Registration No. 2013003

Greenship Bulk Trust and its subsidiaries Annual Financial Statements 31 December 2013

Building a better working world

Greenship Bulk Trust and its subsidiaries General Information

Trustee-Manager

Registered/Business Office

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

23 Church Street #14-06 Capital Square Singapore 049481

Board of directors

Unit Registrar/Unit Transfer Office

Jacques d'Armand de Chateauvieux (Chairman) Fabian Raga Chrobrog (appointed 6 September 2013) Lee Keen Whye (appointed 6 September 2013) Eric Borgen (appointed 6 September 2013) Trond Kyrkjeboe (appointed 6 September 2013) Vidula Verma (appointed 6 September 2013) Philippe Rene Georges Rochet (appointed 21 October 2013)

Stamford Law Corporation Nordea Bank Norge ASA (as registrar for units registered in the Norwegian Central Securities Depositing (Verdipapirsentralen ASA)

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

Ernst &Young LLP Company secretaries Yap Wai Ming (appointed on 8 February 2013) Ng Joo Khin (resigned on 8 February 2013)

Executive Officer

Principal Bankers

Philippe Rene Georges Rochet(Chief Executive Officer)

Banque Degroof Luxembourg DVB Group Merchant Bank (Asia) Ltd. DBS Bank CEXIM Bank HSH Nordbank Nordea Bank Finland PLC Credit du Nord BNP Paribas

Audit Committee Vidula Verma (Chairperson)(appointed 6 September 2013) Lee Keen Whye (appointed 6 September 2013) Eric Borgen (appointed 6 September 2013) Trond Kyrkjeboe (appointed 6 September 2013) Teo Soon Chye (resigned on 6 September 2013) Farid Khan Bin Kaim Khan (resigned on 6 September 2013) David Picard (Chairperson)(resigned on 6 September 2013)

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General Information

Index Page Report of the Trustee-Manager

1

Statement and Certificate by the Trustee-Ma

3

Statement by the Chief Executive Officer of the Trustee-Manager

4

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

5

Statements of Financial Position

7

Consoiiciatea Statement o1 Comprehensive income

~

Consolidated Statement of Changes in Unitholders' Funds

9

Consolidated Statement of Cash Flows

10

Notes to the Financial Statements

11

Greenship Bulk Trust and its subsidiaries Report of the Trustee-Manager

The Directors of Greenship Bulk Manager Pte. Ltd., the Trustee-Manager of Greenship Bulk Trust (the "Trust') are pleased to present their report to the unitholders of the Trust, together with the audited consolidated financial statements of Greenship Bulk Trust and its subsidiaries (collectively, the "Group")for the financial year ended 31 December 2013 and the statement of financial position of the Trust as at 31 December 2013. Directors The Directors of the Trustee-Manager in office at the date of this report are: Jacques d'Armand de Chateauvieux Fabian Raga Chrobog Erik Borgen Lee Keen Whye Vidula Verma Trond Kyrkjeboe Philippe Rene Georges Rochet

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

Arrangements to enable Directors to acquire units and debentures Neither at the end of nor at any time during the financial year was the Trust a party to any arrangement whose objects are, or one of whose objects is, to enable the Directors of the TrusteeManager to acquire benefits by means of the acquisition of units in or debentures of the Trust. Directors' interests in units and debentures No director who held office at the end of the financial year had an interest in units, or debentures of the Trust either at the beginning of the financial year, or date of appointment if later, or at the end of the financial year. Directors' contractual benefits Except as disclosed in the financial statements, no Director of the Trustee-Manager has received or become entitled to receive a benefit by reason of a contract made by the Trust or a related corporation with the Director, or with a firm of which the Director is a member, or with a company in which the Director has a substantial financial interest. Options During the financial year, there were: (i) no options granted by the Trustee-Manager to any person to take up unissued units in the Trust; and (ii) no units issued by the virtue of any exercise of option to take up unissued units of the Trust. As at the end of the financial year, there were no unissued units of the Trust under option.

- 1 -

Greenship Bulk Trust and its subsidiaries Report of the Trustee-Manager

Audit Committee The members of the Audit Committee at the end of the financial year were as follows Vidula Verma (Chairperson) Lee Keen Whye Eric Borgen Trond Kyrkjeboe All members of the Audit Committee are independent and non-executive Directors. The Audit Committee carried out its functions in accordance with regulation 13(6) of the Business Trusts Regulations 2005. In performing those functions, the Audit Committee reviewed the overall scope of external audit and the assistance given by the Trustee-Manager's officers to the auditor. The Audit Committee met with the Trust's external auditor to discuss the scope and results of annual audit. In addition, the Audit Committee reviewed the financial statements of the Group and the Trust before their submission to the Board of Directors of the Trustee-Manager. The Audit Committee has recommended to the Board of Directors, the nomination of Ernst & Young LLP for re-appointment as auditors of the Trust at the forthcoming Annual General Meeting. Auditor Ernst &Young LLP have expressed their willingness to accept reappointment as auditor.

On behalf of the Board of Directors,

Philippe Rene Geo es Rochet Director

la Ver Director

Singapore 30 April 2014

-2-

Greenship Bulk Trust and its subsidiaries Statement and Certificate by the Trustee-Manager

STATEMENT AND CERTIFICATION In our opinion: and the consolidated financial the accompanying statement of financial position of the Trust fair view of the state of statements of the Group are drawn up so as to give a true and and of the results of the affairs of the Trust and of the Group as at 31 December 2013 for the financial year Group business, changes in unitholders' funds and cash flows of the Business Trusts Act ore Singap of the ended on that date in accordance with the provisions and and International Financial Reporting Standards,

(i)

to believe that the Trust will be at the date of this statement, there are reasonable grounds able to pay its debts as and when they fall due.

(ii)

of 'the Group for the year ended 31 With respect to the statement of comprehensive income December 2013: y to the Trustee-Manager are in - fees or charges paid or payable out of the trust propert ry 2012 and amended on Februa 16 dated initially accordance with the Deed of Trust 11 December 2012 and 18 June 213; -

-

ts of the unitholders as a interested person transactions are not detrimental to the interes and whole based on the circumstances at the time of the transactions; anager which would have the Board is not aware of any violation of duties of the Trustee-M on the interests of the or Trust the of ss a materially adverse effect on the busine unitholders as a whole.

ised the above statement and The Board of Directors has, on the date of this statement, author certification and these financial statements for issue. On behalf of the Board of Directors, --

Philippe Rene Georges Rochet Director

n ~' viauia verrna Director Singapore 30 April 2014

-3-

Greenship Bulk Trust and its subsidiaries Statement By The Chief Executive Officer Of The Trustee-Manager

In accordance with Section 86 of the Singapore Business Trusts Act, I certify that I am not aware of any violation of duties of the Trustee-Manager which would have a materially adverse effect on the business of the Trust or on the interests of the unitholders of the Trust as a whole.

~---

Philippe Rene Georges Rochet Chief Executive Officer Singapore 30 April 2014

-4-

Greenship Bulk Trust and its subsidiaries Independent Auditor's Report For the financial year ended 31 December 2013

To the Unitholders of Greenship Bulk Trust Report on the financial statements Bulk Trust (the "Trust") and We have audited the accompanying financial statements of Greenship 49, which comprise the to 7 pages on its subsidiaries (collectively, the "Group") set out t of financial position of statemen the and Group consolidated statement of financial position of the ensive income, the compreh of t statemen ated consolid the the Trust as at 31 December 2013, statement of cash ated consolid the and rs' funds unitholde in consolidated statement of changes nt accounting policies and flows of the Group for the year then ended, and a summary of significa other explanatory information. Trustee-Manager's responsibility for the financial statements ts that give a true end The Trustee-fvlanager is responsible f~~ the preparation of financial statemen Tri Ar_.t (thP "ACt~~I and °cc ictc fair view in accordance with iiie Niu'viSiGi~s vi iiis v..~^yU~7C~° ~?u'Slf1 as management control International Financial Reporting Standards, and for such internal from material free are that ts determines necessary to enable the preparation of financial statemen misstatement, whether due to fraud or error. Auditor's responsibility based on our audit. We Our responsibility is to express an opinion on these financial statements Those standards conducted our audit in a~~orclance with International Standards on Auditing. audit to obtain the require that we comply with ethical requirements and plan and perform misstatement. material from reasonable assurance about whether the financial statements are free the amounts and An audit involves performing procedures to obtain audit evidence about judgment, auditor's the on depend selected es disclosures in the financial statements. The procedur whether ts, statemen financial the of ment misstate material including the assessment of the risks of control s internal consider auditor the ents, assessm risk those due to fraud or error. In making in and fair view order relevant to the entity's preparation of the financial statements that give a true for the purpose of to design audit procedures that are appropriate in the circumstances, but not also includes An audit expressing an opinion on the effectiveness of the entity's internal control. accounting of bleness reasona the evaluating the appropriateness of accounting policies used and financial of the tion presenta overall the ng estimates made by management, as well as evaluati statements. a basis We believe that the audit evidence we have obtained is sufficient and appropriate to provide for our audit opinion.

-5-

Greenship Bulk Trust and its subsidiaries Independent Auditor's Report For the financial year ended 31 December 2013

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

Report on other legal and regulatory requirements In our opinion, the accounting and other records required by the Act to be kept by the TrusteeManager have been properly kept in accordance with the provisions of the Act.

ti'~ S~~

P

Ernst &Young LLF~~ Public Accountants and Chartered Accountants Singapore 30 April 2014

-6-

Greenship Bulk Trust and its subsidiaries Statements of Financial Position as at 31 December 2013

Group

Note ASSETS Non-current assets Vessels Other fixed assets Investments in subsidiaries Goodwill Other non-current assets

Current assets Inventories Trade receivables and other receivables Amounts due from related companies

5 6 ~ $ 9

Tr~igf

2012 US$

2013 US$

2012 US$

431,450,454 330,747 — 1,682,385 877,541

246,360,550 357,773 — 1,682,385 819,798

— — 216,458,258 — —

— — 117,892,989 — —

434,341,127

249,220,506

216,458,258

117,892,989

~~ 11 11

11,854,861 24,756,855 x,531,775

4,284,435 19,040,580 6,583,42Q

— — 50?

150 3~.5

1 444 q44

— 18,565 23,049,OQ1 —

12 13

8,465,773 64,199,723

6,527,398 25,702,730

— 18,599,680

— 140

116,959,292

63,583,507

41,667,246

641

551,300,419

312,804,013

258,125,504

117,893,630

14 14

34,777,214 11,951,565

34,122,870 10,833,833

207,744 —

206,033 —

1~ 15

~,n8~ ng° 18,111,661

Q"~3?

JL~JJJ~LL~

752,519

9,724,010

-

-

16

592,060

584,581

-

-

12,946

7,835

-

-

70,512,945

56,085,766

33,140,973

958,552

46,446,347

7,497,741

8,526,273

(857,911)

-

Tax recoverable

Prepayments Cash and bank balances

2013 US$

Total assets

-

LIABILITIES Current liabilities Trade payables and accruals Deferred income A~pnL!IIfS ~!!? to rglatg~l ~nrppa!?Igc

Loans and borrowings Provisions Income tax payable

Net current assets/(liabilities) Non-current liabilities Loans and borrowings Other liabilities Provisions Employee benefit obligations

15

239,368,519

128,476,386

-

14

33,862,268

-

33,862,268

-

16

4,240,837

5,430,889

-

-

17

299.939

320,297

-

-

277,771,563

134,227,572

33,862,268

-

Total liabilities

348,284,508

190,313,338

67,003,241

958,552

Net assets

203,015,911

122,490,675

191,122,263

116,935,078

192.160.982 3,774

117,892,982

192.160,982 -

117.892.982

10,851,155

4,597,693

203,015,911

122,490,675

Unitholders' funds Uniis in issue Other reserve Retained earnings/(accumulated losses) Total unitholders' funds

18

-

(1,038,719) 191,122,263

(957,904) 116,935,078

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

- 7 -

Greenship Bulk Trust and its subsidiaries Consolidated Statement of Comprehensive Income For the financial year ended 31 December 2013

Group

Note

19

Revenue Cost of sales Rentals Depreciation of vessels Vessel operating expenses Gross profit Other income Interest income

1.1.2013 to 31.12.2013 US$

16.2.2012 (date of constitution) to 31.12.2012 US$

312,139,109

238,418,145

(112,470,447) (16,521,166) (155,813,436)

(118,076,417) (6,259,598) (94,925,302)

27,334,060

19,156,828

308,732

143,950

Other expenses General and administrative expenses Other expenses

20

(12,600,522) (7,728,638)

Profit before tax

21

7,313,632

Income tax expense

22

(1,060,170)

(1,155,704)

6,253,462

4,597,693

Profit net of tax

(10,336,550) (3,210,831) ~./~l VJ~J~/I

Other comprehensive income Item that may be reclassified to profit and loss: 3,774

Foreign currency translation reserve Total comprehensive income for the financial year/period

6,257,236

4,597,693

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

Greenship Bulk Trust and its subsidiaries Consolidated Statement of Changes in Unitholders' Funds For the financial year ended 31 December 2013

Foreign currency translation reserve US$

Units in issue (Note 18) US$

Retained earnings US$

117,892,982

4,597,693

—

122,490,675

Profit for the year

—

6,253,462

—

6,253,462

Foreign currency translation

—

—

3,774

3,774

Total comprehensive income for the year

—

6,253,462

3,774

6,257,236

74,268,000

—

—

74,268,000

Group

2013 At 1 January 2013

Units issued during the year

Total US$

AL 7A 1'1~~~.VL~_ nAA9

Ann Ann nnn

.1 rr

hl .l 1 ✓V1.C111YC1 LV 1 J

I .`7L~ I VV~.70L

I U~OJ I ~ I X7.7

J~ / / ~F

2012 At 16 February 2012 (date of constitution)

1

—

—

1

Total comprehensive income for the period

—

4,597,693

—

4,597,693

Units issued during the period

117,892,981

—

—

117.892,981

At 31 December 2012

117,892,982

4,597,693

—

122,490,675

LUJ~U I .7~.`~

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

~~

Greenship Bulk Trust and its subsidiaries Consolidated Statement of Cash Flows For the financial year ended 31 December 2013 Group 1.1.2013 to 31.12.2013 US$ Cash flows from operating activities: Profit before tax Adjustments for Interest expense Interest income Depreciation Provisions

16.2.2102 (date of constitution) to 31.12.2012 US$

7,313,632

5,753,397

8,226,942 (308,732) 16,610,821 (139,675)

2,991,956 (143,950) 6,342,845 (81,170)

31,702,988

14,863,078

(7,570,426)

(4,284,435)

(6,664,630) (1,938,375)

3,990,180 (1,229,597)

4,433,013 (1,042,898) (20,358)

3,505,454 (276,456) 58,817

Cash flows from operations Interest paid Interest received Income tax refunded/(paid)

18,899,314 (6,633,017) 308,732 239,580

16,627,041 (2,464,854) 143,950 (3,927,474)

Net cash flows generated from operating activities

12,814,609

10,378,663

(187,748,802) (62,629) (57,743) 20,000,000

(252,620,148) (203,688) (71,140)

—

—

Cash flows from investing activities: Purchase of vessels Purchase of other fixed assets Increase in non-current assets Discounts received for purchase of vessels Proceeds from disposal of other fixed assets Net cash inflow on acquisition of a subsidiary

—

Operating cash flows before changes in working capital Total changes in working capital Increase in inventories (Increase)/decrease in trade receivables, other receivables and amounts due from related companies Increase in prepayments Increase in trade and other payables and accruals and amounts due to related companies Decrease in provisions (Decrease)/increase in employee benefit obligations

57,253 12,068,412 (240,769,311)

Cash flows from financing activities: Proceeds from issuance of units Proceeds from loans Repayment of loans Increase in bank balances charged to banks

74,268,000 129,000,000 (9,724,010) (3,200,000)

117,892,982 141,900,000 (3,699,604)

Net cash flows generated from financing activities

190,343,990

256,093,378

35,289,425 3,774

25,702,730

—

(167,869,174)

Net cash used in investing activities

25,702,730

Cash and cash equivalents at end of year/period (Note 13) Bank balances charged to banks at end of year/period Bank overdraft at end of year/period

60,995,929 3,200,000 3,794

25,702,730

Cash and bank balances at end of year/period (Note 13)

64,199,723

25,702,730

—

—

—

—

Net increase in cash and cash equivalents Effect of exchange rate changes on cash and cash equivalents Cash and cash equivalents at beginning of year/period (Note 13)

10

-

-

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

Greenship Bulk Trust and its subsidiaries Notes to the Financial Statements For the financial year ended 31 December 2013

General information Greenship Bulk Trust (the "Trust') is a Singapore business trust constituted on 16 February 2012 under the Business Trusts Act, Chapter 31A of Singapore. The Trust was registered by the Monetary Authority of Singapore pursuant to section 4 of the Singapore Business Trusts Act on 14 January 2013. The Trust is managed by Greenship Bulk Manager Pte. Ltd. (the "Trustee-Manager"). The address of its registered office is 23 Church Street, #1406 Capital Square, Singapore 049481. The principal activity of the Trust is that of investment holding. The principal activities of the subsidiaries are set out in Note 4. Greenship Holdings Manager Pte. Ltd., in its capacity as trustee-manager of Greenship Holdings Trust, constituted in Singapore, is the major unitholder of Greenship Bulk Trust holding 50.14% units issued by the Trust (2012: 100%). Mortimer Pte. Ltd., incorporated in Singapore, is the sole unitholder of Greenship Holdings Trust. Mortimer Pte. Ltd. is solely owned by Jaccar Holdings (the "Jaccar") incorporated in Luxembourg. The Company's ultimate holding company is Cana Tera S.A.S., incorporated in France. Related companies referred to in the financial statements relate to the Jaccar group of companies. 2.

Summary of significant accounting policies

2.1

Basis of preparation Thsse financial statements have been rrepared in accordance with International Financial Reporting Standards ("IFRS"). The financial statements have been prepared under the historical cost convention, except as disclosed in the accounting policies below. The preparation of financial statements in conformity with IFRS requires management to exercise its judgement in the process of applying the Group's accounting policies. It also requires the use of certain critical accounting estimates and assumptions.

2.2

Changes in accounting policies The accounting policies adopted are consistent with those of the previous financial year except in the current financial year, the Group has adopted all the new and revised standards which are effective for annual financial periods beginning on or after 1 January 2013. The adoption of these standards did not have any effect on the financial performance or position of the Trust.

2.3

Standards that are issued but not yet effective and have not been early adopted by the Group The standards and interpretations that are issued, but not yet effective, up to the date of issuance of the Group's financial statements are disclosed below. The Group intends to adopt these standards, if applicable, when they become effective.

Greenship Bulk Trust and its subsidiaries Notes to the Financial Statements For the financial year ended 31 December 2013

2.

Summary of significant accounting policies (cont'd)

2.3

Standards that are issued but not yet effective and have not been early adopted by the Group (cont'd) IFRS 9 Financial Statements IFRS 9, as issued, reflects the IASB's work on the replacement of IAS 39 and applies to classification and measurement of financial instruments and hedge accounting. The effective date of the standard has not been determined. In subsequent phases, the IASB will address impairment of financial assets. The adoption of IFRS 9 will have an effect on the classification and measurement of the Group's financial assets, but will not have an impact on classification and measurement of the Group's financial assets. The Group will quantify the effect in conjunction with the other phases, when the final standard including all phases is issued.

2.4

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

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

(b)

Interest income Interest income is recognised using the effective interest method.

2.5

Group accounting Subsidiaries Subsidiaries are entities (including special purpose entities) over which the Group has power to govern the financial and operating policies, generally accompanied by a shareholding giving rise to the majority of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity. The purchase method of accounting is used to account for the acquisition of subsidiaries. The cost of an acquisition is measured as the fair value of the assets given, equity instruments issued or liabilities incurred or assumed at the dates of exchange and includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair value on the date of acquisition. On an acquisition-by-acquisition basis, the Group recognises any non-controlling interest in the acquiree either at fair value or at the non-controlling interests proportionate share of the acquiree's net assets. Please refer to Note 2.7 for the accounting policy on goodwill on acquisition of subsidiaries.

- 12

Greenship Bulk Trust and its subsidiaries Notes to the Financial Statements For the financial year ended 31 December 2013

2.

Summary of significant accounting policies (cont'd)

2.5

Group accounting (cont'd) Subsidiaries (cont'd) Subsidiaries are consolidated from the date on which control is transferred to the Group They are de-consolidated from the date on which control ceases. In preparing the consolidated financial statements, transactions, balances and unrealised gains on transactions between group entities are eliminated. Unrealised losses are also eliminated but are considered an impairment indicator of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group. Please refer to Note 2.8 for the accounting policy on investments in subsidiaries in the financial statements of the Trust.

2.6

Vessels (a)

Measurement Vessels are initially recognised at cost and subsequently carried at cost less accumulated depreciation and accumulated impairment losses. Vessel cost consists of the contract purchase price and any material expenses incurred upon acquisition (improvements and delivery expensesl. The vessels that are acquired are treated as a business combination to the extent otherwiS? w^ uC^~L~lSItIG'!? ~f a vessel is treated as a purchase of assets and recorded at cost.

that SUGh ?r~iiigitinng !nrliirig hiicinPSg Cha(~ctaricticc~

Where any intangible assets or liabilities associated with the acquisition of a vessel are identified, they are recorded at fair value. Fair value is determined by reference to market data and the revenue stream associated with the charters. (b)

Depreciation Depreciation of an asset begins when it is available for use and is calculated on a straight-line basis, after taking into account the residual value, over its estimated useful life. The estimated useful lives of the vessels are 20 years. The residual values are reviewed, and adjusted as appropriate, at the end of each financial year. The effects of any revision are recognised in profit or loss when the changes arise. Included in the value of vessels acquired are costs relating to dry-docking. These costs are depreciated on a straight-line basis over the period to the next scheduled dry-docking, which is generally 5 years.

(c)

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

- 13 -

Greenship Bulk Trust and its subsidiaries Notes to the Financial Statements For the financial year ended 31 December 2013

2.

Summary of significant accounting policies (conYd)

2.6

Vessels (cont'd) (d)

Disposal On disposal of vessels, the difference between the net disposal proceeds and the carrying amount is recognised in profit or loss.

2.7

Goodwill on acquisitions Initially, goodwill is measured at cost and represents the excess of the cost of an acquisition over the fair value of the Group's share of identifiable net assets and contingent liabilities of the acquired subsidiaries or businesses at the date of acquisition. Subsequently, goodwill on acquisitions of subsidiaries or businesses is measured at cost less any accumulated impairment losses. Gains and losses on the disposal of subsidiaries or businesses include the carrying amount of goodwill relating to the entity or business sold. Negative goodwill represents the excess of the fair value of the identifiable net assets of subsidiaries or businesses when acquired over the cost of acquisition. Negative goodwill is recognised immediately in profit or loss.

2.8

Investments in subsidiaries Investments in subsidiaries are carried at cost less accumulated impairment losses in the Trusts statement of financial position. On disposal of investments in subsidiaries, the difference between disposal proceeds and the carrying amounts of the investments are recognised in profit or loss.

2.9

Impairment ofnon-financial assets (a)

Goodwill Goodwill is tested for impairment annually and whenever there is indication that the goodwill may be impaired. For the purpose of impairment testing of goodwill, goodwill is allocated to each of the Group's cash-generating-units ("CGU") expected to benefit from synergies arising from the business combination. An impairment loss is recognised when the carrying amount of a CGU, including the goodwill, exceeds the recoverable amount of the CGU. Recoverable amount of a CGU is the higher of the CGU's fair value less costs to sell and value-in-use. The total impairment loss of a CGU is allocated first to reduce the carrying amount of goodwill allocated to the CGU and then to the other assets of the CGU pro-rata on the basis of the carrying amount of each asset in the CGU. An impairment loss on goodwill is recognised in profit or loss and is not reversed in a subsequent period.

- 14 -

Greenship Bulk Trust and its subsidiaries Notes to the Financial Statements For the financial year ended 31 December 2013

2.

Summary of significant accounting policies (cont'd)

2.9

Impairment ofnon-financial assets (cont'd)

(b)

Vessels and investments in subsidiaries Vessels and investments in subsidiaries are reviewed for impairment whenever there is any objective evidence of indication that these assets may be impaired. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less costs to sell and the value in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. If this is the case, the recoverable amount is determined for the CGU to which the asset belongs. If the recoverable amount of the asset (or CGU) is estimated to be less than its carrying amount, the carrying amount of the asset (or CGU) is reduced to its recoverable amount. The difference between the carrying amount and recoverable amount is recognised as an impairment loss in profit or loss. An impairment loss for an asset other than goodwill is reversed if, and only if, there has been a change in the estimates used to determine the assets recoverable amount since the last impairment loss was recognised. The carrying amount of an asset other than goodwill is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of any accumulated amortisation or depreciation) had there been no impairment loss recognised for the asset in prior years. A reversal of impairment loss for an asset other than goodwill is recognised in profit or loss.

Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are presented as current assets, except for those maturing later than 12 months after the end of the financial year which are presented as non-current assets. These financial assets are initially recognised at fair value plus transaction costs and subsequently carried at amortised cost using the effective interest method. The Group assesses at the end of each financial year whether there is objective evidence that these financial assets are impaired and recognises an allowance for impairment when such evidence exists. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy, and default or significant delay in payments are objective evidence that these financial assets are impaired. The carrying amount of these assets is reduced through the use of an impairment allowance account which is calculated as the difference between the carrying amount and ine preseni value esiimaiea Tuiure cash riows, discounted at the original effective interest rate. When the asset becomes uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are recognised against the same line item in profit or loss. or

2.10

- 1.5 -

Greenship Bulk Trust and its subsidiaries Notes to the Financial Statements For the financial year ended 31 December 2013

2.

Summary of significant accounting policies (cont'd)

2.10

Loans and receivables(cont'd) The allowance for impairment loss account is reduced through profit or loss in a subsequent period when the amount of impairment loss decreases and the related decrease can be objectively measured. The carrying amount of the asset previously impaired is increased to the extent that the new carrying amount does not exceed the amortised cost had no impairment been recognised in prior period.

2.11

Borrowings Borrowings are presented as current liabilities unless the Group has an unconditional right to defer settlement for at least 12 months after the end of the reporting period. Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently carried at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption value is recognised in profit or loss over the period of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the drawdown occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity services and amortised over the period of the facility to which it relates.

2.12

Trade and other payables Trade and other payables represent liabilities for goods and services provided to the Group prior to the end of financial year which are unpaid. They are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities. Trade and other payables are initially recognised at fair value, and subsequently carried at amortised cost using the effective interest method.

2.13

Derivative financial instruments and hedging activities The Group uses derivative financial instruments to hedge its exposure to risks arising from operational activities, specifically the purchase of bunkers in the course of carrying out fixed freight rate transportation contracts. The Group does not hold or issue derivative financial instruments for trading purposes. A derivative financial instrument is initially recognised at its fair value on the date the contract is entered into and is subsequently carried at its fair value. The method of recognising the resulting gain or loss depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged. The carrying amount of a derivative designated as a hedge is presented as anon-current asset or liability if the remaining maturity of the hedged item is more than 12 months, and as a current asset or liability if the remaining maturity of the hedged item is less than 12 months.

- 16 -

Greenship Bulk Trust and its subsidiaries Notes to the Financial Statements For the financial year ended 31 December 2013

2.

Summary of significant accounting policies (cont'd)

2.14

Related parties A related party is defined as follows: a)

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

b)

2.15

(i)

has control or joint control over the Trust;

(ii)

has significant influence over the Trust; or

(iii)

is a member of the key management personnel of the Group or Trust or of a parent of the Trust.

An entity is related to the Group and the Trust if any of the following conditions applies (i)

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

(ii)

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

(iii)

both entities are joint ventures of the same third party;

(iv)

one entity is a joint venture of a third entity and the other entity is an associate of the third entity;

(v)

the entity is apost-employment benefit plan for the benefit of employees of either the Trust or an entity related to the Trust. If the Trust is itself such a plan, the sponsoring employers are also related to the Trust;

(vi)

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

(vii)

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

Leases As lessor: The Group owns dry bulk vessels and charters them to international customers in the global market of cargo transportation under fixed freight rate charters. These charters are classified as operating leases as the Group retains substantially all risk and rewards incidental to ownership. Rental income from operating leases of the vessels (net of any incentives and commissions given to lessees) is recognised in profit or loss on a straight-line basis over the lease term. Initial direct costs incurred by the Group in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised as an expense in profit or loss over the lease term on the same basis as the lease income. Contingent rents are recognised as income in profit or loss when earned.

- 17 -

Greenship Bulk Trust and its subsidiaries Notes to the Financial Statements For the financial year ended 31 December 2013

2.

Summary of significant accounting policies (cont'd)

2.15

Leases(cont'd) As lessee: Leases of vessels where a significant portion of the risks and rewards of ownership are retained by the lessors are classified as operating leases. Rental expenses under operating leases are charged to profit or loss on a straight-line basis over the term of the relevant lease. Benefits received as an incentive to enter into an operating lease are also spread on a straight-line basis over the lease term.

2.16

Inventories Inventories are bunkers for the vessels. Inventories are carried at lower of cost and net realisable value. Cost is determined using the weighted average method. Bunkers are used for the operation of the vessels, therefore inventories are not written down when market price falls below cost if the overall shipping activity is expected to be profitable.

2.17

Taxes (a)

Current income tax

Current income tax for current and prior period is recognised at the amount expected to be paid to or recovered from the tax authorities, using the tax rates and tax laws that have been enacted or substantively enacted at the end of the financial year. (b)

Deferred tax

Deferred tax is recognised for all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements, except when the deferred tax arises from the initial recognition of an asset or liability in a transaction that is not a business combination, and at the time of the transaction, affects neither accounting nor taxable profit or loss. A deferred tax liability is recognised on temporary differences arising on investments in subsidiaries, except where the Group is able to control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. A deferred tax asset is recognised to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences and tax losses can be utilised. Deferred tax is measured: (i)

at the tax rates that are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted at the end of the financial year; and

(ii)

based on the tax consequence that will follow from the manner in which the Group expects, at the end of the financial year, to recover or settle the carrying amounts of its assets and liabilities.

- 18 -

Greenship Bulk Trust and its subsidiaries Notes to the Financial Statements For the financial year ended 31 December 2013

2.

Summary of significant accounting policies (cont'd)

2.17

Taxes(conYd) (b)

Deferred tax (cont'd) Current and deferred taxes are recognised as income or expense in profit or loss, except to the extent that the tax arises from a business combination or a transaction which is recognised directly in equity. Deferred tax arising from a business combination is adjusted against goodwill on acquisition. The Group's activities are subject to taxation under different tax schemes in several countries. The Group's main shipping activities are located in France, where the income from shipping operations is taxable in accordance with Article 206 of the French Income Tax Act. In France, the activities are both subject to normal company tax scheme, which implies a corporate tax rate of 33.333%, and the French Tonnage Tax Scheme, which has been applicable since 1 January LUU:i.

Part of the Group's shipping activity is located in Singapore, where the income derived by the Group's entities from respective bareboat charter agreements qualifies for tax exemption under Section 13S of the Singapore Income Tax Act, with effective from 1 January 2013 or other dates for certain subsidiaries as indicated in a letter of approval by Maritime and Port Authority of Singapore(MPA) dated 1 August 2013 granting relevant Group's entities the status of the Maritime Sector Incentive — Maritime Leasing ("MSI-ML") (Ship) award, for a period of 5 years, which ends on 31 December 2017, provided that the Group meets the requirements of the MSI-ML(Ship) award. The Group is subject to tax on its income from non-n~~alifyinn arti~lt!?5 a# the prevailing Singapore corporate income tax rate.

2.18

Currency translation (a)

Functional and presentation currency Items included in the financial statements of each entity in the Group are measured using the currency of the primary economic environment in which the Group operates("functional currency"). The financial statements are presented in United States Dollar("USD" or "US$"), which is the Trust's functional currency.

(b)

Transactions and balances Transactions in a currency other than the functional currency("foreign currency") are translated into the functional currency using the exchange rates at the dates of the transactions. Currency translation differences from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at the closing rates as at the end of the financial year are recognised in profit or loss.

Greenship Bulk Trust and its subsidiaries Notes to the Financial Statements For the financial year ended 31 December 2013

Summary of significant accounting policies (conYd) 2.19

Cash and cash equivalents For the purpose of presentation in the consolidated statement of cash flows, cash and cash equivalents include deposits with financial institutions.

2.20

Units in issue Units in issue are classified as equity. Expenses, which are directly attributable to the issuance of units, are deducted directly from net assets attributable to unitholders. Expenses, which are not directly attributable to the issuance of units, are recognised in profit or loss.

2.21

Distributions to unitholders Distributions to unitholders are recorded in the period in which they are declared payable by the Trustee-Manager in accordance with the Trust deed.

2.22

Borrowing costs Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.

2.23

Provisions Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and the amount of the obligation can be estimated reliably. Provisions are reviewed at the end of each reporting period and adjusted to reflect the current best estimate. If it is no longer probable that an oufiFlow of resources embodying economic benefits will be required to settle the obligation, the provision is reversed. If the effect of the time value of money is material, provisions are discounted using a current pre tax rate that reflects, where appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

2.24

Pensions and post employment benefits The Group participates in the national pension schemes as defined by the laws of the countries in which it has employment. The cost of providing benefits under the defined benefit plan is determined on the basis of actuarial evaluations. These evaluations are based on hypotheses regarding rate of updating, rate of increase of salaries, mortality rate and probability of presence in the Group during the retirement. The rates are determined on the basis of global indications such as Reuters. Due to the long-term nature of these plans, the uncertainty bound to these estimations is not significant.

-20-

Greenship Bulk Trust and its subsidiaries Notes to the Financial Statements For the financial year ended 31 December 201 ~

2.

Summary of significant accounting policies (cont'd)

2.24

Pensions and post employment benefits(cont'd) The main assumptions used in the valuation of pensions are as follows: 2013 Discount rate Inflation rate Turnover Wage increase rate

3.

2012 4.20% 1.50% 8.88% 2.00%

4.10% 1.70% 8.88% 1.50%

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

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

a.

Impairment of vessels An impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs to sell and its value in use. The fair value less costs to sell calculation is based on available data from binding sales transactions in an arm's length transaction of similar assets or observable market prices less incremental costs for disposing the asset. The value in use calculation is based on a discounted cash flow model. The cash flows are derived from the budget for the remaining useful life of the vessels and do not include restructuring activities that the Group is not yet committed to or significant future investments that will enhance the assets performance of the cash generating unit being tested. The recoverable amount is most sensitive to the discount rate used for the discounted cash flow model as well as the expected future cash inflows and the growth rate used for extrapolation purposes. The carrv~ng amo~.~nt and ke, assumptien~ used to determine the recorerablc amount are further explained in Note 5. The carrying amount of the Group's vessels as at 31 December 2013 was US$431,450,454 (2012: US$246,360,500).

- 21 -

Greenship Bulk Trust and its subsidiaries Notes to the Financial Statements For the financial year ended 31 December 2013

Significant accounting judgments and estimates (cont'd) Key sources of estimation uncertainty (cont'd) b.

Impairment of goodwill Goodwill is tested for impairment at the end of each reporting period and when circumstances indicate that the carrying value may be impaired. Impairment is determined for goodwill by assessing the recoverable amount of each CGU (or group of CGUs)to which the goodwill relates. When the recoverable amount of the CGU is less than its carrying amount, an impairment loss is recognised. Impairment losses relating to goodwill cannot be reversed in future periods. The key assumptions applied in the determination of the recoverable amount including a sensitivity analysis, are disclosed and further explained in Note 8. The carrying amount of the Group's goodwill as at 31 December 2013 was US$1,682,385 (2012: US$1,682,385).

c.

Impairment of loans and receivables The Group assesses at the end of each reporting period whether there is any objective evidence that a financial asset is impaired. To determine whether there is objective evidence of impairment, the Group considers factors such as the probability of insolvency or significant financial difficulties of the debtor and default or significant delay in payments. Where there is objective evidence of impairment, the amount and timing of future cash flows are estimated based on historical loss experience for assets with similar credit risk characteristics. The carrying amount of the Group's loans and receivables at the end of the reporting period is disclosed in Note 11 to the financial statements.

d.

Taxes Uncertainties exist with respect to the interpretation of complex tax regulations, changes in tax laws, and the amount and timing of future taxable income. Given the wide range of international business relationships and the long-term nature and complexity of existing contractual agreements, differences arising between the actual results and the assumptions made, or future changes to such assumptions, could necessitate future adjustments to tax income and expense already recorded. The Group establishes provisions, based on reasonable estimates, for possible consequences of audits by the tax authorities of the respective countries in which it operates. The amount of such provisions is based on various factors, such as experience of previous tax audits and differing interpretations of tax regulations by the taxable entity and the responsible tax authority. Such differences of interpretation may arise on a wide variety of issues depending on the conditions prevailing in the respective domicile of the Group companies. The carrying amount of the Group's tax payables and recoverables as at 31 December 2013 were US$12,946 (2012: US$7,835) and US$150,305 (2012: US$1,444,944), respectively.

e.

Contingent liabilities Significant judgement is required in assessing the potential claims from counterparties for demurage, shortage of cargo, damages to hull and delays during voyagers. The claims are subject to legal arbitration and only expected to be finalised in the next 5 years. The determination is further explained in Note 16. -22-

Greenship Bulk Trust and its subsidiaries Notes to the Financial Statements For the financial year ended 31 December 2013

4.

Subsidiary companies Details of the subsidiary companies of the Trust at 31 December 2013 and 2012 are as follows:

Name of Company (Country of incorporation)

Principal activities 2013 US$

Held by the Trust: Greenship Bulk 1 Pte. Ltd. (Singapore) Greenship Bulk 2 Pte. Ltd. (Singapore) Vreenship 13u1k 3 Pte. Ltd. (Singapore) Greenship Bulk 4 Pte. Ltd. (Singapore) Greenship Bulk 5 Pte. Ltd. (Singapore) Greenship Bulk 6 Pte. Ltd. (Singapore) Greenship Bulk 7 Pte. Ltd. (Singapore) Greenship Bulk 8 Pte. Ltd. (Singapore) Greenship Bulk 9 Pte. Ltd. (Singapore) Greenship Bulk 10 Pte. Ltd. (Singapore) Greenship Bulk 11 Pte. Ltd. (Singapore) Greenship Bulk 12 Pte. Ltd. (Singapore) Greenship Bulk 13 Pte. Ltd. (Singapore) Greenship Bulk 14 Pte. Ltd. (Singapore) Greenship Bulk 15 Pte. Ltd. (Singapore) Greenship Bulk 16 Pte. Ltd. (Singapore) Greenship Bulk 17 Pte. Ltd. (Singapore) Greenship Bulk 18 Pte. Ltd. (Singapore) SciHr Luxembourg (Luxembourg)

Proportion of interest 2013 2012

Cost

Ship owning activities Ship owning activities Ship owning activities Ship owning activities Ship owning activities Ship owning activities Ship owning activities Ship owning activities Ship owning activities Ship owning activities Ship owning activities Ship owning activities Ship owning activities Ship owning activities Ship owning activities Ship owning activities Ship owning activities Ship owning activities investment holding Total

2012 US$

12,437,320

12,437,320

100

100

12,437,083

12,437,083

100

100

12,487,133

12,487,133

100

100

12,487,133

12,487,133

100

100

13,371,309

13,371,309

100

X00

13,370,309

13,370,309

100

100

13,820,309

13,820,309

100

100

13,820,309

13,820,309

100

100

10,736,724

—

100

—

10,725,407

—

100

—

10,701,902

—

100

—

10,685,232

—

100

—

10,726,091

—

100

—

10,809,116

—

100

—

10,346,492

—

100

—

10,334,305

--

100

—

6,750,000

—

100

—

6,750,000

—

100

—

1:i,ti(i2,Ut~4

1:3,ti6L,084

100

100

216,458,258

117,892,989

-23-

Greenship Bulk Trust and its subsidiaries Notes to the Financial Statements For the financial year ended 31 December 2013

4.

Subsidiary companies (cont'd) Name of Company (Country of incorporation)

Principal activities

Proportion of interest 2012 2013

Held through SETAF Luxembourg: SASU SETAF (France) SASU STCO (France) SASU GESTAF (France) SASU SETAF SAGET (France) SASU PSC (France) SASU SESAC (France) Handy Bulk Ltd (Switzerland)

100 100 100 100

100 100 100 100

Maritime transport Maritime transport Maritime transport

100 100 100

100 100 100

Vessels

Cost At 16 February 2012(date of constitution) Additions

—

Group US$

252,620,148

At 31 December 2012 and 1 January 2013 Additions Adjustment for purchase price discounts received

252,620,148 221,611,070 (20,000,000)

At 31 December 2013

454,231,218

Accumulated depreciation and impairment At 16 February 2012(date of constitution) Depreciation expense for the period

—

5.

Maritime transport Maritime transport Maritime transport Maritime transport

6,259,598

At 31 December 2012 and 1 January 2013 Depreciation expense for the year

6,259,598 16,521,166

At 31 December 2013

22,780,764

Net carrying amount At 31 December 2013

431,450,454

At 31 December 2012

246,360,550

Capitalisation of borrowing costs The Group's vessels include borrowing costs arising from bank loans borrowed specially for the purpose of the construction of the vessels. During the financial year, the borrowing costs capitalised as cost of vessels amounted to US$1,330,000 (2012: US$2,249,018). -24-

Greenship Bulk Trust and its subsidiaries Notes to the Financial Statements For the financial year ended 31 December 2013

5.

Vessels (cont'd) Assets pledged as security The Group's vessels with a carrying amount of US$431,450,454 (2012: US$246,360,550) are mortgaged to secure the Group's bank loans (Note 15). Seller's credit arrangement During the year, the cash outflow on acquisition of vessels amounted to US$187,748,802 (2012: US$252,620,148). A further US$40,000,000 measured at fair value of US$33,862,268 (2012: Nil) was financed by means of a seller's credit arrangement (Note 14). The aggregate cost of vessels acquired during the year amounted to US$221,611,070 (2012: US$252,620,148). Impairment of assets 1 he Group carried out reviews of the recoverable amount of its vessels. No impairment loss was recognised during the financial year. For financial year 2013 the recoverable amount of the vessels were based on the independent valuation of a reputable ship broker. For financial year 2012 the recoverable amount of the vessels were based on their value in use and the pre-tax discount rate used was 8.4%.

6.

Other fixed assets Office

Group

equipment US$

Cos± At 16 February 2012(date of constitution) Acquisition of subsidiary Additions Disposals

— 1,011,066 203,688 (149,421)

At 31 December 2012 and 1 January 2013 Acquisition of subsidiary Additions Write-off

1,065,333

At 31 December 2013

1,113,729

Accumulated depreciation and impairment At 16 February 2012(date of constitution) Acquisition of subsidiary Depreciation expense for the period Disposals

62,629 (14,233)

— 716,481 83,247 (92,168)

At 31 December 2012 and 1 January 2013 Depreciation expense for the year Write-off

707,560 89,655 (14,233)

At 31 Gecembei Ll7~J

782,982

Net carrying amount At 31 December 2013

330,747

At 31 December 2012

357,773

- 2.5 -

Greenship Bulk Trust and its subsidiaries Notes to the Financial Statements For the financial year ended 31 December 2013

Investments in subsidiaries Trust

Unquoted shares, at cost

2013 US$

2012 US$

216,458,258

117,892,989

Details of the subsidiary companies are set out in Note 4. Investments pledged as security The entirety of the shares held by the Group in Greenship Bulk 1 Pte. Ltd., Greenship Bulk 2 Pte. Ltd., Greenship Bulk 3 Pte. Ltd., Greenship Bulk 4 Pte. Ltd., Greenship Bulk 5 Pte. Ltd., Greenship Bulk 6 Pte. Ltd., Greenship Bulk 7 Pte. Ltd., Greenship Bulk 8 Pte. Ltd., Greenship Bulk 9 Pte. Ltd., Greenship Bulk 10 Pte. Ltd., Greenship Bulk 11 Pte. Ltd., Greenship Bulk 12 Pte. Ltd., Greenship Bulk 13 Pte. Ltd., Greenship Bulk 14 Pte. Ltd., Greenship Bulk 15 Pte. Ltd. and Greenship Bulk 16 Pte. Ltd. are pledged as security for the Group's bank loans (Note 15). Under the terms and conditions of the loans, the Group is prohibited from disposing of the investments or subjecting them to further charges without furnishing a replacement security of similar kind. Acquisition ofsubsidiary company in 2012 — SETAF Luxembourg The Group acquired SETAF Luxembourg and its subsidiaries with effect from 1 January 2012. SETAF Luxembourg is a company registered in Luxembourg, whose principal activity is investment holding of bulk shipping companies. The fair values of the identifiable assets and liabilities of the subsidiary as at the date of acquisition were: Recognised on acquisition US$ 294,585 748,658 129,010 29,614,180 170 5,297,801 25,710,756

Other fixed assets Other non-current assets Deferred tax assets Trade and other receivables Tax recoverable Prepayments Cash and cash equivalents

61,795,160 40,569,944 1,463,841 6,373,096 261,480 1,166,840

Trade and other payables Income tax payable Provisions Employee benefit obligations Dividends payable

49,835,201

-26-

Greenship Bulk Trust and its subsidiaries Notes to the Financial Statements For the financial year ended 31 December 2013

7.

Investments in subsidiaries (cont'd) Acquisition of subsidiary company in 2012 — SETAF Luxembourg(conYd) Recognised on acquisition US$ Net identifiable assets acquired Goodwill arising from acquisition

11,959,959 1,682,385

Total purchase consideration, settled in cash

13,642,344

effect of the acquisition of SETAF Luxembourg on cash flows:

Total ~~T UJy

8.

Total purchase consideration, settled in cash Less: Cash and cash equivalents of subsidiary acquired

13,642,344 25,710,756

Net cash inflow on acquisition

12,068,412

Goodwill Group US$ Cost and carrying amount At 16 February 2012(date of constitution) Acquisition of a subsidiary At 31 December 2012, 1 January 2013 and 31 December 2013

— 1,682,385 1,682,385

The goodwill has been allocated to the SETAF Luxembourg group of companies, being the Group's cash generating unit. assumptions used in the value in use calculations The recoverable amount of the cash generating unit is determined based on value-in-use calculations. Value in use was determined by discounting the future cash flows generated from the continuing use of the cash-generating units and was based on the following assumptions: — — — —

Cash flows were projected based on actual operating results and financial budgets approved by management covering a five year period. ine aniicipatea annual revenue growth included in the cash flow protections was 2% per annum from the financial years 2014 to 2019. A discount rate of 8.7% was applied in determining the recoverable amount of the units. The terminal value was estimated using a growth rate of 2%.

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

-2~-

Greenship Bulk Trust and its subsidiaries Notes to the Financial Statements For the financial year ended 31 December 2013

8.

Goodwill (cont'd) Kev assumptions used in the value in use calculations (conYd The Group believes that any reasonably possible changes in the above key assumptions applied are not likely to materially cause the recoverable amounts to be lower than their carrying amounts as at 31 December 2013. Profit margins are based on historical performance adjusted for future expectations.

9.

Other non-current assets Group 2012 US$

2013 US$ Security deposits Other long-term receivables

389,941 487,600

353,305 466,493

877,541

819,798

Security deposits are deposits made for office premises. 10.

Inventories Group 2013 US$ 11,854,861

Bunkers at cost

-28-

2012 US$ 4,284,435

Greenship Bulk Trust and its subsidiaries Notes to the Financial Statements For the financial year ended 31 December 2013

11.

Trade receivables, other receivables and amounts due from related companies Group

Trade receivables Other receivables

Add Amounts due from immediate holding company (non-trade) Amounts due from related companies(non-trade) Amounts due from subsidiary(non-trade)

Cash and bank balances (Note 13) Other non-current assets (Note 9) Total loans and rPr_.eiv~bles

Trust

2013 US$

2012 US$

24,125,085 631,770

18,738,014 302,566

— 18,565

— —

24,756,855

19,040,580

18,565

—

—

1

—

1

7,531,775

6,583,419

182,589

—

—

—

22,866,412

500

32,288,636

25,624,000

23,067,565

X01

64,199,723

25,702,730

18,599,680

140

877,541

819,798

—

—

g7,3g5,~ga

52,~ a~,52~

41,~~?,~4E

6~ 1

2013 US$

2012 US$

Trade receivables are non-interest bearing and are generally on 30 to 120 days' terms. They are recognised at their original amounts which represent their fair values on initial recognition. As at 31 December 2013, the Group's amounts due from related companies include US$6,379,099 (2012: US$6,319,400), comprising US$5,000,000 (2012: US$5,000,000) and Euro1,000,000 (2012: Euro1,000,000), due from Blake Maritime Limited, a fellow subsidiary of the Jaccar Group. These amounts pertain to deposits paid for an option to be exercisable to purchase a vessel under construction which was to be exercised between 19 October 2011 and 18 April 2013. The option has lapsed and the deposits are repayable on demand no later than 18 June 2014 to the Group, bearing interest at a rate of 1 %above the prevailing LIBOR rate. Other amounts due from related companies pertain to payments on behalf and are unsecured, interest free and repayable on demand.

- 29 -

Greenship Bulk Trust and its subsidiaries Notes to the Financial Statements For the financial year ended 31 December 2013

Trade receivables, other receivables and amounts due from related companies (cont'd) Trade and other receivables denominated in foreign currencies at 31 December are as follows: Group 2012 US$

2013 US$

4,254,735

1,432,710 362,679 267,529

Euro Indian Rupee South African Rand

—

11.

166,135

Receivables that are past due but not impaired The Group has trade receivables amounting to US$3,693,356 (2012: US$8,593,245) that are past due at the end of the reporting period but not impaired. These receivables are unsecured and the analysis of their aging at the end of the reporting period is as follows: Group 2012 US$

2013 US$ Trade receivables past due but not impaired: Less than 30 days 30 to 60 days 61 to 90 days 91 to 120 days

1,723,947 763,422 613,221 592,766

6,832,188 1,129,719 130,552 500,786

3,693,356

8,593,245

Receivables that are impaired The Group's trade receivables that are impaired at the end of the reporting period and the movement of the allowance accounts used record the impairment are as follows: Group

Trade receivables — nominal amounts Less: Allowance for impairment

-30-

2013 US$

2012 US$

2,977,082 (2,977,082)

3,345,682 (3,345,682)

Greenship Bulk Trust and its subsidiaries Notes to the Financial Statements For the financial year ended 31 December 2013

11.

Trade and other receivables and amounts due from related companies (cont'd) Movement in allowance account Group US$ Cost and carrying amount At 16 February 2012(date of constitution) Acquisition of a subsidiary

3,345,682

At 31 December 2012 and 1 January 2013 Decrease

3,345,682 (368,600}

At 31 December 2013

2,977,082

iraue receivaUies ii~ai are individuaiiy determined to oe impaired ai[ne end of the reporting period relate to debtors that are in significant financial difficulties and have defaulted on payments. These receivables are not secured by any collateral or credit enhancements. 12.

Prepayments Group 2013 US$

Prepayment for bunkers Prepaid rental Prepaid vessel operating expenses Prepaid insurance premium Others

13.

2012 US$

1,351,380 3,176,403 2,663,072 1,201,268 73,650

1,971,470 2,719,213 1,086,838 581,454 168,423

8,465,773

6,527,398

Cash and bank balances Group 2013 US$ Cash and bank balances Bank balances charged to banks

Trust

2012 US$

2013 US$

60,999,723

25,702,730

3,200,000

—

64,199,723

25,702,730

2012 US$

18,599,680

140

18,599,680

140

18,599,680

140

Less: (~ . -~-7Adl - ~.

—

Bank balances charged to banks

(3,200,000)

—

Cash and cash equivalents

60,995,929

Bank ~vPrclraft (Nntp 1 Sl

25,702,730

- 31 -

Greenship Bulk Trust and its subsidiaries Notes to the Financial Statements For the financial year ended 31 December 2013

13.

Cash and bank balances (cont'd) Cash at banks earns interest at floating rates based on daily bank deposit rates. The bank accounts of the vessel-owning companies, amounting to US$11,345,763 (2012: US$2,498,549) are subject to account security deeds entered into with the respective banks to secure the Group's term loans (Note 15). As at 31 December 2013, the Group is in compliance with the minimum bank balance requirement of US$3,200,000 (2012: Nil) required by the respective banks. Cash and cash equivalents denominated in foreign currencies are as follows: Trust

Group 2013 US$

— —

—

Trade payables, accruals and amounts due to related companies Trust

Group

2012 US$

2013 US$

46,728,779

44,956,703

207,744

5,001,718

1,719

4,999,999

Total trade payables, accruals, amounts due to related companies 85,658,546 and other liabilities Add: Loans and borrowings (Note 15) 257,480,180 Less: Deferred income (11,951,565)

138,200,396 (10,833,833)

Total financial liabilities carried at amortised cost

173,135,903

331,187,161

45,769,340

-32-

—

—

—

— —

— —

33,862,268

67,003,241

—

8

752,511 958,552

958,552 —

33,862,268

33,140,973

206,033

—

45,769,340

27,933,230

—

51,796,278

206,033

—

810,918

207,744

—

Non-current: Other liabilities

65,781

—

Amounts due to immediate holding company (non-trade) Amounts due to subsidiaries (non-trade) Amounts due to other related companies (non-trade)

—

12,231,050 20,813,496 527,102 551,222 10,833,833

—

Current: 27,750,943 Trade payables 4,536,980 Other accounts payables 2,121,027 Interest payable 368,264 Accruals 11,951,565 Deferred income

—

2012 US$

2013 US$

—

14.

9,248,406 162,575

14,092,445 65,662

—

Euro Swiss Franc

2012 US$

2013 US$

2012 US$

67,003,241

958,552

Greenship Bulk Trust and its subsidiaries Notes to the Financial Statements For the financial year ended 31 December 2013

14.

Trade payables, accruals and amounts due to related companies (cont'd) Trade payables are normally settled on 60-day terms and are non-interest bearing. Trade payables and accruals are primarily denominated in United States Dollars. Amounts due to related parties are unsecured, interest-free and repayable on demand. These amounts are to be settled in cash. Other liabilities (non-current) are unsecured and non-interest bearing seller's credit repayable at the earlier of five years upon delivery of relevant vessels or upon the occurrence of certain market conditions. Deferred income pertains to charter income deferred to the extent that conditions necessary for its recognition as revenue have yet to be fulfilled. Trade payables and accruals denominated in foreign currencies are as follows: Group 2013 US$ Euro Singapore Dollar Swiss Franc

15.

2012 US$

4,102,114 129,380 89,675

2,995,815 1,899 18,856

Loans and borrowings Group 2013 US$ Current portion of long term loans, secured - USD bank loan at LIBOR + 3.60% p.a. - USD bank loan at LIBOR + 3.75% p.a. - USD bank loan at LIBOR + 3.30% p.a. - USD bank loan at LIBOR + 3.55% p.a. Bank overdraft

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

Total loans and borrowings

-33-

2012 US$

5,422,224 4,907,143 2,140,000 5,638,500

5,422,224 4,301,786

18,107,867 3,794

9,724,010

18,111,661

9,724,010

58,966,662 59,180,357 30,411,000 90:810.500

64,388,886 64,087,500

239,368,519

128,476,386

257,480,180

138,200,396

Greenship Bulk Trust and its subsidiaries Notes to the Financial Statements For the financial year ended 31 December 2013

15.

Loans and borrowings (cont'd) (A)

USD bank loan at LIBOR + 3.60% p.a. This loan is secured by a first mortgage over the 4 vessels (Note 5), JS AMAZON, JS COLORADO, JS DANUBE and JS GARONNE, of the Group with a net carrying amount of US$106,312,554 (2012: US$121,656,017) as at 31 December 2013 and the principal amount outstanding is repayable in 19 fixed consecutive quarterly repayment installments beginning from 6 months after the drawdown date of the respective tranche for each tranche, with a balloon repayment together with the final installment on the earlier of: (a)

3 May 2017; and

(b)

the date falling 60 months after the drawdown date of each respective tranche.

The loan includes financial covenants for Greenship Holdings Trust (which guarantees 100% of the loan):

(b)

available cash shall at no time be less than US$10,000,000; equity shall at all times be at least US$125,000,000;

(c)

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

(d)

its working capital shall be greater than its current liabilities.

(a)

As of 31 December 2013, the Group has complied with all the covenants under this bank loan. (B)

USD bank loan at LIBOR + 3.75% p.a. This loan is secured by a first mortgage over the 4 vessels (Note 5), JS LOIRE, JS MEUSE, JS RHIN and JS RHONE, of the Group with a net carrying amount of US$109,120,754 (2012: US$124,704,533) as at 31 December 2013 and the principal amount outstanding under each tranche is repayable in 22 fixed consecutive quarterly repayment installments beginning from 6 months after the drawdown date of the respective tranche for each tranche, with a balloon repayment together with the final instalment on 28 June 2018. The loan includes financial covenants as follows: (a)

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

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

(ii)

its net debt shall not exceed its net asset value; and

(iii)

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

-34-

Greenship Bulk Trust and its subsidiaries Notes to the Financial Statements For the financial year ended 31 December 20'!3

15.

Loans and borrowings (cont'd) (B)

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

Greenship Holdings Trust (which guarantees 100% of the loan) shall at all times maintain: (i)

its equity shall not: from the date of the guarantee up to and including 31 December 2012, be less than US$50,000,000; and from 31 December 2012, be less than US$125,000,000;

(ii) (c)

its working capital shall be greater than current liabilities; and

Greenship Bulk Trust (which guarantees 100% of the loan) shall at all times maintain: (i)

its available cash shall be equal to or greater than the higher of: US$10,000,000; and the sum equivalent to US$1,500,000 multiplied by the number of vessels directly or indirectly wholly owned by the Greenship Bulk Trust.

(ii)

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

(iii)

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

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

USD bank loan at LIBOR + 3.30% p.a. This loan is secured by a first mortgage over the 2 vessels (Note 5), JS NARMADA and JS SANAGA of the Group with a net carrying amount as at 31 December 2013 of US$54,234,352 and the principal amount outstanding under each tranche is repayable in consecutive semi-annually equal installments at 1/30th of the amount advanced under that tranche, together with a balloon installment equal to the amount of that tranche outstanding on the final repayment date. The first repayment instalment in respect of each tranche shall be repaid on the date falling 6 months after the drawdown date in respect of that tranche.

Greenship Bulk Trust and its subsidiaries Notes to the Financial Statements For the financial year ended 31 December 2013

15.

Loans and borrowings (cont'd) (C)

USD bank loan at LIBOR + 3.30% p.a.(conYd) The loan includes financial covenants as follows: (a)

(b)

(c)

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

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

(ii)

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

(iii)

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

Greenship Holdings Trust (which guarantees 100% of the loan) shall at all times maintain: (i)

its equity shall not be less than 31 December 2012 and thereafter; and:

(ii)

its working capital shall be positive;

USD100,000,000 from

Greenship Bulk Trust (which guarantees 100% of the loan) shall at all times maintain: (i)

its available cash shall be equal to or greater than the higher of: A. US$10,000,000; and B. the sum equivalent to US$1,500,000 per ship owned, directly or indirectly by the Greenship Bulk Trust.

(ii)

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

(iii)

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

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

USD bank loan at LIBOR + 3.55% p.a. This loan is secured by a first mortgage over the 6 vessels (Note 5), JS CONGO, JS MEKONG, JS MISSISSIPPI, JS MISSOURI, JS VOLGA and JS YANGSTE of the Group with a net carrying amount as at 31 December 2013 of US$161,782,794 and the principal amount outstanding under each tranche is repayable in consecutive semi-annually equal installments at 3.5% of the amount advanced under that tranche, together with a balloon installment equal to the amount of that tranche outstanding on the final repayment date. The first repayment installment in respect of each tranche shall be repaid on 21 January 2014 (for the first four vessels) and 21 July 2014 (for the last two vessels) in respect of that tranche with the final repayment date falling 114 months after the first repayment date. -36-

Greenship Bulk Trust and its subsidiaries Notes to the Financial Statements For the financial year ended 31 December 20'!3

15.

Loans and borrowings(conYd) (D)

USD bank loan at LIBOR + 3.55% p.a. (cont'd) The loan includes financial covenants as follows: (a)

(b)

(c)

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

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

(ii)

its net debt shall not exceed its value adjusted equity exceed by 100%; and

(iii)

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

Greenship Holdings Trust (which guarantees 100% of the loan) shall at all times maintain: (i)

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

(ii)

its working capital shall be positive;

Greenship Bulk Trust (which guarantees 100% of the loam shall at all times maintain: (il

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

US$10,000,000; and the sum equivalent to US$1,500,000 per ship owned, directly or indirectly by the Greenship Bulk Trust.

(ii)

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

(iii)

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

In October 2013, Jaccar had applied to the financial institutions providing the loan, to request for a change in its financial covenants of (a)(i) and (a)(ii) to be based on Jaccar's standalone financial statements instead of Jaccar's consolidated financial statements. Subsequent to the year-end, the request has been approved by relevant lenders with retroactive effect from 31 December 2013. As of 31 December 2013, the Group has complied with all the covenants under this bank loan. In addition to the mortgage over the vessel (for which a collateral maintenance ratio of between 70% and 140% is required and complied with as at 31 December 2013), all of the interest bearing loan facilities above are secured through the earnings and retention accounis (ivote ~~j, general assignments of the vessel's rights and interests including insurance and the vessel manager's undertaking. Subsequent to the year end, Jaccar has applied to and obtained approval from the financial institutions providing the loans of (B),(C) and (D) for a removal of the financial covenants as disclosed under (B)(a),(C)(a) and (D)(a)for the respective loans.

_ ~7 _

Greenship Bulk Trust and its subsidiaries Notes to the Financial Statements For the financial year ended 31 December 2013

Provisions Excess Contingent liabilities costs from charter hire US$ US$

Total US$

Current

—

—

—

—

—

—

At 16 February 2012(date of constitution) Acquisition of a subsidiary Arising during the period Utilised during the period

—

—

—

At 31 December 2012 and 1 January 2013 Arising during the year Utilised during the year At 31 December 2013

—

276,456 584,581 (276,456)

276,456 584,581 (276,456)

584,581 592,060 (584,581)

584,581 592,060 (584,581)

592,060

592,060

4,240,837

—

At 31 December 2013

—

5,430,889 (458,317) (731,735)

—

At 31 December 2012 and 1 January 2013 Utilised during the year Unused amounts reversed

—

6,096,640 76,616 (742,367)

—

At 16 February 2012(date of constitution) Acquisition of a subsidiary Arising during the period Unused amounts reversed

—

Non-current

—

16.

6,096,640 76,616 (742,367) 5,430,889 (458,317) (731,735) 4,240,837

Contingent liabilities The claims are subject to legal arbitration and only expected to be finalised in the next 5 years. These mainly relate to claims from counterparties for demurrage, shortage of cargo, damages to hull and delays during voyages. As at 31 December 2013, the provision was reassessed and has been reduced to US$4,240,837(2012: US$5,430,889). Excess costs from charter hire The provision is based on profit and loss analysis of undergoing charter hires using market information as at 31 December. It is expected that that excess costs will be incurred during completion of charter hires within one year.

-38-

Greenship Bulk Trust and its subsidiaries Notes to the Financial Statements For the financial year ended 31 December 2013

17.

Employee benefit obligations Group 2013 US$ Pensions

18.

2012 US$

299,939

320,297

Units in issue Ordinary units No. of units

Amount US$

At 16 February 2012(date of constitution) Issuance of units durir~y the ~eriou

1 i 17,892,981

1 i i7,zsy~,y8 i

At 31 December 2012 and 1 January 2013

117,892,982

117,892,982

68,076,222

74,268,000

185,969,204

192,160,982

Issuance of units during the year At 31 December 2013

The unitholders are entitled to receive distribution as a~nci when rler_.~~rec~ by the Tr~!steeManager. All issued units are fully paid. 19.

Revenue Group

Charter income

20.

1.1.2013 to 31.12.2013 US$

16.2.2012 (date of constitution) to 31.12.2012 US$

312,139,109

238,418,145

Other expenses Group 'I 6.2.2012 1.1.2013 (date of to constitution) 31.12.2013 to 31.12.2012 US$ US$ Interest expense —bank loans Foreign exchange (gain)/loss, net

- 39 -

8,226,942 (498,304)

2,991,956 218,875

7,728,638

3,210,831

Greenship Bulk Trust and its subsidiaries Notes to the Financial Statements For the financial year ended 31 December 2013

21.

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

Group 16.2.2012 (date of constitution) to 31.12.2012 US$

1.1.2013 to 31.12.2013 US$

22.

2,000,000 16,521,166 89,655

130,482 6,259,598 83,247

7,597,929 718,577 821,450 260,920

6,575,886 678,307 1,326,616 —

Base fee charged by Trustee-Manager Depreciation of vessels (Note 5) Depreciation of other fixed assets (Note 6) Personnel and related costs comprising: Salaries and bonuses Office lease rental Legal and professional service fees Taxes other than income tax

Income tax expense A reconciliation between the tax expense and the product of accounting profit before tax multiplied by the applicable tax rate for the financial year ended 31 December 2013 and financial period ended 31 December 2012 is as follows:

Group 1.1.2013 to 31.12.2013 US$ Profit before tax Taxation at statutory tax rates of each national jurisdiction Adjustments Income not subject to taxation Non-deductible expenses Others

7,313,632

5,753,397

2,434,632

2,118,775

(1,378,782)

(1,207,144) 234,694 9,379

4,320 1,060,170

Income tax expense

16.2.2012 (date of constitution) to 31.12.2012 US$

1,155,704

The above reconciliation is prepared by aggregating separate reconciliations for each national jurisdiction. No provision is made for taxation on qualifying shipping income derived from the operation of the Group's vessels which is exempt from taxation under Section 13A of the Singapore Income Tax Act and the Singapore's Maritime Sector Incentive — Maritime Leasing("MSIML")(Ship) Award which was granted to the Trust and its vessel-owning subsidiaries on 1 August 2013 by the Maritime and Port Authority of Singapore (`MPA"). In certain other countries in which the Group operates, income arising from shipping activities is subject to a tonnage-based tax system under which the computation of taxable income is based on the tonnages of the qualifying vessel fleet. -40-

Greenship Bulk Trust and its subsidiaries Notes to the Financial Statements For the financial year ended 31 December 20'!3

23.

Commitments (a)

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

(b)

Operating lease commitments — As lessee At the end of the reporting period, the Group has the following minimum lease payments under non-cancellable operating leases with initial or remaining term of one year or more: Group

Not later than one year Later than one year but not later than five years

2013 US$

2012 US$

151,696 —

151,696 151,696

151,696

303,392

The Group leases its office premise under operating leases. The lease runs for an initial tenure of three years with option to renew every three years. Lease payments under these leases are fixed for the entire initial tenure. The leases generally do not contain escalation clauses. There are no restrictions placed upon the Group or the Trust by entering into the lease. 24.

Related party transactions (a)

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

1.1.2013 to 31.12.2013 US$ With related companies: Rental costs Technical supervision costs charged Base fee charged by Trustee-Manager Aviv ^i:^cic,yc :,viiiiiiiSSivii aiiu T@2 f@C@IV@O

16.2.2012 (date of constitution) to 31.12.2012 US$

5,672,905 1,149,585 2,000,OOG

1,541,617 503,949 130,482

2i,:~y~

z5z,yyz

82,199

163,145

iiiai~ayc~iiciii

Interest received

- 41 -

Greenship Bulk Trust and its subsidiaries Notes to the Financial Statements For the financial year ended 31 December 2013

24.

Related party transactions (cont'd) (b)

Compensation of key management personnel

Directors' fees of the Trustee-Manager

25.

Group

Trust

1.1.2013 to 31.12.2013 US$

1.1.2013 to 31.12.2013 US$

166,309

166,309

Trust Group 16.2.2012 16.2.2012 (date of (date of constitution) constitution) to 31.12.2012 to 31.12.2012 US$ US$ 73,427

73,427

Financial risk management objectives and policies The Group is exposed to financial risks arising from its operations and the use of financial instruments. The key financial risks include credit risk, interest rate risk, liquidity risk and foreign currency risk. The Group's overall risk policy is to minimise potential adverse effects on the Group's financial performance. The management reviews and agrees policies for managing these risks and they are summarised below: a)

Credit risk Credit risk is the risk of loss that may arise on outstanding financial instruments should a counterparty default on its obligations. The carrying amounts of receivables and cash and cash equivalents represent the Group's maximum exposure to credit risk. It is the Group's policy to provide credit terms to creditworthy and reputable customers. These receivables are continually monitored on an ongoing basis to ensure that issues arising from non-collectibility are minimised. Therefore, the Group does not expect material credit losses on its debts with customers. For other financial assets, the Group minimises credit risk by dealing exclusively with high credit rating counterparties. Exposure to credit risk The Group's maximum exposure to credit risk in the event that counterparties fail to perform their obligations as of 31 December 2013 and 2012 in relation to each class of recognised financial assets is the carrying amount of those assets as indicated in the statement of financial position. As at 31 December 2013 and 2012, the Group does not have significant concentration of credit risk. Cash and cash equivalents are placed with reputable financial institutions. Management believes that the financial institutions that hold the Company's assets are financially sound and accordingly, minimum credit risk exists with respect to these assets.

- 42 -

Greenship Bulk Trust and its subsidiaries Notes to the Financial Statements For the financial year ended 31 December 2013

25.

Financial risk management objectives and policies (cont'd) a)

Credit risk (cont'd) Financial assets that are neither past due nor impaired Trade and other receivables that are neither past due nor impaired are creditworthy receivables with good payment record with the Group. Financial assets that are either past due or impaired Information regarding financial assets that are either past due or impaired is disclosed in Note 11.

b)

Interest rate risk Interest rate risk is the risk that the future cash flows of the Group's financial instruments will fluctuate because of changes in market interest rates. The Group's exposure to interest rate risk arises primarily from their loans and borrowings, interest-bearing deposits given to related companies and bank deposits. The Group's financial assets and liabilities at floating rates are contractually repriced at intervals of less than 6 months from the end of the reporting period. The Group's policy is to manage interest cost using floating rate debts. Sensitivity analysis for interest rate risk At the end of the reporting period, if interest rates had been 1 %higher with all other variables held constant, the Groin's nr~fit hefore tax ~vo~!Ir~ have been US$1,998,818 (2012: US$779,260) lower, arising mainly as a result of higher interest expenses after netting off interest income. The assumed movement for interest rate sensitivity analysis is based on the currently observable market environment.

c)

Liquidity risk Liquidity risk is the risk that the Group or the Trust will encounter difficulty in meeting financial obligations due to shortage of funds. The Group's and the Trusts exposure to liquidity risk arises primarily from mismatches of the maturities of financial assets and liabilities. The Group's and the Trusts objective is to maintain a balance between continuity of funding and flexibility through the use of stand-by credit facilities.

- 43 -

25.

c)

Trade payables and accruals Amounts due to related companies Loans and borrowings

752,159

958,552

—

—

—

40,000,000

752,519

958,552

812,637 161,270,745 196,206,252

— 45,490,263 45,490,263

— 100,595,186 100,595,186

812,637 15,185,296 50,120,803

-44-

206,033 — —

Total US$

206,033

Over 5 years US$

34,122,870

1 to 5 years US$

73,141,043

32,933,299 40,000,000

207,744

Total US$

—

1 year or less US$

Trust 2012

40,000,000

Over 5 years US$

—

Total US$

33,141,043

— 40,000,000

1 to 5 years US$

Trust 2013

34,122,870

1 year or less US$

Group 2012 Over 5 1 to years 5 years US$ US$

387,653,443

97,605,562

222,700,110

67,347,771

32,933,299 -

5,067,499 40,000,000 307,808,730

— — 97,605,562

—

207,744

34,777,214

1 year or less US$

—

40,000,000 182,700,110

—

—

Total US$

Trade payables and 34,777,214 accruals Amounts due to related 5,067,499 companies liabilities Other non-current 27,503,058 Loans and borrowings

1 year or less US$

Group 2013 Over 5 1 to years 5 years US$ US$

The table below summarises the maturity profile of the Group's and the Trusts financial liabilities at the end of the reporting period based on contractual undiscounted repayment obligations.

Liquidity risk (cont'd)

Financial risk management objectives and policies (cont'd)

Notes to the Financial Statements For the financial year ended 31 December 2013

Greenship Bulk Trust and its subsidiaries

Greenship Bulk Trust and its subsidiaries Notes to the Financial Statements For the financial year ended 31 December 2013

25.

Financial risk management objectives and policies (cont'dj d)

Foreign currency risk The Group has transactional currency exposures arising from sales or purchases that are denominated in a currency, primarily Euro ("EUR"), other than the respective functional currency of the entities within the Group. Approximately 99% (2012: 99%)of the Group's sales are denominated in the functional currency of the entities within the Group whilst approximately 96% (2012: 91%) of costs are denominated in the respective functional currency of the entities within the Group. The Group's trade receivables and trade payables at the end of the reporting period have similar exposures with 88% (2012: 98%) and 90% (2012: 89%) denominated in the respective functional currency. The Group also holds cash and cash equivalents denominated in foreign currencies for working capital purposes. At the end of the reporting period, such foreign currency balances are mainly in Eurc. Sensitivity analysis for foreign currency risk The following table demonstrates the sensitivity of the Group's profit net of tax to a 1 %change in Euro against the USD, with all other variables held constant. Group Profit after Profit after tax tax 2013 Lu1L US$ US$ CURIliSU

26.

5irengtheneci Weakened

114,230 (114,230)

105,073 (105,073)

Financial instruments Fair value Fair value is defined as the amount at which the financial instrument could be exchanged in a current transaction between knowledgeable willing parties in an arm's length transaction, other than in a forced or liquidation sale. The following methods and assumptions are used to estimate the fair value of each class of financial instruments: (a)

Fair value hierarchy The Group categories fair value measurements using a fair value hierarchy that is dependent on the valuation inputs used as follows: -

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

-

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

-

Level 3 — Unobservable inputs for the asset or liability.

-45-

Greenship Bulk Trust and its subsidiaries Notes to the Financial Statements For the financial year ended 31 December 2013

26.

Financial instruments (cont'd) (a)

Fair value hierarchy (cont'd) Fair value measurements that use inputs of different hierarchy levels are categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.

(b)

Assets and liabilities not carried at fair value but for which fair value is disclosed: The following table shows an analysis of the Group's assets and liabilities not measured at fair value at 31 December 2013 but for which fair value is disclosed:

Group 2013 Fair value measurements at the end of the reporting period using Quoted prices in active markets for identical instruments (Level 1) US$

Significant observable inputs other Significant than quoted unobservable inputs prices (Level 3) (Level 2) US$ US$

Total

Carrying amount

US$

US$

Assets Other non-current assets

—

—

776,856

776,856

877,541

—

—

33,241,131

33,241,131

33,862,268

Liabilities Other liabilities (non-current)

-46-

Greenship Bulk Trust and its subsidiaries Notes to the Financial Statements For the financial year ended 31 December 2013

26.

Financial instruments (cont'd} (b)

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

Trust 2013 Fair value measurements at the end of the reporting period using Quoted prices in Significant observable active markets for inputs other Significant identical than quoted unobservable instruments prices inputs no,gi~~ i~~~ n ii ~~~.~I ~ ~~°V~~ ~Ll^.VGIi~~ J~ US$

US$

US$

Total

Carrying amount

US$

US$

Liabilities Other liabilities (non-current)

—

—

33,241,131

33,241,131

33,862,268

~eterminati~~~ of fair value Other non-current assets and other liabilities The fair values as disclosed in the table above are estimated by discounting expected future cash flows at market incremental lending rate or similar types of lending, borrowing or leasing arrangements at the end of the reporting period.

-4~r-

Greenship Bulk Trust and its subsidiaries Notes to the Financial Statements For the financial year ended 31 December 2013

26.

Financial instruments (cont'd) (c)

Fair value of financial instruments by classes that are not carried at fair value and whose carrying amounts are not reasonable approximation of fair value The fair value of financial assets and liabilities by classes that are not carried at fair value and whose carrying amounts are not reasonable approximation of fair value are as follows:

Group Note

2012

2013 Carrying amount

Fair value

Carrying amount

Fair value

US$

US$

US$

US$

9

877,541

776,856

819,798

719,769

14

33,862,268

33,241,131

—

—

Financial assets: Other non-current assets

Financial liabilities: Other liabilities (non-current)

Trust Note

2012

2013 Carrying amount

Fair value

Carrying amount

Fair value

US$

US$

US$

US$

33,862,268

33,241,131

Financial liabilities: Other liabilities (non-current)

27.

14

—

—

Events occurring after the end of the reporting period On 28 January 2014, the Trustee-Manager declared a cash distribution determined based on 90% of the net distributable amount of the Trust, which is a distribution of US$0.0428 per unit and a total of US$7,959,482 was paid to unitholders in early February 2014.

-48-

Greenship Bulk Trust and its subsidiaries Notes to the Financial Statements For the financial year ended 31 December 2013

28.

Comparative figures The comparative figures for the Consolidated Statement of Comprehensive Income, Consolidated Statement of Changes in Unitholders' Funds, Consolidated Statement of Cash Flows and their related notes are less than 12 months as the Trust was constituted on 16 February 2012. Certain comparatives have been reclassified to better reflect the nature of the balances and to conform with current year's presentation.

Note

(a)

2012 US$

2012 US$

As reclassified

As previously reported

Brokerage revenue and cost previously reported on a net basis Consolidated Statement of Comprehensive Income Revenue Rentals Vessel operating expenses

(b)

238,418,145 (118,076,417) (94,925,302)

143,797,221 (46,240,029) (72,140,766)

Inventories previously reported ag n~e~~iri gX~gncac

Statement of Financial Position Inventories Prepayments 29.

10 12

4,284,435 6,527,398

— 10,811,833

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

_ag_