels by the charterers is not accounted for; with regard to vessels Milos and Sifnos the calculation is based on the floor rate without taking into account any profit share scheme; for the vessels into Joint Venture (see note 9) 50% of revenue is included):

 

 

2012

U.S.$'000

 

2011

U.S.$'000

Within one year

20,505

 

46,847

1-5 years

15,330

 

14,098

 

35,835

 

60,945



GOLDENPORT HOLDINGS INC.

NOTES TO THE FINANCIAL STATEMENTS

 

20.     COMMITMENTS AND CONTINGENCIES (continued):

 

c.       Cheyenne Maritime Company, the vessel owing company of M/V Sofia, Dionysus Shipholding Carrier Co. the vessel owing company of M/V Eleni D and Citrus Shipping Corp., the vessel owing company of M/V Marie Paule, were registered as unsecured creditors in the Rehabilitation proceedings that were commenced by Korea Line Corporation with respect to unpaid hire and/or damages amounting to U.S.$10,300, U.S.$8,028 and U.S.$643, for the aforementioned companies, respectively.

           

The Rehabilitation plan was approved by the majority of creditors at the meeting held on 14 October 2011. According to the plan all unsecured creditors may recover the acknowledged claim as follows: i) 37% of the claim in cash over 10 years (2012-2021) which will be non-interest bearing and ii) 63% in Korea Line's shares, bearing no voting rights for the rehabilitation period.

 

During December 2012 and subject to the repayment schedule according to the rehabilitation plan, Cheyenne Maritime Company, Dionysus Shipholding Carrier Co. and Citrus Shipping Corp. received U.S.$19, U.S.$14 and U.S.$2 respectively.

 

21.     RELATED PARTY TRANSACTIONS:

 

(a)     Transactions with related parties consisted of the following for the years ended 31 December:

 

Goldenport Shipmanagement Ltd. ("GSL"): All vessel operating companies included in the consolidated financial statements have a management agreement with GSL, a Liberian corporation directly controlled by Captain Paris Dragnis, to provide, in the normal course of business, a wide range of shipping managerial and administrative services, such as commercial operations, chartering, technical support and maintenance, engagement and provision of crew for a monthly management fee of U.S.$15.2 (U.S.$14.5 in 2011) per vessel. On 14 March 2013 the Board of Directors of the Company approved an increase in monthly management fee from U.S.$15.2 to U.S.$15.6 per vessel. The increase is effective from 1 January 2013. In addition to the monthly fee GSL charges a commission equal to 2% of time and voyage revenues relating to charters it organises.

 


2012

U.S.$ '000


2011

U.S.$ '000

Voyage expenses - related Party




Goldenport Shipmanagement Ltd (Note 3)

1,504


2,051

Management fees - related party




Goldenport Shipmanagement Ltd

4,321


4,185

Total

5,825


6,236

 

 

 

2012

U.S.$ '000


2011

U.S. $'000

Due from related parties -Current




Goldenport Shipmanagement Ltd

4,560


1,373

Total

4,560


1,373

 

The amounts receivable from GSL, shown in the table above are not interest bearing and represent the vessel operating companies' cash surplus handled by GSL.



GOLDENPORT HOLDINGS INC.

NOTES TO THE FINANCIAL STATEMENTS

 

21.     RELATED PARTY TRANSACTIONS (continued):

 

(b)     Share-based payment transactions, Annual Incentive Plan and other remuneration of Directors and Management team

 

Annual incentive plan: The Remuneration Committee believes that a significant proportion of total remuneration should be performance-related. In addition, performance-related rewards should be deliverable largely in shares to more closely align the interests of shareholders and all Executive Directors and Management. In order to achieve this, the Board decided to terminate the 2006 Annual Cash Bonus arrangements and to replace them with a new plan called the Annual Incentive Plan ('AIP'), which is administrated by the Remuneration Committee.

 

It was decided that under the terms of the AIP the eligible employees (i.e Executive Directors and Management) can elect to have their annual cash bonus delivered in the form of restricted shares in the Company. The performance criteria remained the same as for the Annual Cash Bonus. Again, it is intended that the maximum limit for each participant will be 40% of annual base salary. The Remuneration Committee may select in future years, to adjust the maximum but it will not in any event exceed 75% of annual base salary. The Board (after a proposal by the Remuneration Committee) reserves the right to award shares in other circumstances which could include, without being limited to, subsequent offers of shares (primary or secondary). In each year the Remuneration Committee will propose to the Board the percentage of base salary applicable to each participant for the purposes of the AIP ("Base Award").

 

Under the AIP, a participant may apply his Base Award in one of three ways:

 

·        Full Cash Award ('FCA'): If the participant selects the FCA, then the AIP will pay cash but only at 90% of the Base Award.

·        Full Shares Award ('FSA'): If the participant selects the FSA, then under the AIP 110% of Base Award will be given in the form of shares.

·        Half Cash-Half Shares Award ('HCHS'): If the participant selects the HCHS, then on 50% of Base Award the 90% rule will apply and will be paid cash and on the other 50% the 110% rule will apply and will be paid in shares.

 

The Remuneration Committee at its meeting on 6 December 2012 proposed nil amount (2011: nil amount) as base award for all the participants. The Board of Directors on 18 December 2012 approved the Remuneration Committee proposal.

 

Share-based payment transactions: On 1 September 2010, the Company granted the Discretionary Share Option Plan (the "DSOP"), with eligibility for executive directors and employees, and the Group Share Award Plan (the "Plan"), with eligibility for all employees and Directors. The total shares under option and award amounted initial to 1,520,000 (DSOP shares: 1,020,000 & Plan: 500,000) and there are no cash settlement alternatives. As at 31 December 2012, and subject to the cessation of employment of an executive director, the total shares under option and award amounted to 1,352,800 (DSOP shares: 910,000 & Plan: 445,000).

 

Performance Period and Vesting Date

Options granted pursuant to the DSOP and awards granted pursuant to the Plan will vest over a three year period (the "Performance Period") commencing on the date of grant (the

"Start Date"). The extent to which options and awards vest will be determined by reference to the date that falls on the third anniversary of the Start Date (the "Vesting Date"). Options granted pursuant to the DSOP will lapse on the tenth anniversary of the Start Date, or earlier in accordance with the rules of the DSOP.



GOLDENPORT HOLDINGS INC.

NOTES TO THE FINANCIAL STATEMENTS

 

21.     RELATED PARTY TRANSACTIONS (continued):

 

Performance Conditions

Options granted in 2010 pursuant to the DSOP and the Plan will vest subject to the

performance conditions as follows:

 

• 100% of the option or award will vest if the Total Shareholder Return (the "TSR")

 

Ø  over the five dealing days prior to the Vesting Date or

Ø  over any continuous 60 calendar day period during the Performance Period is either equal to or greater than 65% over and above the Issue Price (GBP1.27 or U.S.$1.982).

 

• 75% of the option or award will vest if the Total Shareholder Return (the "TSR")

 

Ø  over the five dealing days prior to the Vesting Date or

Ø  over any continuous 60 calendar day period during the Performance Period is either equal to or greater than 60% over and above the Issue Price (GBP1.27 or U.S.$1.982).

 

• 50% of the option or award will vest if the Total Shareholder Return (the "TSR")

 

Ø  over the five dealing days prior to the Vesting Date or

Ø  over any continuous 60 calendar day period during the Performance Period is either equal to or greater than 55% over and above the Issue Price (GBP1.27 or U.S.$1.982).

 

Total Shareholder Return (the "TSR") calculation is based on share price plus dividend per share.

 

The fair value of the share options is estimated at the grant date using a binomial option pricing model, taking into account the terms and conditions upon which the share option were granted.

 

The assumptions on which the price tree was constructed are summarized as follows:

 

 

 

Ø  The Current Stock Price is the stock price at the grant date of the option (1 September 2010).

Ø  The Risk Free Interest Rate is the 3y U.K. Government Bonds rate.

Ø  The Expected Dividend Yield is the annualized dividends divided by the Current Stock Price.

Ø  The Volatility of Stock Price is the average annual stock price volatility on a historical period 2006 - 2010 except 2008 volatility.



GOLDENPORT HOLDINGS INC.

NOTES TO THE FINANCIAL STATEMENTS

 

21.     RELATED PARTY TRANSACTIONS (continued):

 

The amounts included in the financial statements under AIP, DSOP, the Plan and other remuneration of Directors and Management team as of 31 December are as follows:

 


2012

U.S.$ '000


2011

U.S.$ '000

Directors and management team remuneration

1,163


1,289

Share based payment transactions

192


255


1,355


1,544

 

(c)     The Interests of the Directors, the Senior Management and their respective immediate families in the share capital of the Company (all of which are beneficial unless otherwise stated), were as at 31 December 2012 as follows:

 

Name


Number of shares as at 31 December 2011


Shares issued under the final 2011 share dividend


Number of shares as at 31 December 2012


Percentage of shares as at 31 December 2012

Dragnis Family


51,954,908


1,333,031


53,287,939


57.18%

Chris Walton


19,212


492


19,704


0.02%

Konstantinos Kabanaros


117,734


3,020


120,754


0.13%

 

(d)     Rental of office space: A monthly rental of EUR18.2 (EUR 18 in 2011) was agreed to be charged by the owner of the building (a related party under common control) to Goldenport Marine Services for the rental of the head offices. Total rent expense for the year ended 31 December 2012 amounted to U.S.$314 (U.S.$322 in 2011) and is included in General and administration expenses in the accompanying financial statements.

 

The future minimum lease (rental) payments under the above agreement as at 31 December are as follows:

 


2012

U.S.$'000


2011

U.S.$ '000

Within one year

293


284

After one year but not more than five years

413


615

More than five years

-


79


706


978

 

22.     INCOME TAXES:

 

Under the laws of the Republic of Marshall Islands and the respective jurisdictions of the Consolidated Companies the Group is not subject to tax on international shipping income. However, the Consolidated Companies are subject to registration and tonnage taxes, which have been included in vessel operating expenses in the accompanying consolidated statement of comprehensive income.



GOLDENPORT HOLDINGS INC.

NOTES TO THE FINANCIAL STATEMENTS

 

22.     INCOME TAXES (continued):

 

Pursuant to the  United States Internal Revenue Code of 1986, as amended (the ''Code''), U.S. source income derived by a foreign corporation from the international operation of ships generally is exempt from U.S. tax if the company operating the ships meets both of the following requirements, (a) the company is organised in a foreign country that grants an equivalent exception to corporations organised in the United States and (b) either (i) more than 50% of the value of the company's shares is owned, directly or indirectly, by individuals who are ''residents'' of the company's country of organization or of another foreign country that grants an ''equivalent exemption'' to corporations organised in the United States (50% Ownership Test) or (ii) the company's shares are ''primarily and regularly traded on an established securities market'' in its country of organization, in another country that grants an ''equivalent exemption'' to United States corporations, or in the United States (Publicly-Traded Test). Under the regulations, company's shares will be considered to be ''regularly traded'' on an established securities market if (i) one or more classes of the its shares representing more  than 50%  of its outstanding shares, by voting power and value, is listed on the market and is traded on the market, other than in minimal quantities, on at least 60 days during the taxable year; and (ii) the aggregate number of shares traded during the taxable year is at least 10% of the average number of shares outstanding during the taxable year. Notwithstanding the foregoing, the regulations provide, in pertinent part, that each class of the company's shares will not be considered to be ''regularly traded'' on an established securities market for any taxable year in which 50% or more of the vote and value of the outstanding shares of such class are owned, actually or constructively under specified stock attribution rules, on more than half the days during the taxable year by persons who each own 5% or more of the value of such class of the company's outstanding shares, (''5 Percent Override Rule''). In the event the 5 Percent Override Rule is triggered, the regulations provide that the 5 Percent Override Rule will nevertheless not apply if the Company can establish that among the closely-held group of 5% Stockholders, there are sufficient 5% Stockholders that are considered to be "qualified stockholders" for purposes of Section 883 to preclude non-qualified 5% Stockholders in the closely-held group from owning 50% or more of each class of the Company's stock for more than half the number of days during the taxable year.

 

Treasury regulations under the Code were promulgated in final form in August 2003. These regulations apply to taxable years beginning after September 24, 2004. As a result, such regulations are effective for calendar year taxpayers, like the Company, beginning with the calendar year 2005. All the Company's ship-operating subsidiaries currently satisfy the 50% Ownership Test. In addition, the management of the Company believes that by virtue of a special rule applicable to situations where the ship operating companies are beneficially owned by a publicly traded company like the Company, the 50% Ownership Test can also be satisfied based on the trading volume and the widely-held ownership of the Company's shares. Regarding the 2007, 2008, 2009, 2010, 2011 and 2012 tax years, the Company believes that it satisfies the Publicly-Traded Test and all of its United States source shipping income will be exempt from U.S. federal income tax.

 

23.     FINANCIAL INSTRUMENTS:

 

Risk management objectives and policies

 

The Group's principal financial instruments are bank loans. The main purpose of these financial instruments is to finance the Group's operations and further fleet expansion. The Group has various other financial instruments such as cash and cash equivalents, trade receivables and trade payables, which arise directly from its operations.

 

From time to time, the Group also uses derivative financial instruments, principally interest rate swaps.



GOLDENPORT HOLDINGS INC.

NOTES TO THE FINANCIAL STATEMENTS

 

23.     FINANCIAL INSTRUMENTS (continued):

 

The main risks arising from the Group's financial instruments are interest rate risk and credit risk. The majority of the Group's transactions are denominated in U.S. dollars therefore its exposure to foreign currency risk is minimal.

 

Cash flow interest rate risk

 

Cash flow interest rate risk arises primarily from the possibility that changes in interest rates will affect the future cash outflows from the Group's long-term debt. The sensitivity analysis presented in the table below demonstrates the sensitivity to a reasonably possible change in interest rates (libor), with all other variables held constant, on the Group's profit for the year (fluctuations in interest rates do not impact the Group's equity).  The sensitivity analysis has been prepared using the following assumptions:

 

·        A rise or fall in interest rates will impact interest expense on floating rate borrowings.

·        Although the fair value of the derivatives, and therefore the statement of comprehensive income will be impacted by movements in interest rates, the fair value impact of the derivatives have been excluded from the sensitivity analysis as not significant.

·        One interest rate swap entered into in 2007 and one in 2009 (which has matured as at 31 December 2011) economically hedge the respective loans and the interest payments/receipts almost fully offset, therefore these two loans have not been included in the sensitivity analysis.

 




US$ '000


Increase/Decrease (%)


Effect on profit

2012

+0.5%


-1,179

-0.5%


+1,179

2011

+0.5%


-1,254

-0.5%


+1,254

 

Credit risk

 

The Group's maximum exposure to credit risk in the event the counterparties fail to perform their obligations as of 31 December 2012 in relation to each class of recognised financial assets, other than derivatives, is the carrying amount of those assets as indicated in the statement of financial position.

 

Concentration of Credit Risk

 

Financial instruments, which potentially subject the Group to significant concentrations 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 performs annual evaluations of the relative credit standing of those financial institutions. Credit risk with respect to trade accounts receivable is generally managed by the chartering of vessels to major trading houses (including commodities traders), established container-line operators, major producers and government-owned entities rather than to more speculative or undercapitalised entities. The vessels are normally chartered under time-charter agreements where as per the industry practice the charterer pays for the transportation service in advance, supporting the management of trade receivables.



GOLDENPORT HOLDINGS INC.

NOTES TO THE FINANCIAL STATEMENTS

 

23.     FINANCIAL INSTRUMENTS (continued):

 

Fair Values

 

Derivatives are recorded at fair value while all other financial assets and financial liabilities are recorded at amortised cost which approximates fair value.

 

Foreign currency risk

 

The majority of the Group's transactions are denominated in U.S. dollars therefore its exposure to foreign currency risk from operations is minimal.

 

Liquidity risk

 

The Group aims to mitigate liquidity risk by managing cash generation by its operations, applying cash collection targets throughout the Group. The vessels are normally chartered under time-charter agreements where as per the industry practice the charterer pays for the transportation service in advance, supporting the management of cash generation. Investment is carefully controlled, with authorisation limits operating up to Group's Board level and cash payback periods applied as part of the investment appraisal process. In this way the Group aims to maintain a good credit rating to facilitate fund raising.

 

In its funding strategy, the Group's objective is to maintain a balance between continuity of funding and flexibility through the use of bank loans. The Group's policy regarding new investments in second-hand vessels is that not more than 60% of the value of each investment will be funded through borrowings, whereas for the new buildings the respective limit is 70%. The acquisition of vessel Conti Seattle was financed exclusively from equity funds.

 

The Group normally meets its working capital needs through cash flows from operating activities and available credit lines. Management prepares cash flow projections in order to forecast its short term working capital position.

 

Excess cash used in managing liquidity is only invested in financial instruments exposed to insignificant risk of changes in market value, being placed on interest-bearing deposit with maturities fixed at no more than 3 months. Short term flexibility is achieved if required by credit line facilities.



GOLDENPORT HOLDINGS INC.

NOTES TO THE FINANCIAL STATEMENTS

 

23.     FINANCIAL INSTRUMENTS (continued):

 

The table below summarises the maturity profile of the Group's financial liabilities at 31 December 2012 and 2011, based on contractual undiscounted payments (including interest to be paid, which is calculated using the last applicable rate for each loan, as of 31 December 2012 and 2011):

 

31 December 2012

<3 months


 3-12 months


1- 2
years


2- 5
years


>5
years


Total


U.S.$000


U.S.$000


U.S.$000


U.S.$000


U.S.$000


U.S.$000

Interest bearing loans

9,729


19,796


28,719


77,673


106,627


242,544

Trade payables

7,282


-


-


-


-


7,282

Accrued liabilities and other payables

6,911


-


-


-


-


6,911

Shipyard Credit

-


1,400


-


-


-


1,400

Derivative instrument liability

67


177


159


-


-


403


23,989


21,373


28,878


77,673


106,627


258,540

31 December 2011

<3 months


 3-12 months


1- 2
years


2- 5
years


>5
years


Total


U.S.$000


U.S.$000


U.S.$000


U.S.$000


U.S.$000


U.S.$000

Interest bearing loans

9,856


31,318


48,343


95,450


128,848


313,815

Trade payables

8,437


-


-


-


-


8,437

Accrued liabilities and other payables

7,933


-


-


-


-


7,933

Shipyard Credit

715


2,188


744


-


-


3,647

Derivative instrument liability

75


195


222


138


-


630


27,016


33,701


49,309


95,588


128,848


334,462

 

Capital Management

 

The primary objective of the Group's capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximize shareholder value.

 

The Group monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Group's policy is to keep the gearing ratio below 75% on average (also Group's funding policy in Liquidity Risk section). Excess capital represented by a low gearing ratio, is used to fund further expansion plans. The Group includes within net debt, interest bearing loans, less cash and cash equivalents. Capital includes issued share capital, share premium and retained earnings.



GOLDENPORT HOLDINGS INC.

NOTES TO THE FINANCIAL STATEMENTS

 

23.     FINANCIAL INSTRUMENTS (continued):

 


2012


2011


US$ 000


US$ 000

Interest bearing loans

212,668


280,623

Less: cash and short term deposits (including restricted cash)

(22,789)


(42,018)

Net debt

189,879


238,605





Issued share capital

935


912

Share premium

148,307


145,419

Other capital reserves

531


339

Retained earnings

42,819


113,980

Non controlling interest

955


1,000

Treasury stock

(486)


(486)

Total capital

193,061


261,164






Capital & Net debt

382,940


499,769

Gearing ratio

49.6%


47.7%

 

24.     EVENTS AFTER THE REPORTING DATE:

 

Refinancing: On 21 January 2013, the Group signed a new loan agreement for the refinancing of outstanding balances of certain loan agreements. On 22 January the Group proceeded with the drawdown of U.S$30,255 and immediate repayment of the outstanding balances as at 31 January 2013. Vessel Conti Seattle was provided as collateral along with the existing vessels. This loan is repayable as described in note 16 of the financial statements.

 

Restructuring: On 21 February 2013, the Group signed amendments on existing loan agreements (j, k, l and m as per note 16) providing for relaxation of required covenants' ratios as well as deferral of the 40% of eight quarterly instalments, commencing from the signature date of the term sheet of amendments. The repayment schedule of the amended loan agreement has changed as described in note 16 of the financial statements.

 

Release of the restricted cash and relaxation of covenants: On 1 March 2013, the Group signed a term sheet providing for the relaxation of specific required covenants' ratios. In addition, the release of restricted cash amounting to U.S$4,000 was provided in the term sheet and its subsequent deposit in a new pledged account in order to be used proportionally for the repayment of the forthcoming eight instalments of loan agreements e and f as per note 16 of the financial statements.

 

Additional security provided to the financing bank: A shortfall of the minimum security cover of U.S.$3,350 in respect of loans h and i was identified as at 31 December 2012 for which the Company has been granted waiver expiring on 29 March 2013. The Company proposed to the financing bank to rectify the shortfall by providing one of its debt free vessels, Paris JR, as additional security. (see also Note 16). The amount of the shortfall was classified as a current liability in the accompanying 2012 consolidated statement of financial position.

 

Change of Management Company: Effective from 1st January 2013 the management of the vessel Paris JR has been transferred to the newly established related entity Goldenport Marine Cyprus.

 

Acquisition of vessel: On 7 March 2013, the Group agreed the acquisition of M/V Gallia, a 2,500 TEU geared container vessel, built in 1998 at Thyssen Shipyard. Contract price has been set at U.S.$6,010 and the vessel will be delivered ex dry-docking with estimated delivery in May 2013.


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
FR NKKDQCBKDCNB
Close
London Stock Exchange plc is not responsible for and does not check content on this Website. Website users are responsible for checking content. Any news item (including any prospectus) which is addressed solely to the persons and countries specified therein should not be relied upon other than by such persons and/or outside the specified countries. Terms and conditions, including restrictions on use and distribution apply.

Annual Financial Report - RNS