Annual Report • Apr 28, 2016
Annual Report
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MISSION STATEMENT EXMAR is a provider of floating solutions for the operation, transportation and transformation of gas. EXMAR's mission is to serve customers with innovations in the field of offshore extraction, transformation, production, storage and transportation by sea of liquefied natural gases, petrochemical gases and liquid hydrocarbons.
EXMAR creates economically viable and sustainable energy value chains in long term alliances with first class business partners.
EXMAR designs, builds, certifies, owns, leases and operates specialized, floating maritime infrastructure for this purpose as well as aiming for the highest standards in performing commercial, technical, quality assurance and administrative management for the entire maritime energy industry.
ANNUAL REPORT 2015 EXMAR AT A GLANCE
1
PANORAMA 2015
Market overview Floating Regasification and Liquefaction 21 Outlook LNG Shipping
26 Market Overview 26 2015 Highlights 27 Outlook 27 Engineering services 27 Accommodation barges 28 DVO 29 BEXCO
32 Market Overview 33 2015 highlights 36 Outlook
2
FLEET LIST
The EXMAR share is listed on NYSE Euronext Brussels and is a part of the BEL Mid Index (EXM) since 23 June 2003. Reference shareholder is SAVEREX NV.
DIVIDEND PER SHARE
TOTAL = 59,500,000 SHARES
SAVEREX FREEFLOAT EXMAR BASE INTERIM
| International Financial Reporting Standards (IFRS 11) |
Management reporting based on proportional consolidation |
|||
|---|---|---|---|---|
| Total per 31/12/2015 |
Total per 31/12/2014 |
Total per 31/12/2015 |
Total per 31/12/2014 |
|
| CONSOLIDATED INCOME STATEMENT (IN MILLION USD) | ||||
| Turnover | 112.2 | 134.0 | 315.3 | 331.2 |
| EBITDA | -23.8 | -8.2 | 99.5 | 133.0 |
| Depreciations and impairment losses | -5.2 | -7.7 | -59.3 | -46.4 |
| Operating result (EBIT) | -29.0 | -15.9 | 40.2 | 86.6 |
| Net financial result | 8.9 | 17.3 | -24.6 | -14.0 |
| Share in the result of equity accounted investees | 35.2 | 70.9 | -0.3 | -0.2 |
| Result before tax | 15.1 | 72.3 | 15.3 | 72.4 |
| Tax | -3.9 | -4.0 | -4.1 | -4.1 |
| Consolidated result after tax | 11.2 | 68.3 | 11.2 | 68.3 |
| of which group share | 11.2 | 68.2 | 11.2 | 68.2 |
| Weighted average number of shares of the period | 56,770,261 | 56,876,600 | 56,770,261 | 56,876,600 |
|---|---|---|---|---|
| EBITDA | -0.42 | -0.14 | 1.75 | 2.34 |
| EBIT (operating result) | -0.51 | -0.28 | 0.71 | 1.52 |
| Consolidated result after tax | 0.20 | 1.20 | 0.20 | 1.20 |
| Exchange rate | 1.1150 | 1.3348 | 1.1150 | 1.3348 |
|---|---|---|---|---|
| EBITDA | -0.38 | -0.11 | 1.57 | 1.75 |
| EBIT (operating result) | -0.46 | -0.21 | 0.64 | 1.14 |
| Consolidated result after tax | 0.18 | 0.90 | 0.18 | 0.90 |
* REBITDA: RECURRING EARNINGS BEFORE INTERESTS, TAXES, DEPRECIATIONS AND AMORTISATIONS.
LPG PRESSURIZED LPG MGC LPG VLGC LNG OFFSHORE
ANNUAL REPORT 2015
These words summarized last year's Annual Report introduction. This has seemingly never been truer than today, with the world facing a perfect storm of economic slowdown against a backdrop of changing geopolitics and international security threats. Oil and gas prices are subject to extreme short-term fluctuations and have never been as low as in recent months. At the same time the COP21 accord agreed to between the 196 countries in Paris last December, aims at limiting greenhouse emissions by human activity to the same levels that our planet can absorb naturally by the second half of this century. Developed countries have pledged to support developing countries with up to USD 100 billion per year by 2020 to adapt to climate change and switch to renewable and more sustainable energy. All of these momentous events are transforming the energy landscape.
EXMAR has already anticipated many of these changes and future demands. Our people design and develop proven fast-to-market floating infrastructure which is available today for clients to meet immediate energy needs using LNG as an alternative energy source. EXMAR is the only independent player in a position to immediately offer both barge-based floating liquefaction and floating storage and regasification solutions (FLNG & FSRU) and by doing so eliminating the need for land-based export and import terminal infrastructure. EXMAR's scalable floating production system named Opti®, is a semi-submersible design that is a proven, innovative solution with many repeatable applications in upstream production of oil and gas. It can be designed, constructed and brought on stream at a fraction of the cost of typical floating production systems. EXMAR also offers sustainable LPG and Petrochemical gas transportation through its brand new midsize LPG fleet with an advanced energy-efficient design capable of being rapidly retrofitted to run on alternative fuels in the future.
What remains a constant over time is the longterm demand for energy to supply rapidly- growing, emerging regions across the globe. According to the United Nations, world population is growing by approximately 74 million people per year with an estimate that the world population will reach 9 billion around 2040. Half of that growth is expected to come from just 12 countries. One might therefore expect that energy chains will need to be smarter, and more sustainable.
Our sole focus is to optimize our customers' supply chains to deliver their energy commodities safely, economically and with the highest quality.
EXMAR has always taken a pragmatic long-term view, and will deliver value to its customers and long-term partners by focusing on viable energy value chain solutions for a tough and uncompromising year ahead.
Our star performer has been our LPG division where our VLGC and in particular our MGC fleet had one of its best years overall. All other activities in our LNG and Offshore Business Units have been contributing as per their underlying contracts and we have seen some good performances from our other activities in Supporting Services.
When looking at the overall result compared to our peers in the industry, EXMAR has performed relatively well in 2015.
Our portfolio remains well-balanced between longterm and short-term contracts. Long-term charter commitments act as a natural hedge against the short-term volatility of both energy and shipping markets. As the results have shown in previous years, this approach has secured a steady stream of income and a profitable year for EXMAR in 2015. EXMAR has also responded to the current oil and gas market environment by taking decisions to sustain profitable future growth. The recent decision taken with its partners to cancel the Douglas FLNG project in Canada is one such example.
Optimization of costs and operational efficiency have become key phrases in the Oil and Gas industry, more so now than ever before. EXMAR has anticipated this and our sole focus is to optimize our customers' supply chains to deliver their energy commodities safely, economically and with the highest quality.
It is the innovators in EXMAR who design such solutions. In most cases we own, operate and lease the assets created to serve customers over a long term period of time. We believe that when innovation meets partnership, good becomes great.
We can see this in practice when looking at the productivity in this last year of the award-winning Delta House Floating Production System and the interest it has generated with Oil Majors and Private Owners alike. Its "one size fits most" design is setting a new standard for economic upstream production in the deepwater segment.
We have also seen the tangible results in terms of high availability and efficiency of the six newbuild midsize LPG vessels delivered so far to the EXMAR fleet since 2014. This is in part due to the highly innovative design and also thanks to operational excellence delivered by our in house management team to serve our first class customers. It is these clients who have responded with long-term commitments.
As owner of high-specification maritime LNG solutions, our fleet diversification from offering pure ship transportation of LNG to value added services such as regasification and ship-to-ship transfers has also secured an important income stream.
We shall do so by maintaining our focus on innovation and long-term, strategic partnerships.
The industry-pioneering, barge-based liquefaction and regasification units which have been designed by EXMAR will be managed and maintained with our unique in-house knowledge, in partnership with customers. By optimizing costs and efficiently managing our clients' LNG supply chains, we will give them a competitive edge in their markets.
We shall also opportunistically pursue viable, repeatable economic Floating Production System (FPS) solutions for clients ready to commit in the new market environment. These field developments will come at a fraction of the cost and be delivered in a fraction of the time offered by anyone else on the market. We have already proven our ability to deliver
ANNUAL REPORT 2015
We shall also continue with the renewal of the EXMAR midsize LPG fleet with another six 38,000 m³ vessels between now and 2018, consolidating our leadership in this segment of the market.
With well over a century's worth of long-term charter commitments from its customer base, EXMAR is ready to weather the storm of uncertainty and prepare itself for the upswing to its own advantage.
EXMAR has experienced many storms in the markets in which it has operated during the last four decades of its history. Financial crises, armed conflict, instability in energy prices and market upheavals today are no different than those EXMAR experienced in the past. During those challenging times our Company has never ceased to reinvent itself based on existing and future customer needs and will continue to do so. The pace of globalisation and new technologies means that the pace and frequency of change has never been higher. It is in the nature of our company and our culture to remain focussed on delivering innovations to customers and their ever-changing energy supply chains. This is the unique and consistent approach which will see EXMAR navigate both the storms and calm seas of today and tomorrow.
Take a look at the last section of our Annual Report this year (Our People, pages 48-49) and you will see that the Company has undergone a genuine transformation. The change in demographics has been very much geared to suit EXMAR's globalised business needs of today and tomorrow. Currently a third of our shore staff are engineers. Many of these are experienced seafarers who can pass on vital knowledge into our operations, technical designs and processes.To ensure knowledge continuity, at our headquarter-based companies in Antwerp we have a near-equal number of people between 20-30, 30-40, 40-50 and 50-60 years-of-age, with virtual parity between male and female professional colleagues overall between 20 and 50 years of age. This also encourages a stream of new ideas from our highly intelligent and engaged younger colleagues coming through the ranks.
There are also 17 nationalities amongst these 240 people in Antwerp, which is in strong contrast to our not-too distant past. EXMAR is now spread over the entire globe (pages 10-11), with local and expatriate staff in regional and representative offices, subsidiaries and permanently-moored floating units in all continents of the world. Our seastaff has never been more diverse, with 28 nationalities on board our ships, regasification units and accommodation barges.
This diverse talent pool brings us our stream of innovations and will give our growing customer base excellent service and innovative solutions to their problems.
EXMAR's Chairman Baron Philippe Bodson
It is in the nature of our Company and our culture to remain focussed on delivering innovations to customers and their ever-changing energy supply chains.
UNITED STATES OF AMERICA
69 USA
10
BRAZIL
Guanabara Bay
Boston
Puerto Rico (2016)
Gulf of Mexico
ARGENTINA Escobar Bahia Blanca
12 February 2015 EXMAR LPG – Steel cutting of LPG newbuild Kontich, third in the series of 8 LPG 38,000m3 vessels to be built for EXMAR at the HHIC shipyard in Subic Bay, Philippines.
ANNUAL REPORT 2015
ANNUAL REPORT 2015 4 ACTIVITIES
15
LNG 16-23 OFFSHORE 24-29 LPG/AMMONIA/PETCHEMS 30-39 SUPPORTING SERVICES 40-45
EXMAR's LNG activity focusses on 3 segments: LNG shipping, regasification and liquefaction.
LNG shipping refers to all business activities in which EXMAR is a stakeholder as shipowner. LNG Infrastructure combines all assets in which EXMAR has a shareholding and which transforms LNG from one state (i.e. liquid) to another state (i.e. gaseous). These assets are known as FSRUs (Floating Regasification Units) or FLNGs (Floating Liquefaction Units). FSRUs are used at import terminals to regasify LNG to be fed into local energy grids onshore. FLNG systems transform Natural Gas to Liquefied Natural Gas ready for shipping. LNG projects refer to all projects that EXMAR is developing but are not yet in production phase.
EXMAR currently has a stake in 2 LNG shipping vessels; 4 FSRUs and 1 FLNG; and has several LNG projects (regasification and liquefaction) in development.
ANNUAL REPORT 2015
4 ACTIVITIES / LNG
Throughout 2015 EXMAR's LNG division continued to provide enterprising and creative innovations for its customer base along the LNG supply chain, performing to contract on its profitable long term charter contracts whilst preparing groundbreaking innovations for customers' floating LNG infrastructural needs of the future. With its decades of experience in handling, storing and transporting LNG, EXMAR has risen to meet a host of challenges in a rapidly-changing market by focusing on delivering outstanding ship-to-ship transfer, regasification and liquefaction innovations. In this way, EXMAR will meet future global demand for LNG as a clean alternative fuel source of energy.
Combined firm time charters for EXMAR FSRUs (4) and LNG/Cs (2) as of 2016.
Gas field and processing facility
Liquefaction
Facility
LNG Storage Tank
FLNG LNG CARRIER
LNG Carrier
MARKET OVERVIEW
EXMAR's key challenge in 2015 and one of its major successes was how it dealt with volatile market conditions. The volatility in energy markets, reflected in both oil and gas prices, has impacted on customers' approach to new projects and investments.
It is in these challenging times that EXMAR's reputation and experience in the market has enabled it to maintain long-term relationships with key customers, on the back of its proven track record of meeting customers' needs.
Since 2014, the LNG market has remained relatively stable, producing between 240-245 million tonnes per year. However in 2016 the entire market will face a significant increase in output as Australia is expected to bring on-stream up to 60 million tonnes. The USA will commission new export facilities, adding another 20-30 million tonnes. In what is already an oversupplied market, this is bound to present traders and suppliers with major challenges.
Currently LNG is trading at just under USD 5/MMBTU and worldwide prices have converged. The recent significant drop in energy prices has led to various export liquefaction projects being cancelled or put on hold. However cheaper LNG has created major interest in import regasification projects, with a number of potentially promising FSRU projects in the pipeline.
Gulf Gateway
Northeast Gateway Neptune LNG
Termicos
Pecem
Bahia
Guanabara Bay
Escobar Bahia Blanca
Regasification EXISTING UNDER CONSTRUCTION NOT OPERATIONAL
UNDER CONSTRUCTION
Teesside PETRONAS PFLNG 1 SHELL PRELUDE FLNG Kaliningrad Klaipeda Port Toscana (OLT) Israel Mina Al-Ahmadi Pakistan Tianjin Jordan DUSUP Lampung West Java Egypt (2) PETRONAS PFLNG 2 GOLAR FLNG 1 EXMAR CARIBBEAN FLNG PETRONAS PFLNG 2 (on hold) LNG Storage Tank Vaporizers To Pipeline System End User DOWNSTREAM FSRU MID STREAM ANNUAL REPORT 2015 19 4 ACTIVITIES / LNG
UNDER CONSTRUCTION CHARTERED MIN REVENUE UNDERTAKING WITH FIRST CLASS COUNTERPART
OPTION UNCOMMITTED
EXMAR's strong belief in the economics of barge-based regasification and liquefaction has been reaffirmed with the planned delivery of Caribbean FLNG in the second quarter of 2016, once the unit has been successfully performance tested at the Wison shipyard in Nantong, China. EXMAR is actively negotiating employment of the unit with several counterparts in various locations. The unit will have a liquefaction capacity of approximately 0.5 million tons per annum of LNG and an LNG storage volume of 16,100 m³.
EXMAR has also taken the decision to prolong the option period for the construction of a second FLNG at Wison Shipyard until the end of 2016, positioning itself perfectly for a potential turnaround in energy prices during the coming months.
EXMAR will be the first company in the world to build, own and operate a barge-based Floating Storage and Regasification Unit (FSRU). EXMAR's 26,230 m³ regasification barge is progressing well and expected to be delivered by the first quarter of 2017.
This unit is a perfect response to increased interest in low-cost offshore LNG import projects, which are a reflection of lower gas prices and spikes in energy demand in emerging countries. Economically and environmentally, LNG is viewed as a valuable energy source for nations which had not considered this option in the past. This regasification solution, can then be augmented with a floating storage unit offering greater flexibility at lower cost compared to traditional land-based terminals. In these cost sensitive times this is a winning formula.
Employment prospects look promising for EXMAR's first FSRU barge with various projects under consideration and negotiations ongoing.
The level of dynamism in emerging markets to import LNG has emboldened EXMAR's commitment to offering unique barge-based solutions to energy providers. EXMAR is negotiating multiple projects for both its FSRU and FLNG assets around the globe.
Apart from marketing Caribbean FLNG and the 26,230 m³ regas barge, EXMAR is also developing newbuild barge-based LNG projects.In November 2015 EXMAR has for example entered into a binding Term Sheet with Swan Energy Limited for the joint development and operation of the Jafrabad LNG port project.The project is planned to be located in the State of Gujarat, India. An FSRU solution aimed at producing LNG at a rate of 5 million tons per annum (MTPA) will be required for this project and both parties
have the firm intention to expand the terminal to 10 MTPA, through the eventual deployment of a second FSRU. The FEED study is currently ongoing and FID (Final Investment Decision) is planned for the first half of 2016.
ANNUAL REPORT 2015
In September 2015, the General Electric (GE) Gas Generator, also known as 'the turbine', was installed on board the Caribbean FLNG. Hence the heart of the liquefaction plant of EXMAR's first floating liquefaction, regasification and storage unit is in place.
The PGT25+, made by GE, is a gas turbine consisting of an aero derivative gas generator coupled with a rugged, industrial power turbine and can deliver a power of 31 megawatts. (By way of comparison, the average passenger car engine ranges somewhere between 30 and 200 kilowatts) The turbine drives the gas compressor and pushes the liquid through the process to extract heat from the natural gas and produce
LNG. Remarkable detail: this lightweight, high-performance unit is fixed with only 2 bolts.
EXMAR remains committed to a long-term chartering policy, and is therefore not directly impacted by the rate fluctuations on the worldwide market. The only LNG carrier on the spot market is Excel, which has benefited from the minimum revenue undertaking from a first class client with discussions on future employment on-going.
The 138,000 m³ LNG Carrier Excel is positioned to trade in niche markets, particularly in the Far East where more-recently delivered tonnage exceed the capacity needed. Excel's competitive advantage is its mid-range tonnage capacity compared to recent newbuild designs that are much larger. This benefit means Excel can compete for business in Asia, particularly around the coastal markets of Japan and Indonesia, where this relatively smaller-sized tonnage offers many advantages.
The only other remaining carrier in EXMAR fleet Excalibur (138,000 m³) remains under long-term charter until March 2022.
Through EXMAR's Oil and Gas Infrastructure Services Division, the company is developing unique knowledge and expertise for long-term partnerships in liquefaction, regasification, ship-to-ship transfers and transportation of natural gas. EXMAR's Camilio Falla describes his experiences so far.
"In China we are learning how to operate the barge and developing the manuals and the procedures. I attended both the gas turbine and the compressor maintenance courses in Florence in September. Subsequently we had an interesting Lock-Out/Tag- Out course to learn about the policies, procedures and permits to work in EXMAR and we discussed potential improvements."
"Apart from some related theory in college, this turbine is completely new to me. The trainings were enlightening. Now we know the function of all components and how to maintain them. I also enjoyed being one of the first trainees to learn through the 3D-modelling teaching aid. We could -really see what the turbine is really like,
also on the inside. We got all the details, piece by piece, and built a clear understanding of what the symbols on the plans actually stand for. I am totally impressed by this new technology and the precision of the components. Moreover, GE has an awesome factory with high-tech tools. We visited the workshop where the centrifugal compressors are produced and saw how they do the measurements and calibrations to make them vibration-proof."
"Though the operational principles of many pumps and engines on board are similar to what I am familiar with, the sheer size of our barge can be overwhelming. The first sight of this multitude of components, machines, motors plus the incredible maze of pipelines makes your jaw
4 ACTIVITIES / LNG
125K STEAM 145K STEAM 160K TRI-FUEL
ANNUAL REPORT 2015
LNG trade Source - Fearnleys and Artic Securities Source - Market average from Consultants and Brokers Reports
drop. Add to that a brand new turbine and interesting electronics and you see the challenge. I could not resist it and now I am really happy to be part of this team.
We get good training sessions to operate safely, such as the ones in Florence and the two-week' Black & Veatch course at the yard to understand the whole plant process. I also like developing the maintenance plan and including procedures in our on-board maintenance system. The team is doing a nice job there. Actually creating this ourselves builds trust that we are getting a grip on it and know what we have to do."
DELIVERED UNDEDICATED (FSRU)
UNDEDICATED (LNG/C) COMMITTED
| SIZE | FLEET No |
ORDER BOOK |
NB % FLEET |
|---|---|---|---|
| 140k + | 266 | 142 | 53% |
| 100-140 | 129 | 0 | 0% |
| 60-100 | 9 | 0 | 0% |
| 40-60 | 0 | 0 | 0% |
| -40k | 36 | 19 | 53% |
| TOTAL | 440 | 161 | 37% |
EXMAR Offshore is dedicated to the ownership and leasing of offshore assets and providing floating solutions to the production, drilling, and accommodations market.
USA-based EXMAR Offshore Company (EOC) is an engineering company specializing in the development of floating production systems as well as engineering services related to marine vessels, ships, and offshore units.
EXMAR Offshore Oil and Gas Infrastructure Services (OGIS) division operates a variety of offshore assets for both the EXMAR Group and external client owners.
Oil Production Capacity = 80,000 BOPD Gas Production Capacity = 200 MMSCFD Hull built in Ulsan, South Korea Deck and Topside integration in Ingleside, Texas Ring Pontoon = 88.8 x 88.8 meters Deck Truss = 68.4 x 68.4 meters Top of Column Height = 52 meters Upper Deck Height = 59.5 meters Operating/Storm Survival Draft = 30 meters
Displacement = 39K metric tons Hub class facility with a capacity of 18 production or export risers
Delta House was delivered to contract in less than 36 months, rapidly, safely and within budget.
In these tough times, these challenging times, EOC shows its worth and unique value to customers.
EXMAR is capable of offering the market low-cost, executable solutions. EOC has the proven track record to better serve the market in ways that sets it apart from its competitors.
Nowhere does the EXMAR innovation philosophy better express itself than in implementation of the LLOG Exploration's award-winning Delta House Floating Production System (FPS).
EOC continually reflects EXMAR's global vision of innovative spirit and partnership, by applying two decades of expert technical knowledge, operational experience, and groundbreaking technology to solve highly complex customer demands. In what has been a very tough market, EOC remains well positioned, offering appropriate and cost-effective solutions at the right price, which is what keeps customers engaged and poised to invest at the right moment.
Crude oil prices continued to fall in 2016. Prices stood at close to USD 60 a barrel at the beginning of 2015, slipping to USD 35 a barrel by year end, a slump of some 40 per cent over the year. Market observers predict prices could fall further, as leading suppliers continue to produce at extremely high levels, while Iran's return to the market has further exacerbated oversupply in the market.
These market developments continue to apply downward pressure to the offshore exploration markets and undermine expansion in other areas where EOC is active.
Experts consider these times to be the most difficult market conditions in more than a decade. However it is in this difficult market climate that customers particularly appreciate the value and cost sensitivity of EOC's solutions and project management abilities.
Over 2015 EOC has been actively pursuing several new Floating Production System (FPS) contracts with oil majors and independents, engaging with clients, partner suppliers and regulatory agencies on all levels to become the full EPCI (Engineering Procurement Construction and Installation) contractor. It is convinced that when the customer is ready to proceed, and reach a Final Investment Decision (FID) with these projects, that EOC will be in a good position to win these contracts.
As a simpler and safer method meaning less intervention (no divers are needed), FAST™ can be applied in heavier wave and windier weather conditions than ever previously thought possible. Its design is uniform for each riser and easy to modify, making each pull-in quicker, requiring less equipment and manpower onboard, reducing overall installation costs.
Thanks to a unique design developed by our Houston team, EXMAR's FAST™ method significantly reduces the time it takes to connect risers (the pipelines used for bringing oil and gas from the fields up to the OPTI® hull out again to land-based storage facilities).
Completion of installation of Delta House, a four-column semi-submersible floating production system based on EXMAR's OPTI® series of designs, took place in 2015. One of the key aspects of the OPTI® is that it lowers the cost and weight of the hull without sacrificing strength. Delta House has already reached nameplate capacity after just eight months of operation.
Delta House is the perfect example of the improvement of the OPTI®-EX experience both technically and in execution. The lessons learned from the OPTI®-EX were applied to the Delta House with impressive results in terms of cost, schedule and operability. At a time when the market needs simpler and less expensive solutions, EXMAR offers proven designs and execution plans that can enable its clients to take a non-economic development and make it profitable. Yet even with the impressive results of the Delta House, EXMAR is already working with its clients and partners to improve the design further and to bring new and better OPTI® products to the market.
Delta House was honoured by leading industry publication Offshore magazine as one of the top five global projects of 2015 joining the OPTI®-EX which received the same accolade for the Who Dat field installation in 2011.
EOC is now well positioned to win contracts and work on an EPCI basis, building on its hard- won reputation to deliver turnkey projects in a timely fashion within budget. EOC has built up its project capabilities, excellent quality systems and information management expertise, allowing the company to be extremely competitive in a primary EPCI capacity.
EXMAR continues to pursue multi-faceted projects around the globe based on its unique OPTI® semisubmersible design. With historically low oil prices and inactive rigs, demand for low cost deepwater oil and gas production solutions might rise through the second half of the year 2016.
In addition EOC has been collaborating with a major Engineering, Construction, and Project Management multinational on a major energy logistics project in Australasia and experienced significantly higher utilization rates for engineering work in the second half of 2015 versus the first 6 months of the year. However the current adverse market conditions mean that EOC does not have high expectations for large engineering contracts until the latter half of 2016.
EXMAR's Offshore Gas and Infrastructure Services team will continue to operate the accommodation barges Nunce, Wariboko and Kissama in West Africa (WAF). The first 2 of these barges will be fully utilized throughout 2016. There is a possibility that the Kissama might be redelivered to its current contract customer in May of this year. If the extension does not occur it will be offered for employment in the region, with prospective customers already being sounded out. The EXMAR Offshore Business Unit is also active on a number of tenders for offshore accommodation and specialized maritime infrastructure ownership, operation and management.
28
With its main office located near Paris, France, DV Offshore (DVO) is an independent firm of consulting engineers specialised in all the technical aspects of marine engineering and operations.
With over 40 years of consulting, engineering and supervision experience, DVO consultants have the necessary know-how and skills to efficiently and rapidly advise or assist their customers in industrial maritime projects. Their permanent focus on new developments and technologies gives them a leading edge.
DVO has acted as consulting engineers to oil majors in France (58% of total activity) and abroad (42%), as well as port authorities, governmental institutions or companies involved in the oil and gas Industry.
To date, more than 1,000 specialist assignments have been satisfactorily completed in 40 different countries, with recognized expertise in mooring engineering and installation.
DVO has developed its activities in the following marine sectors:
— Open Sea Terminals (Single Point Mooring, Conventional Buoy Mooring) — Port Terminals
— Offshore floating storage (Floating Storage and Offloading as well as Floating Production Storage and Offloading units),
— Liner shipping
— Marine operations — Underwater engineering and operations — Marine renewable energy applications
DVO's strength results from the versatility of their engineers, in-house competence due to permanent contract personnel and regular training on latest technologies.
DVO has been involved in the past 5 years in many marine renewables energies projects, especially seawater air conditioning, tidal turbines and wind turbines (fixed & floating).
BEXCO is a high quality, speciality, tailor- made rope solutions provider for maritime and offshore applications. Its main production facility is located in Hamme, Belgium with a new, water-bound production facility in Antwerp commissioned in 2015 for its offshore product range. This new facility, located at the Bluegate Antwerp industry zone, will cater for future demand for larger, heavier, high-spec synthetic rope for deepwater mooring.
In 2015 BEXCO performed well in all its main market segments with a double digit growth in production volumes for maritime, heavy lift, and offshore mooring applications as well as strong organic growth in its Single Point Mooring (SPM) hawser business.
In the maritime segment, BEXCO offered its new strong, lightweight Maximus rope solution for the new generation of Ultra Large Container Vessels (ULCVs) and was adopted by two of the world's largest liner shipping companies.
Performance in the Deep Water Mooring segment was below the 2014 performance but still very satisfactory, taking into account weakened demand from offshore markets.
Looking ahead in 2016, BEXCO will continue to expand its presence in heavy lift, specialized offshore mooring and renewable segments whilst consolidating its role as a leading player in maritime, single point and deepwater offshore mooring. The industry faces increased competition from Asian manufacturers and BEXCO will focus on its quality production, high level service and further innovations to keep the company ahead of the pack.
EXMAR LPG is a leading shipowner and operator in the transportation of liquefied gas products such as Liquid Petroleum Gas (butane, propane, and a mixture of both), anhydrous ammonia and petrochemical gases. With its fleet of over 30 specialized LPG tankers, EXMAR trades worldwide for the fertilizer, clean energy fuel and petrochemical industry. As a prominent Midsize LPG owneroperator, EXMAR benefits from long-term contracts and enduring partnerships with first class customers.
ANNUAL REPORT 2015 4 ACTIVITIES / LPG
31
and CoA employment - Midsize fleet for 2016.
Renewing a series of charters with long-term industrial partners was part of EXMAR's Midsize fleet success in 2015. EXMAR still enjoys a mix of time charters and CoA (Contracts of Affreightment), reflecting the long-term nature of its business relationships. Thanks to the in-house expertise offered by EXMAR Ship Management, the EXMAR fleet recorded a limited amount of off-hire time during 2015. The focus on quality service delivery has culminated in the renewal of the Midsize fleet whilst paying meticulous attention to the technical and financial OPEX management of the existing fleet of vessels.
Despite downward freight corrections during the fourth quarter of the 2015, freight levels for Very Large Gas Carriers ("VLGC") were still healthy and turned out very similar to the same period in 2014.
During the fourth quarter of 2015, 14 additional VLGC newbuilds were added to the already substantial order book. At present, the equivalent of 35% of the existing VLGC fleet is on order, while deliveries made during 2015 already accounted for a year-on-year expansion of 20%.
Overall the Midsize Gas Carrier ("MGC") market has remained very positive throughout 2015, mainly driven by consistently high LPG volumes in the Atlantic Ocean, North Sea and Indian Ocean with near full employment of the fleet.
With yet another five newbuilds reportedly contracted at the tail end of 2015, the order book for the Fully-Refrigerated 35 – 39,000 m³ segment has reached a historic high. The equivalent of half the Midsize LPG fleet currently sailing, is expected for delivery in the 2016-2017 timeframe. These market developments will be felt mostly as from the second half of 2016, and are likely to impact eventual redeliveries or new long-term contracts.
In the Pressurized carrier market, global fleet saw no improvement in freight rate levels and the ANNUAL REPORT 2015 4 ACTIVITIES / LPG
downward pressure continued since the substantial dip of 2014. The majority of EXMAR's worldwide trading Pressurized vessels are covered on term contract for the remainder of 2016.
An oversupply of vessels, less petrochemical product demand from China (which is producing more petrochemical and downstream products domestically) has had – amongst other factors - a negative impact on the Pressurized sector in the region.
Still the general market sentiment remains that a very gradual structural recovery will take place based on increased scrapping of tonnage a modest Pressurized newbuild order book (3% of total Pressurized fleet) and new product outlets.
With freight rates reaching near historically low levels in the Pressurized segment, prices may well have bottomed out. However, while the market uncertainty persists there is a growing conviction that rates in this segment could rebound by the end of 2016.
The one VLGC EXMAR has under its wing is BW Tokyo, which is chartered out until the middle of 2016. The segment experienced historically high rates in 2015, and, at partial Baltic Freight Index-related levels, produced healthy earnings in 2015. Discussions are already underway regarding re-fixing of BW Tokyo, for when it comes open in the summer of 2016. The current charterer Itochu has had a relationship with EXMAR for more than a decade.
EXMAR's vessels in the Midsize segment have not been available to the spot market. It is now clear that 2015 was a very good year for the company's mid-sized fleet. The majority of the fleet remains busy and committed under contract, well into 2016 and beyond.
In early 2015, EXMAR's Midsize LPG fleet was strengthened by the delivery of Warisoulx, this being the last of four 38,000 m³ carriers built at the Hyundai Mipo shipyard in Korea. This latest delivery follows the successful deliveries of Waasmunster, Waregem and Warinsart to EXMAR LPG the previous year.
In August 2015, the naming of Kaprijke marked a milestone for the Philippines as it was the first 38,000 m³ LPG carrier to be built at Hanjin Heavy Industry's Subic Bay shipyard (HHIC).
EXMAR has since taken delivery of an additional Midsize newbuild with the same technical specifications from HHIC in the first-half of 2016. Knokke was named in January 2016 and it is under Time Charter to Statoil. Kontich (to be named) is expected to be delivered to that very same major customer in the second-half of 2016. These two vessels have been chartered for 5 years each. A third to-be-named (tbn) newbuild, is expected in the final quarter of 2016 and has been fixed with a first class customer until the end of 2018.
EXMAR will continue to take advantage of its role as the single largest player in the Midsize market. With four Midsize 38,000 m³ newbuilds foreseen from Subic Bay between February 2017 and January 2018, EXMAR is confident it will be able to develop interesting employment opportunities for these vessels.
All Midsize LPG newbuilds are the beneficiaries of new vessel design programmes, with improved capacity, greater efficiency overall and lower fuel consumption (see the Energy Efficiency section, pages 50-51).
In the Pressurized segment, EXMAR notes that there is still potential for intra-Asian petrochemical activity and it is making the most of the opportunities. EXMAR is also in the fortunate position of having little or no exposure to the spot market with 79% of its Pressurized vessels under contract throughout 2016.
There is the likelihood that some of the older Pressurized vessels in the market may be scrapped. There are potential signs of market consolidation or more pooling arrangements. A reduction of available vessels will have a positive effect on market conditions.
6
of the Midsize newbuilds already committed to blue-chip customers for 28 years.
For VLGCs, the long-haul transatlantic and transpacific routes are encountering challenges with vessel oversupply. EXMAR however has rather limited exposure in this sector.
There are likely to be increased business opportunities for the growing Midsize fleet, with additional US LPG supply potentially offering home to the newly available tonnage in 2016. In addition the Ammonia segment offers decent prospects, with EXMAR already reasserting its
presence in this market with recent long-term contracts.
One of the important features of the market will most likely be managing the relationship between existing and new vessels. EXMAR is in a position to offer package deals to those taking delivery of new vessels. However, the variety of EXMAR's Midsize fleet should allow it to efficiently face the upcoming market challenges by allocating the most appropriate vessel profile
depending on the requirements of future market opportunities. Particular attention will be paid to niche trading. Customers are given the option of support from existing fleet tonnage which is in position and can thus be offered as back-up when required.
EXMAR's fleet has been consistently employed by well-established industrial players on a mid- to long-term basis throughout 2015 and this provides a solid buffer in the event of a downturn in 2016.
| Petchem |
|---|
| gases |
| Propylene |
VCM Ethylene
Fuel gas C1 Hydrogen Pygas
Heavy aromatics C5/C6 non aromatics
BTX
Fuel oil
TOTAL = 7,295,875 MT SHARES
OTHER PETCHEMS (1.7%)
Polypropylene (fibres, fabrics, injection mouldings, car appliances, toys …)
Polyvinyl chloride (PVC) (pipes, electric cables, signs, clothing, furniture, healthcare, flooring, …)
Polyethylene (food packaging, milk, water and juice bottles, power cables, chemical containers, injection mouled products, …)
Styrenes (foam, insulations …)
| VESSEL | 2H 15 | 1H 16 | 2H 16 | 1H 17 | 2H 17 | 1H 18 | 2H 18 |
|---|---|---|---|---|---|---|---|
| MIDSIZE | |||||||
| Touraine | |||||||
| Eupen | |||||||
| Libramont | |||||||
| Sombeke | |||||||
| Brussels | |||||||
| Brugge Venture | |||||||
| Antwerpen | |||||||
| Courcheville | |||||||
| Bastogne | |||||||
| Waasmunster | |||||||
| Warinsart | |||||||
| Waregem | |||||||
| Warisoulx | |||||||
| Kaprijke | |||||||
| Knokke | |||||||
| Kontich | |||||||
| Kortrijk | |||||||
| Hanjin p126 | |||||||
| Hanjin p127 | |||||||
| Hanjin p135 | |||||||
| Hanjin p136 | |||||||
| SEMI-REF | |||||||
| Temse | |||||||
| VLGC | |||||||
| BW Tokyo | |||||||
| PRESSURIZED | |||||||
| Magdalena / 3,500 m³ | |||||||
| Sabrina / 5,000 m³ | |||||||
| Elisabeth / 3,500 m³ | |||||||
| Debbie / 3,500 m³ | |||||||
| Joan / 3,500 m³ | |||||||
| Helane / 5,000 m³ | |||||||
| Marianne / 3,500 m³ | |||||||
| Angela / 3,500 m³ | |||||||
| Anne / 3,500 m³ | |||||||
| Fatime / 5,000 m³ |
= FIXED = COMMITTED TO COA = IN CHARTERERS' OPTION = TRADING FREELY
| VESSEL | TYPE | CAPACITY ( m³) |
YEAR BUILT | CLASS | FLAG | STATUS |
|---|---|---|---|---|---|---|
| VLGC | ||||||
| BW Tokyo | fr | 83,270 | 2009 | NK | Singapore | time chartered |
| MIDSIZE (LPG / AMMONIA / PETROCHEMICAL GASES) | ||||||
| Touraine | fr | 39,270 | 1996 | BV | Hong Kong | joint venture |
| Eupen | fr | 38,961 | 1999 | LR | Belgium | joint venture |
| Libramont | fr | 38,455 | 2006 | DNV | Belgium | joint venture |
| Sombeke | fr | 38,447 | 2006 | DNV | Belgium | joint venture |
| Waasmunster | fr | 38,245 | 2014 | LR | Belgium | joint venture |
| Warisoulx | fr | 38,227 | 2015 | LR | Belgium | joint venture |
| Warinsart | fr | 38,213 | 2014 | LR | Belgium | joint venture |
| Waregem | fr | 38,189 | 2014 | LR | Belgium | joint venture |
| Kaprijke | fr | 38,405 | 2015 | LR | Belgium | joint venture |
| Knokke | fr | 38,405 | 2016 | LR | Belgium | joint venture |
| Brussels | fr | 35,454 | 1997 | LR | Belgium | joint venture |
| Brugge venture | fr | 35,418 | 1997 | LR | Hong Kong | joint venture |
| Bastogne | fr | 35,229 | 2002 | DNV | Belgium | joint venture |
| Antwerpen | fr | 35,223 | 2005 | LR | Hong Kong | time chartered |
| Courcheville | fr | 28,006 | 1989 | LR | Belgium | joint venture |
| NEW BUILDINGS | ||||||
| Hanjin p102 | fr | 38,405 | June '16 | LR | Belgium | joint venture |
| Hanjin p103 | fr | 38,405 | October '16 | LR | Belgium | joint venture |
| Hanjin p126 | fr | 38,405 | February '17 | LR | Belgium | joint venture |
| Hanjin p127 | fr | 38,405 | June '17 | LR | Belgium | joint venture |
| Hanjin p135 | fr | 38,405 | September '17 | LR | Belgium | joint venture |
| Hanjin p136 | fr | 38,405 | January '18 | LR | Belgium | joint venture |
| SEMI-REFRIGERATED (LPG / AMMONIA / PETROCHEMICAL GASES) | ||||||
| Temse (ex Kemira gas) | sr | 12,030 | 1995 | DNV | Belgium | Bareboat-in |
| PRESSURIZED | ||||||
| Sabrina | pr | 5,019 | 2009 | NK | Hong Kong | joint venture |
| Helane | pr | 5,018 | 2009 | NK | Hong Kong | joint venture |
| Fatime | pr | 5,018 | 2010 | NK | Hong Kong | joint venture |
| Elisabeth | pr | 3,542 | 2009 | NK | Hong Kong | joint venture |
| Magdalena | pr | 3,541 | 2008 | BV | Hong Kong | joint venture |
| Anne | pr | 3,541 | 2010 | NK | Hong Kong | joint venture |
| Angela | pr | 3,540 | 2010 | NK | Hong Kong | joint venture |
| Joan | pr | 3,540 | 2009 | NK | Hong Kong | joint venture |
| Marianne | pr | 3,539 | 2009 | NK | Hong Kong | joint venture |
| Debbie | pr | 3,518 | 2009 | NK | Hong Kong | joint venture |
In addition to its core business activities, EXMAR Holdings has business interests in a variety of companies in the fields of insurance, specialized travel, offshore consultancy and supplies to the marine and offshore industry.
EXMAR Ship Management.
EXMAR Ship Management is an industry-leading provider of technical, crewing, Health, Safety, Environment and Quality (HSEQ) and financial management of maritime infrastructure dedicated to serving the oil and gas industry.
Travel PLUS is the largest independent luxury and B2B travel agency in Belgium, with over 1000 clients.
BELGIBO is one of Belgium's fastest growing insurance companies, with 13% year-on-year growth.
EXMAR Ship Management is an affiliate of EXMAR specializing in managing an assorted range of vessels. These include LNG Carriers, LNG Regasification vessels, VLGC's, Midsized and Pressurized LPG carriers, FPSO's, a Floating Storage and Regasification Unit and Offshore accommodation barges; EXMAR Ship Management creatively manages these assets for a host of owners.
These are challenging times for shipowners everywhere. In these times of uncertainty and volatility EXMAR Ship Management believes it is more important than ever to provide peace of mind to its customers with reliability and service continuity.
EXMAR's hard-earned reputation for delivering excellent and reliable service allows its customers to focus on their short-term and medium-term objectives, safe in the knowledge that their vessel management is in the safest of hands.
EXMAR has more than 30 years'experience of managing gas carriers; in this time it has developed highly innovative approaches to maintaining and operating LPG, LNG and Offshore units, working in creative partnerships with external clients in unique ways that go well beyond the traditional relationships between a shipowner and a ship management service provider.
As a market leader in handling regasification units, with around half of the world's fleet coming under its management wing, EXMAR Ship Management skilfully manages LNG Regasification vessels as well as Floating Storage and Regasification units.
EXMAR Ship Management has obtained the safety standards ISO 9001, ISO 14001, OHSAS 18001, ISO 29001 and ISO 50001.
The company also plays an important role in the Taking the Safety LEAD initiative, which continues to embed EXMAR's commitment to a safety culture in all of its activities. EXMAR Ship Management has launched a series of initiatives which reinforce EXMAR's determination to go beyond compliance and become an industry leader in all aspects of safety.
Ship management has successfully achieved a major overhaul of her LNG fleet, which racked up a record 421 days of dry-dock time in 2015. This activity is a major part of the process of preparing for new regasification programmes in the United Arab Emirates, Pakistan and Puerto Rico. Vessels have been upgraded to increase capacity and efficiency. Meanwhile following on from its dry-dock upgrade the Expedient joined the Exemplar and the Escobar LNG terminal in Argentina, engaging in the tricky choreography
of changing places and resuming regasification activities – another great triumph for ship management.
The LNG Business Unit has also undertaken a major overhaul of one of its European client's LNG carriers, replacing it's cargo tanks' primary membrane and introducing a major revamp of engine automation processes.
The Commissioning of the Caribbean FLNG unit, the first barge-based Floating Liquefaction unit, is being effectively managed by EXMAR Ship Management with the Oil and Gas Infrastructure team. The unit is expected to be fully ready for delivery in the second-quarter of 2016, once it has successfully completed its performance testing exercises.
EXMAR Ship Management also successfully completed 160 LNG ship-to-ship transfers in 2015; to date the total figure of numbers of ship-to-ship transfers have reached 887 whereby over 95 million Cubic Meters of LNG were transferred.
The delivery of the 38,000 m³ Warisoulx to its new owner marked the final phase of commissioning the four new midsized W-series newbuilds from the Hyundai Mipo Dockyard in Korea, which proved a major achievement for ship management. The W-series vessels are now fully in service.
Meanwhile the management of eight LPG newbuilds continues apace at the Hanjin shipyard in Subic Bay, in the Philippines. The first of these vessels, the Kaprijke, has been named and fully commissioned in 2015. The Knokke was delivered in February 2016 and the Kontich is expected to be delivered in the second-half of 2016; all 3 are under long-term Time Charters to a well-established and long term EXMAR customer. These new Midsize Gas Carriers benefit from innovative advances in design, including a more efficient hull form which improves fuel efficiency and service speed.
By mid-July, the delivery of Very Large Gas Carrier (VLGC) newbuild Sirocco to Norwegian-based owner Avance Gas at the Shanghai Jiangnan Changxing Heavy Industry Co. Ltd shipyard berth meant that the LPG Unit had delivered and commenced operations with four newbuilds to this client in the same year from a Chinese yard manufacturing gas carriers for the first time.
EXMAR Ship Management continues to successfully manage the FSRU Toscana offshore Livorno (Italy) and the accommodation barges Nunce and Wariboko off the West African coast. The West African market remains healthy and the Kissama has been re-deployed successfully.
"Since I joined EXMAR in 2006 I have always been encouraged to further my career, first at sea and then on shore. Taking up various operational roles at Antwerp Headquarters and EXMAR India was a great preparation for my current position as MD of EXMAR India. Also my life-long ambition to take an MBA course has been fully supported. With over 130 local staff now serving the fleet at sea and on shore, the aim is to grow EXMAR's reputation in India as pioneers with 'first mover advantage' in gas transportation, regasification and liquefaction."
Travel PLUS is a service-oriented travel agency based in Antwerp, and is the country's largest independent travel agency.
The company specializes in both business and leisure travel differentiating itself from its competitors by fully exploring the travel requirements and options with each individual client in order to produce a customized and appropriate travel plan.
Travel PLUS guarantees quality by creating tailor-made solutions to meet every travel request, whether for private or business travel. A team of 24 travel experts offer a guarantee of the top quality offers, due in part to the educational trips they have undertaken, thus gaining extensive first-hand experience of all aspects of the travel industry.
Seeking to better serve its customers Travel PLUS developed and launched the "mobile shift", a new comprehensive travel app, which bundles all relevant information into one place. In February 2016, the company has also launched travelplus.be, its new-look website.
Travel PLUS has a varied portfolio of clientele of which around 80% are Belgian.
The company's total revenue grew by 2% in 2015; activity is split with approximately 70% of activity in the business travel sector and the remaining 30% in the leisure travel sector.
BELGIBO Insurance Group (BELGIBO NV) is an independent specialties insurance broker and risk & claims management
service provider with outstanding expertise in Marine, Aviation, Industrial, Transport and Credit & Political Risks. BELGIBO serves a diverse client portfolio at both a national and global level. BELGIBO is based in Antwerp and ranks amongst the top 10 insurance brokers in the country.
In 2015, BELGIBO successfully integrated FINSERVE Aviation Insurance, a specialized aerospace insurance broker with an international portfolio and equally based in Antwerp . The merger will be fully legalized in the second quarter of 2016.
BELGIBO's consolidated revenue growth (including FINSERVE) is 13% where the average growth in revenue in the industry is 1%. The company's EBITDA increased by 50%, in 2015. The company's strong growth has been realized primarily in the Marine and Industry divisions.
The company will focus on further specialized growth, in 2016, combined with additional investments in Marketing and a new IT-programme.
BELGIBO currently operates three major business units:
There has been strong growth in Construction and Marine Liability insurance, especially in terminals and logistics as well as forwarders. There is now a new focus on transport insurance (trading companies / production companies).
The company continues to broaden its Marine client base adding anything from a barge owner to a VLCC tank operator.
In Aviation the focus will remain on the private jets business segment and helicopters, with a growing portfolio of drones, gliders and small-midsized airliners.
In terms of business development, BELGIBO focuses especially on small/midsize fleets (both in marine and aviation); with some recent successes.
CMC-BELGIBO will continue to expand its presence as a specialized Credit Insurance Broker. The synergies between CMC-BELGIBO and BEL-GIBO rest mainly in the area of Special Risks. Nonetheless the company's broad client base continues to contribute to successful results.
OUR PEOPLE 48-49 ENERGY EFFICIENCY 50-51 TAKING THE SAFETY LEAD 52-53
With the increasing globalization and internationalization of EXMAR's business, the Company has undergone rapid change to attract, develop and keep highly-talented people from all over the world.
Innovation is a permanent learning process for all and means creating the right environment where every individual can reach his or her full potential. It is the spirit of entrepeneurship, open-mindedness and willingness to develop solutions as a team which enables EXMAR to remain a step ahead of its competitors.
EXMAR endeavours to achieve this working environment by creating the right balance between gender, age and experience as well as cultural background. The Company also highly values its long-serving seafarers who decide to come ashore, as they can apply their practical knowledge to virtually every aspect of EXMAR's core business activities.
Numbers speak for themselves, and in this report for 2015, the following statistics for the EXMAR's staff provide a glimpse of just how much the Company has been transformed in recent years:
ages of twenty and sixty years of age. This ensures continuity in terms of knowledge capital and creates project teams with a proper mix of younger and more experienced staff members.
Through annual seafarer conferences in Antwerp, Mumbai, Manila, Split, Odessa, and Buenos Aires contact between shore and sea staff is regularly maintained, with the latest company and technical updates. Seafarers are provided with specialised technical training with Original Equipment Manufacturers, and are being trained in-house to meet the latest STCW 2010 requirements.
To further nurture and develop talent onshore, EXMAR regularly sponsors its personnel to take
academic courses, including Master Degrees in Engineering, Business Administration and Information Management. Senior EXMAR personnel regularly lecture at Maritime Academies, Universities and other education establishments. Young engineers and cadets serve on board EXMAR vessels or complete internships at EXMAR's offices around the globe. EXMAR Ship Management has developed long-term partnerships with Mapua school and PHILCAMSAT training centre in the Philippines, as well as the Caribbean Maritime Institute in Kingston, Jamaica and regularly recruits new talent to its growing fleet.
BELGIAN, BULGARIAN, CROATIAN, COLUMBIAN, DUTCH, FRENCH, INDIAN, ITALIAN, JAMAICAN, LATVIAN, LE- 65 BANESE, POLISH, ROMANIAN, SPANISH, UKRAINIAN
EXMAR continues with its efforts to maximise energy efficiency and minimise fuel consumption as part of its commitment to lessen its environmental footprint. Innovative vessel design and creative ship modifications are key areas where much has been achieved.
EXMAR's use of multi-criteria optimisation software programmes with yards in the vessel design phase means that ship design can now better reflect the reality of vessel operating conditions, through the whole of the vessel's life. Traditionally vessels have been designed to peak optimisation criteria in good weather, which was not the best suited to the day-to-day management of fuel consumption and energy efficiency. Another aspect of multi-criteria optimisation programmes is the shift towards multi-purpose bulbous bows, which works well in all situations and do not just excel in ballast sea trials.
These state-of-the art computer programmes allow for the infinitely incremental changes in a number of key parameters to maximise vessel performance. Modifications to the hull
and propeller are further examples of how fuel consumption can be better managed.
EXMAR is making the most of software tools which contribute significantly to energy efficiency and fuel consumption optimisation. The VICUS and the ECO ASSISTANT trim optimisation software which has now been fitted to four classes of EXMAR vessels, offers Masters much more information how best to trim a vessel, depending on loading conditions, in order to save fuel.
The Company recently revised and relaunched its Ship Energy Efficiency Management Plan (SEEMP). This is an operational guidance programme, which has been placed on all LNG vessels in the EXMAR fleet. It outlines each vessel's key performance baselines for maximising fuel savings. SEEMP provides regular quarterly data sets, which are used to generate three monthly reports for owners and charterers.
KYMA is another piece of software which contributes to vessel proficiency; it is a steam plant diagnostic tool, which allows for better steam plant adjustment and maintenance, leading to improved efficiency in these units.
EXMAR plans to shortly roll-out its Combustion Analyser Trend Software which has been
developed specifically for internal combustion engines. It offers millisecond measurements of the diesel engine, in terms of the performance of fuel injection pumps, and maximising cylinder pressure through the whole cycle. Diesel engine efficiency is measured, allowing adjustments to be made which will improve the quality of combustion, which in itself minimises fuel consumption.
Cargo conditioning planning enables the optimisation of cargo cooling on LPG vessels. They are another useful tool in the battle for great energy efficiency.
EXMAR will seek to continuously improve the energy efficiency performance of all its assets in 2016. It's commitment to greater energy efficiency is reflected in EXMAR obtaining ISO 50001 certification, and it has no intention to rest on its laurels.
On-the-job employee training onboard and greater staff commitment to energy efficiency are the best tools EXMAR has when it comes to successfully maximising the significant investments that have been made and continue to be made in the area of energy efficiency.
Midsize newbuild LPG carrier Knokke is equipped with an Exhaust Gas Scrubber (EGS) for Heavy Fuel Oil (HFO).
Reduces >60% of air particulates emissions
Taking the Safety LEAD has been further embedded into EXMAR's culture and working environment over the past twelve months.
The Taking the Safety LEAD initiative is first and foremost about nurturing a safety mindset among all EXMAR's employees. From its very conception, EXMAR looked at industry safety standards and decided it wanted to go beyond – hence time and resources were put towards developing the initiative.
One of the key elements of Taking the Safety LEAD is that the safety mindset is not imposed from above. It is about creating a working dynamic where all staff are encouraged to consciously engage in safety best practice, because they are convinced it is the right thing to do. A great deal of thought was given to the challenge of breaking through the glass ceiling of compliance. In order to make progress EXMAR partnered with Green-Jacobsen, who conducted a full safety maturity assessment throughout the Company, interviewing more than 120 people, from top and middle management to seafarers on vessels and office personnel.
After the safety assessment multiple actions have been taken, including two in-house, custom-made training programmes rolled out by EXMAR since 2014.
The first is a Safety Mindset Training course aimed at ratings and juniors, focused on creating a safety mindset by ensuring that those
who completed the course developed a clear, standard understanding of safety best practice and a common vocabulary related to creating a safety mindset. Around 500 junior officers and ratings have successfully completed the course so far.
The second programme, the Safety Leadership Course, is for seniors and key office personnel. It focuses on creating ambassadors for the safety culture, role models who could create a culture of open communication around safety both on-board and in the office. Around 150 senior officers and key office personnel have undertaken this course.
The training programmes take place in a variety of locations including Manila, Split, Odessa, Antwerp, Mumbai and Kingston, Jamaica. Each year EXMAR organises a number of staff conferences around the globe, and Taking the Safety LEAD always features at these events.
The programme has always been interactive, with staff encouraged to give feedback on the development of the programme as well as offering practical input and behavioural advice both on-board vessels and in the office. After
every contract, a seafarer is given a safety feedback survey to measure progress.
Taking the Safety LEAD is also linked to five safety behaviours – the Safety-I's™: Insight, Innovation, Integration, Influence and Intervention. A set of communication tools have been developed to embed the Safety-I's in particular, and the safety mindset approach in general, such as a safety mindset game and accompanying handbook.
The game has been played at a number of EXMAR conferences and now it will be going aboard vessels as part of a package incorporating seven short training exercises on the job, which is the best place for putting the Safety LEAD mindset into practice. The exercises are linked to actual safety-related tasks which have to be undertaken on-board.
| BOPD | Barrels of Oil Per Day | LPG/C | Liquefied Petroleum Gas Carrier |
|---|---|---|---|
| BTX | Mixture of benzene, toluene and xylenes | MGC | Midsize Gas Carrier |
| C4 | Crude betadine | Midsize | 20,000 m³ to 40,000 m³ |
| CEO | Chief Executive Officer | MMBTU | million British Thermal Unit |
| CoA | Contract of Affreightment | MMSCFD | Million standard cubic feet per day |
| COSO | Committee of Sponsoring Organizations | MTPA | Million tonnes per annum |
| COP21 | Paris Climate Conference (December 2015) | NH3 | Ammonia |
| DVO | DV Offshore | NYSE | New York Stock Exchange |
| EBIT | Earnings before interest and taxes | OGIS | Offshore Oil and Gas Infrastructure Services |
| EBITDA | Earnings before interest, taxes, depreciation, and amortization |
OHSAS 18001 |
An international occupational health and safety management system specification |
| EGS | Exhaust Gas Scrubber | OLT | Offshore LNG Toscana |
| EOC | Exmar Offshore Company | PEP | Pacific Exploration and Production |
| EPCC | Engineering Procurement Construction | Petchems | Petrochemicals |
| and Commissioning | PGT25+ | Gas turbine | |
| EPCIC | Engineering Procurement Construction and Installation and Commissioning |
PMT | per metric tonne |
| FEED | Front End Engineering and Design | PoA | Port of Antwerp |
| FID | Final Investment Decision | PVC | Polyvinyl Chloride |
| FLNG | Floating Liquefaction of Natural Gas | RPM | Rotation per minute |
| FPS | Floating Production System | SDP | Staff Development Programme |
| FPSO | Floating Production Storage and Offloading-unit | SEEMP | Ship Energy Efficiency Management Plan |
| FSMA | Financial Services and Markets Authority | SPM | Single Point Mooring |
| FSRU | Floating Storage and Regasification Unit | SPOS | Ship Performance Optimisation System |
| GAAP | Generally Accepted Accounting Principles | STCW | Standards of Training, Certification and Watchkeeping |
| GE | General Electric | STS | Ship-to-ship |
| HHIC | Hanjin Heavy Industries and Construction | tbn | To be named |
| HFO | Heavy Fuel Oil | TC | Time chartered |
| HSEQ | Health, Safety, Environment and Quality | U/C | Under Construction |
| HMRC | UK tax authority | UK | United Kingdom |
| IAS | International Accounting Standards | ULCV | Ultra-Large-Container-Vessel |
| IASB | International Accounting Standards Board | UM | Under ship management |
| ICBC | Industrial and Commercial Bank of China | US | United States |
| IFRS | International Financial Reporting Standards | USA | United States of America |
| ISO | International Organization for Standardization | USD | United States Dollar |
| JV | Joint venture | VCM | Vinyl Chloride Monomer |
| k | 1000 | VLGC | Very Large Gas Carrier |
| KRO | Key Risk Officers | VPM | Vessel Performance Monitoring |
| LNG | Liquefied Natural Gas | WAF | West Africa |
| LNG/C | Liquefied Natural Gas Carrier | ||
| LNG/RV | Liquefied Natural Gas Regasification Vessel |
LPG Liquefied Petroleum Gas
Baron Philippe Bodson – Chairman Nicolas Saverys – CEO Ludwig Criel Patrick De Brabandere – COO Howard Gutman Jens Ismar Ariane Saverys Barbara Saverys Pauline Saverys Guy Verhofstadt Baron Philippe Vlerick
Nicolas Saverys – Chief Executive Officer, Chairman of the Executive Committee Patrick De Brabandere – Chief Operating Officer Miguel de Potter – Chief Financial Officer Pierre Dincq – Managing Director Shipping Bart Lavent – Managing Director LNG Infrastructure David Lim – Managing Director Offshore Marc Nuytemans – CEO EXMAR Ship Management
KPMG – auditors Represented by Mr. Filip De Bock
EXMAR NV De Gerlachekaai 20 2000 Antwerpen Tel: +32(0)3 247 56 11 Fax: +32(0)3 247 56 01
Business registration number: 0860 409 202 RPR Antwerp Website: www.exmar.com E-mail: [email protected]
The Dutch version of this annual report must be considered to be the official version.
Design: Thecrewcommunication.com
| Shareholders' Meeting | 17 May 2016 |
|---|---|
| Provisional Results 1st semester 2016 | 28 July 2016 |
| Final Results 1st semester 2016 | 2 September 2016 |
| Results 3rd quarter 2016 | 27 October 2016 |
| Provisional Results 2016 | 26 January 2017 |
| Shareholders' Meeting | 16 May 2017 |
Remuneration Report Internal Control and Risk Management Systems
FINANCIAL REPORT 2015
EXMAR is committed to achieving the highest standards of Corporate Governance.
EXMAR pledges to follow the nine principles laid out in the Belgian Corporate Governance Code announced on 12 March 2009 by the Corporate Governance Committee:
6) the Company develops a clear structure for Executive Management;
7) the Company compensates the Directors and the members of the Executive Management in a fair and responsible manner;
This Charter also applies to all the affiliated companies of EXMAR. The Corporate Governance Charter contains a summary of the rules and principles that form the basis of EXMAR's Corporate Governance and is based on the provisions of EXMAR's Articles of Association, the Belgian Companies Code, and the Belgian Corporate Governance Code of 2009.
In the main section, the Board of Directors provides an explanation of the policy pursued concerning Corporate Governance, the management structure and the operation of the Board and its Committees, including a description of the main features of the internal control and risk management systems and the Remuneration Report.
2 If applicable, an explanation is provided about the deviations during the past financial year on specific provisions of the Code in accordance with the "comply or explain" principle.
It also describes the measures taken by EXMAR to ensure compliance with laws and regulations relating to insider trading, corruption, money-laundering practices, competition, sanctions and suchlike.
The following definitions shall apply in this charter:
Charter: the Corporate Governance Charter.
Code: the Belgian Corporate Governance Code.
Group: the Company as well as the companies which the Company controls.
Board: the Company's Board of Directors.
Audit Committee: the Committee designated pursuant to article 526bis of the Companies Code.
CEO: the Chief Executive Officer of the Company, i.e. the person entrusted with the daily management of the Company.
Chairman of the Board: the person appointed by the Directors to act as Chairman.
External Auditor: the Statutory Auditor of the Company who is in charge of performing the audit of the Company's Financial Statements and Consolidated Financial Statements.
Internal Auditor: the Company is assisted by an Internal Auditor in the conducting of its internal audit activities.
Remuneration Committee: the Committee designated pursuant to article 526quater of the Companies Code.
De Gerlachekaai 20, 2000 Antwerp, Belgium.
VAT BE 0860 409 202, Company Registration Antwerp.
The Company was established by notarial deed on 20 June 2003, published in the appendix to the Belgian Official Gazette of 30 June 2003, reference 03072972, and of 4 July 2003, reference 03076338.
The Articles of Association were amended several times and for the last time by deed executed before civil law notary Benoit De Cleene in Antwerp, replacing his colleague notary
Patrick Van Ooteghem in Temse, on 19 May 2015, published in the appendix to the Belgian Official Gazette of 11 June 2015, reference 15082595.
The issued capital amounts to USD 88,811,667, is fully paid-up and is represented by 59,500,000 shares without nominal value. For the application of the provisions of the Belgian Companies Code, the reference value of the capital is set at EUR 72,777,924.85.
No changes in capital occurred during the course of 2015.
Pursuant to the Belgian Companies Code, the Board of Directors may be authorized by the shareholders, during a five years period, to increase the capital up to a defined amount and within certain limits.
By decision of the Extraordinary General Meeting of Shareholders held on 15 May 2012, the Board of Directors was authorized to increase the share capital of the Company once or several times, in the manner and at conditions to be determined by the Board of Directors, within a period of five years with effect from the date of publication of such a decision, by a maximum amount of USD 12,000,000, the reference value of EUR 7,703,665.66 for application of the provisions of the Belgian Companies Code. The special report of the Board of Directors was drawn up in accordance with the provisions of Section 604 of the Belgian Companies Code.
The Annual General Meeting takes place on the third Tuesday of May at 2.30 p.m.
The rules governing the convening, the participation, the conducting of the meeting, the exercising of the voting rights, amendments to the Articles of Association, nomination of the members of the Board of Directors and its Committees can be found in the coordinated Articles of Association and the Corporate Governance Charter of the Company, both of which are available on the Company's website under investor relations.
On 20 May 2014, the Extraordinary General Meeting of Shareholders authorized the Board of Directors of EXMAR to acquire the Company's own shares within a well-defined price range and do this during a period of five years.
The number of treasury shares as at 31 December 2015 amounted to 4.66%, which represents 2,774,133 shares.
On 13 November 2015 EXMAR disclosed that in accordance with the mandate to acquire shares, 245,978 non dematerialized shares were purchased on 12 November 2015. These shares were sold pursuant to the act of 14 December 2005 on the abolition of bearer securities.
The EXMAR share is listed on NYSE Euronext Brussels and is part of the Bel Mid index. (Euronext: EXM).
During the course of 2015, EXMAR NV did not receive any notifications in the context of the Transparency Act of 2 May 2007.
In accordance with Section 74§6 of the law on public takeover bids of 1 April 2007, Saverex NV notified the Financial Services and Markets Authority (FSMA) on 15 October 2007, updated on 27 August 2015, that it holds more than 30%
of the securities with voting rights in EXMAR NV, a listed Company.
FINANCIAL REPORT 2015
The statutory information is published on the website (www.exmar.be).
The Company has no knowledge of any agreements made between shareholders.
The Articles of Association impose no restrictions on the transfer of shares.
| Name | Position and nature of mandate | End of mandate |
|---|---|---|
| BOARD OF DIRECTORS | ||
| Baron Philippe BODSON | Chairman (non-executive director) | 2018 |
| Nicolas SAVERYS | executive director | 2018 |
| Patrick DE BRABANDERE | executive director | 2018 |
| Howard GUTMAN | independent director | 2017 |
| Jens ISMAR | independent director | 2016 |
| Guy VERHOFSTADT | independent director | 2016 |
| Ludwig CRIEL | non-executive director | 2017 |
| Ariane SAVERYS | non-executive director | 2018 |
| Pauline SAVERYS | non-executive director | 2018 |
| Baron Philippe VLERICK | non-executive director | 2017 |
| Barbara SAVERYS | non-executive director | 2018 |
The independent directors: Howard Gutman, Jens Ismar and Guy Verhofstadt meet the independence criteria of Section 526 of the Belgian Companies Code.
The Board of Directors is the prime decision-making body of the Company; it has all the powers with the exception of matters reserved by the Belgian Companies Code or the coordinated Articles of Association for the General Meeting of Shareholders.
The Board of Directors strives for the success of the Company in the long term, provides the necessary leadership for this, and ensures that risks can be identified and managed. The Board is responsible for the overall strategy and values of EXMAR, based on the social, economic and ecological responsibility, gender diversity, and diversity in general. The powers and the operation of the Board are described extensively in the Corporate Governance Charter.
The Directors will be provided in good time with a file containing all the information for the deliberations on the agenda items.
Decisions are taken at Board of Directors meetings in accordance with Article 22 of the Articles of Association, which includes the stipulation that the Chairman's vote is decisive in the event of a tied vote. To date, such a tied vote has never occurred.
Directors who had a Conflict of Interest with respect to an agenda item have reported this and have conducted themselves according to the provisions of the Belgian Companies Code.
The Board of Directors is composed of members from diverse professional backgrounds, who represent a wide range of experience.
The Board of Directors consists of a sufficient number of Directors to ensure proper operation, taking into account the specificness of the Company.
Regarding the gender diversity at the level of the Board of Directors, Section 7 of the Law of 28 July 2011 stipulates that companies with a free float of less than 50% have a period of eight years rather than six years to regularise themselves.
The necessary measures will be taken for future appointments to ensure that the imposed quotas are reached with effect from 1 January 2019.
4
The Board of Directors held seven meetings during 2015, of which two were by telephone. All the meetings were held under the chairmanship of Mr. Bodson.
At the meeting of 12 June 2015, Mr. Guy Verhofstadt and Mr. Philippe Vlerick were excused for absence.
At the meeting of 21 September 2015, Mr. Guy Verhofstadt was excused for absence.
In addition to exercising the powers provided by law, the Articles of Association and the EXMAR Charter, the Board of Directors deals with topics including the following:
The Board of Directors also met twice to discuss the Flex transaction.
| Name | Position and nature of mandate | End of mandate |
|---|---|---|
| AUDIT COMMITTEE | ||
| Ludwig Criel | Chairman (non-executive director) | 2017 |
| Baron Philippe Bodson | non-executive director | 2018 |
| Baron Philippe Vlerick | non-executive director | 2017 |
| Jens Ismar | independent director | 2016 |
The Audit Committee operates in compliance with Section 526bis of the Belgian Companies Code. The Board of Directors has granted the Audit Committee the broadest powers of investigation within its area.
The Audit Committee assists the Board of Directors with the fulfilment of its supervisory task and to ensure monitoring in the broadest sense. The Audit Committee is the main point of liaison for the internal and the external auditor.
Because of their qualifications, their careers in various multinational groups and their current professional activities, all the members possess the necessary expertise concerning accounting and auditing, and are familiar with financial reporting, accounting standards and risks.
The Corporate Governance Code stipulates that at least half of the members of the Audit Committee must be independent. Section 526bis of the Belgian Companies Code and the EXMAR Corporate Governance Charter stipulates that at least one member be independent. The Board of Directors believes that the composition of the Audit Committee meets the purpose of the law.
The specific responsibilities are set out in an Audit Charter that was approved by the Board of Directors on 31 March 2011 and modified on 25 March 2015.
In 2015, four meetings were held, each in the presence of all Members with the exception of the meeting of 25 March 2015, from which Mr. Jens Ismar was excused for absence, and the meeting of 3 September 2015, from which Mr. Philippe Bodson was excused for absence. The Statutory and the internal Auditor were present during two of the meetings.
The quarterly, half-yearly, and annual figures were analysed and discussed at these meetings before they were presented to the Board of Directors.
The Audit Committee also deliberated on specific financial matters that arose during the year, made recommendations to the Board of Directors, as well as the application of Section 523 of the Belgian Companies Code.
Other agenda items included:
| Name | Position and nature of mandate | End of mandate |
|---|---|---|
| NOMINATION AND REMUNERATION COMMITTEE | ||
| Baron Philippe Bodson | Chairman (non-executive director) | 2018 |
| Guy Verhofstadt | independent director | 2016 |
| Jens Ismar | independent director | 2016 |
FINANCIAL REPORT 2015
The Nomination and Remuneration Committee of EXMAR operates in compliance with Section 526quater of the Belgian Companies Code.
The Nomination and Remuneration Committee assists the Board of Directors with the exercising of its responsibilities concerning the determination of the Company's remuneration policy and the nomination procedures.
The Nomination and Remuneration Committee of EXMAR was composed of three members on 31 December 2015, of whom at least half were independent directors.
All the members of the Nomination and Remuneration Committee possess the necessary expertise in the area of remuneration policy based on exercising their positions during their careers.
The specific responsibilities have been set out in a Nomination and Remuneration Committee Charter that was approved by the Board of Directors on 29 November 2011. The procedure for the nomination and reappointment of Directors and members of the Executive Committee was approved by the Board of Directors at the same meeting.
The Nomination and Remuneration Committee met twice during the past year. All the members were present at each meeting.
With respect to remuneration, the following items were discussed:
With respect to the nominations, the following items were discussed:
Furthermore, there was a review of the composition of the Board of Directors and the various Committees as well as the independence criteria. The necessary attention was paid to the succession within the Board of Directors and the various committees.
As at 31 December 2015, the Executive Committee consisted of seven members:
| Name | Position and nature of mandate |
|---|---|
| EXECUTIVE COMMITTEE – CEO | |
| Nicolas Saverys | Chief Executive Officer (CEO) |
| Patrick De Brabandere | Chief Operating Officer (COO) |
| Miguel de Potter | Chief Financial Officer (CFO) |
| Pierre Dincq | Managing Director of Shipping |
| Bart Lavent | Managing Director LNG Infrastructure |
| David Lim | Managing Director of EXMAR Offshore |
| Marc Nuytemans | CEO of EXMAR Ship Management |
The Board of Directors has delegated its management powers to an Executive Committee in accordance with Section 524bis of the Belgian Companies Code.
The Executive Committee is responsible for the day-to-day management of EXMAR and the EXMAR Group, under supervision of the Board of Directors.
The operating rules of the Executive Committee are set out in a charter that was approved by the Board of Directors on 29 November 2011.
The Executive Committee meets on a regular basis. The CEO is the Chairman of the Executive Committee.
The role of the Executive Committee consists of leading EXMAR according to the values, strategies, policies, schedules and budgets set by the Board of Directors.
The Board of Directors introduced an evaluation process in 2011, which was renewed in 2014 in order to assess the effectiveness of the Board and the Committees.
The purpose of the evaluation is to improve the effectiveness of the Board and the individual contributions, as well as to expand the relationship management.
The Board of Directors has decided at each meeting to organize a discussion with the non-executive directors, in the absence of the CEO and the other executive directors, to evaluate their communication
Each Committee has reported on its activities to the Board.
The Statutory Auditor of the Company is KPMG Bedrijfsrevisoren CVBA (company auditors), represented by Mr. Filip De Bock. The Statutory Auditor conducts the external audit of both the consolidated and separate figures of EXMAR, and reports to the Board of Directors twice a year.
The Statutory Auditor was reappointed at the Ordinary General Meeting of 19 May 2015 for a new period of three years, which will end at the General Meeting in 2018.
In the conducting of its internal audit activities, the Company is assisted by EY. The Internal Auditor was reappointed by the Audit Committee of 26 March 2013 for a new period of three years. On recommendation of the Audit Committee, EY was reappointed for a new term of three years ending at the meeting of the Audit Committee in March 2016.
Mr. Mathieu Verly, appointed since 1 July 2015.
The Company Secretary shall ensure that Board procedures are complied with and that the Board acts in accordance with its statutory obligations and its obligations under the Articles of Association. He shall advise the Board on all governance matters and assist the Chairman of the Board in fulfilling his duties as detailed above, as well as in the logistics associated with the affairs of the Board (information, agenda, etc.).
Mr. Patrick De Brabandere, appointed on the recommendation of the Audit Committee, by the Board of Directors on 25 March 2015 with effect from 1 July 2015.
The Compliance Officer is responsible for the implementation of and the supervision on compliance with the Dealing Code and the tasks described in the Compliance Model.
Each member of the Board of Directors and of the Executive Committee is encouraged to organize their personal and business interests in such a way that there is no direct or indirect Conflict of Interest with the Company. The Company's Corporate Governance Charter requires that every transaction between the Company or any of its subsidiaries, and any director or member of the Executive Committee must first be approved by the Board of Directors, regardless of whether such a transaction is or is not subject to the applicable statutory regulations. Such a transaction can only take place on the basis of arm's length conditions.
The provisions of the Belgian Companies Code will apply in the event of a Conflict of Interest.
In accordance with Section 523 of the Belgian Companies Code, the Board of Directors is required to adhere to a special procedure if one or more directors have a direct or indirect Conflict of proprietary Interest with any decision or transaction belonging within the powers of the Board of Directors.
In accordance with Section 524ter of the Belgian Companies Code, the Executive Committee is required to adhere to a special procedure if one or more members of the Executive Committee have a direct or indirect Conflict of proprietary Interest with any decision or transaction belonging within the powers of the Executive Committee.
EXMAR has no knowledge of any potential Conflicts of Interest among the members of the Board of Directors and the members of the Executive Committee in the meaning of Sections 523 or 524ter, except those that may be described in the Annual Report from the Board of Directors.
The provisions of the Belgian Companies Code will apply in the case of transactions with affiliated companies.
Section 524 of the Belgian Companies Code provides for a special procedure applicable to transactions within a group or transactions with affiliated companies. This procedure applies to decisions and transactions between the Company and affiliated companies that are not subsidiaries of the Company.
Currently Saverbel NV and Saverex NV, companies controlled by Mr. Nicolas Saverys, CEO, provide administrative services to the EXMAR Group. These services are invoiced and are at arm's length conditions.
EXMAR recognizes the need for clear codes of conduct, structures and procedures to ensure compliance with the globally applicable standards, laws and practices relating to Corporate Governance and to prevent breaches of compliance with the applicable legislation on competition, Conflicts of Interest, insider trading, financial statements fraud, fraud and corruption, health, safety, environment, information management and privacy.
EXMAR's Code of Business Ethics describes "The way we work". It brings together the values and sets out the rules and guidelines for everyone within EXMAR. This code is included in the Corporate Governance Charter as Appendix 4.
Our Code of Business Ethics ensures that each and every one of our colleagues understands what is expected of them when acting on behalf of EXMAR.
FINANCIAL REPORT 2015
A special dealing code has been drawn up and included in the Corporate Governance Charter as Appendix 3. This code summarizes the rules that must be observed in case of dealing in the Company's financial instruments.
Compliance is very much part of the overall business strategy and operations of the whole organization.
To ensure even better compliance with rules and laws, and to reduce the risks of infringements and the adverse consequences for EXMAR and all the stakeholders, the Board of Directors decided to implement a Compliance Program for EXMAR.
This Program was developed in cooperation with the management and external advisers and is based on the international standard COSO Framework (COSO stands for "Committee of Sponsoring Organizations"). It aims for a permanent state of compliance by means of procedures and structures that are intended to provide continuous improvement.
The Compliance Program is included in the Compliance Model which describes the structures and procedures that are used to assess and detect risks, to report and curb violations, and finally to make our employees aware and provide them with additional training.
The Compliance Model provides for the setting up of a Risk Committee. This Risk Committee is responsible for the continuous supervision of the compliance with relevant legislation and the operation of the Compliance Model.
The duties of the Risk Committee are described in the Compliance Model.
In addition, a Compliance Manual has been drawn up. This Manual confirms the commitment of EXMAR to supervise the compliance with applicable laws, rules, guidelines, and ethics concerning:
A whistleblowing procedure was put in place and communicated to all employees.
No whistleblowing events were reported since the installation of the whistleblowing hotline.
The Remuneration Report describes EXMAR's remuneration policy as provided for in the legislation of 6 April 2010 in relation to Corporate Governance.
The remuneration policy and the individual scheme for members of the Board of Directors and members of the Executive Committee is in line with the aforementioned legislation.
The Nomination and Remuneration Committee is responsible for deciding about the procedure for developing a remuneration policy.
The remuneration amounts for non-executive directors were revised and approved by the Shareholders Meeting most recently in 2006. The Remuneration Committee checked at the meeting of 4 December 2015 the remuneration amounts for compliance with market practices and no changes were recommended.
The nature and the amounts of the remuneration awarded to executive Directors and the members of the Executive Committee are decided by the Board of Directors on the basis of recommendations from the Nomination and Remuneration Committee.
The Board of directors decides on the plans for granting stock options, on the basis of recommendations from the Nomination and Remuneration Committee.
EXMAR strives for remuneration which will attract, retain and motivate the members of the Board of Directors and members of the Executive Committee and which will guarantee and promote the Company's interests in the medium and longer term.
With this policy EXMAR attempts to ensure that the members of the Board of Directors and members of the Executive Committee do not act in their own interests, and do not take risks that do not fit in with the Company's strategy and risk profile.
The remuneration of non-executive Directors consists of a fixed non performance-related annual remuneration which is linked to the Director's position and positions on the various committees, in accordance with the Company's remuneration policy. Non-executive Directors do not receive any variable remuneration and do not benefit from additional pension plans or share-related incentives. The Nomination and Remuneration Committee regularly checks the remuneration of non-executive Directors for compliance with market practices.
The mandate of executive directors who are members of the Executive Committee is remunerated according to the remuneration criteria for the Executive Committee following recommendations from the Nomination and Remuneration Committee.
The remuneration of the members of the Executive Committee including the CEO consists of a fixed and a variable component.
The scale of the fixed remuneration for members of the Executive Committee, including the executive directors, depends on their position and the responsibilities related to their position.
The variable payment depends on the Company's results, as well as on other factors such as the performance of the individual, future prospects, the market situation, exceptional contribution(s) and/or special projects.
The remuneration is determined on the basis of the remunerations of a reference group consisting of a number of comparable enterprises in the maritime industry. The Nomination and Remuneration Committee can, if necessary, call on an independent external consultant.
Once a year the various compensation components for the members of the Executive Committee (including the CEO) are evaluated by the Nomination and Remuneration Committee and tested against conditions in the market.
The following information concerns the remuneration policy valid up to and including 31 December 2015.
The non-executive Directors receive a fixed annual remuneration of EUR 50,000. Because of his role and responsibility, the Chairman receives a higher annual fixed remuneration of EUR 100,000. No variable remunerations, share options, additional pension plans, loans or advance payments were granted to the non-executive and independent directors.
The members of the Audit Committee receive a fixed annual remuneration of EUR 10,000. The Chairman receives a remuneration of EUR 20,000.
The members of the Nomination and Remuneration Committee receive a fixed annual remuneration of EUR 10,000.
Six members of the Executive Committee (including the CEO) have self-employed status. Except for Lara Consult BVBA, represented by Mr. Bart Lavent, and Chirmont NV, represented by Mr. Miguel de Potter, they have no entitlement to any form of redundancy payment in the event of termination of their appointment. The length of the notice period for Lara Consult BVBA and Chirmont NV complies with statutory provisions.
Mr. David Lim has an employment agreement under United States law.
The remuneration package of the members of the Executive Committee consists of:
The basic salary is the key component in the remuneration package and is linked to the function performed by the person concerned, his responsibilities and competencies.
The short-term variable remuneration (annual bonus) rewards members of the Executive Committee for achieving performance criteria and the amount is expressed as a percentage of the fixed annual remuneration. The evaluation period is the financial year.
The variable remuneration is linked for 60% to developments in the results, where various weightings are used for the recurrent and non-recurrent parts of the results. The remaining 40% is linked to the specific evaluation and the performance of each individual.
The Board of Directors can deviate from this and decide to award a bonus to a member of the Executive Committee on the basis of other objective criteria.
The Extraordinary Shareholders' Meeting held on 17 May 2011 decided on the application of the provision of article 520ter of the Code of Companies and waived the staggering of the payment of the variable remuneration of the members of the Executive Committee.
The decision on the application of this dispensation was delegated by the Shareholders' Meeting to the Board of Directors.
If the result deviates substantially from the basis on which the variable remuneration of the members of the Executive Committee is calculated, the Board of Directors can decide to revise the variable part of the remuneration and if needed to reclaim that part.
The ratio between the fixed and variable part of the remuneration for members of the Executive Committee was as follows in 2015:
| CHAIRMAN OF THE EXECUTIVE COMMITTEE (CEO) | |
|---|---|
| Basic salary | 67% |
| Variable remuneration | 33% |
| OTHER MEMBERS OF THE EXECUTIVE COMMITTEE | |
|---|---|
| Basic salary | 64% |
| Variable remuneration | 36% |
EXMAR works towards creation of sustainable economic value by means of long-term remuneration. This ensures that the interests of the members of the Executive Committee are more in line with those of shareholders and that they remain bound to the Company.
The long-term remuneration consists of a share option plan for existing EXMAR shares.
The options can only be exercised after a period of 3 years.
In the event that a member of the Executive Committee resigns or is dismissed for compelling reasons by EXMAR the right to exercise the options lapses.
The amounts of share options offered are every year approved by the Board of Directors upon recommendation of the Remuneration and Nomination Committee. The granting of stock options is not linked to pre-determined and objectively quantifiable performance criteria.
The Extraordinary Shareholders' Meeting held on 17 May 2011 decided on the dispensation for the provisions of article 520ter of the Code of Companies concerning the definite acquisition of shares and share options by a director or member of the Executive Committee. The decision on the application of this dispensation was delegated by the Shareholders' Meeting to the Board of Directors.
Article 29 of the Articles of Association was adjusted accordingly.
The members of the Executive Committee with self-employed or employed status benefit from group insurance (type individual pension benefits for the self-employed) as well as guaranteed income insurance, accident insurance, hospitalisation insurance and travel insurance. During its meeting held on 2 December 2014 the Board of Directors decided – on recommendation of the Remuneration and Nomination Committee – to bring the pension plan of the members of the Executive Committee that are self-employed in line with current market conditions as from 2015.
The members of the Executive Committee receive a company car, a cell phone and meal cheques.
FINANCIAL REPORT 2015
| Name | Position and nature of mandate |
Fixed remuneration |
Audit Commitee remuneration |
Remuneration Committee remuneration |
Total |
|---|---|---|---|---|---|
| NOMINATION AND REMUNERATION COMMITTEE | |||||
| Baron Philippe Bodson | Chairman | 100,000 | 10,000 | 10,000 | 120,000 |
| Nicolas Saverys | CEO | - | 0 | ||
| Patrick De Brabandere | COO | - | 0 | ||
| Ludwig Criel | non-executive director | 50,000 | 20,000 | 70,000 | |
| Howard Gutman | non-executive director | 50,000 | 50,000 | ||
| Jens Ismar | non-executive director | 50,000 | 10,000 | 10,000 | 70,000 |
| Baron Philippe Vlerick | non-executive director | 50,000 | 10,000 | 60,000 | |
| Pauline Saverys | non-executive director | 50,000 | 50,000 | ||
| Barbara Saverys | non-executive director | 31,010 | 31,010 | ||
| Ariane Saverys | non-executive director | 50,000 | 50,000 | ||
| Guy Verhofstadt | non-executive director | 50,000 | 10,000 | 60,000 | |
| Total | 481,010 | 50,000 | 30,000 | 561,010 |
| CEO: Nicolas Saverys | 2015 | 2014 | |
|---|---|---|---|
| OVERVIEW OF THE REMUNERATION OF THE CHAIRMAN OF THE EXECUTIVE COMMITTEE (CEO) | |||
| Basic salary | 823,205 € | 823,205 € | |
| Variable remuneration | 350,000 € | 500,000 € | |
| Share options (taxable base) | 60,606 € | 66,402 € | |
| Insurance package** | 212,475 € | 51,475 € | |
| Other benefits*** | p.m. | p.m. | |
| Total | 1,446,286 € | 1,441,402 € |
| Members: 6 | 2015 | 2014* |
|---|---|---|
| OVERVIEW OF THE REMUNERATION OF THE OTHER MEMBERS OF THE EXECUTIVE COMMITTEE | ||
| Basic salary | 2,296,547 € | 2,296,547 € |
| Variable remuneration | 1,150,000 € | 1,800,000 € |
| Share options (taxable base) | 191,919 € | 210,273 € |
| Insurance package** | 320,247 € | 235,786 € |
| Other benefits*** | 60,000 € | p.m. |
| Total | 4,018,713 € | 4,542,606 € |
* The 2014 figures only include the remuneration of the 6 members that are still active in the Committee per 31 December 2015.
** individual pension benefit, guaranteed income insurance, accident insurance, hospitalisation insurance, travel insurance.
*** housing, car, cell phone and meal cheques.
No loans or advance payments were awarded to the members of the Executive Committee in 2015.
The members of the Executive Committee benefit from the share option plans as previously approved by the Board of Directors. On the basis of the recommendations of the Nomination and Remuneration Committee the Board of Directors decided to award share options for the year 2015. (Exercise price € 9,62).
| Name | Outstanding as per 31/12/2014 |
Expired during 2015 |
Exercised in 2015 | Granted in 2015 | Outstanding as per 31/12/2015 |
|---|---|---|---|---|---|
| SHARES, SHARE OPTIONS AND OTHER RIGHTS IN CONNECTION WITH SHARES | |||||
| Nicolas Saverys | 367,055 | 1,625 | - | 60,000 | 425,430 |
| Patrick De Brabandere | 209,758 | 50,951 | 40,000 | 198,807 | |
| Miguel de Potter | 92,625 | 29,137 | 30,000 | 93,488 | |
| Pierre Dincq | 109,293 | 19,464 | 30,000 | 119,829 | |
| David Lim | 116,158 | - | 30,000 | 146,158 | |
| Marc Nuytemans | 128,928 | 10,000 | 30,000 | 148,928 | |
| Bart Lavent | 87,439 | 24,464 | 30,000 | 92,975 | |
| Total | 1,111,256 | 1,625 | 134,016 | 250,000 | 1,225,615 |
No significant changes were made to the remuneration policy in 2015, except for the increase in the insurance premiums for the EXCO members with a self-employed status.
No fundamental changes are expected to the remuneration policy for the next two years.
The law of 6 April 2010 regarding the reinforcement of Corporate Governance of listed companies introduced an obligation by bringing in a description of the main features of the Company's internal control and risk management systems. Just like any other company, EXMAR is within the context of its normal business operations exposed to a number of risks which could have a material adverse impact on its business, prospects, consolidated results of operations and financial condition. This section describes the risks with which EXMAR is confronted, along with the operational and financial risks associated with EXMAR's activities.
The Company is convinced that risk management is an essential part of good governance and the development of a sustainable business and has implemented risk management and an internal control system. The EXMAR control and risk management system covers policy, identification processes, evaluation, management and follow-up of business and financial risks. The Board of Directors is assisted by the Executive Committee, the Audit Committee and the Risk Committee in the exercise of its control responsibilities on the Company's entities, in particular in monitoring the mechanisms for risk management and internal control.
The main features of the control and risk management systems can be summarised as follows:
The internal controls and risk management systems are reviewed and updated and have been designed, among other things, to reveal, eliminate and prevent errors and anomalies in the financial accounts. Although risks can never be entirely excluded, the internal control and risk management systems are meant to offer sufficient certainty that material errors and anomalies will be detected.
The Board of Directors is assisted in this respect by:
The Compliance Officer is appointed and charged with monitoring and ensuring compliance with policy regarding insider trading and market manipulation by Directors and members of the Executive Committee as well as other persons who have access to inside information, as well as monitoring of the Anti-Fraud and Anti-Corruption Policies.
The Audit Committee, set up within the Board of Directors, checks on the accuracy of the financial information published by the Company.
It also audits and manages the control and risk management systems set up by the Executive Committee.
The Audit Committee ensures that the external audit reflects the needs of the Group and guarantees compliance with the policy on independence of external auditors.
The Audit Committee is also responsible for follow-up of questions and recommendations emanating from the External Auditors.
The Audit Committee is the point of contact for both the internal and the external audits.
The Risk Committee, set up by the Audit Committee, evaluates on a continuous basis compliance with relevant legislation and the compliance model.
The Risk Committee reports to the Audit Committee on an annual basis or an ad hoc basis in case of any complaints or non-compliance.
The Internal Auditors have the following objectives:
An internal audit system has been developed that examines these policies on a regular basis.
14 Such a system needs to be continuously managed and adjusted where an organisation operates in an environment with variable risk factors.
The Internal Auditors need to flag up shortcomings and report these to the management, so the necessary measures can be taken.
The Internal Auditors report to the Audit Committee, which verifies and guarantees the effectiveness and independence of the Auditors.
The EXMAR Group has appointed EY as the Group's Internal Auditor.
As is required by law, the External Auditors verify the financial results of the Company, the annual accounts and compliance with Belgian legislation.
The External Auditors report directly to the Audit Committee and to the Board of Directors. They are directly in contact with the Chairman of the Audit Committee and if needed with the Chairman of the Board of Directors.
At least twice every year they will issue a report to the Audit Committee in which they will present their findings on the financial results or any irregularities.
The External Auditors are invited to attend every General Meeting of Shareholders, where they present their report on the annual accounts as well as any other report required by law in the case of certain transactions or under certain circumstances.
The Audit Committee monitors the External Auditors in the performance of their duties. They must moreover comply with Belgian company laws and the relevant Royal Decrees, the International Audit Standards, the rules of the Belgian Institute of Auditors and all other applicable laws and regulations.
The EXMAR Group has appointed KPMG as the Group's external auditor.
EXMAR operates in a dynamic environment with variable risk factors, so the internal audit process is constantly managed and fine tuned.
Shortcomings that could impact on the achievement of the Company's objectives are flagged up and reported to the Executive Committee, to ensure the right measures can be taken.
The Audit Committee has important responsibilities in relation to assessing the effectiveness of the internal risk and control system, the findings of internal investigations, the findings of the Executive Committee when weaknesses are identified and the findings of the Risk Committee.
The effectiveness of the control system set up by the Executive Committee is assessed at least once a year and on an annual basis the Risk Committee will report the conclusions of its annual risk assessment.
The Audit Committee investigates whether the necessary policy measures have been implemented to ensure that risks affecting the Company are identified.
To be able to perform this responsibility correctly, the Audit Committee receives the necessary information from the Executive Committee in relation to the risks, policy measures, procedures and checks concerning the integrity of the financial reporting.
The Audit Committee has a good understanding of the control system so it can make recommendations to the Board of Directors in relation to weaknesses in controls.
All important aspects and improvements are discussed and reported to the Board of Directors. Moreover the Audit Committee regularly reports to the Board of Directors.
The main features of the intern control and risk management in relation to financial reporting are as follows:
> The existence of financial and accounting instructions for the various accounting sections;
> Periodic reporting to the Audit Committee on all material areas in the financial statements concerning critical accounting assessments and accounting uncertainties.
EXMAR faces risks that in broad terms can be categorized as follows:
The worldwide transportation of gas (either LNG or LPG) or of any other products that are carried on board the EXMAR fleet entails a certain risk, either due to the nature of the goods being transported or the potential implications of the overall political environment in foreign countries.
The LPG transportation industry in which we operate is competitive, especially with respect to the negotiation of long-term charters. Competition arises primarily from other LPG carrier's owners and new competitors investing in our segments through consolidation, acquisitions of second hand or newbuildings.
EXMAR's activities are situated in a worldwide context. The LPG and LNG loads are transported from and to politically unstable regions. Changing economic, legal and political circumstances in some countries, including political, civil and military conflicts from time to time result in attacks on ships, and disruption to waterways and shipping due to mines, piracy, terrorism and other activities. Terrorist acts, regional hostilities or other political instability may disrupt LPG and LNG trading patterns resulting in reduced income or increased costs. EXMAR may also be obliged to incur additional or unexpected expenses to comply with changed laws or regulations in countries where our ships are active.
EXMAR's operating results depend on whether or not profitable time charters and journey charters can be concluded and/or renewed. Notwithstanding significant cargo coverage, EXMAR is exposed to the volatility of the markets for the transportation of LPG and ammonia as well as underlying freight tariffs. Moreover, these markets affect the value of the fleet, which is a key element supporting some of EXMAR's financings through Asset Protection clauses. As per 31 December 2015, EXMAR is in compliance with these clauses.
The carrying values of our vessels may not reflect changes in charter rates and the cost of newbuildings. Historically, both charter rates and vessel values tend to be cyclical.
While the LPG rates in the recent past have been volatile, the Company is of the opinion that the cash flows generated from the continuing use of the fleet, calculated using internal models and assumptions, continue to support the carrying values as at the date of this report. Although management believes that these calculations provide a reliable basis for their current assessment, there are many factors that are outside the control of the Company which may influence future profitability if the market conditions would deteriorate.
EXMAR will continue to closely monitor the market evolution in the different segments in which it operates in order to assess whether a deterioration of the market conditions would impact the book value of its fleet.
The growth strategy of EXMAR includes the development of floating LNG infrastructure assets such as the Caribbean FLNG and the FSRU. The demand for LNG infrastructure assets and the related hire rates for such assets are not readily available and might be adversely affected by economic, political and environmental factors. Our ability to develop & operate such assets and to obtain charter agreements for these assets on a profitable basis will have a material effect on our financial position and our result of operations.
Cost attributable to specific projects under development are deferred. In case projects are cancelled or terminated such costs will be expensed and negatively impact our financial position and our results.
FINANCIAL REPORT 2015
The operation of ocean-going vessels entails inherent risks. These risks include the possibility of disasters at sea, piracy, environmental accidents and work interruptions caused by mechanical defects, human error, war, terrorism, political actions in various countries, strikes and bad weather.
Any of these circumstances or events could result in increased costs or loss of income.
The involvement of one of our ships in an environmental disaster could harm our reputation as a reliable operator of LPG and LNG ships.
If our ships incur damage they must be urgently repaired. The costs of repair are unpredictable and can be very high. Costs that are not covered by an insurance policy have to be paid. The loss of income during the repair period as well as the costs of repairs themselves may result in decreased operating profits. Additionally, under the time charters, our joint ventures undertake that the vessels meet certain performance standards. If any such performance standard is not met, the charterer could withhold a portion of the hire due to our joint ventures and the resulting loss could harm our financial position and our results.
Operating expenses for our ships and capital expenditure for dry docks depend on various factors such as costs of manning, provisions, deck and machinery parts, lubricants, 16 insurance, maintenance and repairs, costs of shipyards, etc. These costs are difficult to control given that they are determined externally. Such costs have an impact on the entire shipping industry. Normally we do not bear the costs of fuel if our ships are used for a time-charter contract. Nevertheless fuel costs are significant during periods when a ship is not in use or if it is being repositioned for a time-charter contract.
As a ship ages, the cost of keeping the ship in optimum sailing condition increases. The bunkering costs are for the charterer's expense. Because older ships generally consume more fuel they are more expensive to operate than more modern ships featuring technological improvements. Charterers generally opt to use newer ships for that reason. Official regulations, including environmental regulations, safety and other equipment in relation to the age of ships may result in expenses to upgrade ships or result in restrictions on the type of transportation for which a ship can be used. Because some vessels of our fleet are ageing, eventually the expenses that have to be incurred to keep these vessels profitable for the rest of their lifespan may not be justifiable.
EXMAR receives a considerable part of its income from a limited number of clients and the loss of a client, a time charter or other revenues can lead to a significant loss of income and cash flows. In the LNG segment, EXMAR is particularly dependent on the performance of its most important client, Excelerate Energy. With the exception of one LNG vessel, the entire EXMAR LNG fleet is deployed under long-term charters with Excelerate Energy. PEP and EXMAR recently agreed to terminate the Tolling Agreement in place for the Caribbean FLNG. This termination agreement stipulates a termination fee payable by PEP in monthly instalments from March 2016 until June 2017 and cancels all obligations and commitments between both parties under the original Tolling Agreement.
EXMAR has currently several LPG newbuildings under construction at a Philippine shipyard and the Caribbean FLNG and one FSRU under construction at a Chinese shipyard. Advanced payments have been made under these contracts and some of these payments are secured by refund guarantees from first class banks. In the event shipyards do not perform under these contracts and we are unable to enforce the refund guarantees, we might lose all or part of our investment. Failure to construct or deliver the vessels by the shipyards as per contract or in case of significant delays in delivering the vessels could impact our results.
As a Company that uses financial leveraging to a considerable extent, EXMAR is subject to restrictions on credit agreements, such as financial covenants, audit changes and restrictions on opportunities for EXMAR and its subsidiaries to take on further debts, distribute dividends, sell capital shares in subsidiaries, undertake certain investments, sell ships or make sales without the consent of its lenders. As of 31 December 2015 EXMAR complies with all the applicable financial conditions of its loan agreements.
With a view to funding future purchases of vessels and other future projects, enhancing working capital or other capital expenditure, EXMAR may be obliged to utilize its available cash, to contract new loans or generate cash by selling assets.
The use of cash from operational activities for future investments may reduce the amount available for dividends.
Our capacity to obtain funds from financial institutions or our access to the financial markets for any future debts could be limited by adverse market conditions as a result, among other things, of general economic conditions and risks and uncertainties outside of our control.
A major part of our assets under construction and our committed investments are not financed yet. Discussions with several financial institutions are ongoing. While we believe that we will be able to arrange financing for the full amount of our newbuild program, to the extent that we don't timely obtain the financing, the completion of our newbuild vessels could either be delayed either we could suffer financial loss. More details are specified in note 28 of the consolidated accounts.
A vessel held by one of our joint ventures was party to a lease arrangement whereby the lessor could claim tax depreciation on the capital expenditures it incurred to acquire these vessels. As is typical in these leasing arrangements, tax and change of law risks are assumed by the lessee. Our joint venture terminated this lease arrangement in 2013. However, in case of a successful challenge by the UK tax authority ("HMRC") of the tax treatment of the lease by the UK lessor, we can be required to compensate the lessor for any tax amounts to be paid.
The long-term vision that is typical of EXMAR's activities is accompanied by long-term financing and therefore also exposure to underlying rates of interest. EXMAR actively manages this exposure by means of various instruments to cover itself for rising interest rates for a significant part of its debt portfolio.
EXMAR operates in USD but has to settle certain annual costs in Euros. At the date of this report EXMAR has no cover of EUR/USD exposure. A weakening of USD could therefor negatively influence our results.
In July 2014, EXMAR successfully closed a NOK 700 million senior unsecured bond issue, in May 2015 a second tranche was issued for an amount of NOK 300 million. The total amount outstanding is NOK 1,000 million and the floating interest rate exposure as well as the NOK/USD exposure is managed by a derivative financial instrument. This derivative financial instrument requires that the risk over and above a predetermined limit is guaranteed by cash collateral on an escrow account with the counterparty. This cash collateral amounted to USD 25.4 million on 31 December 2015. Additional cash guarantees might be required.
The Board of Directors is honored to submit for your approval the statutory and consolidated financial statements of EXMAR NV (the "Company") for the year ended 31 December 2015, in accordance with Articles 95 and 119 of the Belgian Companies Code.
Under the provisions of the Royal Decree of 14 November 2007 regarding the duties of issuers of financial instruments admitted to trading on the Belgian regulated market, the Company is required to publish its annual financial report.
The elements that are applicable to the Company as provided by the regulations mentioned above, as well as in the Companies Code, are addressed in the present financial statements, and also in the annual report under the Corporate Governance Statement.
The share capital of the Company amounts to USD 88,811,667 and is represented by 59,500,000 no-parvalue shares. All shares have been paid up in full. The capital has not changed during the previous financial year.
Notwithstanding the provisions laid down in Article 125 of the Companies Code, the capital and the financial statements are expressed in US dollars. This derogation was granted by the Ministry of Economic Affairs and was confirmed in writing on 2 July 2003. The Board of Directors believes that the reasons for which this derogation was requested still apply to the financial statements for the period under discussion.
During the past financial year, no capital changes have occurred that must be reported in accordance with article 608 of the Companies Code.
The statutory result for the financial year amounts to USD 57.3 million (USD 3.5 million in 2014). The result of EXMAR NV for the year 2015 was positively affected by the dividend income from its subsidiaries and joint ventures for an amount of USD 117.2 million, compensated for the write-down on financial assets (USD 53.7 million) and the expenses relating to the cancelled DC LNG project (USD 12.9 million).
At the end of 2015, the total assets amounted to USD 905.1 million (USD 905.9 million at the end of 2014), including USD 666.7million financial fixed assets (USD 700.9 million in 2014).
Shareholder's equity amounted to USD 548.2 million at the end of 2015 (USD 510.5 million in 2014). This increase is the net effect of the result for the financial year 2015 amounting to USD 57.3 million, compensated by the interim dividend paid during 2015 and the dividend proposed to the General Shareholders' Meeting for a total amount of USD 19.6 million.
Total liabilities at the end of 2014 amounted to USD 356.9 million (USD 395.4 million at the end of 2014), of which USD 285.2 million debt exceeding one year, and USD 71.7 million short-term debt (USD 299.4 million and USD 96.0 million at the end of 2014 respectively).
The 2015 statutory annual accounts show a profit of USD 57.3 million. Including the results carried forward from the previous financial year, an amount of USD 167.3 million is available for appropriation.
At the General Shareholders' Meeting of 17 May 2016, the Board of Directors will propose to distribute a gross dividend of EUR 0.30 per share, of which EUR 0.10 per share was paid in September 2015 as an interim dividend.
If the General Shareholders' Meeting approves this proposal, the dividend of EUR 0.20 gross per share (EUR 0.146 net per share) will be payable as from 25 May 2016 (ex-date 23 May – record date 24 May). The dividend for the holders of registered shares or dematerialised shares will automatically be
Following this appropriation, the shareholders' equity of USD 548,198,224.60 will be composed as follows:
Below commentary on the consolidated financial statements is based on the consolidated financial statements using the equity method. We also refer to the management report on the results and activities of our segments in the annual report.
In 2015, EXMAR Group achieved a consolidated result of USD 11.2 million (USD 68.3 million in 2014).
The share of result of equity accounted investees amounts to USD 35,2 million wich includes a non cash impairment on the Pressurized Fleet of USD 14.0 million.
The assets under construction amount to USD 151.8 million and consist of the payments made for the first FLNG unit Caribbean FLNG, the FSRU and the second FLNG unit.
The investment in equity accounted investees consists of our share in the different joint ventures and associates. Borrowings to equity accounted investees comprise the shareholder loans granted to our LPG and LNG joint ventures. The decrease compared to 2014 is mainly caused by the repayments made by our joint ventures on the outstanding shareholder loans.
The net cash position (cash and cash equivalents reduced by overdrafts at financial institutions) on 31 December 2015 Shareholder's equity amounted to USD 404.8 million on 31 December 2015 (2014: USD 429.8 million). This decrease in 2015 is mainly the net effect caused by the profit for 2015 and the dividends paid in 2015.
The financial debt amounted to USD 412.6 million on 31 December 2015, and increased by USD 5.9 million compared to 2014. The financial debt primarily increased following the issue of the second tranche of the NOK senior unsecured bonds for an additional amount of NOK 300 million (equivalent to USD 39.5 million), offset by the repayments made on the existing facilities.
The net negative market value of financial instruments amounted to USD 41.2 million on 31 December 2015, an increase compared to 2014 (USD 21.7 million).
On 31 December 2015, EXMAR employed 1,901 people worldwide, including 1,557 seagoing staff.
Pursuant to the act of 14 December 2005, amended by the act of 21 December 2013 a mandatory sale of securities that have not been claimed by their rightful owners was organized by EXMAR, issuer. The Company organized the sale of 245,978 shares.
In accordance with article 207§2 of the Royal Decree of 30 January 2001, modified by the Royal Decree of 26 April 2009, these 245,978 non dematerialized shares were purchased by EXMAR on 12 November 2015 on Euronext.
The Company requested the statutory auditor to perform the verification of the selling procedure.
The Company will submit the confirmation of the auditor to the Deposit and Consignment Office and will state in the 2015 annual accounts that this verification has taken place.
FINANCIAL REPORT 2015
So far, the Board of Directors has decided on 10 occasions to offer options on existing shares to a number of employees of the EXMAR Group.
| Date of offer | Number of outstanding options |
Exercise period | Exercise price in euro |
|---|---|---|---|
| STOCK OPTION PLAN | |||
| 15/12/2004 | 67,186 | Between 01/04/08 and 15/10/2017 (*) | 6.12 (°) |
| 09/12/2005 | 312,705 | Between 01/01/09 and 15/10/18 (*) | 10.73 (°) |
| 15/12/2006 | 401,918 | Between 01/01/10 and 15/10/19 (*) | 15.96 (°) |
| 04/12/2007 | 225,975 | Between 01/01/11 and 15/10/20 (*) | 14.64 (°) |
| 19/12/2008 | 102,417 | Between 01/01/12 and 18/12/16 (*) | 5.92 (°) |
| 29/12/2009 | 194,590 | Between 01/01/13 and 28/12/2017 | 4.85 (°) |
| 09/12/2010 | 234,478 | Between 01/01/14 and 28/12/2018 | 4.71 (°) |
| 03/12/2013 | 517,600 | Between 01/01/17 and 02/12/2021 | 10.54 |
| 02/12/2014 | 425,350 | Between 01/01/18 and 02/12/2022 | 10.54 |
| 04/12/2015 | 415,250 | Between 01/01/19 and 03/12/2023 | 9.62 |
(*) The Board of Directors meeting of 23 March 2009 decided to extend the original exercise period for the first four option plans by five years, by virtue of the decision by the Belgian Government to extend the duration of the Act of 26 March 1999, in particular regarding stock option plans.
(°) As a result of the capital increase of November 2009, the dilution protection and extra dividend of May 2012, the number and exercise price of the stock options were modified.
The authorization to acquire shares was granted to the Board of Directors by decision of the Extraordinary Shareholders' Meeting held on 20 May 2014, renewing the authorization of the Board of Directors to proceed, in case of a takeover bid for the securities of EXMAR NV, to a capital increase in accordance to the provisions and within the limits of Article 607 of the Companies Code. The Board of Directors is authorised to apply these measures if the notice of a takeover bid is given by the FSMA to the Company, not later than three years after the date of the abovementioned Extraordinary General Meeting.
On 31 December 2015, EXMAR held 2,774,133 own shares, representing 4.66% of the total number of issued shares.
The accounting principles applied, including the accounting estimates and assumptions used, at the closing of the annual financial statements do not differ from the accounting principles that were applied in the previous financial year. The significant accounting principles are included in the annual financial statements.
In February 2016 the Douglas Channel LNG Consortium announced the cancellation of further development of the DC LNG project due to the unfavourable market conditions. Following this decision, the costs incurred by EXMAR relating to this project have been expensed in 2015 for a total amount of USD 12.9 million.
20 In March 2016 EXMAR NV and Pacific Exploration and Production (PEP) have agreed to terminate the Tolling Agreement for the Caribbean FLNG, originally executed in March 2012 for a term of 15 years as from delivery. This termination agreement stipulates a termination fee payable by PEP in monthly instalments from March 2016 until June 2017 and cancels all obligations and commitments between both parties under the original Tolling Agreement. The Caribbean FLNG is now available for other projects and new employment negotiations are ongoing.
EXMAR has been approached after year end to sell part of its ownership (60%) in the Wariboko barge to its logistical partner Springview.
Besides the Head Office in Antwerp (Belgium), EXMAR has offices in Hong Kong, Houston, London, Limassol, Luxembourg, Mumbai, Paris, Singapore and the Netherlands.
EXMAR has branches in Shanghai, Luanda and Tripoli.
The risks and uncertainties are described in the Corporate Governance Statement.
The long-term vision, that is typical of EXMAR's activities, is accompanied by long-term financing and therefore EXMAR's activities are also exposed to floating interest rates. EXMAR actively manages this exposure and if deemed appropriate could cover itself for rising interest rates for a significant part of its debt portfolio by means of various instruments.
EXMAR successfully closed a NOK 700 million senior unsecured bond issue in 2014 and issued an additional NOK 300 million in 2015. The floating interest rate exposure (3m NIBOR) and the NOK/USD exposure (NOK 1,000 million) are managed by a derivative financial instrument.
EXMAR operates in USD but has to settle certain annual costs in Euros. The EUR/USD exposure is managed by means of hedging instruments if deemed necessary. At the date of this report EXMAR has no cover of EUR/USD exposure.
Extract from the minutes of the meeting of the Board of Directors of EXMAR NV, held on 4 December 2015:
Prior to discussion of this agenda item and in compliance with Article 523 of the Code of Companies, CEO Nicolas Saverys and COO Patrick De Brabandere inform the other Board members that they have a pecuniary interest that conflicts with that of the Company.
Nicolas Saverys and Patrick De Brabandere will not participate in the discussion or voting on the recommendations of the Committee.
Both gentlemen will inform the auditors in writing in compliance with Art 523 of the Code of Companies.
There were no Conflicts of Interest as far as the Executive Committee is concerned.
The existing LNG and LNG Regasification fleet is expected to perform in accordance with the underlying time-charter contracts.
The commissioning of the Caribbean FLNG unit will start in the coming weeks. As announced in the Press Release of 8 March 2016 EXMAR has freed the barge for alternative long term employment. EXMAR is in advance discussions to employ the barge on projects mainly in the Middle East and WAF. EXMAR is currently amending the previously agreed financing terms with Industrial and Commercial Bank of China ("ICBC") to reflect the new delivery conditions.
The Regasification barge under construction at Wison Offshore & Marine is actually being discussed for long term employment with various clients. EXMAR is actively discussing employment. We believe that long term lease of the unit will be achieved in the course of 2016.
In the light of the current oil and gas market environment, the consortium between EDFT, Idemitsu Altagas and EXMAR has decided to terminate the DOUGLAS CHANNEL FLNG.
The Offshore division will continue to perform as expected under its long-term charter contracts with the accommodation barges Wariboko and Nunce. The accommodation barge Kissama is employed until the summer with some extension options. Among its peers, EXMAR is unique in not having any barges idle.
EXMAR has been approached to sell part of its ownership in the Wariboko barge to its logistical partners, Springview. A sale to Springview will be commercially attractive and will strengthen its local presence in the Nigerian market.
EXMAR will continue to enjoy the tariff fee on the production of the OPTI-EX® which is expected to remain until January 2017.
Interest in the OPTI® production design remains high for its proven low cost and short delivery time. EOC is developing a new design of a Micro – Opti® in order to respond to strong demand to develop small fields (below 40,000 BOPD) in a cost effective way in today's low oil environment.
Despite a continuous boost of long-haul exports driven by high US LPG inventories and recent US export terminal expansions, the VLGC freight market dropped by about 50% since the beginning of 2016.
The latter is among others related to 13 newbuilding VLGC already having entered the market during first quarter, whereas another 34 (excl. Ethane carriers) are expected during the balance of 2016.
Prospects therefore largely depend on at which pace LPG trading volumes will continue to grow in order to employ such shipping capacity.
In the meantime EXMAR's single VLGC position, BW Tokyo (built 2009 - 83,000 m³), is satisfactorily covered until midyear. The aim is to secure further Time-Charter employment on the basis of long-lasting customer relationships.
Albeit to moderate extent, the recent downward VLGC correction is affecting Midsize vessels as well. Waiting time is being incurred both East and West of Suez.
Forward employment cover for the Midsize fleet as a whole amounts to as much as 85% for 2016 and 46% for 2017 at rewarding levels. EXMAR is well positioned to further pursue its strategy to develop medium- to long-term employment with industrial counterparts on its newbuildings while gradually disposing of elder tonnage.
EXMAR took delivery of LPG/C Knokke (38,000 m³ - built at Hanjin Heavy Industries - Philippines) on 15 February 2016, whereupon the vessel immediately set course to Europe to enter into a long-term contract with Statoil of Norway.
Two more newbuildings (tbn Kontich, tbn Kortrijk) will join EXMAR's fleet within 2016, which both also are already chartered for long Time-Charter commitments. The last 4 newbuildings will be delivered in 2017 and early 2018.
Overall trading activity on the smallest gas carriers has somewhat improved and the orderbook remains very limited, Time-Charter levels have not materially benefited of the latter yet.
EXMAR's focus remains on developing term business with first class customers both in South East Asia/Far East and Europe.
It currently results into its Pressurized fleet being covered up to 79% for 2016 and 21% for 2017.
All information which pursuant to Article 96(2) of the Companies Code must be included in the present annual report, more particularly the Corporate 34 of the Royal Decree of 14 November 2007, is shown under the chapter "Corporate Governance Statement", under the chapter "Risk Factors", and by reference
We request the General Shareholders' Meeting to approve the financial statements for the year ended 31 December 2015 in their entirety, and to appropriate the result as provided in this report. We also request the meeting to grant discharge to the directors and the Statutory Auditor for the performance of their mandates during the above-mentioned financial year.
FINANCIAL REPORT 2015
The mandate of Mr. Guy Verhofstadt and Mr. Jens Ismar comes to an end on the occasion of the General Meeting.
During its meeting of 25 March 2016 the Nomination Committee has provided its recommendation concerning the proposal of appointments and reappointments to the Board of Directors.
The Committee proposed to the Board to reappoint Mr. Jens Ismar as independent Director and to appoint Mr. Michel Delbaere as independent Director replacing Mr. Guy Verhofstadt who's mandate comes to and end.
The Board of Directors
| Note | 31/12/2015 | 31/12/2014 | |
|---|---|---|---|
| ASSETS | |||
| NON-CURRENT ASSETS | 684,687 | 726,060 | |
| Operational assets | 168,991 | 85,114 | |
| Operational assets | 9 | 17,194 | 475 |
| Operational assets under construction | 9 | 151,797 | 84,639 |
| Other property, plant and equipment | 10 | 4,104 | 5,049 |
| Intangible assets | 11 | 2,368 | 3,755 |
| Investments in equity accounted investees | 12 | 132,816 | 172,575 |
| Borrowings to equity accounted investees | 14 | 376,408 | 459,402 |
| Other investments | 0 | 165 | |
| CURRENT ASSETS | 241,425 | 192,006 | |
| Available-for-sale financial assets | 15 | 3,487 | 8,341 |
| Trade and other receivables | 16 | 64,669 | 69,130 |
| Current tax assets | 968 | 1,703 | |
| Cash and cash equivalents | 18 | 172,301 | 112,832 |
| TOTAL ASSETS | 926,112 | 918,066 | |
| EQUITY AND LIABILITIES | |||
| TOTAL EQUITY | 404,804 | 429,762 | |
| Equity attributable to owners of the Company | 404,614 | 429,587 | |
| Share capital | 19 | 88,812 | 88,812 |
| Share premium | 19 | 209,902 | 209,902 |
| Reserves | 19 | 94,689 | 62,638 |
| Result for the period | 19 | 11,211 | 68,235 |
| Non-controlling interest | 190 | 175 | |
| NON-CURRENT LIABILITIES | 445,621 | 422,217 | |
| Borrowings | 21 | 397,425 | 391,902 |
| Employee benefits | 23 | 4,445 | 6,211 |
| Provisions | 24 | 2,522 | 2,395 |
| Derivative financial instruments | 26 | 41,229 | 21,709 |
| CURRENT LIABILITIES | 75,687 | 66,087 | |
| Borrowings | 21 | 15,161 | 14,806 |
| Trade debts and other payables | 25 | 55,815 | 47,356 |
| Current tax liability | 4,711 | 3,925 | |
| TOTAL EQUITY AND LIABILITIES | 926,112 | 918,066 |
The notes are an integral part of these consolidated financial statements.
| (in thousands of USD) | Note | 01/01/2015 - 31/12/2015 |
01/01/2014 - 31/12/2014 |
|---|---|---|---|
| STATEMENT OF PROFIT OR LOSS | |||
| Revenue | 112,220 | 133,967 | |
| Capital gain on sale of assets | 4 | 110 | 4,565 |
| Other operating income | 4 | 3,261 | 4,909 |
| Operating income | 115,591 | 143,441 | |
| Goods and services | -80,986 | -84,799 | |
| Personnel expenses | 6 | -51,468 | -57,586 |
| Depreciations, amortisations & impairments losses | 9/10/11 | -5,174 | -7,739 |
| Provisions | 24 | -134 | 0 |
| Capital loss on disposal of assets | -47 | -294 | |
| Other operating expenses | 5 | -6,753 | -8,930 |
| Result from operating activities | -28,971 | -15,907 | |
| Interest income | 7 | 23,037 | 23,326 |
| Interest expenses | 7 | -12,952 | -14,762 |
| Other finance income | 7 | 7,346 | 13,788 |
| Other finance expenses | 7 | -8,523 | -5,039 |
| Net finance income | 8,908 | 17,313 | |
| Result before income tax and share of result of equity accounted investees | -20,063 | 1,406 | |
| Share of result of equity accounted investees (net of income tax) | 12 | 35,180 | 70,889 |
| Result before income tax | 15,117 | 72,295 | |
| Income tax expense | 8 | -3,872 | -4,041 |
| Result for the period | 11,245 | 68,254 | |
| Attributable to: | |||
| Non-controlling interest | 34 | 19 | |
| Owners of the Company | 11,211 | 68,235 | |
| RESULT FOR THE PERIOD | 11,245 | 68,254 | |
| Basic earnings per share (in USD) | 20 | 0,20 | 1,20 |
| Diluted earnings per share (in USD) | 20 | 0,20 | 1,19 |
| STATEMENT OF COMPREHENSIVE INCOME | |||
| Result for the period | 11,245 | 68,254 | |
| Items that are or may be reclassified to profit or loss | |||
| Equity accounted investees - share in other comprehensive income | 7 | -1,627 | -667 |
| Foreign currency translation differences | 7 | -2,607 | -3,754 |
| Foreign currency translation differences reclassified to profit or loss | 7 | 1,863 | 0 |
| Net change in fair value of cash flow hedges - hedge accounting | 7 | -1,598 | -1,002 |
| Available-for sale financial assets - net change in fair value | 7 | -4,854 | -489 |
| Available-for sale financial assets - reclassified to profit or loss | 7 | 0 | -1,411 |
| -8,823 | -7,323 | ||
| Items that will never be reclassified to profit or loss | |||
| Employee benefits - remeasurements of defined benefit liability/asset | 23 | 1,087 | -2,685 |
| Other comprehensive income for the period (net of income tax) | -7,736 | -10,008 | |
| Total comprehensive income for the period | 3,509 | 58,246 | |
| Attributable to: | |||
| Non-controlling interest | 15 | -113 | |
| Owners of the Company | 3,494 | 58,359 | |
| TOTAL COMPREHENSIVE INCOME FOR THE PERIOD | 3,509 | 58,246 |
The notes are an integral part of these consolidated financial statements.
(in thousands of USD)
| Note | 01/01/2015 - 31/12/2015 |
01/01/2014 - 31/12/2014 |
|---|---|---|
| OPERATING ACTIVITIES | ||
| Result for the period | 11,245 | 68,254 |
| Share of result of equity accounted investees (net of income tax) 12 |
-35,180 | -70,889 |
| Depreciations, amortisations and impairment loss 9/10/11 |
5,174 | 7,739 |
| Changes in the fair value of derivative financial instruments 7 |
0 | -4,101 |
| Net interest income/expenses 7 |
-10,085 | -8,564 |
| Income tax expense 8 |
3,872 | 4,042 |
| Net gain on sale of available-for-sale financial assets 7 |
0 | -1,638 |
| Net gain on sale of assets 4 |
-63 | -4,271 |
| Dividend income 7 |
-417 | -586 |
| Unrealised exchange difference 7 |
-2,107 | -5,202 |
| Equity settled share-based payment expenses (option plan) 22 |
951 | 830 |
| Gross cash flow from operating activities | -26,610 | -14,386 |
| Increase/decrease of trade and other receivables | 5,513 | 9,825 |
| Increase/decrease of trade and other payables | 9,094 | -16,717 |
| Increase/decrease in provisions and employee benefits | 69 | -115 |
| Cash generated from operating activities | -11,934 | -21,393 |
| Interest paid | -12,824 | -13,554 |
| Interest received | 22,514 | 23,418 |
| Income taxes paid | -2,351 | -3,962 |
| NET CASH FROM OPERATING ACTIVITIES | -4,595 | -15,491 |
| INVESTING ACTIVITIES | ||
| Acquisition of intangible assets 11 |
-571 | -1,091 |
| Acquisition of vessels and other property, plant and equipment 9/10 |
-63,697 | -21,888 |
| Proceeds from the sale of vessels and other property, plant and equipment (incl. held for sale) | 384 | 8,112 |
| Acquisition of available-for-sale financial assets | 0 | -2,479 |
| Proceeds from sale of available-for-sale financial assets | 0 | 6,641 |
| Acquisition of subsidiaries, associates and other investments (net of cash acquired) 11/12 |
0 | -3,020 |
| Dividends from equity accounted investees 12 |
88,642 | 2,400 |
| Borrowings to equity accounted investees 14 |
-1,512 | -71,814 |
| Repayments from equity accounted investees 14 |
45,315 | 13,843 |
| NET CASH FROM INVESTING ACTIVITIES | 68,561 | -69,296 |
| FINANCING ACTIVITIES | ||
| Dividends paid 19 |
-25,453 | -38,648 |
| Dividends received 7 |
417 | 586 |
| Early termination derivative financial instruments (*) | 0 | -15,399 |
| Acquisitions from treasury shares 19 |
-5,292 | 0 |
| Proceeds from treasury shares and share options exercised 19 |
1,370 | 2,415 |
| Proceeds from new borrowings 21 |
40,020 | 113,968 |
| Repayment of borrowings 21 |
-14,774 | -13,869 |
| NET CASH FROM FINANCING ACTIVITIES | -3,712 | 49,053 |
| NET INCREASE / DECREASE IN CASH AND CASH EQUIVALENTS | 60,254 | -35,734 |
| RECONCILIATION OF NET INCREASE/DECREASE IN CASH AND CASH EQUIVALENTS | ||
| Net cash and cash equivalents at 1 January | 112,832 | 149,389 |
| Net increase/decrease in cash and cash equivalents | 60,254 | -35,734 |
| Exchange rate fluctuations on cash and cash equivalents | -785 | -823 |
| NET CASH AND CASH EQUIVALENTS AT 31 DECEMBER 18 |
172,301 | 112,832 |
The notes are an integral part of these consolidated financial statements.
(*) In 2014, the cash out mainly related to the termination by RBS of all LPG related contracts.
(in thousands of USD)
| Share capital | Share premium |
|
|---|---|---|
| CONSOLIDATED STATEMENT OF CHANGES IN EQUITY AS PER 31 DECEMBER 2014 | ||
| 1 JANUARY 2014 | NOTE 88,812 |
209,902 |
| Comprehensive result for the period | ||
| Result for the period | ||
| Foreign currency translation differences | 7 | |
| Net change in fair value of cash flow hedges - hedge accounting | 7 | |
| Net change in fair value of available-for-sale financial assets | 7 | |
| Employee benefits - remeasurements of defined benefit liability/asset | 23 | |
| Total other comprehensive result | 0 | 0 |
| TOTAL COMPREHENSIVE RESULT FOR THE PERIOD | 0 | 0 |
| Transactions with owners of the Company | ||
| Dividends paid | 19 | |
| Share-based payments | 22 | |
| Share options exercised | ||
| Treasury shares sold | ||
| Share-based payments transactions | ||
| TOTAL TRANSACTIONS WITH OWNERS OF THE COMPANY | 0 | 0 |
| 31 DECEMBER 2014 | 88,812 | 209,902 |
| CONSOLIDATED STATEMENT OF CHANGES IN EQUITY AS PER 31 DECEMBER 2015 | |||
|---|---|---|---|
| 1 JANUARY 2015 NOTE |
88,812 | 209,902 | |
| Comprehensive result for the period | |||
| Result for the period | |||
| Foreign currency translation differences | 7 | ||
| Net change in fair value of cash flow hedges - hedge accounting | 7 | ||
| Net change in fair value of available-for-sale financial assets | 7 | ||
| Employee benefits - remeasurements of defined benefit liability/asset | 23 | ||
| Total other comprehensive result | 0 | 0 | |
| TOTAL COMPREHENSIVE RESULT FOR THE PERIOD | 0 | 0 | |
| Transactions with owners of the Company | |||
| Dividends paid | 19 | ||
| Share-based payments | 22 | ||
| Share options exercised | |||
| Treasury shares purchased | |||
| Share-based payments transactions | |||
| TOTAL TRANSACTIONS WITH OWNERS OF THE COMPANY | 0 | 0 | |
| 31 DECEMBER 2015 | 88,812 | 209,902 |
The notes are an integral part of these consolidated financial statements.
26
| 27 | |
|---|---|
| Retained | Reserve for | Translation | Fair value | Hedging | Share-based | Total | Non | Total equity | |
|---|---|---|---|---|---|---|---|---|---|
| earnings | treasury | reserve | reserve | reserve | payments | controlling | |||
| shares | reserve | interest | |||||||
| 161,285 | -60,867 | -4,329 | 2,781 | -554 | 9,610 | 406,640 | 288 | 406,928 | |
| 68,235 | 68,235 | 19 | 68,254 | ||||||
| -4,516 | -4,516 | -132 | -4,648 | ||||||
| -775 | -775 | -775 | |||||||
| -1,900 | -1,900 | -1,900 | |||||||
| -2,685 | -2,685 | -2,685 | |||||||
| -2,685 | 0 | -4,516 | -1,900 | -775 | 0 | -9,876 | -132 | -10,008 | |
| 65,550 | 0 | -4,516 | -1,900 | -775 | 0 | 58,359 | -113 | 58,246 | |
| -38,648 | -38,648 | -38,648 | |||||||
| -2,943 | 5,276 | -606 | 1,727 | ||||||
| -1,134 | 1,822 | 688 | |||||||
| 821 | 821 | ||||||||
| -42,725 | 7,098 | 0 | 0 | 0 | 215 | -35,412 | 0 | ||
| 184,110 | -53,769 | -8,845 | 881 | -1,329 | 9,825 | 429,587 | 175 | 429,762 |
| 184,110 -53,769 -8,845 881 -1,329 9,825 429,587 |
175 429,762 |
|---|---|
| 11,211 11,211 |
34 11,245 |
| -1,456 -1,456 |
-19 -1,475 |
| -2,494 -2,494 |
-2,494 |
| -4,854 -4,854 |
-4,854 |
| 1,087 1,087 |
|
| 1,087 0 -1,456 -4,854 -2,494 0 -7,717 |
-19 -7,736 |
| 12,298 0 -1,456 -4,854 -2,494 0 3,494 |
15 |
| -25,453 -25,453 |
-25,453 |
| -3,039 4,938 -572 1,327 |
|
| -5,292 -5,292 |
-5,292 |
| 951 951 |
|
| -28,492 -354 0 0 0 379 -28,467 |
0 -28,467 |
EXMAR NV ("the Company") is a company domiciled in Belgium whose shares are publicly traded (Euronext – EXM). The consolidated financial statements of the Group comprise the Company, its subsidiaries, and the Group's interest in associates and joint arrangements (referred to as "The Group"). The Group is active in the industrial shipping business.
The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) as adopted by EU on 31/12/2015.
The Group has adopted the following new standards, amendments to standards, including any consequential amendments to other standards, and new interpretations with a date of initial application of 1 January 2015:
A number of new standards, amendments to standards and interpretations are not yet effective for the year ended 31 December 2015, and have not been applied in preparing these consolidated financial statements:
payments and presenting them as a right of use asset in the statement of financial position of the lessee. Lease payments that are paid over time should be presented as a financial liability. In the statement of profit or loss, the depreciation charge of the lease asset will be presented separately from the interest expense on the lease liability. IFRS 16 does not substantially change lease accounting for lessors. A lessor will continue to classify leases as either operational or finance lease and account for those two types of leases differently. The group is currently investigating the impact that the application of the new standard will have on the consolidated financial statements.
The following new or amended standards are not expected to have a significant impact on the Group's consolidated financial statements.
The consolidated financial statements were approved and were authorised for issue by the Board of Directors on 24 March 2016.
The consolidated accounts are presented in USD in accordance with the deviation granted by the Financial Services and Markets Authority (FSMA) by letter of 2 July 2003, and all values are rounded to the nearest thousand. USD is the Company's functional currency. They are prepared on the historical cost basis except for the following material assets and liabilities that have been measured on an alternative basis on each reporting date: derivative financial instruments, non-derivative financial assets at fair value through profit and loss, available-for-sale financial assets and the net defined benefit liability. Assets held for sale are stated at the lower of carrying amount and fair value less cost to sell.
The preparation of the consolidated financial statements in accordance with IFRS requires management to make judgments, estimates and assumptions that affect the application of the accounting policies and the reported amounts of assets and liabilities, income and expenses. The estimates and related assumptions are based on historical experience and various other factors that are believed to be reasonable
under the circumstances. Actual results may differ from these estimates.
The estimates and the underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision only affects that period, or in the period of the revision and future periods, if the revision affects both current and future periods.
Preparing the consolidated financial statements, the Group has made judgements, estimates and assumptions regarding the fair value for the share options, the employee benefit plans, provisions and contingencies and the classification of new lease commitments and time charter agreements. On a yearly basis the residual value and the useful life of the vessels is reviewed.
The carrying values of the vessels may not represent the fair market value at any point in time since the market prices of second-hand vessels tend to fluctuate with changes in charter rates and the cost of new buildings. Historically, both charter rates and vessel values tend to be cyclical. The carrying amounts of each specific fleet are reviewed for potential impairment whenever events or changes in circumstances indicate that the carrying amount of a specific fleet may not be fully recoverable. The recoverable amount is the highest of the fair value less cost to sell and the value in use. The fair value less cost to sell is determined based upon independent valuation reports. The value in used is based upon future cash flows discounted to their present value. In developing estimates of future cash flows, we must make assumptions about future charter rates, ship operating expenses, the estimated remaining useful lives of the fleet and the WACC. These assumptions are based on historical trends as well as future expectations. Although management believes that the assumptions used to evaluate potential impairment are reasonable and appropriate, such assumptions are highly subjective. The vessels are mainly registered within our equity accounted investees.
The Group has consistently applied the accounting policies to all periods presented in the consolidated financial statements.
Subsidiaries are those entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.
The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date on which control ceases. All intra-Group balances, income and expenses, unrealized gains and losses and dividends resulting from intra-Group transactions are eliminated in full.
Upon the loss of control, the Group derecognizes the assets and liabilities of the subsidiary, and non-controlling interests and the other components of equity related to the subsidiary. Any surplus or deficit arising on the loss of control is recognized in profit and loss. If the Group retains any interest in the previous subsidiary, then such interest is measured at fair value at the date the control is lost. Subsequently it is accounted for as an equity-accounted investee or as an available-for-sale financial asset depending on the level of influence retained.
The Group's interest in equity accounted investees comprises interests in associates and joint ventures.
Associates are those entities in which the Group has significant influence, but not control or joint control, over the financial and operating policies. Significant influence is presumed to exist when the Group holds between 20 and 50% of the voting power.
A joint venture is an arrangement in which the Group has joint control, whereby the Group has rights to the net assets of the arrangement, rather than rights to its assets and obligations for its liabilities.
Investments in associates and joint ventures are accounted for using the equity method and are recognised initially at cost. The cost of the investment includes transaction costs. Subsequent to initial recognition, the consolidated financial statements include the Group's share of the profit or loss and OCI of equity accounted investees, from the date that significant influence or joint control commences until the date that significant influence or joint control ceases.
When the share of the Group in the losses exceeds its interest in an equity accounted investee, the carrying amount of that interest is reduced to zero, and the recognition of future losses is discontinued, except to the extent that the Group has an obligation or has made payments on behalf of the investee. In such case the negative investment in equity accounted investees is deducted from other components of the investor's interest in the equity accounted investee (borrowings to equity accounted investees). If the negative investment in equity accounted investees exceeds the investor's interest, a liability is recognized for the net amount. Unrealised gains arising from transactions with equityaccounted investees are eliminated against the investment to the extent of the Group's interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.
Foreign currency transactions are converted to the respective functional currencies at the exchange rate applicable at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated to USD at the exchange rate applicable at that date. The non-monetary assets and liabilities that are measured in terms of historical cost are translated to USD at the
exchange rate at the date of the initial transactions. Nonmonetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date the fair value was determined. Foreign exchange differences arising on translation are recognised in the profit or loss statement, except for differences arising on the retranslation of available-for-sale equity instruments or qualified cash flow hedges to the extent that the hedges are effective, which are recognised in other comprehensive income.
Assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated to USD using the closing rate at reporting date.
The income and expenses of the foreign operations are converted to USD at the exchange rate at the date of the transaction (the average exchange rate during the relevant period is used in case the date of transaction approximates this average rate).
Foreign currency differences are recognized directly in other comprehensive income. These foreign currency differences are presented within the translation reserve. However, if the operation is a non-wholly-owned subsidiary, then the relevant proportionate share of the translation difference is allocated to the non-controlling interests.
When a foreign operation is disposed of such that control, significant influence or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to profit and loss as part of the gain or loss on disposal. When the Group disposes of only part of its interest in a subsidiary that includes a foreign operation while retaining control, the relevant proportion of the cumulative amount is reattributed to non-controlling interests. When the Group disposes of only part of its investment in an associate or joint venture that includes a foreign operation while retaining significant influence or joint control, the relevant proportion of the cumulative amount is reclassified to profit and loss.
Loans and receivables and deposits are initially recognised on the date that they are originated. All other financial assets are recognised initially at trade date.
The Group derecognises a financial asset when the contractual rights to the cash flow from the assets expire, or it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all risks and rewards of ownership are transferred, or it neither transfers nor retains substantially all of the risks and rewards of ownership and does not retain control over the transferred asset. Any interest in such transferred financial assets that is created or retained by the Group is recognised as a separate asset or liability.
Financial assets and liabilities are offset when and only when, the Group has a legal right to offset the amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.
A financial asset is classified at fair value through profit and loss if it is classified as held for trading or designated as such on initial recognition. Upon initial recognition attributable transaction costs are recognised in the profit or loss statement as incurred. Financial assets at fair value through profit and loss are measured at fair value and changes therein are recognised in the profit or loss statement.
If the Group has the positive intent and ability to hold debt securities to maturity, then such financial assets are classified as held-to-maturity. Held-to-maturity financial assets are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition held-to-maturity financial assets are measured at amortised cost, using the effective interest method, less any impairment losses.
Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are recognised initially at fair value (normally equals transaction price) plus any directly attributable transaction costs. Subsequent to initial recognition loans and receivables are measured at amortised cost, using the effective interest method, less any impairment losses.
Cash and cash equivalents comprise cash balances and demand deposits. Bank overdrafts that are repayable on demand and form an integral part of the Group's cash management are included as a component of cash and cash equivalents for the purpose of the statement of the cash flows.
Available-for-sale financial assets include equity securities, which are not classified as held for trading, designated at fair value through profit and loss or held to maturity. Available-for-sale financial assets are recognised initially at fair value plus any directly attributable transaction costs. Available-for-sale financial assets are, subsequent to initial recognition, measured at fair value and changes therein, other than impairment losses, are recognised in other comprehensive income and presented within the fair value reserve. When an investment is derecognised, the cumulative gain or loss in other comprehensive income is transferred to the profit or loss statement.
The Group initially recognises debt securities issued and subordinated liabilities on the date that they are originated. All other financial liabilities are recognised initially at trade date at which the Group becomes a party to the contractual provisions of the instrument. The Group derecognises a financial liability when its contractual obligations are discharged or cancelled or expire.
The Group has the following non-derivative financial liabilities: loans and borrowings, bank overdrafts and trade and other payables. Such financial liabilities are recognised initially at fair value (normally equals the transaction price for trade and other payables) plus any directly attributable transaction costs for loans and borrowings. Subsequent to initial recognition these financial liabilities are measured at amortised cost using the effective interest method.
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares and share options are recognised as a deduction from equity, net of tax effects. When share capital recognised as equity is repurchased, the amount of the consideration paid, including directly attributable costs net of tax, is recognised as a deduction from equity. When treasury shares are sold, the amount received is recognised as an increase in equity and the resulting surplus or deficit on the transaction is presented in retained earnings.
The Group holds derivative financial instruments to hedge its foreign currency and interest rate risk exposures.
Embedded derivatives are separated from the host contract and accounted for separately if the economic characteristics and risks of the host contract and the embedded derivative are not closely related, a separate instrument with the same terms as the embedded derivative would meet the definition of a derivative and the combined instrument is not measured at fair value through profit and loss.
On initial designation of the hedge, the Group formally documents the relationship between the hedging instrument(s) and the hedged item(s), including the risk management objectives and strategy in undertaking the hedge transaction, together with the methods that will be used to assess the effectiveness of the hedging relationship. The Group makes an assessment, both at the inception of the hedge relationship as well as on an ongoing basis, whether the hedging instruments are expected to be "highly effective" in offsetting the changes in the fair value or cash flows of the respective hedged items during the period for which the hedge is designated, and whether the actual results of each hedge are within the range of 80-125%.
Derivatives are recognised initially at fair value; attributable transaction costs are recognised in the profit or loss statement as incurred. Subsequent to initial recognition, derivatives are recognized at fair value and changes therein are generally recognized in profit and loss, except for:
32 terminated, exercised, or the designation is revoked, then the hedge accounting is discontinued prospectively. The cumulative gain or loss previously recognized in other comprehensive income remains there until the forecast transaction affects the profit or loss statement. If the forecast transaction is no longer expected to occur, than the amount accumulated in equity is reclassified to profit or loss.
Goodwill arising upon the acquisition of subsidiaries is included in intangible assets.
For acquisitions on or after 1 January 2010, the Company measures goodwill at the acquisition date as: the fair value of the consideration transferred; plus the carrying amount of any non-controlling interests in the acquiree; plus if the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree; less the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed. When the excess is negative, a bargain purchase gain is recognised immediately in the statement of profit or loss. The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are generally recognised in the statement of profit or loss. Costs related to the acquisition, other than those associated with the issue of debt or equity securities, that the Company incurs in connection with a business combination are expensed as incurred. Any contingent consideration payable is recognised at fair value at the acquisition date. If the contingent consideration is classified as equity, it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes to the fair value of the contingent consideration are recognised in profit or loss.
For acquisitions prior to 1 January 2010, goodwill represents the excess of the cost of the acquisition over the Company's interest in the recognized amount (generally fair value) of the identifiable assets, liabilities and contingent liabilities of the acquiree. When the excess was negative, a bargain purchase gain was recognized immediately in the statement of comprehensive income. Transaction costs, other than those associated with the issue of debt or equity securities, that the Company incurred in connection with business combinations were capitalized as part of the cost of the acquisition.
Subsequently goodwill is measured at cost less accumulated impairment losses. In respect of equity accounted investees, the carrying amount of goodwill is included in the carrying amount of the investment and an impairment loss on such an investment is allocated to the carrying amount of the equity accounted investee as a whole.
Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical knowledge and understanding, is recognised in profit or loss as incurred.
Development activities involve a plan or design for the production of new or substantially new improved products and processes. Development cost is capitalised only if development costs can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable and the Group intends to and has sufficient resources to complete development and to use or sell the asset. Otherwise, it is recognised in profit or loss as incurred. Capitalised development expenditure is measured at cost less accumulated amortisation and accumulated impairment losses.
Other intangible assets (e.g. software,…) acquired by the Group that have finite useful lives are measured at cost less accumulated amortisations and accumulated impairment losses. The amortisation is recognized in the profit or loss statement, and is spread over the useful life of the relevant intangible assets following the straight-line depreciation method. The amortization starts from the date that they are available for use. Amortization methods, useful lives and residual values are reviewed at each financial year-end and adjusted if appropriate.
Intangible assets with an indefinite useful life or that are not yet available for use, are subject to an annual impairment test.
Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific assets to which it relates. All other expenditure is recognized in profit or loss as incurred.
Items of property, plant and equipment are stated at cost less accumulated depreciation and impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the asset and to bringing the asset to the location and condition necessary for its intended use. The cost of self-constructed assets includes the cost of materials and direct labor, any other costs directly attributable to bringing the asset to a working condition for its intended use and capitalized borrowing costs.
Subsequent expenses associated with items of property, plant and equipment are capitalised only if a future economic advantage will result from this expenditure and its cost can be measured reliably. If a part of an item of property, plant and equipment is replaced, the replacement cost is capitalised and the carrying amount of the replaced part is derecognized. The costs of the day-to-day servicing of property, plant and equipment are recognised in the profit or loss statement as incurred.
When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.
Depreciation is calculated over the depreciable amount, which is the cost of an asset, less its residual value and is recognized in profit or loss.
The vessels are depreciated on a straight-line basis to their residual value over their estimated useful life in the Group.
| Gas vessels LPG: | 30 years |
|---|---|
| Gas vessels LNG: | 35 years |
| Accommodation platform, second hand: | 10-12 years |
| Accommodation platform, newbuild: | |
| - Hull, machinery & deck outfitting | 20 years |
| - Accommodation | 10 years |
Dry-docking expenses are capitalised when they occur and depreciated over a period until the next dry-dock.
Other property, plant and equipment are depreciated over their estimated useful life using the straight-line depreciation method. Land is not depreciated.
The estimated depreciation percentages of the various types of assets are as follows:
| Buildings: | 3% |
|---|---|
| Leased real estate: | 3% |
| Plant and equipment: | 20% |
| Furniture: | 10% |
| Cars: | 20% |
| Airplane: | 10% |
| IT equipment: | 33% |
The method of depreciation, the residual value, and the useful life values are reviewed at each financial year-end and adjusted if appropriate.
Lease agreements substantially assigning all risks and rewards inherent to ownership to the Group, are classified as finance leases. The leased assets measured at an amount equal to the lower of its fair value and the present value of the minimum lease payments at inception of the lease, are subsequently reduced by the accumulated depreciation and possible impairment losses. The depreciation period matches the useful life. If there is uncertainty with respect to the transfer of ownership to the Group at the end of the contract, the asset is fully depreciated over the shorter of the lease term and its useful life.
Investment property is measured at historical cost less accumulated depreciation and accumulated impairment losses.
The depreciation is recognized in the profit or loss statement on a straight-line basis over the estimated useful lives of the investment properties.
Financial assets measured at cost are assessed, at both individual and collective level, each reporting date to determine whether there is objective evidence of impairment. A financial asset is impaired if objective evidence indicates that a loss event has occurred after initial recognition of the asset and that the loss event had a negative effect on
the estimated future cash flows of that asset that can be estimated reliably. When there are no realistic prospects of recovery of the asset, the relevant amount is written off. In assessing impairment, historical information on the timing of recoveries and the amount of loss incurred is used.
An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount and the present value of the estimated future cash flows discounted at the asset's original effective interest rate. Losses are recognised in the profit or loss statement. When a subsequent event causes the amount of impairment loss to decrease, the decrease in impairment loss is reversed through profit and loss.
Impairment losses on available-for-sale investment securities are recognised by transferring the cumulative loss that has been recognised in other comprehensive income and presented in the fair value reserve in equity to profit and loss. An impairment loss is recognized in the profit or loss statement if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset. The amount reclassified is the difference between the acquisition cost (net of any principal repayment and amortisation) and the current fair value, less any impairment loss previously recognised in profit or loss. If the fair value of an impaired available for sale debt security subsequently increases and the increase can be related objectively to an event occurring after the impairment loss was recognised, than the impairment loss is reversed through profit or loss, otherwise it is reversed through OCI.
After application of the equity method, the entity applies IAS 39 to determine whether it is necessary to recognise an impairment loss with respect to its net investment in the associate or joint venture. An impairment loss in respect of an equity-accounted investee is measured by comparing the recoverable amount of the investment with its carrying amount. An impairment loss is recognised in profit and loss and is reversed when there is a favourable change in the estimates used to determine the recoverable amount.
The carrying value of non-financial assets, other than deferred tax assets, are reviewed at each balance sheet date to determine whether there is an indication of impairment. If any such indication exists, the asset's recoverable amount is estimated.
For goodwill and intangible assets that have indefinite lives or that are not yet available for use the recoverable amount is estimated on each balance sheet date.
The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows from continuing use that
34 are largely independent of the cash inflows of other assets or groups of assets (the "cash-generating unit").
The goodwill acquired in a business combination, for the purpose of impairment testing, is allocated to cash-generating units that are expected to benefit from the synergies of the combination.
An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its estimated recoverable amount. All impairment losses are recognised in the profit or loss statement.
Impairment losses recognized in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit (group of units) on a pro rata basis.
An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses in prior periods are assessed at each reporting date for indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
Non-current assets, or disposal groups comprising assets and liabilities, that are expected to be recovered primarily through sale rather than through continuing use, are classified as held for sale. Immediately before classification as held for sale, the assets (or components of a disposal group) are remeasured in accordance with the Group's accounting policies. Thereafter the assets (or disposal group) are measured at the lower of their carrying amount and fair value less cost to sell. Any impairment loss on a disposal group is allocated first to goodwill, and then to the remaining assets and liabilities on a pro rata basis except that no loss is allocated to assets not in the measurement scope of IFRS 5, which continue to be measured in accordance with the Group's other accounting policies. Intangible assets, property, plant and equipment and investment property once classified as held for sale or distribution are not amortised or depreciated. In addition, equity accounting of equity-accounted investees ceases once classified as held for sale or distribution.
Obligations for contributions to defined contribution pension plans are recognised as an expense in the profit or loss statement as the related service is provided.
Belgian defined contribution plans are subject to the Law of 28 April 2003 on occupational pensions (hereafter "the WAP"). According to Article 24 of this Law, the employer
has to guarantee an average minimum return of 3.75% on employee contributions and of 3.25% on employer contributions. Article 24 of the WAP obliges the employer to ensure that plan members receive at the date of leaving the plan at least the amount of the contributions capitalized at aforementioned statutory guaranteed minimum returns. Because of its nature, employee benefit plans with a promised return on contributions do not meet the definition of defined contribution plans under IFRS and have to be classified as defined benefit plans. For estimating the liability, management applies an intrinsic value approach.
This method consists in calculating the liability in the statement of financial position as the sum of any individual differences between the mathematical reserves, i.e. the reserves calculated by capitalizing all premiums paid at the interest rate guaranteed by the insurer – also taking account of profit sharing, and the minimum reserves as determined by Article 24 of the WAP. This measurement also considers any balance of financing funds that could be attributed to related plans. Management considers this approach more appropriate than a method based on the Projected Unit Credit (PUC) method that IFRS requires to apply for "pure" defined benefit plans. When applying the PUC method for measuring the liability, the liability should cover the whole career of each participating employee as from the entry date. With an employee benefit plan with a promised return on contributions, the sponsoring employer should ensure that plan members receive at the date of leaving the plan at least the amount of the contributions capitalized at the statutory guaranteed minimum returns applicable as of that date. Each funding gap that might exist at that date has to be immediately funded. As from that date the sponsoring employer no longer has a commitment towards its former employees. This is not the case with "pure" annuity based defined benefit plans. Additionally, the assumptions that are generally applied in the PUC method would result in an important provision at financial reporting date as at each reporting date the funding gap should be provided for. Management believes that the application of the PUC method on Belgian defined contribution plans with return guaranteed by law does not give a true and fair insight in the commitments of the sponsoring employers nor does it provide the reader of the financial statements with relevant information.
The Group's net obligation in respect of defined benefit pension plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods; discounting that amount and deducting the fair value of any plan assets. The calculation is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a potential asset for the Group, the recognized asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. To calculate the present value of economic benefits, consideration is given to any applicable minimum funding requirements.
Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan
assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognised immediately in OCI. The Group determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then net defined benefit liability (asset), taking into account any changes in the net defined benefit liability (asset) during the period as a result of contributions and benefit payments. Net interest expense and other expenses related to defined benefit plans are recognised in profit or loss.
When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognised immediately in profit or loss. The Group recognises gains and losses on the settlement of a defined benefit plan when the settlement occurs.
Termination benefits are recognised as an expense when the Group is demonstrably committed, without realistic possibility or withdrawal, to a formal detailed plan to either terminate employment before the normal retirement date, or to provide termination benefits as a result of an offer made to encourage voluntary redundancy. Termination benefits for voluntary redundancies are recognised as an expense if the Group has made an offer of voluntary redundancy, it is probable that the offer will be accepted, and the number of acceptances can be estimated reliably. If benefits are payable more than 12 months after the reporting date, then they are discounted to their present value.
Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognised for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the obligation can be estimated reliably.
The grant date fair value of options granted to employees is recognised as an employee expense, with a corresponding increase in equity, over the period that the employees unconditionally become entitled to the options. The amounts recognised as an expense is adjusted to reflect the actual number of options for which the related service and nonmarket vesting conditions are expected to be met, such that the amount ultimately recognised as an expense is based on the number of awards that do meet the related service and non-market performance conditions at vesting date.
A provision is recognised in the statement of financial position when the Group has a legal or constructive obligation as result of a past event, that can be estimated reliably and it is probable that an outflow of benefits will be required to settle the obligation. If the effect is material, provisions are determined by discounting the expected future cash flows
at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.
Provisions for restructuring are recognised when the Group has approved a detailed and formal restructuring plan, and the restructuring has either commenced or has been announced publicly. Future operating costs are not provided for.
A provision for onerous contracts is recognised when the expected benefits to be derived by the Group from a contract are lower than the unavoidable cost of meeting its obligations under the contract. The provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. Before a provision is established, the Group recognises any impairment loss on the assets associated with that contract.
The Company and/or its joint ventures generate revenues from charterers for the use of its assets. Assets are chartered using voyage/spot, time or bareboat charters. For voyage/spot charters, a contract is closed in the spot market for the use of an asset for a specific voyage at a contractual agreed rate per metric tonnes transported. For time or bareboat charters, a contract is entered into for the use of an asset for a specific period of time at a contractual agreed daily or monthly rate. Revenue is recognised on a straight line basis over the duration of each voyage, time or bareboat charter.
Revenue from the sale of assets is recognised in the profit or loss statement when the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, there is no continuing management involvement with the assets, and the amount of revenue can be measured reliably. The timing of the transfer of risks and rewards can vary depending on the individual terms of the sales agreement.
Revenue from services rendered is recognised in the profit or loss statement in proportion to the stage of completion of the transaction at the balance sheet date. The stage of completion is assessed by reference to surveys of work performed.
No revenue is recognised if there are significant uncertainties regarding recovery of the consideration due and associated costs.
If the Group acts in the capacity of an agent rather than as a principal in the transaction, then the revenue recognised is the net amount of commission made by the Group.
Rental income from investment property is recognised in the profit or loss statement on a straight-line basis over the term of the lease agreement.
Payments made under operating leases are recognised in the statement of profit or loss on a straight-line basis over the term of the lease. Lease incentives received are recognised as an integral part of the total lease expense, over the term of the lease.
Minimum lease payments made under finance leases are apportioned between the finance expense and the reduction of the outstanding liability. The finance expense is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Contingent lease payments are accounted for in profit or loss except when they relate to future benefits in which case the minimum lease payments are revised over the remaining term of the lease when the lease adjustment is confirmed.
Government grants are recognised initially as deferred income at fair value when there is a reasonable assurance that they will be received and the Group will comply with the conditions associated with the grant and are then recognised in profit and loss as other income on a systematic basis over the useful life of the asset. Grants that compensate the Group for expenses incurred are recognised in profit or loss on a systematic basis in the periods in which the expenses are recognised.
Finance income consists of interests received, dividend income, gains on the disposal of available-for-sale financial assets, changes in the fair value of financial assets at fair value through profit or loss, and gains on hedging instruments that are recognised in profit or loss and exchange rate gains. Interest income is recognised in the profit or loss statement as it accrues, taking into account the effective yield on the asset. Dividend income is recognised in the profit or loss statement on the date that the dividend is declared.
Finance expenses consist of interest expense on borrowings, unwinding of the discount on provisions, changes in the fair value of financial assets at fair value through profit or loss, impairment losses recognised on financial assets, exchange rate losses and losses on hedging instruments that are recognised in profit or loss.
Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognised in profit or loss using the effective interest method. Foreign currency gains and losses are reported on a net basis per currency as either other finance income or finance expense.
Income tax expense consists of current and deferred taxes. Current and deferred tax is recognized in the profit or loss statement, except to the extent it relates to a business combination, or when they relate to items that are recognised directly in equity or in other comprehensive income.
Current tax is the expected tax payable or receivable on the taxable income or loss of the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years. Current tax assets and liabilities are offset only if certain criteria are met.
Deferred tax is recognised on all temporary differences between the carrying amounts of assets and liabilities for reporting purposes and the amounts used for taxation purposes. The following temporary differences are not provided for: the initial recognition of goodwill, the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting, nor taxable profit, and differences relating to investments in subsidiaries, associates and joint arrangements to the extent that the Group is able to control the timing of reversal and it is probable that they will not reverse in the foreseeable future.
Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets are recognised for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that future taxable profits will be available against which they can be utilised.
Deferred tax assets are reduced when it is no longer probable that the related tax benefits will be realized. Unrecognized deferred tax assets are reassessed at each reporting date and recognized to the extent that is has become probable that future taxable profits will be available against which they can be used. Deferred tax assets and liabilities are offset only if certain conditions are met.
Tonnage tax is not accounted for as income taxes in accordance with IAS 12 and is not presented as part of income tax expense in the profit or loss statement but is shown under other operating expenses.
An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group's other components. All operating segments' operating results are reviewed regularly by management to make decisions about resources to be allocated to the segment and assess its performance.
The result for each segment includes all income and expenses generated directly by this segment, as well as part of the income and expenses that can reasonably be allocated to this segment. The assets and liabilities of a segment include the assets and liabilities that belong directly to the segment, and the assets and liabilities that can reasonably be allocated to this segment.
Segment capital expenditure is the total cost incurred during the period to acquire property, plant and equipment and intangible assets other than goodwill.
All intersegment transactions are on an arm's length basis.
The Group presents basic and diluted earnings per share for its ordinary shares. Basic earnings per share is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period, adjusted for treasury shares held. Diluted earnings per share is determined by adjusting the profit and loss attributable to ordinary shareholders and the weighted average of ordinary shares outstanding, adjusted for treasury shares held and for the effects of all dilutive potential ordinary shares such as share options granted to employees.
A discontinued operation is a component of the Group's business, the operations and cash flows of which can be clearly distinguished from the rest of the Group and which represents a separate major line of business or geographical area of operations that has been disposed of or is held for sale; is part of a single co-ordinated plan to dispose of a separate major line of business or geographic area of operations or is a subsidiary acquired exclusively with a view to re-sale. Classification of a discontinued operation occurs upon disposal or when the operation meets the criteria to be classified as held for sale, if earlier. When an operation is classified as a discontinued operation, the comparative profit or loss statement is restated as if the operation had been discontinued from the start of the comparative period.
The Company continues to manage its operations based on internal management reports applying the principles of the proportionate consolidation method previously applied. The reconciliation of the segment reporting to the consolidated statement of financial position and the consolidated statement of profit or loss is presented in note 3. All differences relate to the application of IFRS 11 Joint arrangements, no other differences exist.
The Group has 4 reportable segments. These segments offer different products and services and are managed separately. The LPG segment includes transportation of Liquid Petroleum Gas, ammonia and other petrochemical gases through the Midsize, VLGC and pressurised fleet. The LPG fleet is reported as one segment taken into account the similar characteristics of the fleet (eg nature of the products,...). Transportation of Liquefied Natural Gas is comprised in the LNG segment. The activities in the offshore industry through the supply of services and equipment are allocated to the Offshore segment. The segment Services includes the specialised supporting services to the oil and gas industry such as shipmanagement services, insurance brokerage services and travel agency services. The Company's internal and management structure does not distinguish any geographical segments as the Company's fleet navigates between geographical segments.
The intra-segment revenue mainly relates to management and crew services provided.
Major LNG client Excelerate Energy Llc represents 87% (73% in 2014) of the revenue of the LNG segment revenue and 25% (19% in 2014) of the EXMAR Group revenue in 2015.
| LPG | LNG | Offshore | Services | Eliminations | Total | |
|---|---|---|---|---|---|---|
| INCOME STATEMENT | ||||||
| Revenue third party | 120,351 | 88,671 | 73,324 | 32,030 | 0 | 314,376 |
| Revenue intra-segment | 4,223 | 20 | 1,160 | 16,068 | -21,471 | 0 |
| Total revenue | 124,574 | 88,691 | 74,484 | 48,098 | -21,471 | 314,376 |
| Revenue on property rental third party | 0 | 0 | 0 | 909 | 0 | 909 |
| Revenue on property rental intra-segment | 0 | 0 | 0 | 146 | -146 | 0 |
| Total revenue on property rental | 0 | 0 | 0 | 1,055 | -146 | 909 |
| Capital gain on sale of assets | 0 | 0 | 0 | 110 | 0 | 110 |
| Other operating income | 2,272 | 2 | 1,152 | 719 | 0 | 4,145 |
| Other operating income intra-segment | 0 | 98 | 0 | 397 | -495 | 0 |
| Total other operating income | 2,272 | 100 | 1,152 | 1,116 | -495 | 4,145 |
| Operating income | 126,846 | 88,693 | 75,636 | 49,982 | -21,617 | 319,540 |
| Operating result before depreciation and amorti sation charges (EBITDA) |
51,333 | 39,381 | 8,641 | 126 | 99,481 | |
| Depreciations, amortisations and impairment loss | -33,561 | -18,447 | -4,218 | -3,080 | -59,306 | |
| Operating result (EBIT) | 17,772 | 20,934 | 4,423 | -2,954 | 0 | 40,175 |
| Interest income/expenses (net) | -9,651 | -12,628 | -1,208 | -637 | -24,124 | |
| Other finance income/expenses (net) | 1,311 | -782 | -794 | -1,706 | -1,971 | |
| Share of result of equity accounted investees | ||||||
| (net of income tax) | 0 | 0 | 334 | -640 | -306 | |
| Income tax expense | 7 | -1,623 | -1,721 | -715 | -4,052 | |
| Segment result for the period | 9,439 | 5,901 | 1,034 | -6,652 | 0 | 9,722 |
| Unallocated finance result | 1,523 | |||||
| RESULT FOR THE PERIOD | 11,245 | |||||
| Non-controlling interest | 34 | |||||
| Attributable to owners of the Company | 11,211 |
| LPG | LNG | Offshore | Services | Eliminations | Total | |
|---|---|---|---|---|---|---|
| STATEMENT OF FINANCIAL POSITION | ||||||
| ASSETS | ||||||
| Operational assets | 308,986 | 585,364 | 31,129 | 0 | 925,479 | |
| Other property, plant and equipment | 627 | 13 | 850 | 1,901 | 3,391 | |
| Intangible assets | 0 | 0 | 1,285 | 2,290 | 3,575 | |
| Investment property | 0 | 0 | 0 | 9,558 | 9,558 | |
| Derivative financial instruments | 0 | 51 | 0 | 0 | 51 | |
| Cash and cash equivalents | 56,336 | 40,802 | 15,177 | 50,898 | 163,213 | |
| Total segment assets | 365,949 | 626,230 | 48,441 | 64,647 | 0 | 1,105,267 |
| Unallocated other property plant and equipment | 776 | |||||
| Unallocated equity accounted investees | 5,171 | |||||
| Unallocated available-for-sale financial assets | 3,487 | |||||
| Unallocated trade and other receivables | 67,475 | |||||
| Unallocated cash | 92,357 | |||||
| Other unallocated assets | 993 | |||||
| TOTAL ASSETS | 1,275,526 | |||||
| EQUITY AND LIABILITIES | ||||||
| Non-current borrowings | 186,212 | 372,387 | 5,000 | 118,246 | 681,845 | |
| Current borrowings | 24,162 | 19,057 | 2,000 | 1,333 | 46,552 | |
| Derivative financial instruments | 1,076 | 0 | 198 | 41,229 | 42,503 | |
| Total segment liabilities | 211,450 | 391,444 | 7,198 | 160,808 | 0 | 770,900 |
| Unallocated equity | 404,804 | |||||
| Unallocated trade and other payables | 88,104 | |||||
| Unallocated other liabilities | 11,718 | |||||
| TOTAL EQUITY AND LIABILITIES | 1,275,526 | |||||
| CASH FLOW STATEMENT | ||||||
| Cash from operating activities Cash from investing activities |
44,848 -44,803 |
37,273 -47,134 |
7,093 -18,720 |
7,521 -546 |
96,735 -111,203 |
|
| Cash from financing activities | 51,960 | 39,969 | -2,000 | 37,298 | 127,227 | |
| Unallocated cash flow | -15,874 | |||||
| Dividends paid/received | -25,453 | |||||
| TOTAL CASH FLOW | 52,005 | 30,108 | -13,627 | 44,273 | 0 | 71,432 |
| ADDITIONAL INFORMATION | ||||||
| Capital expenditures | -44,803 | -47,134 | -18,720 | -973 | -111,630 | |
| Proceeds from disposals | 0 | 0 | 0 | 384 | 384 |
| LPG | LNG | Offshore | Services | Eliminations | Total | |
|---|---|---|---|---|---|---|
| INCOME STATEMENT | ||||||
| Revenue third party | 122,783 | 84,041 | 94,216 | 29,118 | 0 | 330,158 |
| Revenue intra-segment | 3,175 | 0 | 1,025 | 16,274 | -20,474 | 0 |
| Total revenue | 125,958 | 84,041 | 95,241 | 45,392 | -20,474 | 330,158 |
| Revenue on property rental third party | 0 | 0 | 0 | 1,067 | 0 | 1,067 |
| Revenue on property rental intra-segment | 0 | 0 | 0 | 185 | -185 | 0 |
| Total revenue on property rental | 0 | 0 | 0 | 1,252 | -185 | 1,067 |
| Capital gain on sale of assets | 37,128 | 0 | 7 | 1,002 | 90 | 38,227 |
| Other operating income | 2,055 | 0 | 2,300 | 778 | 98 | 5,231 |
| Operating income | 165,141 | 84,041 | 97,548 | 48,424 | -20,471 | 374,683 |
| Operating result before depreciation and amorti sation charges (EBITDA) |
74,023 | 41,988 | 12,712 | 3,757 | 0 | 132,480 |
| Depreciations, amortisations and impairment loss | -18,566 | -17,954 | -6,266 | -3,157 | -45,943 | |
| Operating result (EBIT) | 55,457 | 24,034 | 6,446 | 600 | 0 | 86,537 |
| Interest income/expenses (net) | -9,411 | -9,378 | -395 | -5,481 | -24,665 | |
| Other finance income/expenses (net) | 2,174 | 2,482 | 350 | 1,170 | 6,176 | |
| Share of result of equity accounted investees (net of income tax) |
0 | 0 | 203 | -334 | -131 | |
| Income tax expense | -410 | -830 | -841 | -2,040 | -4,121 | |
| Segment result for the period | 47,810 | 16,308 | 5,763 | -6,085 | 0 | 63,796 |
| Unallocated overhead expenses and finance result | 4,458 | |||||
| RESULT FOR THE PERIOD | 68,254 | |||||
| Non-controlling interest | 19 | |||||
| Attributable to owners of the Company | 68,235 |
| LPG | LNG | Offshore | Services | Eliminations | Total | |
|---|---|---|---|---|---|---|
| STATEMENT OF FINANCIAL POSITION | ||||||
| ASSETS | ||||||
| Operational assets | 295,670 | 556,217 | 15,894 | 364 | 868,145 | |
| Other property, plant and equipment | 745 | 48 | 991 | 2,461 | 4,245 | |
| Intangible assets | 0 | 0 | 1,692 | 3,621 | 5,313 | |
| Investment property | 0 | 0 | 0 | 11,063 | 11,063 | |
| Cash and cash equivalents | 40,750 | 33,111 | 17,660 | 54,715 | 146,236 | |
| Total segment assets | 337,165 | 589,376 | 36,237 | 72,224 | 0 | 1,035,002 |
| Unallocated other property plant and equipment | 897 | |||||
| Unallocated available-for-sale financial assets | 8,341 | |||||
| Unallocated trade and other receivables | 69,137 | |||||
| Unallocated cash | 38,881 | |||||
| Other unallocated assets | 7,841 | |||||
| TOTAL ASSETS | 1,160,099 | |||||
| EQUITY AND LIABILITIES | ||||||
| Non-current borrowings | 125,094 | 331,078 | 7,000 | 100,191 | 563,363 | |
| Current borrowings | 33,319 | 19,568 | 2,000 | 1,456 | 56,343 | |
| Derivative financial instruments | 0 | 0 | 327 | 21,709 | 22,036 | |
| Total segment liabilities | 158,413 | 350,646 | 9,327 | 123,356 | 0 | 641,742 |
| Unallocated equity | 429,762 | |||||
| Unallocated trade and other payables | 76,020 | |||||
| Unallocated other liabilities | 12,575 | |||||
| TOTAL EQUITY AND LIABILITIES | 1,160,099 | |||||
| CASH FLOW STATEMENT | ||||||
| Cash from operating activities | 9,437 | 29,184 | 8,939 | 12,507 | 60,067 | |
| Cash from investing activities | 12,424 | -43,314 | -336 | -479 | -31,705 | |
| Cash from financing activities | -19,972 | -106,046 | -2,000 | 110,888 | -17,130 | |
| Unallocated cash flow | -2,521 | |||||
| Dividends paid/received | -38,648 | |||||
| TOTAL CASH FLOW | 1,889 | -120,176 | 6,603 | 122,916 | 0 | -29,937 |
| ADDITIONAL INFORMATION | ||||||
| Capital expenditures | -70,743 | -43,320 | -336 | -2,125 | -116,524 | |
| Proceeds from disposals | 83,167 | 0 | 0 | 3,170 | 86,337 |
The financial information of each operating segment is reviewed by management using the proportionate consolidation method. The below tables reconcile the 31 December 2015 financial information as reported in the consolidated statement of financial position and the consolidated statement of profit or loss (using the equity consolidation method as required under IFRS 11) with the financial information disclosed in note 2 "Segment reporting" (using the proportionate consolidation method).
| Proportionate consolidation | Difference | Equity Consolidation | |
|---|---|---|---|
| RECONCILIATION CONSOLIDATED STATEMENT OF FINANCIAL POSITION AND SEGMENT REPORTING | |||
| 31 DECEMBER 2015 | |||
| Operational assets | 925,479 | -756,488 | 168,991 |
| Other property, plant and equipment | 4,167 | -63 | 4,104 |
| Intangible assets | 3,575 | -1,207 | 2,368 |
| Investment property | 9,558 | -9,558 | 0 |
| Investments in equity accounted investees | 5,171 | 127,645 | 132,816 |
| Borrowings to equity accounted investees | 0 | 376,408 | 376,408 |
| Derivative financial instruments | 51 | -51 | 0 |
| NON-CURRENT ASSETS | 948,001 | -263,314 | 684,687 |
| Available-for-sale financial assets | 3,487 | 0 | 3,487 |
| Trade receivables and other receivables | 67,475 | -2,806 | 64,669 |
| Current tax assets | 993 | -25 | 968 |
| Cash and cash equivalents | 255,570 | -83,269 | 172,301 |
| CURRENT ASSETS | 327,525 | -86,100 | 241,425 |
| EQUITY | 404,804 | 0 | 404,804 |
| Borrowings | 681,845 | -284,420 | 397,425 |
| Employee benefits | 4,445 | 0 | 4,445 |
| Provisions | 2,562 | -40 | 2,522 |
| Derivative financial instruments | 42,503 | -1,274 | 41,229 |
| NON-CURRENT LIABILITIES | 731,355 | -285,734 | 445,621 |
| Borrowings | 46,552 | -31,391 | 15,161 |
| Trade debts and other payables | 88,104 | -32,289 | 55,815 |
| Current tax liability | 4,711 | 0 | 4,711 |
| CURRENT LIABILITIES | 139,367 | -63,680 | 75,687 |
RECONCILIATION CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND SEGMENT REPORTING
| Revenue | 315,285 | -203,065 | 112,220 |
|---|---|---|---|
| Capital gain on sale of assets | 110 | 0 | 110 |
| Other operating income | 4,145 | -884 | 3,261 |
| Goods and services | -160,684 | 79,698 | -80,986 |
| Personnel expenses | -51,550 | 82 | -51,468 |
| Depreciations, amortisations & impairment losses | -59,306 | 54,132 | -5,174 |
| Provisions | -131 | -3 | -134 |
| Capital loss on disposal of assets | -47 | 0 | -47 |
| Other operating expenses | -7,647 | 894 | -6,753 |
| RESULT FROM OPERATING ACTIVITIES | 40,175 | -69,146 | -28,971 |
| Interest income | 345 | 22,692 | 23,037 |
| Interest expenses | -22,571 | 9,619 | -12,952 |
| Other finance income | 7,497 | -151 | 7,346 |
| Other finance expenses | -9,843 | 1,320 | -8,523 |
| RESULT BEFORE INCOME TAX AND SHARE OF RESULT OF EQUITY ACCOUNTED INVESTEES |
15,603 | -35,666 | -20,063 |
| Share of result of equity accounted investees (net of income tax) |
-306 | 35,486 | 35,180 |
| Income tax expense | -4,052 | 180 | -3,872 |
| RESULT FOR THE PERIOD | 11,245 | 0 | 11,245 |
| Proportionate consolidation | Difference | Equity Consolidation | |
|---|---|---|---|
| RECONCILIATION CONSOLIDATED STATEMENT OF FINANCIAL POSITION AND SEGMENT REPORTING | |||
| 31 DECEMBER 2014 | |||
| Operational assets | 868,145 | -783,031 | 85,114 |
| Other property, plant and equipment | 5,142 | -93 | 5,049 |
| Intangible assets | 5,313 | -1,558 | 3,755 |
| Investment property | 11,063 | -11,063 | 0 |
| Investments in equity accounted investees | 5,939 | 166,636 | 172,575 |
| Borrowings to equity accounted investees | 0 | 459,402 | 459,402 |
| Other investments | 195 | -30 | 165 |
| NON-CURRENT ASSETS | 895,797 | -169,737 | 726,060 |
| Available-for-sale financial assets | 8,341 | 0 | 8,341 |
| Trade receivables and other receivables | 69,138 | -8 | 69,130 |
| Current tax assets | 1,706 | -3 | 1,703 |
| Cash and cash equivalents | 185,117 | -72,285 | 112,832 |
| CURRENT ASSETS | 264,302 | -72,296 | 192,006 |
| EQUITY | 429,762 | 0 | 429,762 |
| Borrowings | 563,363 | -171,461 | 391,902 |
| Employee benefits | 6,211 | 0 | 6,211 |
| Provisions | 2,438 | -43 | 2,395 |
| Derivative financial instruments | 22,035 | -326 | 21,709 |
| NON-CURRENT LIABILITIES | 594,047 | -171,830 | 422,217 |
| Borrowings | 56,343 | -41,537 | 14,806 |
| Trade debts and other payables | 76,022 | -28,666 | 47,356 |
| Current tax liability | 3,925 | 0 | 3,925 |
RECONCILIATION CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND SEGMENT REPORTING
| FOR THE YEAR ENDED 31 DECEMBER 2014 | |||
|---|---|---|---|
| Revenue | 331,226 | -197,259 | 133,967 |
| Capital gain on sale of assets | 38,228 | -33,663 | 4,565 |
| Other operating income | 5,231 | -322 | 4,909 |
| Goods and services | -173,227 | 88,428 | -84,799 |
| Personnel expenses | -57,586 | 0 | -57,586 |
| Depreciations, amortisations & impairment losses | -46,463 | 38,724 | -7,739 |
| Provisions | -43 | 43 | 0 |
| Capital loss on disposal of assets | -294 | 0 | -294 |
| Other operating expenses | -10,535 | 1,605 | -8,930 |
| RESULT FROM OPERATING ACTIVITIES | 86,537 | -102,444 | -15,907 |
| Interest income | 281 | 23,045 | 23,326 |
| Interest expenses | -23,271 | 8,509 | -14,762 |
| Other finance income | 12,346 | 1,442 | 13,788 |
| Other finance expenses | -3,387 | -1,652 | -5,039 |
| RESULT BEFORE INCOME TAX AND SHARE OF RESULT OF EQUITY ACCOUNTED INVESTEES |
72,506 | -71,100 | 1,406 |
| Share of result of equity accounted investees (net of income tax) |
-131 | 71,020 | 70,889 |
| Income tax expense | -4,121 | 80 | -4,041 |
| RESULT FOR THE PERIOD | 68,254 | 0 | 68,254 |
(in thousands of USD)
| 2015 | 2014 | |
|---|---|---|
| CAPITAL GAIN ON THE DISPOSAL OF ASSETS | ||
| Profit on the sale of Cessna aircraft | 0 | 3,151 |
| Profit on the sale of building | 0 | 1,282 |
| Other | 110 | 132 |
| 110 | 4,565 |
| 2015 | 2014 | |
|---|---|---|
| OTHER OPERATING INCOME | ||
| Tariff fee OPTI-EX® | 1,128 | 2,207 |
| Other | 2,133 | 2,702 |
| 3,261 | 4,909 |
| 2015 | 2014 | |
|---|---|---|
| OTHER | ||
| Non-income based taxes (*) | -5,932 | -8,825 |
| Other | -821 | -105 |
| -6,753 | -8,930 |
(*) Non-income based taxes mainly comprise a variety of different non-income based taxes paid mainly for our offshore activities. The majority of these taxes is paid for the accomodation barge Wariboko (ex -OTTO5 ) in Nigeria, for which the 2015 amount totaled KUSD 4,140 (2014: KUSD 5,889).
| 2015 | 2014 | |
|---|---|---|
| PERSONNEL EXPENSES | ||
| Salaries and wages | -42,256 | -47,351 |
| Social security charges | -6,822 | -7,922 |
| Employee benefit, defined benefit and defined contribution plan | -1,439 | -1,484 |
| Share option plan | -951 | -829 |
| -51,468 | -57,586 |
The decrease in the personnel expenses can be mainly explainded by the evolution of the EURO/USD exchange rate. Major part of the salaries are paid in EURO. We refer to note 32 which shows the evolution of the exchange rates.
| 2015 | 2014 | |
|---|---|---|
| NUMBER OF PERSONNEL (IN FULL TIME EQUIVALENT) | ||
| Seagoing (*) | 1,557 | 1,403 |
| Staff | 344 | 340 |
| 1,901 | 1,743 |
(*) Almost all seagoing personnel is employed on the assets held or operated by our joint ventures, the related expense is not included in the personnel expenses disclosed above but presented as operating expenses in our equity accounted investees.
| 2015 | 2014 | |
|---|---|---|
| INTEREST INCOME AND EXPENSES | ||
| Interest income | ||
| Interest income on borrowings to equity accounted investees (*) | 22,710 | 23,036 |
| Interest income on cash and cash equivalents | 327 | 290 |
| 23,037 | 23,326 | |
| Interest expenses | ||
| Interest expenses on borrowings | -11,603 | -8,657 |
| Interest expenses on financial instruments | -1,349 | -6,105 |
| -12,952 | -14,762 |
(*) The interest income relates to interests paid by equity accounted investees on the borrowings provided by EXMAR. We refer in this respect to note 14.
| OTHER FINANCE INCOME AND EXPENSES | ||
|---|---|---|
| Other finance income | ||
| Realised exchange gains | 3,604 | 720 |
| Unrealised exchange gains | 3,095 | 5,269 |
| Change in the fair value of financial instruments | 0 | 4,101 |
| Dividend income from non-consolidated companies | 417 | 586 |
| Gain on sale available-for-sale financial assets | 0 | 1,637 |
| Other | 230 | 1,475 |
| 7,346 | 13,788 | |
| Other finance expenses | ||
| Realised exchange losses | -2,827 | -4,105 |
| Foreign currency translation differences reclassified to profit or loss | -1,863 | 0 |
| Unrealised exchange losses | -988 | -67 |
| Banking fees | -1,452 | -6 |
| Other | -1,393 | -861 |
| -8,523 | -5,039 | |
| FINANCE INCOME/EXPENSE RECOGNISED DIRECTLY IN EQUITY | ||
| Equity accounted investees - share of other comprehensive income | -1,627 | -667 |
| Foreign currency translation differences | -2,607 | -3,754 |
| Foreign currency translation differences reclassified to profit or loss | 1,863 | 0 |
| Net change in fair value of cash flow hedges - hedge accounting | -1,598 | -1,002 |
| Available-for-sale financial assets - net change in fair value | -4,854 | -489 |
| Available-for-sale financial assets - reclassified to profit or loss | 0 | -1,411 |
| -8,823 | -7,323 | |
| Recognised in: | ||
| Fair value reserve | -4,854 | -1,900 |
| Translation reserve | -1,456 | -4,516 |
| Hedging reserve | -2,494 | -775 |
| Non-controlling interest | -19 | -132 |
| -8,823 | -7,323 |
| 2015 | 2014 | |
|---|---|---|
| INCOME TAXES | ||
| Income taxes | ||
| Taxes current period | -3,814 | -3,421 |
| Prior year adjustments | -58 | -620 |
| -3,872 | -4,041 | |
| Deferred income taxes | 0 | 0 |
| Total income taxes | -3,872 | -4,041 |
| RECONCILIATION OF THE EFFECTIVE TAX RATE | ||
|---|---|---|
| Result before income tax | 15.117 | 72.295 |
| Tax at domestic tax rate | -33.99% -5,138 |
-33.99% -24,573 |
| Share of profit of equity accounted investees net of tax | 11,958 | 24,095 |
| Increase/decrease resulting from: | ||
| Effects of tax rates in foreign jurisdictions | -2,933 | -1,443 |
| Non-deductible expenses | -1,784 | -1,389 |
| Other income taxes | 847 | -1,419 |
| Current year tax losses/ credits for which no deferred tax asset has been rec ognised |
-6,910 | -3,818 |
| Use of tax credits, tax losses carried forward and other tax benefits | 998 | 5,629 |
| Tax exempt income | -852 | -503 |
| Adjustments in respect of prior years | -58 | -620 |
| -25.62% -3,872 |
-5.59% -4,041 |
(in thousands of USD)
| Operational | Under construction | Total | |
|---|---|---|---|
| COST 2014 | |||
| Balance as per 1 January 2014 | 40,459 | 64,566 | 105,025 |
| Changes during the financial year | |||
| Acquisitions (*) | 20,073 | 20,073 | |
| Disposals | 0 | 0 | |
| Conversion differences | 0 | 0 | |
| Balance as per 31 December 2014 | 40,459 | 84,639 | 125,098 |
| COST 2015 | |||
| Balance as per 1 January 2015 | 40,459 | 84,639 | 125,098 |
| Changes during the financial year | |||
| Acquisitions (*) | 18,700 | 44,008 | 62,708 |
| Disposals | 0 | 0 | 0 |
| Conversion differences | 0 | -30 | -30 |
| Transfer (*) | 0 | 23,180 | 23,180 |
| Balance as per 31 December 2015 | 59,159 | 151,797 | 210,956 |
| DEPRECIATIONS AND IMPAIRMENT LOSSES 2014 | |||
| Balance as per 1 January 2014 | 35,852 | 0 | 35,852 |
| Changes during the financial year | |||
| Depreciations | 4,132 | 4,132 | |
| Disposals | 0 | 0 | |
| Conversion differences | 0 | 0 | |
| Balance as per 31 December 2014 | 39,984 | 0 | 39,984 |
| DEPRECIATIONS AND IMPAIRMENT LOSSES 2015 | |||
| Balance as per 1 January 2015 | 39,984 | 0 | 39,984 |
| Changes during the financial year | |||
| Depreciations | 1,981 | 1,981 | |
| Disposals | 0 | 0 | |
| Conversion differences | 0 | 0 | |
| Balance as per 31 December 2015 | 41,965 | 0 | 41,965 |
| NET BOOK VALUE | |||
| Net book value as per 31 December 2014 | 475 | 84,639 | 85,114 |
| Net book value as per 31 December 2015 | 17,194 | 151,797 | 168,991 |
(*) The bareboat agreement for the accommodation barge Wariboko (ex OTTO 5) contained a purchase option. End February 2015 EXMAR exercised this purchase option and acquired the accommodation barge. The operational assets under construction mainly relate to the payments made for the construction of the Caribbean FLNG, the second FLNG (under option) and the FSRU. Per 31 December 2015 an agreement was concluded whereby the advance payments on the second FLNG can been applied for the capital commitments on the FSRU. The above registered transfer relates to the FSRU which has been reclassified from borrowings to equity accounted investees towards the operational assets under construction. In the second half of 2015, EXMAR acquired full ownership over the FSRU (floating storage and regasification barge).
| Land and buildings | Machinery and equipment |
Furniture and movables |
Total | |
|---|---|---|---|---|
| COST 2014 | ||||
| Balance as per 1 January 2014 | 4,849 | 2,650 | 8,561 | 16,060 |
| Changes during the financial year | ||||
| Acquisitions | 0 | 176 | 1,639 | 1,815 |
| Disposals | 0 | -2,002 | -686 | -2,688 |
| Translation differences | -580 | -186 | -635 | -1,401 |
| Balance as per 31 December 2014 | 4,269 | 638 | 8,879 | 13,786 |
| COST 2015 | ||||
| Balance as per 1 January 2015 | 4,269 | 638 | 8,879 | 13,786 |
| Changes during the financial year | ||||
| Acquisitions | 0 | 291 | 698 | 989 |
| Disposals | 0 | 0 | -1,907 | -1,907 |
| Translation differences | -441 | -23 | -471 | -935 |
| Balance as per 31 December 2015 | 3,828 | 906 | 7,199 | 11,933 |
| DEPRECIATIONS AND IMPAIRMENT LOSSES 2014 | ||||
| Balance as per 1 January 2014 | 3,763 | 1,931 | 5,198 | 10,892 |
| Changes during the financial year | ||||
| Depreciations | 36 | 271 | 1,159 | 1,466 |
| Disposals | 0 | -1,962 | -686 | -2,648 |
| Translation differences | -454 | -77 | -442 | -973 |
| Balance as per 31 December 2014 | 3,345 | 163 | 5,229 | 8,737 |
| DEPRECIATIONS AND IMPAIRMENT LOSSES 2015 | ||||
| Balance as per 1 January 2015 | 3,345 | 163 | 5,229 | 8,737 |
| Changes during the financial year | ||||
| Depreciations | 30 | 275 | 1,060 | 1,365 |
| Disposals | 0 | 0 | -1,586 | -1,586 |
| Translation differences | -346 | -17 | -324 | -687 |
| Balance as per 31 December 2015 | 3,029 | 421 | 4,379 | 7,829 |
| NET BOOK VALUE | ||||
| Net book value as per 31 December 2014 | 924 | 475 | 3,650 | 5,049 |
| Net book value as per 31 December 2015 | 799 | 485 | 2,820 | 4,104 |
| Concessions, patents, licences |
Client portfolio | Total | |
|---|---|---|---|
| COST 2014 | |||
| Balance as per 1 January 2014 | 2,127 | 4,387 | 6,514 |
| Changes during the financial year | |||
| Acquisitions (*) | 1,091 | 4,212 | 5,303 |
| Disposals | -918 | 0 | -918 |
| Translation differences | -256 | 0 | -256 |
| Balance as per 31 December 2014 | 2,044 | 8,599 | 10,643 |
| COST 2015 | |||
| Balance as per 1 January 2015 | 2,044 | 8,599 | 10,643 |
| Changes during the financial year | |||
| Acquisitions | 571 | 0 | 571 |
| Disposals | -17 | 0 | -17 |
| Translation differences | -286 | 0 | -286 |
| Transfer | 307 | -307 | 0 |
| Balance as per 31 December 2015 | 2,619 | 8,292 | 10,911 |
| AMORTISATIONS AND IMPAIRMENTS LOSSES 2014 | |||
| Balance as per 1 January 2014 | 1,601 | 4,387 | 5,988 |
| Changes during the financial year | |||
| Depreciations | 233 | 1,404 | 1,637 |
| Disposals | -501 | 0 | -501 |
| Translation differences | -236 | 0 | -236 |
| Balance as per 31 December 2014 | 1,097 | 5,791 | 6,888 |
| AMORTISATIONS AND IMPAIRMENTS LOSSES 2015 | |||
| Balance as per 1 January 2015 | 1,097 | 5,791 | 6,888 |
| Changes during the financial year | |||
| Depreciations | 424 | 1,404 | 1,828 |
| Disposals | -17 | 0 | -17 |
| Translation differences | -156 | 0 | -156 |
| Transfer | 193 | -193 | 0 |
| Balance as per 31 December 2015 | 1,541 | 7,002 | 8,543 |
| NET BOOK VALUE | |||
| Net book value as per 31 December 2014 | 947 | 2,808 | 3,755 |
| Net book value as per 31 December 2015 | 1,078 | 1,290 | 2,368 |
(*) In 2014, Belgibo acquired 100% of the shares of the company Finserve. Part of the purchase price has been allocated to the client portfolio.
| Balance as per 1 January 2014 | 115,085 |
|---|---|
| Changes during the financial year | |
| Share in the profit/loss(-) | 70,889 |
| Dividends paid | -2,400 |
| Changes in scope (*) | 2,044 |
| Allocation of negative net assets (**) | -12,446 |
| Conversion differences | -895 |
| Changes in other comprehensive income equity accounted investees | 228 |
| Other | 70 |
| Balance as per 31 December 2014 | 172,575 |
| Changes during the financial year | |
| Share in the profit/loss(-) | 35,180 |
| Dividends paid | -88,642 |
| Allocation of negative net assets (**) | 15,459 |
| Conversion differences | -731 |
| Changes in other comprehensive income equity accounted investees | -896 |
| Other | -129 |
| Balance as per 31 December 2015 | 132,816 |
(*) Belgibo acquired in 2013 a share in CMC for an amount of KUSD 1,989, in 2014 this investment qualified as joint-venture and was consolidated using the equity method.
(**) The equity accounted investees for whom the share in the net assets is negative, are allocated to other components of the investor's interest in the equity accounted investee and if the negative net asset exceeds the investor's interest, a corresponding liability is recognized.
EXMAR has analysed the existing joint arrangements and has concluded that the existing joint arrangements are all joint ventures in accordance with IFRS 11 "joint arrangements".
EXMAR has provided guarantees to financial institutions that have provided credit facilities to her equity accounted investees. As of 31 December 2015, an amount of USD 614.8 million was outstanding under such loan agreements, of which EXMAR has guaranteed USD 307.4 million.
Following regulatory requirements or borrowing arrangements, our joint ventures or associates may be restricted to make cash distributions such as dividend payments or repayments of shareholder loans. Under the borrowing arrangements our joint ventures or associates may only make a distribution if no event of default or no breach of any covenant would result from such distribution. Under corporate law, dividend distributions are restricted if the net assets would be less than the amount of paid up capital plus any reserves that cannot be distributed.
For the jointly owned pressurized fleet, internal and external triggers have been identified which indicated that the carrying value of this fleet should be tested for impairment. At the level of the joint ventures, the carrying amount of this fleet was compared to the recoverable amount, which is the higher of the fair value less cost to sell and the value in use. The fair value less costs to sell is based upon the average fair market value as determined by two independent ship brokers. The value in use is based upon the estimated future cash flows discounted to their present value and reflecting current market assessments relating to freight rate estimates, employment and operating expenses. The discounted cash flow model used by management includes cash flows for the remaining lifetime of the jointly owned fleet. Three year cash flow forecasts are estimated by management based upon the past experience as well as current market expectations regarding volumes and freight rates going forward. Freight rates as well as operating expenses subsequent to this three year period are expected to change in line with estimated inflation afterwards. The discount rate used is a weighted average cost of capital of 6,3%. Based on the impairment test performed at the level of the joint ventures, a total impairment loss of USD 14.0 was accounted for and recognized in the share of the results of equity accounted investees.
No other impairment indicators have been identified and no other impairment tests have been performed.
51
| 2015 | 2014 | |
|---|---|---|
| ASSETS | ||
| Interest in joint ventures | 127,645 | 166,636 |
| Interest in associates | 5,171 | 5,939 |
| Borrowings to equity accounted investees | 400,545 | 482,376 |
| 533,361 | 654,951 | |
| LIABILITIES | ||
| Interest in joint ventures | 0 | 0 |
| Interest in associates | 0 | 0 |
| Segment | JV partner | Description activities | |
|---|---|---|---|
| JOINT VENTURES | |||
| Best Progress International Ltd | LPG | WAH KWONG | Owner of 1 pressurized vessel |
| Blackbeard Shipping Ltd | LPG | OTHER | No operating activities |
| Croxford Ltd | LPG | WAH KWONG | Owner of 1 pressurized vessel |
| Estrela Ltd | Offshore | ASS | Owner of 1 accommodation platform |
| Excelerate NV | LNG | EXCELERATE ENERGY | Owner of 1 LNGRV |
| Excelsior BVBA | LNG | TEEKAY | Owner of 1 LNGRV |
| EXMAR Gas Shipping Ltd | LPG | TEEKAY | Owner of 2 midsize vessels |
| EXMAR LPG BVBA | LPG | TEEKAY | Holding company for EXMAR-Teekay LPG activities |
| EXMAR Shipping BVBA | LPG | TEEKAY | Owner of 19 midsize carriers of which 7 under construction, 1 carrier under finance lease |
| Explorer NV | LNG | EXCELERATE ENERGY | Owner of 1 LNGRV |
| Express NV | LNG | EXCELERATE ENERGY | Owner of 1 LNGRV |
| Farnwick Shipping Ltd | LPG | WAH KWONG | Owner of 1 pressurized vessel |
| Fertility Development Co Ltd | LPG | WAH KWONG | Owner of 1 pressurized vessel |
| Glory Transportation Ltd | LPG | WAH KWONG | Owner of 1 pressurized vessel |
| Good Investment Ltd | LPG | TEEKAY | Time-charter agreement 1 VLGC |
| Hallsworth Marine Co. | LPG | WAH KWONG | Owner of 1 pressurized vessel |
| Laurels Carriers Inc | LPG | WAH KWONG | Owner of 1 pressurized vessel |
| Monteriggioni Inc | LNG | MOL | Owner of 1 LNG carrier |
| Reslea NV | Services | CMB | Owner of investment property |
| Solaia Shipping Llc | LNG | TEEKAY | Owner of 1 LNG carrier |
| Splendid Ltd | LPG | OTHER | No operating activities |
| Talmadge Investments Ltd | LPG | WAH KWONG | Owner of 1 pressurized vessel |
| Universal Crown Ltd | LPG | WAH KWONG | Owner of 1 pressurized vessel |
| Vine Navigation Co. | LPG | WAH KWONG | Owner of 1 pressurized vessel |
| Marching Prospects | LNG | OTHER | No operating activities |
| ASSOCIATES | |||
| Bexco NV | Services | Rope manufacturer for marine and offshore industry |
|
| CMC Belgibo BVBA | Services | Provides credit management and credit insurance |
|
| Marpos NV | Services | Provides waste solutions for marine industry |
The financial information presented below represents the IFRS financial statements of the joint ventures or associates and not EXMAR's share of those amounts. For the capital commitments, contingencies and operating lease obligations of the joint ventures, we refer to note 27, 28 and 29.
| 52 JOINT VENTURE PARTNER |
WAH KWONG | TEEKAY | EELP | MOL | |
|---|---|---|---|---|---|
| SEGMENT | LPG | LPG | LNG | LNG | |
| PERCENTAGE OWNERSHIP INTEREST | 50% | 50% | 50% | 50% | |
| 31 DECEMBER 2015 | |||||
| Non-current assets | 134,546 | 572,070 | 578,681 | 96,932 | |
| Current assets | 8,578 | 102,306 | 25,676 | 12,713 | |
| of which Cash and cash equivalents | 5,824 | 74,014 | 15,810 | 8,041 | |
| Non-current liabilities | 152,191 | 511,000 | 585,821 | 125,563 | |
| of which Borrowings | 152,191 | 508,848 | 585,820 | 125,563 | |
| Current liabilities | 14,197 | 49,979 | 67,079 | 2,939 | |
| of which Borrowings | 8,983 | 39,339 | 46,109 | 0 | |
| Revenue | 23,648 | 173,247 | 97,682 | 22,213 | |
| Depreciations, amortizations & impairment losses | 7,723 | 30,942 | 21,120 | 5,407 | |
| Interest income | 9 | 968 | 18 | 0 | |
| Interest expense | 1,759 | 11,716 | 35,016 | 1,728 | |
| Income tax expense | 0 | 55 | 0 | 0 | |
| Result for the period | -30,788 | 64,826 | 4,391 | 7,413 | |
| Other comprehensive result for the period | 0 | -2,152 | 0 | 0 | |
| TOTAL COMPREHENSIVE RESULT FOR THE PERIOD | -30,788 | 62,674 | 4,391 | 7,413 | |
| Net assets (100%) | -23,264 | 113,397 | -48,543 | -18,857 | |
| EXMAR's share of net assets | -11,632 | 56,699 | -24,272 | -9,429 | |
| Share in the net assets of equity accounted investees at 1 January 2015 | 3,762 | 80,490 | -26,467 | -13,135 | |
| Share in total comprehensive income | -15,394 | 31,337 | 2,196 | 3,707 | |
| Dividends paid/received | 0 | -55,000 | 0 | 0 | |
| Other | 0 | -128 | 0 | 0 | |
| SHARE IN THE NET ASSETS OF EQUITY ACCOUNTED INVESTEES AT 31 DECEMBER 2015 |
-11,632 | 56,699 | -24,272 | -9,429 |
(*) Part of the allocation of the negative net assets has been allocated to Teekay LNG.
| 31 DECEMBER 2014 | |||||
|---|---|---|---|---|---|
| Non-current assets | 169,729 | 518,677 | 599,801 | 102,339 | |
| Current assets | 10,276 | 145,722 | 20,674 | 11,339 | |
| of which Cash and cash equivalents | 9,090 | 55,393 | 13,107 | 9,443 | |
| Non-current liabilities | 159,764 | 435,169 | 613,224 | 137,563 | |
| of which Borrowings | 159,764 | 435,162 | 613,224 | 137,563 | |
| Current liabilities | 12,717 | 68,251 | 60,185 | 2,385 | |
| of which Borrowings | 8,983 | 57,656 | 44,079 | 0 | |
| Revenue | 39,076 | 158,077 | 87,104 | 22,850 | |
| Depreciations, amortizations & impairment losses | 7,463 | 29,233 | 21,120 | 5,407 | |
| Interest income | 10 | 1,005 | 24 | 0 | |
| Interest expense | 1,906 | 11,180 | 35,976 | 2,560 | |
| Income tax expense | 0 | -4 | 0 | 0 | |
| Result for the period | -196 | 105,784 | 3,246 | 6,099 | |
| Other comprehensive result for the period | 0 | 0 | 0 | 0 | |
| TOTAL COMPREHENSIVE RESULT FOR THE PERIOD | -196 | 105,784 | 3,246 | 6,099 | |
| Net assets (100%) | 7,524 | 160,979 | -52,934 | -26,270 | |
| EXMAR's share of net assets | 3,762 | 80,490 | -26,467 | -13,135 | |
| Share in the net assets of equity accounted investees at 1 January 2014 | 3,857 | 27,560 | -28,121 | -16,184 | |
| Equity accounted investees entered in consolidation scope | 0 | 0 | 0 | 0 | |
| Share in total comprehensive income | -98 | 52,892 | 1,623 | 3,049 | |
| Dividends paid/received | 0 | 0 | 0 | 0 | |
| Other | 2 | 38 | 31 | 0 | |
| SHARE IN THE NET ASSETS OF EQUITY ACCOUNTED INVESTEES AT 31 DECEMBER 2014 |
3,762 | 80,490 | -26,467 | -13,135 |
| TOTAL | OTHER | ASSOCIATES | CMB | ASS | TEEKAY | ||
|---|---|---|---|---|---|---|---|
| Services Marpos |
Services CMC Belgibo |
Services Bexco |
Services | Offshore | LNG | ||
| Allocation negative net assets |
50% | 45% | 49,90% | 45% | 50% | 50% | 50% |
| 1,628,754 | 0 | 159 | 1,041 | 4,133 | 19,287 | 30,283 | 191,622 |
| 218,687 | 136 | 473 | 1,270 | 13,803 | 2,824 | 5,642 | 45,266 |
| 153,317 | 0 | 215 | 964 | 151 | 181 | 5,605 | 42,512 |
| 1,555,444 | 4 | 0 | 4 | 752 | 12,132 | 10,397 | 157,580 |
| 1,552,699 | 4 | 0 | 0 | 698 | 12,075 | 10,000 | 157,500 |
| 165,285 | 0 | 323 | 96 | 8,432 | 2,507 | 4,195 | 15,538 |
| 0 | 0 | 0 | 2,766 | 1,709 | 4,000 | 8,750 | |
| 0 | 1,231 | 1,201 | 22,990 | 2,030 | 14,803 | 49,845 | |
| 0 | 73 | 1,041 | 1,230 | 1,050 | 2,969 | 10,353 | |
| 1 | 1 | 9 | 0 | 1 | 4 | 5 | |
| 0 | 3 | 9 | 153 | 342 | 677 | 6,748 | |
| 0 | 1 | 86 | 1 | 306 | 0 | 0 | |
| 13 | -278 | -1,035 | 743 | 361 | 3,276 | 26,466 | |
| 0 | 0 | 0 | 0 | 0 | 257 | 101 | |
| 13 | -278 | -1,035 | 743 | 361 | 3,533 | 26,567 | |
| 132 | 309 | 2,211 | 8,752 | 7,472 | 21,333 | 63,770 | |
| 66 | 139 | 1,103 | 3,931 | 3,736 | 10,667 | 31,885 | |
| 56,959 | 201 | 291 | 1,685 | 3,963 | 3,825 | 10,900 | 50,101 |
| 7 | -125 | -514 | 334 | 181 | 1,767 | 10,792 | |
| -142 | 0 | 0 | 0 | 0 | -2,000 | -31,500 | |
| 12,966 (*) | 0 | -27 | -68 | -366 | -270 | 0 | 2,492 |
| 69,925 | 66 | 139 | 1,103 | 3,931 | 3,736 | 10,667 | 31,885 |
| 1,649,512 | 0 | 247 | 2,067 | 4,954 | 22,362 | 33,950 | 195,386 | |
|---|---|---|---|---|---|---|---|---|
| 253,726 | 433 | 758 | 1,494 | 12,043 | 3,691 | 9,998 | 37,298 | |
| 131,061 | 295 | 452 | 848 | 557 | 499 | 9,944 | 31,433 | |
| 1,429,795 | 0 | 0 | 3 | 740 | 15,439 | 14,653 | 53,240 | |
| 1,428,933 | 0 | 0 | 0 | 688 | 15,372 | 14,000 | 53,160 | |
| 241,242 | 31 | 358 | 182 | 7,432 | 2,964 | 7,495 | 79,242 | |
| 129,510 | 0 | 0 | 0 | 2,357 | 1,785 | 4,000 | 10,650 | |
| 430,331 | 0 | 1,271 | 1,632 | 41,056 | 2,440 | 14,296 | 62,529 | |
| 79,007 | 0 | 85 | 1,047 | 1,274 | 1,051 | 2,969 | 9,358 | |
| 1,061 | 1 | 2 | 16 | 0 | 1 | 2 | 0 | |
| 56,556 | 0 | 3 | 1 | 159 | 612 | 847 | 3,312 | |
| 228 | 0 | 0 | 69 | 1 | 162 | 0 | 0 | |
| 141,810 | 312 | -115 | -566 | 452 | 587 | 3,074 | 23,133 | |
| 457 | 0 | 0 | 0 | 0 | 147 | 310 | 0 | |
| 142,267 | 312 | -115 | -566 | 452 | 734 | 3,384 | 23,133 | |
| 402 | 647 | 3,376 | 8,825 | 7,650 | 21,800 | 100,202 | ||
| 201 | 291 | 1,685 | 3,963 | 3,825 | 10,900 | 50,101 | ||
| 69,405 115,085 |
445 | 385 | 0 | 4,206 | 3,789 | 11,208 | 38,535 | |
| 2,044 | 0 | 0 | 2,044 | 0 | 0 | 0 | 0 | |
| 71,117 | 156 | -52 | -282 | 203 | 367 | 1,692 | 11,567 | |
| -2,400 | -400 | 0 | 0 | 0 | 0 | -2,000 | 0 | |
| -12,446 -13,272 |
0 | -42 | -77 | -446 | -331 | 0 | -1 | |
| 56,959 172,575 |
201 | 291 | 1,685 | 3,963 | 3,825 | 10,900 | 50,101 | |
(in thousands of USD)
| LPG | LNG | Offshore | Services | Total | |
|---|---|---|---|---|---|
| BORROWINGS TO EQUITY ACCOUNTED INVESTEES 2014 | |||||
| As per 1 January | 104,271 | 307,446 | 242 | 0 | 411,959 |
| New loans and borrowings | 2,592 | 69,222 | 0 | 71,814 | |
| Repayments | 0 | -13,601 | -242 | -13,843 | |
| Change in allocated negative net assets (*) | 16,365 | -3,919 | 0 | 12,446 | |
| AS OF 31 DECEMBER | 123,228 | 359,148 | 0 | 0 | 482,376 |
| More than 1 year | 123,228 | 336,174 | 0 | 0 | 459,402 |
| Less than 1 year | 0 | 22,974 | 0 | 0 | 22,974 |
| BORROWINGS TO EQUITY ACCOUNTED INVESTEES 2015 | |||||
| As per 1 January | 123,228 | 359,148 | 0 | 0 | 482,376 |
| New loans and borrowings | 1,262 | 250 | 1,512 | ||
| Repayments | -25,500 | -19,815 | -45,315 | ||
| Change in allocated negative net assets (*) | -15,880 | 421 | -15,459 | ||
| Capitalised interests | 523 | 88 | 611 | ||
| Other (**) | 0 | -23,180 | -23,180 | ||
| AS PER 31 DECEMBER | 83,633 | 316,912 | 0 | 0 | 400,545 |
| More than 1 year | 83,633 | 292,775 | 0 | 0 | 376,408 |
| Less than 1 year | 0 | 24,137 | 0 | 0 | 24,137 |
(*) The equity accounted investees for whom the share in the net assets is negative, are allocated to other components of the investor's interest in the equity accounted investee and if the negative net asset exceeds the investor's interest, a corresponding liability is recognized.
(**) The other movement relates to the FSRU which has been reclassified from the borrowings to equity accounted investees towards the operational assets under construction. In the second half of 2015, EXMAR acquired full ownership over the FSRU (floating storage and regasification barge).
The activities and assets of certain of our joint ventures are financed by shareholder borrowings made by the Company to the respective joint ventures. The current portion of such borrowings and the working capital facilities are presented as other receivables.
In 2004, Excelerate NV issued 258 subordinated bonds each to EXMAR and Taurus Charitable Income Trust, an affiliated company of Excelerate Energy. The bonds bear a fixed interest rate. Each bond represents an amount of USD 398,400. The bonds mature in 2018. EXMAR is entitled to a first priority mortgage on the vessel Excelerate but passed on the benefit of such first priority mortgage to its Lenders. The bonds include mandatory repayment clauses upon the occurrence of certain contingent events, as well as voluntary repayment options. Both shareholders of Excelerate NV have also extended a credit facility up to USD 8 million to finance Excelerate NV's working capital.
EXMAR granted two shareholder loans to Explorer NV and Express NV, respectively in 2008 and 2009. The shareholder loans are split into a variable interest rate bearing loan and a fixed interest rate bearing loan. These loans are repaid over a period of 25 years in quarterly installments. The shareholder loans include mandatory repayment clauses based on the occurrence of certain contingent events, including the sale or total loss of the vessels.
EXMAR NV and Excelerate Energy LP also agreed a facility up to USD 15 million to finance the working capital of Explorer NV.
Both JV partners have equally granted shareholder loans to all companies at the moment of the signing of the building contracts of the respective vessels (2007). Repayment occurs based on availability of cash.
Both shareholders have granted shareholder loans to EXMAR LPG in 2013. Repayment occurs based on availability of cash and only if such repayment would not result in a breach of the covenants applicable on the bank borrowings to EXMAR LPG. During 2015, a repayment of KUSD 50.000 occured in respect of these shareholders loans.
Both shareholders have granted shareholder loans to Monteriggioni Inc in 2001. Repayment occurs based on availability of cash.
| 2015 | 2014 | |
|---|---|---|
| SHARES AVAILABLE-FOR-SALE | ||
| Unquoted shares (*) | 1,526 | 1,990 |
| Quoted shares (**) | 1,961 | 6,351 |
| 3,487 | 8,341 |
(*) The unquoted shares include the 149 shares of Sibelco, which were acquired during 2014.
(**) The quoted shares include the 149,089 shares of Teekay (ISIN code MHY8564M1057) quoted at USD 13.15 (2014: 149,089 shares quoted at USD 42.6).
| 2015 | 2014 | |
|---|---|---|
| TRADE AND OTHER RECEIVABLES | ||
| Trade receivables | 23,970 | 29,451 |
| Cash guarantees | 270 | 769 |
| Other receivables | 30,276 | 29,598 |
| Deferred charges (*) | 9,145 | 4,464 |
| Accrued income (*) | 1,008 | 4,848 |
| 64,669 | 69,130 | |
| OF WHICH FINANCIAL ASSETS (NOTE 26) | 51,788 | 57,857 |
(*) "Deferred charges" comprise expenses already invoiced relating to the next accounting year, e.g. hire, insurances, commissions, bunkers,... "Accrued income" comprises uninvoiced revenue related to the current accounting period, e.g. interests,...
The Group's exposure to credit and currency risks and impairment losses related to trade and other receivables is disclosed in note 26.
(in thousands of USD)
| Assets | Liabilities | Assets | Liabilities | |
|---|---|---|---|---|
| 31 December 2015 | 31 December 2014 | |||
| DEFERRED TAX ASSETS AND LIABILITIES IN DETAIL | ||||
| Provisions | 613 | 596 | ||
| Employee benefits | 4,767 | 5,089 | ||
| Tax assets/liabilities (-) | 5,380 | 0 | 5,685 | 0 |
| Set off of tax assets/liabilities | 0 | 0 | ||
| Tax assets not recognised (*) | -5,380 | -5,685 | ||
| NET TAX ASSET / LIABILITY (-) | 0 | 0 | 0 | 0 |
| DEFERRED TAX ASSETS AND LIABILITIES NOT RECOGNISED | ||||
| Deductible temporary differences (33.99%) | 5,380 | 5,685 | ||
| Unused tax losses and investment tax credits (**) | 57,109 | 70,575 | ||
| Net deferred tax assets/liabilities not recognised (*) | 62,489 | 0 | 76,260 | 0 |
(*) These deferred tax assets have not been recognised because no taxable profits are to be expected in the coming years based on entity level business plans.
(**) The unused tax losses and the main part of the investment tax credits do not expire in time.
The decrease in the amount compared to 2014 can be mainly explained by the evolution of the EURO/ USD exchange rate. We refer to note 32 which shows the evolution of the exchange rates.
| 2015 | 2014 | |
|---|---|---|
| CASH AND CASH EQUIVALENTS | ||
| Bank | 128,210 | 87,219 |
| Cash in hand | 158 | 206 |
| Short-term deposits (*) | 43,933 | 25,407 |
| NET CASH AND CASH EQUIVALENTS | 172,301 | 112,832 |
(*) Includes reserved cash related to credit facilities and financial instrument agreements for an amount of KUSD 42,332 for 2015 (2014: KUSD 24,278).
| 2015 | 2014 | |
|---|---|---|
| NUMBER OF ORDINARY SHARES | ||
| Issued shares as per 1 January | 59,500,000 | 59,500,000 |
| Issued shares as per 31 December - paid in full | 59,500,000 | 59,500,000 |
The issued shares do not mention a nominal value. The holders of ordinary shares are entitled to dividends and are entitled to one vote per share during the General Shareholders' Meetings of the Company.
In September 2015 the Board of Directors approved the payment of an interim dividend of 0.10 EUR per share. The proposed dividend for 2014 of 0.3 EUR per share was approved by the General Shareholders' Meeting in May 2015. Both dividends were recognised as a distribution to owners of the Company during 2015.
| 2015 | 2014 | |
|---|---|---|
| DIVIDEND PAID | ||
| Gross interim dividend/share (in EUR) | 0,10 | 0,20 |
| Rate used: | 1,1215 | 1,3188 |
| Interim dividend payment (in thousands of USD) | 6,370 | 15,011 |
| Dividend payment (in thousands of USD) | 19,083 | 23,637 |
| TOTAL DISTRIBUTION TO OWNERS OF THE COMPANY (IN THOUSANDS OF USD) |
25,453 | 38,648 |
After the balance sheet date the Board of Directors made a final dividend proposal for 2015 of 0.2 EUR per share (0.3 EUR per share of which 0.10 EUR per share was paid as interim dividend). The proposal for a final dividend has not yet been approved by the General Shareholders' Meeting, and has not been processed in the statement of financial position.
| 2015 | 2014 | |
|---|---|---|
| PROPOSED DIVIDEND | ||
| Gross dividend/share (in EUR) | 0.20 | 0.30 |
| Rate used: | 1.0887 | 1.2141 |
| Proposed dividend payment (in thousands of USD) | 12,956 | 21,672 |
The reserve for treasury shares comprises the cost of the Company's shares held by the Group.
| 2015 | 2014 | |
|---|---|---|
| TREASURY SHARES | ||
| Number of treasury shares held as of 31 December (*) | 2,774,133 | 2,481,256 |
| Bookvalue of treasury shares held (in thousands USD) | 54,123 | 53,769 |
| Average cost price per share (in EUR) - historical value | 14.1507 | 15.3537 |
(*) 253,101 treasury shares have been sold during 2015 for the share options exercised during the year. In addition, 545,978 new treasury shares have been purchased.
The translation reserve comprises all foreign exchange differences arising from the translation of the financial statements of foreign operations and the financial statements of consolidated companies not reporting in USD as functional currency. During 2015, part of the currency translation difference has been reclassified to the profit or loss statement as a consequence of distributions.
The fair value reserve includes the cumulative net change in the fair value of available-for-sale financial assets until derecognition.
The hedging reserve comprises the effective portion of the cumulative net change in the fair value of cash flow hedging instruments related to the hedged transactions that have not yet occurred.
In 2014 EXMAR entered into a cross currency interest rate swap (CCIRS) to cover its exposure on the issued bond in NOK. In July 2015, a new CCIRS was closed on the additional amount of NOK 300 million that has been issued in 2015 (see also note 21 in this respect).
| 2015 | 2014 | |
|---|---|---|
| BASIC EARNINGS PER SHARE | ||
| Result for the period (in USD) | 11,211,371 | 68,235,236 |
| Issued ordinary shares as per 31 December | 59,500,000 | 59,500,000 |
| Effect of treasury shares | -2,729,739 | -2,623,400 |
| Weighted average number of ordinary shares as per 31 December | 56,770,261 | 56,876,600 |
| Basic earnings per share in USD | 0.20 | 1.20 |
| DILUTED EARNINGS PER SHARE | ||
| Result for the period (in USD) | 11,211,371 | 68,235,236 |
| Weighted average number of ordinary shares as per 31 December | 56,770,261 | 56,876,600 |
| Average closing rate of one ordinary share during the year (in EUR) (a) |
9.58 | 11.50 |
| Average exercise price for shares under option during the year (in EUR) (b) |
5.12 | 6.59 |
| - Option plan 1: EUR 6.12 for 67,186 shares under option | ||
| - Option plan 5: EUR 5.92 for 102,417 shares under option | ||
| - Option plan 6: EUR 4.85 for 194,590 shares under option | ||
| - Option plan 7: EUR 4.71 for 234,478 shares under option | ||
| Number of shares under option (c) |
598,671 | 1,162,396 |
| Number of shares that would have been issued at average market price: (c*b) / a | -319,958 | -666,103 |
| Weighted average number of ordinary shares during the year including options | 57,048,974 | 57,372,893 |
| Diluted earnings per share (in USD) (*) | 0.20 | 1.19 |
(*) As option plan 2,3, 4, 8, 9 and 10 are anti-dilutive as per 31 December 2015, they are not included in the calculation of the diluted earnings per share.
| Bank loans | Other loans | Total | |
|---|---|---|---|
| BORROWINGS AS PER 31 DECEMBER 2014 | |||
| As of 1 January 2014 | 326,636 | 0 | 326,636 |
| New loans | 2,400 | 111,568 | 113,968 |
| Scheduled repayments | -13,869 | 0 | -13,869 |
| Change in consolidation scope | 121 | 0 | 121 |
| Amortized transaction costs | 0 | 374 | 374 |
| Translation differences | 0 | -20,522 | -20,522 |
| AS OF 31 DECEMBER 2014 | 315,288 | 91,420 | 406,708 |
| More than 1 year | 300,482 | 91,420 | 391,902 |
| Less than 1 year | 14,806 | 0 | 14,806 |
| AS OF 31 DECEMBER 2014 | 315,288 | 91,420 | 406,708 |
| LPG | 0 | 0 | 0 |
| LNG | 313,641 | 0 | 313,641 |
| Offshore | 0 | 0 | 0 |
| Services | 1,647 | 91,420 | 93,067 |
| AS OF 31 DECEMBER 2014 | 315,288 | 91,420 | 406,708 |
| Bank loans | Other loans | Total | |
|---|---|---|---|
| BORROWINGS AS PER 31 DECEMBER 2015 | |||
| As of 1 January 2015 | 315,288 | 91,420 | 406,708 |
| New loans | 500 | 39,520 | 40,020 |
| Scheduled repayments | -14,774 | 0 | -14,774 |
| Amortized transaction costs | 0 | 992 | 992 |
| Translation differences | -143 | -20,217 | -20,360 |
| AS OF 31 DECEMBER 2015 | 300,871 | 111,715 | 412,586 |
| More than 1 year | 285,710 | 111,715 | 397,425 |
| Less than 1 year | 15,161 | 0 | 15,161 |
| AS OF 31 DECEMBER 2015 | 300,871 | 111,715 | 412,586 |
| LPG | 0 | 0 | 0 |
| LNG | 299,898 | 0 | 299,898 |
| Offshore | 0 | 0 | 0 |
| Services | 973 | 111,715 | 112,688 |
| AS OF 31 DECEMBER 2015 | 300,871 | 111,715 | 412,586 |
| 2015 | 2014 | |
|---|---|---|
| UNUSED CREDIT FACILITIES | ||
| Unused credit facilities | 23,135 | 25,496 |
| 23,135 | 25,496 |
The bank loans mainly relate to the Excelerate facility and the Explorer/Express facility.
In 2005, EXMAR entered into a secured loan facility (the "Excelerate Facility") for the acquisition of certain bonds issued or to be issued by Excelerate NV to assist it in financing the construction and acquisition of the vessel Excelerate. The Excelerate Facility consists of three tranches. A first tranche of up to USD 85 million that bears interest at an annual fixed rate of 5.515%. The principal amount is repayable in 24 consecutive equal semi-annual installments of approximately USD 3.5 million, ending on 20 October 2018. The other two tranches of respectively USD 22 million and USD 19 million which are referred to collectively as the "commercial loans", bear interest at an annual rate of three-month LIBOR plus 1% at all times when the Excelerate is under an acceptable charter and an annual rate of three-month LIBOR plus 1.1% at all other times. The principal amount of the commercial loans is repayable in full at maturity on 20 October 2018. EXMAR may prepay principal amounts owed pursuant to the Excelerate Facility at any time, with 30 days' written notice, without any penalty or premium. The Excelerate Facility includes mandatory repayment clauses based on the occurrence of certain contingent events, including the sale or total loss of the Excelerate.
In May 2006, EXMAR entered into a secured loan facilitiy totaling USD 280 million, consisting of two tranches of USD 140 million each, for the financing of the Explorer and the Express (the "Explorer & Express Facility"). The facility bears interest at an annual floating rate of three-month LIBOR plus 0.9%. The principal amount of the Explorer & Express Facility is repayable in 48 quarterly installments ranging from approximately USD 0.62 million to USD 1.2 million for each tranche with a balloon payment of USD 98.7 million for each tranche payable at the maturity date of the loan. The maturity dates of the facility are April 2020 and April 2021 for Explorer and Express, respectively. EXMAR may prepay principal amounts owed pursuant to the Explorer & Express Facility at any time, with 14 days' written notice, without any penalty or premium. The Explorer and Express Facility include mandatory repayment clauses based on the occurrence of certain contingent events, including the sale or total loss of the vessels.
The other loans relate to a NOK 700 million senior unsecured bond issue (initially equivalent to USD 114 million). This bond was closed in July 2014 by EXMAR Netherlands BV ("issuer"), a 100% subsidiary of EXMAR NV. The bonds shall be repaid for the full amount on the final maturity date, being 7 July 2017. The bonds bear interest at a floating rate of three months NIBOR plus a margin of 4.50%, the interest is payable on a quarterly basis. All obligations of the issuer are guaranteed by EXMAR NV ("guarantor"). The bond trustee (on behalf of the bondholders), may make a demand to the guarantor for immediate payment of any due and unpaid amount. EXMAR NV has to maintain direct or indirect a 100% ownership in the issuer. A cross currency interest rate swap (CCIRS) has been closed in this respect. We refer to note 26 for more information. During 2015, an additional amount of NOK 300 million has been issued (second tranche on the original NOK 700 million bond). This additional drawdown is presented in the above roll forward schedule as an amount of KUSD 39,520, composed of KUSD 40,128 original drawdown reduced with KUSD 608 banking fees and legal fees paid in respect of the drawdown. The total nominal amount outstanding amounts to NOK 1,000 million with maturity date in July 2017. InJuly 2015, a new CCIRS was closed on the additional amount of NOK 300 million that has been issued in 2015. The translation differences presented in the above roll forward schedule relate to the translation of the NOK bond in USD which is fully hedged with the cross currency intrest rate swaps.
On 23 June 2015, EXMAR signed a financing agreement with the Industrial and Commercial Bank of China ltd (ICBC). ICBC will provide financing to EXMAR for the FLNG project for a total amount of USD 198,4 million, subject to conditions as discussed in note 28. As per 31 December 2015 no financing has been drawn yet under the new facility. Deferred financing costs in relation to this facility amount to USD 5,5 million which are capitalised on the balance sheet per December 31, 2015 and which will be amortised over the term of the loan.
In general, the borrowings held by EXMAR and its equity accounted investees are secured by a mortgage on the underlying assets owned by the equity accounted investees. Furthermore, different pledges and other types of guarantees exist to secure the borrowings. In addition, dividend restrictions may exist. Also different debt covenants exist that require compliance with certain financial ratio's. In case of non compliance with these convenants, early repayment of related borrowings might occur. As of 31 December 2015 EXMAR was compliant with all covenants.
The Group established a share option plan program that entitles certain employees to register for a number of shares. The share options are only excersiable after a period of three years and for employees still in service after this three year period. Each share option entitles the holder of the option to one EXMAR share.
The fair value of services received in return for share options granted are measured by reference to the exercise price of the granted share options. The estimated fair value of the services received is measured based on a binomial lattice model. The contractual life of the option is used as an input into this model.
| Plan 10 (****) | Plan 9 | Plan 8 | Plan 7 | Plan 6 | Plan 5 | Plan 4 | Plan 3 | Plan 2 | Plan 1 | |
|---|---|---|---|---|---|---|---|---|---|---|
| GRANT DATE FAIR VALUE OF SHARE OPTIONS AND ASSUMPTIONS AT INCEPTION | ||||||||||
| Number of options out standing at year-end (*) |
415,250 | 425,350 | 517,600 | 234,478 | 194,590 | 102,417 | 225,975 | 401,918 | 312,705 | 67,186 |
| Fair value at grant date (in EUR) |
3.21 | 2.32 | 3.36 | 1.35 | 2.29 | 1.63 | 5.64 | 7.38 | 5.25 | 2.50 |
| Share price (in EUR) | 9.62 | 10.00 | 11.33 | 5.28 | 5.75 | 7.85 | 16.80 | 23.84 | 18.47 | 9.24 |
| Exercise price at inception (in EUR) (*) |
9.62 | 10.54 | 10.54 | 4.71 | 4.85 | 5.92 | 14.64 | 15.96 | 10.73 | 6.12 |
| Expected volatility (**) | 40.70% | 30.60% | 31.40% | 39.70% | 38.16% | 30.43% | 25.78% | 31.10% | 24.50% | 24.21% |
| Option life at inception (***) | 8 years | 8 years | 8 years | 8 years | 8 years | 8 years | 8 years | 8 years | 8 years | 8 years |
| Maturity date | 2023 | 2022 | 2021 | 2018 | 2017 | 2016 | 2020 | 2019 | 2018 | 2017 |
| Expected dividends | 0.3 €/y | 0.3 €/y | 0.4 €/y | 0.4 €/y | 0.49 €/y | 0.43 €/y | 0.50 €/y | 0.66 €/y | 0.66 €/y | 0.19 €/y |
| Risk-free interest rate | 0.53% | 0.62% | 1.87% | 3.61% | 3.22% | 3.75% | 4.29% | 3.85% | 3.90% | 3.27% |
(*) The number of options granted and the exercise prices for option plans have been adjusted due to the dilutive effect of the capital increase (adjustment ratio of 0.794) of November 2009, extraordinary dividend distributions (adjustment ratio of 0.929) of May 2012 and extraordinary dividend distributions (adjustment ratio of 0.9364) of September 2013. The number of options granted and the exercise price mentioned above reflect the adjusted amounts.
(**) The expected volatility is based on the historical volatility (calculated based on the weighted average remaining life of the share options), adjusted for any expected changes to future volatility due to publicly available information.
(***) The Board of Directors of 23 March 2009 decided to extend the exercise period for option plans 1 - 4 by 5 years, in virtue of the decision by the Belgian Government to extend the Act of 26 March 1999 regarding stock options. At modification date additional fair value calculations were made based on the remaining and extented life time of the options.
(****) The Board of Directors of 3 December 2015 agreed to launch a new stock option plan (plan 10) to certain employees. Based on the average price of the EXMAR share over the last 30 days, the option price amounts to EUR 9.62. A total of 415,250 options were accepted at the closing date of the offer on 15 February 2016. The related employee expense is recognized as from the acceptance date of the offer.
| 2015 | 2014 | |||
|---|---|---|---|---|
| number of options |
weighted average exercise price |
number of options |
weighted average exercise price |
|
| RECONCILIATION OF OUTSTANDING SHARE OPTIONS | ||||
| Outstanding at 1 January | 2,823,770 | 10.05 | 2,623,593 | 9.58 |
| New options granted | 421,454 | 9.55 | 469,420 | 10.61 |
| Changes during the year | ||||
| Options exercised | -257,224 | 4.93 | -235,934 | 5.23 |
| Options forfeited | -90,531 | 11.34 | -33,309 | 15.48 |
| Outstanding at 31 December | 2,897,469 | 10.39 | 2,823,770 | 10.05 |
| EXERCISABLE AT 31 DECEMBER | 1,539,269 | 10.49 | 1,813,320 | 9.78 |
| 2015 | 2014 | ||
|---|---|---|---|
| SHARE OPTIONS | |||
| Total number of share options outstanding | 2,897,469 | 2,823,770 | |
| Included in personnel expenses | option plan 8 | 557 | 829 |
| option plan 9 | 394 | 0 | |
| 951 | 829 |
The Group provides pension benefits for most of its employees, either directly or through a contribution to an independent fund. The pension benefits for management staff employed before 1 January 2008 are provided under a defined benefit plan. This plan is a defined benefit plan organized as a final pay program.
For the management staff employed as from 1 January 2008, the management staff promoted to management as from 1 January 2008 and the management staff who reached the age of 60, the pension benefits are provided under a defined contribution plan. For the defined contribution plan, the contributions are recognised in the profit or loss statement (2015: KUSD 695 and 2014: KUSD 745) and no liability is recorded.
Belgian defined contribution plans are subject to the Law of 28 April 2013 on supplementary pensions (WAP). According to Article 24 of this law, the employer has to guarantee a fixed minimum return of 3.25% on employer contributions and of 3.75% on employee contributions. This guaranteed minimum return generally exceeds the return that is commonly promised by the insurer.
Because the employer has to guarantee the statutory minimum return on these plans, not all actuarial and investment risks relating to these plans are transferred to the insurance company managing the plans. Therefore these plans do not meet the definition of defined contribution plan under IFRS and have to be classified by default as defined benefit plans. However, IAS 19 Employee Benefits, does not envisage the accounting treatment of employee benefit plans with a promised return on contributions. In the absence of a specific accounting policy in IFRS for these types of plans, management has applied an intrinsic value approach in determining whether or not a liability should be recognised at financial reporting date. This method consists in calculating the liability in the statement of financial position as the sum of any individual differences between the mathematical reserves, i.e. the reserves calculated by capitalizing all premiums paid at the interest rate guaranteed by the insurer – also taking account of profit-sharing, and the minimum reserves as determined by Article 24 of the WAP. This evaluation also considers any balance of financing funds that could be attributed to related plans. This evaluation which has been performed for each individual seperately, did not reveal a significant shortfall and therefore no liability has been recorded at 31 December 2014 and 2015. The calculation of the liability takes into account the guaranteed minimum return only until the financial reporting date. The fact that the guaranteed minimum return must also be achieved in the future can have an impact on future cash flows.
According to Belgian Law, the employer has to guarantee as from January 2016, an average minimum return of 1.75% on both employer and employee contributions as from 2016.
| 2015 | 2014 | 2013 | 2012 | 2011 | |
|---|---|---|---|---|---|
| EMPLOYEE BENEFITS | |||||
| Present value of funded obligations | -11,662 | -14,063 | -12,919 | -13,594 | -11,119 |
| Fair value of the defined plan assets | 7,217 | 7,852 | 8,519 | 8,776 | 7,942 |
| Present value of net obligations | -4,445 | -6,211 | -4,400 | -4,818 | -3,177 |
| TOTAL EMPLOYEE BENEFITS | -4,445 | -6,211 | -4,400 | -4,818 | -3,177 |
| 2015 | 2014 | |
|---|---|---|
| CHANGES IN LIABILITY DURING THE PERIOD | ||
| Liability as per 1 January | 14,063 | 12,919 |
| Distributions | -777 | -642 |
| Actual employee's contributions | 101 | 113 |
| Interest cost | 138 | 341 |
| Current service cost | 629 | 575 |
| Actual taxes on contributions paid (excluding interest) | -98 | -103 |
| Actuarial gains/losses | -965 | 2,721 |
| Translation differences | -1,430 | -1,861 |
| LIABILITY AS PER 31 DECEMBER | 11,662 | 14,063 |
| CHANGES OF FAIR VALUE OF PLAN ASSETS | ||
| Plan assets as per 1 January | 7,852 | 8,519 |
| Contributions | 910 | 957 |
| Distributions | -777 | -642 |
| Return on plan assets | 80 | 237 |
| Actuarial gain/loss | 122 | -36 |
| Actual taxes on contributions paid (excluding interest) | -98 | -103 |
| Actual administration costs | -57 | -59 |
| Translation differences | -814 | -1,019 |
| PLAN ASSETS AS PER 31 DECEMBER (*) | 7,217 | 7,852 |
| EXPENSE RECOGNISED IN THE STATEMENT OF PROFIT OR LOSS | ||
| Current service expenses | -629 | -575 |
| Interest expense | -138 | -341 |
| Expected return on plan assets | 80 | 237 |
| Administration cost | -57 | -59 |
| TOTAL PENSION COST RECOGNISED IN THE INCOME | -744 | -739 |
| STATEMENT (SEE NOTE 6) | ||
| EXPENSE RECOGNISED IN OTHER COMPREHENSIVE INCOME | ||
| Recognition of actuarial gains and losses (**) | 1,087 | -2,685 |
| TOTAL PENSION COST RECOGNISED IN OTHER | 1,087 | -2,685 |
| COMPREHENSIVE INCOME | ||
| MOST SIGNIFICANT ASSUMPTIONS, EXPRESSED IN WEIGHTED AVERAGES | ||
| Discount rate at 31 December | 1.50% | 1.10% |
| Expected return on assets at 31 December | 1.50% | 1.10% |
| Future salary increases (including inflation) | (salary scales) | (salary scales) |
| Mortality tables | Belgian (MR/FR) | Belgian (MR/FR) |
| Inflation | 2% | 2% |
| EXPECTED NEXT YEAR CONTRIBUTIONS | ||
| Best estimate of contributions expected to be paid during next year | 941 | 985 |
| DETAIL PLAN ASSETS INVESTMENTS | ||
| Shares | 6% | 4% |
| Bonds & loans | 86% | 85% |
| Property investments | 6% | 6% |
Cash 2% 5%
(*) The plan assets do not include any shares issued by EXMAR or property occupied by EXMAR.
(**) The recognition of actuarial gains and losses in other comprehensive income mainly relates to a change in the used discount rate.
| Claims | |
|---|---|
| PROVISIONS | |
| Long-term provisions (*) | 2,399 |
| Short-term provisions | 0 |
| As per 1 January 2014 | 2,399 |
| New provisions | 0 |
| Reversal of unused provisions | -4 |
| As per 31 December 2014 | 2,395 |
| Long-term provisions (*) | 2,395 |
| Short-term provisions | 0 |
| As per 1 January 2015 | 2,395 |
| New provisions | 127 |
| Reversal of unused provisions | 0 |
| As per 31 December 2015 | 2,522 |
| Long-term provisions (*) | 2,522 |
| Short-term provisions | 0 |
| AS PER 31 DECEMBER 2015 | 2,522 |
(*) Due to the partial demerger from CMB, EXMAR provided for 39% of the estimated exposure relating to the PSA claim against CMB. The amount and timing of possible outflows related to this provision are uncertain. In 2015 the updated risk assessment did not result in an adjustment of the provision.
| 2015 | 2014 | |
|---|---|---|
| TRADE AND OTHER PAYABLES | ||
| Trade payables | 41,055 | 26,731 |
| Other payables | 7,788 | 9,551 |
| Accrued expenses and deferred income(*) | 6,972 | 11,074 |
| 55,815 | 47,356 | |
| OF WHICH FINANCIAL LIABILITIES | 48,495 | 35,569 |
(*) "Accrued expenses" comprise expenses not invoiced yet, but to be allocated to the current accounting year, e.g. commissions, port expenses, interests,... "Deferred income" comprises already invoiced revenue, related to the next accounting year, e.g. freight, hire,...
A significant increase in trade payables compared to 2014 is noticeable in above overview. An explanation is amongst others a provision made for invoices to be received relating to the DC LNG project. We also refer to note 34 in this respect.
During the normal course of its business, EXMAR is exposed to strategic, operational and financial risks as described in more detail in the Corporate Governance Statement, section internal control and risk management systems. EXMAR is exposed to credit, interest, currency and liquidity risks and in order to hedge this exposure, EXMAR uses various financial instruments such as exchange rate and interest rate hedges. EXMAR applies hedge accounting for all hedging relations which meet the conditions to apply hedge accounting (formal documentation and high effectiveness at inception and on an ongoing basis). Financial instruments are recognised initially at fair value. Subsequent to initial recognition, the effective portion of changes in fair value of the financial instruments qualifying for hedge accounting, is recognised in other comprehensive income. Any ineffective portion of changes in fair value and changes in fair value of financial instuments not qualifying for hedge accounting are recognised immediately in profit or loss.
| 2015 | 2014 | |
|---|---|---|
| ASSETS | ||
| TOTAL ASSETS | 0 | 0 |
| LIABILITIES | ||
| Non-current | ||
| Interest rate swaps | 0 | 0 |
| Cross currency interest rate swap | 41,229 | 21,709 |
| TOTAL LIABILITIES | 41,229 | 21,709 |
| Level 1 | Level 2 | Level 3 | Total | |
|---|---|---|---|---|
| 31 DECEMBER 2015 | ||||
| Equity securities - available-for-sale | 1,961 | 1,526 | 3,487 | |
| TOTAL FINANCIAL ASSETS CARRIED AT FAIR VALUE |
1,961 | 1,526 | 0 | 3,487 |
| Cross currency interest rate swap used for hedging | 41,229 | 41,229 | ||
| TOTAL FINANCIAL LIABILITIES CARRIED AT FAIR VALUE |
0 | 41,229 | 0 | 41,229 |
Financial instruments other than those listed above are all measured at amortized cost.
The long-term vision that is typical of EXMAR's activities is accompanied by long-term financing and therefore also exposure to underlying rates of interest. EXMAR actively manages this exposure by means of various instruments to cover rising interest rates for a significant part of its debt portfolio. In 2014, a cross currency interest rate swap ("CCIRS") was entered into in order to hedge the currency and floating interest exposure on the issued NOK 700 million senior unsecured bonds. In July 2015, a new CCIRS was closed on the additional amount of NOK 300 million that has been issued in 2015.
Credit risk is monitored closely on an ongoing basis by the Group and creditworthiness controls are carried out if deemed necessary. At year-end no significant creditworthiness problems were noted. A considerable part of the income of our LNG joint ventures is dependent on the performance of one important client, Excelerate Energy. No creditworthiness issues have been identified in this context and the maximum exposure is kept within predefined limits. The borrowings to equity accounted investees consist of shareholder loans to our joint ventures that own or operate an LPG or LNG vessel, as all vessels are operational and generate income, we do not anticipate any recoverability issues for the outstanding borrowings to equity accounted investees.
| 2015 | 2014 | |
|---|---|---|
| CARRYING AMOUNTS OF FINANCIAL ASSETS | ||
| Borrowings to equity accounted investees | 400,545 | 482,376 |
| Available-for-sale financial assets | 3,487 | 8,341 |
| Held-to-maturity investments | 0 | 165 |
| Trade and other receivables | 27,651 | 34,882 |
| Cash and cash equivalents | 172,301 | 112,832 |
| 603,984 | 638,596 |
The carrying amounts of the financial assets represent the maximum credit exposure.
As past due outstanding receivable balances are immaterial, no ageing analysis is disclosed. No important impairment losses have occured and at reporting date, no significant allowances for impairment have been recorded.
Most of EXMAR's time-charter income is based on a fixed rate component calculation, while the interest-bearing loans are mainly negotiated with variable interest rates. In order to monitor this interest risk, the Group uses a variety of interest hedging instruments available on the market (i.a. IRS, CAPS, floors and collars). The Group applies hedge accounting when the conditions to apply hedge accounting are met. In case no hedge accounting is applied the changes in fair value are recorded in the statement of profit or loss.
| 2015 | 2014 | |
|---|---|---|
| INTEREST RATE SWAPS | ||
| Nominal amount of interest rate swaps and cross currency interest rate swaps | 152,000 | 114,000 |
| Net fair value of interest rate swaps and cross currency interest rate swaps | -41,229 | -21,709 |
| Maximum maturity date | 2017 | 2017 |
In 2014, a cross currency interest rate swap ("CCIRS") was entered into in order to hedge the currency and floating interest exposure on the issued NOK 700 million senior unsecured bonds. In July 2015, a new CCIRS was closed on the additional amount of NOK 300 million that has been issued in 2015.
| 2015 | 2014 | |
|---|---|---|
| EXPOSURE TO INTEREST RATE RISK | ||
| Total borrowings | 412,586 | 406,708 |
| with fixed interest rate | -21,250 | -28,333 |
| with variable interest rate: gross exposure | 391,336 | 378,375 |
| Interest rate financial instruments (nominal amount) | -114,000 | -114,000 |
| NET EXPOSURE | 277,336 | 264,375 |
In case the interest rate would increase/decrease with 50 basis points, the financial statements would be impacted with the following amounts (assuming that all other variables remain constant):
| 2015 | 2014 | |||
|---|---|---|---|---|
| + 50 bp | - 50 bp | + 50 bp | - 50 bp | |
| SENSITIVITY ANALYSIS | ||||
| Interest-bearing loans (variable interest rate) | -1,956 | 1,956 | -1,892 | 969 |
| Interest rate swaps and cross currency rate swaps | 570 | -570 | 570 | -292 |
| Sensitivity (net) | -1,386 | 1,386 | -1,322 | 677 |
| Impact in profit and loss | -1,386 | 1,386 | -1,322 | 677 |
| Impact in equity | 1,140 | -1,140 | 1,425 | -1,425 |
| TOTAL IMPACT | -246 | 246 | 103 | -748 |
A significant portion of EXMAR's interest income is derived from borrowings to equity accounted investees with variable interest rates. Any increase/decrease in the interest rate would result in an increase/decrease of interest income but would mainly be offset by an increase/decrease in the interest expense recognized by the equity accounted investee for a corresponding amount. Accordingly, any increase/decrease in the variable interest rate applied on the borrowings to equity accounted investees would have no impact on the net result of the Group. Therefore, borrowings to equity accounted investees have not been included in the above sensitivity analysis.
The Group's currency risk is historically mainly affected by the EUR/USD ratio for manning its fleet, paying salaries and all other personnel-related expenses. In order to monitor the EUR currency risk, the Group uses a varied range of foreign currency rate hedging instruments. As per 31 December 2015 and 2014, no forward exchange contracts were outstanding to cover the EUR/USD exposure. In 2014, a NOK 700 million senior unsecured bond was issued (initially equivalent to USD 114 million). The NOK/USD exposure was covered by a cross currency interest rate swap that matches the debt profile of the bond. During 2015, an additional amount of NOK 300 million has been issued (second tranche on the original NOK 700 million bond). In July 2015, a new CCIRS was closed to cover the NOK/USD exposure.
Exposure to currency risk, based on notional amounts in thousands of foreign currency:
| 2015 | 2014 | |||||||
|---|---|---|---|---|---|---|---|---|
| EUR | NOK | LYD | CAD | EUR | NOK | GBP | CAD | |
| EXPOSURE TO RISK | ||||||||
| Receivables | 16,447 | 0 | 0 | 0 | 14,180 | 0 | 91 | 1,043 |
| Payables | -22,434 | 0 | -433 | -9,070 | -18,052 | 0 | -703 | -15 |
| Interest-bearing loans | -626 | -1,000,000 | 0 | 0 | -1,805 | -700,000 | 0 | 0 |
| Balance sheet exposure | -6,613 | -1,000,000 | -433 | -9,070 | -5,677 | -700,000 | -612 | 1,028 |
| IN THOUSANDS OF USD | -7,200 | -113,371 | -321 | -6,532 | -6,892 | -91,420 | -954 | 887 |
As per 31 December 2015 an increase in the year-end USD/EUR rate of 10% would effect the income statement with KUSD -720 (KUSD -689 for 2014), excluding the effect on any forward exchange contracts. A 10% decrease of the USD/EUR rate would impact the profit or loss statement with the same amount (opposite sign).
The NOK/USD exposure on the outstanding NOK 1,000 million bond is fully covered by the CCIRS entered into that matches the terms and conditions of the outstanding bond. Any impact of an increase/decrease of the NOK/USD exchange rate on the outstanding bond would be offset by a decrease/increase in the fair value of the CCIRS for a corresponding amount.
The Group manages the liquidity risk in order to meet financial obligations as they fall due. The risk is managed through a continuous cash flow projection follow-up, monitoring balance sheet liquidity ratio's against internal and regulatory requirements and maintaining a diverse range of funding sources with adequate back-up facilities.
Different debt covenants exist that require compliance with certain financial ratio's. As of December 31, 2015 EXMAR was compliant with all covenants. We also refer in this respect to note 21 in respect of borrowings and to note 28 in respect of capital commitments.
Our current financial liabilities such as trade and other payables are expected to be paid within the next twelve months and therefore not included in below tables. The following are the contractual maturities of our financial liabilities and our borrowings to equity accounted investees, including estimated interest payments:
| CONTRACTUAL CASH FLOWS | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Cu rre ncy |
Int ere st rat es |
Ma tur ity |
am Ca rry ou nt ing |
Tot al |
0-1 2 m ths |
1-2 ye ars |
2-5 ye ars |
> 5 ye ars |
| Non-derivative financial liabilities: | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Bank loans | USD | LIBOR + 1% | 2018 | -40,900 | -43,222 | -683 | -805 | -41,734 | 0 |
| Bank loans | USD | 5.515% | 2018 | -21,250 | -23,333 | -8,176 | -7,776 | -7,381 | 0 |
| Bank loans | USD | LIBOR + 0.9% | 2020- 2021 |
-237,748 | -260,434 | -11,641 | -12,945 | -134,889 | -100,959 |
| Bond | NOK | NIBOR + 4.5% | 2017 | -111,715 | -124,291 | -6,988 | -117,303 | 0 | 0 |
| Other bank loans | EUR | -973 | -1,008 | -544 | -464 | 0 | 0 | ||
| -412,586 | -452,288 | -28,032 | -139,293 | -184,004 | -100,959 |
| Cross currency interest rate swap | USD | -41,229 | -41,229 | -1,780 | -39,449 | 0 | 0 | |
|---|---|---|---|---|---|---|---|---|
| -41,229 | -41,229 | -1,780 | -39,449 | 0 | 0 | |||
| Borrowings to equity accounted | USD | 400,545 | 700,569 | 49,056 | 80,610 | 170,913 | 399,990 | |
| investees | ||||||||
| Non-derivative financial liabilities: | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Bank loans | USD | LIBOR + 1% | 2018 | -40,400 | -43,270 | -562 | -693 | -42,015 | 0 |
| Bank loans | USD | 5.515% | 2018 | -28,333 | -31,901 | -8,568 | -8,176 | -15,157 | 0 |
| Bank loans | USD | LIBOR + 0.9% | 2020- 2021 |
-244,908 | -270,836 | -10,162 | -11,955 | -39,869 | -208,850 |
| Bond | NOK | NIBOR + 4.5% | 2017 | -91,420 | -108,011 | -5,806 | -6,177 | -96,028 | 0 |
| Other bank loans | EUR | -1,647 | -1,722 | -589 | -561 | -572 | 0 | ||
| -406,708 | -455,740 | -25,687 | -27,562 | -193,641 | -208,850 | ||||
| Derivative financial instruments (net): | |||||||||
| Cross currency interest rate swap | USD | -21,709 | -22,117 | -805 | -452 | -20,860 | 0 | ||
| -21,709 | -22,117 | -805 | -452 | -20,860 | 0 | ||||
| Borrowings to equity accounted investees |
USD | 482,377 | 806,737 | 48,563 | 80,174 | 191,603 | 486,397 |
| 2015 | 2014 | ||||
|---|---|---|---|---|---|
| Fair value hierarchy (*) |
Carrying amount |
Fair value | Carrying amount |
Fair value | |
| CARRYING AMOUNTS VERSUS FAIR VALUES | |||||
| Borrowings to equity accounted investees | 2 | 400,545 | 488,701 | 482,376 | 545,323 |
| Available-for-sale financial assets | 1/2 | 3,487 | 3,487 | 8,341 | 8,341 |
| Interest-bearing loans | 1/2 | -412,586 | -401,467 | -406,708 | -381,503 |
| Derivative financial instruments liabilities | 2 | -41,229 | -41,229 | -21,709 | -21,709 |
| -49,783 | 49,492 | 62,300 | 150,452 |
(*) The financial assets and liabilities carried at fair value are analysed and a hierarchy in valuation method has been defined: level 1 being quoted bid prices in active markets for identical assets or liabilities, level 2 being inputs in other than quoted prices included in level 1 that are observable for the related assets and liabilities, either directly (as prices) or indirectly (derived from prices), level 3 being inputs for the asset or liability that are not based on observable market data.
| CARRYING AMOUNTS VERSUS FAIR VALUES | |
|---|---|
| Available-for-sale financial assets: | quoted closing bid price at reporting date for Teekay shares / non quoted closing fixing price at reporting date through a public auction via Euronext for Sibelco shares |
| Derivative financial instruments: | present value of future cash flows, discounted at the market rate of interest at reporting date |
| Interest-bearing loans: | quoted closing bid price at reporting date for NOK bond/ present value of future cash flows, discounted at the market rate of interest at reporting date |
| Borrowings to equity accounted investees: | present value of future cash flows, discounted at the market rate of interest at reporting date |
For certain financial assets and liabilities (trade and other receivables, cash and cash equivalents and trade and other payables) not carried at fair value, no fair value is disclosed because the carrying amounts are a reasonable approximation of the fair values.
The board's policy is to maintain a strong capital base as to maintain investor, creditor and market confidence and to sustain future development of the business. The balance between a higher return that might be possible with higher levels of borrowings and the advantages and security afforded by a sound capital position is monitored on a continuing basis. The board monitors the return on capital and the level of dividends to ordinary shareholders.
EXMAR leases a number of assets using operating lease agreements. The agreements don't impose restrictions such as additional debt and further leasing. The expense for 2015 relating to the operating lease agreements amounts to KUSD 16,112 (2014: KUSD 24,120) of which KUSD 12,772 is born by our joint ventures (2014: KUSD 15,645). The decrease in the costs relating to operating leases can be mainly explained by the purchase of the Wariboko (ex OTTO5) in February 2015. No payments for non-cancellable subleases were received. The future minimum lease payments for our subsidiaries and joint ventures are as follows:
| 2015 | 2014 | ||||
|---|---|---|---|---|---|
| Subsidiaries | Joint ventures | Subsidiaries | Joint ventures | ||
| OPERATING LEASE OBLIGATIONS | |||||
| Less than 1 year | 1,667 | 8,859 | 2,796 | 8,859 | |
| Between 1 and 5 years | 6,668 | 28,249 | 6,668 | 31,699 | |
| More than 5 years | 834 | 18,030 | 2,501 | 23,439 | |
| 9,169 | 55,138 | 11,965 | 63,997 |
70 The amounts disclosed for the joint ventures represent our share in the lease obligations. The average duration of the lease agreements amount to 5.6 years. The Group has for some of the leased assets purchase options, some contracts foresee extension options. Such extension options have not been taken into account for determining above lease obligations.
The Group entered into long-term time charter agreements for certain assets in its fleet. In respect of lease classification, it was judged that substantially all risks and rewards remain with the Group. As a consequence, these agreements qualify as operating leases.
The income in 2015 relating to operating leases amounts to KUSD 179,234 (2014: KUSD 197,906) of which KUSD 150,482 is earned by our joint ventures (2014: KUSD 158,397). The future minimum rental receipts are as follows:
| 2015 | 2014 | |||
|---|---|---|---|---|
| Subsidiaries | Joint ventures | Subsidiaries | Joint ventures | |
| OPERATING LEASE RIGHTS (LEASES AS LESSOR) | ||||
| Less than 1 year | 19,377 | 149,108 | 7,274 | 142,022 |
| Between 1 and 5 years | 22,669 | 406,119 | 0 | 432,402 |
| More than 5 years | 0 | 598,678 | 0 | 686,048 |
| 42,046 | 1,153,905 | 7,274 | 1,260,472 |
The amounts disclosed for the joint ventures represent our share in the lease rights. The average duration of the lease agreements amounts to 4.76 years. The Group has granted for some of these vessels purchase options and some contracts foresee a possible extension at the end of the lease agreement. Such extension options have not been taken into account for determining above lease rights.
As per December 31, 2015 the capital commitments are as follows:
| Subsidiaries | Joint ventures | |
|---|---|---|
| LPG | 0 | 133,023 |
| LNG | 312,500 | 0 |
| 312,500 | 133,023 |
The amounts disclosed for the joint ventures represent our share in the joint ventures. The capital commitments relate to the midsize carriers under construction as well as to the committed investments in the FLNG and the FSRU. The order of the second FLNG is not final but optional, hence the second FLNG is not included in these commitments. The payments of these commitments will be spread over the next 3 years.
At the date of this report, no financing agreements are in place for the financing of these commitments, except for the commitments amounting to USD 55 Mio relating to the delivery of three midsize carriers foreseen in 2016. Hence an important part of our assets under construction is not yet financed. We are negotiating with different financing institutions in this respect. Although we believe to be able to arrange financing for our newbuild program, we can not guarantee to obtain financing timely and in accordance with expected terms. The delivery of certain newbuilds may be delayed and we can suffer financial losses in case the necessary financing is not obtained timely.
As announced in our press release of March 8, 2016 the Caribbean FLNG is again available for new employment. EXMAR is actively negotiating to employ the unit for projects mainly in the Middle East and Africa. At the moment of delivery of the unit by Wison Offshore & Marine (expected mid 2016), EXMAR will need to pay the remaining balance of USD 202 Mio. EXMAR is currently negotiating a change to the agreed financing of USD 198,4 Mio with the Industrial and Commercial Bank of China (ICBC) in order to align the agreement with the new delivery terms as a consequence of the termination of the tolling agreement with Pacific Exploration and Production. At the date of this report negotiations are ongoing but EXMAR believes to be able to successfully close these negotiations.
The floating storage and regasification unit (FSRU) under construction at Wison Offshore & Marine is currently proposed to different clients for long term employment. EXMAR is actively negotiating employment and expects to close a long term agreement in this respect. At the moment of delivery of the platform which is expected beginning of 2017, a payment obligation of USD 83 Mio exists. Different financing possibilities are being explored by EXMAR.
Different financing possibilities are being investigated for the capital commitments in 2017 and 2018, amounting to USD 74 Mio relating to the newbuild program of the midsize fleet.
Several of the Group's companies are involved in a number of minor legal disputes arising from their daily management. The directors do not expect the outcome of these procedures to have any material effect on the Group's financial position.
A vessel held by one of our joint ventures was party to a lease arrangement whereby the lessor could claim tax depreciation on the capital expenditures it incurred to acquire these vessels. As is typical in these leasing arrangements, tax and change of law risks are assumed by the lessee. Our joint venture terminated this lease arrangement in 2013. However, in case of a successful challenge by the UK tax authority ("HMRC") of the tax treatment of the lease by the UK lessor, we can be required to compensate the lessor for any tax amounts to be paid.
The Company has a related party relationship with its subsidiaries and joint ventures and with its directors and executive officers.
Saverbel NV & Saverex NV, controlled by Mr. Nicolas Saverys (CEO of EXMAR) charged EUR 169.668 to the Group (2014: EUR 204.678) for services provided during 2015. All services are supplied on an arm's length basis.
Saverex NV, the major shareholder of EXMAR nv prepares financial statements available in Belgium.
EXMAR provides general, accounting and corporate management services for its joint ventures. For these services, fees are charged to the joint ventures based on contractual agreements between all parties involved and based on terms that are equivalent to those that prevail in arm's length transactions.
EXMAR also provides borrowings to its joint ventures for which an interest income is recognised in the financial statements. We refer to note 14 for an overview of these borrowings and to note 7 for the total amount of interest income.
| 2015 | 2014 | |
|---|---|---|
| BOARD OF DIRECTORS (IN EUR) | ||
| Chairman | 100,000 | 100,000 |
| Other members | 50,000 | 50,000 |
| Total paid (*) | 481,010 | 444,126 |
(*) The total amount paid to the members of the Board of Directors represents the total payments to all non-executive and independent directors for the activities as members of the Board of Directors. The directors who are member of the Executive Committee and were paid accordingly, have foregone the director's payment. No loans or advances were granted to them.
| 2015 | 2014 | |
|---|---|---|
| AUDIT COMMITTEE (IN EUR) | ||
| Chairman | 20,000 | 20,000 |
| Other members | 10,000 | 10,000 |
| Total paid | 50,000 | 50,000 |
| 2015 | 2014 | |
|---|---|---|
| NOMINATION AND REMUNERATION COMMITTEE (IN EUR) | ||
| Members | 10,000 | 10,000 |
| Total paid | 30,000 | 30,000 |
The remuneration of the members of the Executive Committee is determined annually by the Board of Directors on the basis of a proposal of the Nomination and Remuneration Committee. In 2015 the Executive Committee, excluding the CEO, consisted of 6 members on average. Five members of the Executive Committee have a self-employed status. In the event of termination of their appointment, they have no right to any form of severance compensation, except for the agreement with Lara Consult NV represented by Bart Lavent and the agreement with Chirmont NV represented by Miguel de Potter. David Lim is employed through an agreement under United States law. The remuneration consists of a fixed component and a variable component. The variable component is partly determined in function of the financial result of the Group.
| 2015 | 2014 | |
|---|---|---|
| EXECUTIVE COMMITTEE, EXCLUDING CEO (IN THOUSANDS OF EUR) | ||
| TOTAL FIXED REMUNERATION | 2,869 | 2,743 |
| of which for insurance and pension plan | 320 | 236 |
| of which value of share options (taxable basis) | 192 | 210 |
| TOTAL VARIABLE REMUNERATION | 1,150 | 1,800 |
| 2015 | 2014 | |
|---|---|---|
| CEO (IN THOUSANDS OF EUR) | ||
| TOTAL FIXED REMUNERATION | 1,096 | 941 |
| of which for insurance and pension plan | 212 | 52 |
| of which value of share options (taxable basis) | 61 | 66 |
| TOTAL VARIABLE REMUNERATION | 350 | 500 |
No loans were granted to the members of the Executive Committee in 2015. Per December 31 2015, a receivable of EUR 377,151 was outstanding towards Mr Nicolas Saverys.
The members of the Executive Committee are among the beneficiaries of the 10 share option plans approved by the Board of Directors. The accumulated number of options (plan 1 - 10) allocated to the members of the Executive Committee are as follows:
| 2015 | 2014 | |
|---|---|---|
| NUMBER OF SHARES ALLOCATED | ||
| Nicolas Saverys | 425,430 | 367,055 |
| Patrick De Brabandere | 198,807 | 209,758 |
| Pierre Dincq | 119,829 | 109,293 |
| Paul Young (*) | 0 | 62,541 |
| Didier Ryelandt (*) | 0 | 141,114 |
| Marc Nuytemans | 148,928 | 128,928 |
| Bart Lavent | 92,975 | 87,439 |
| Miguel de Potter | 93,488 | 92,625 |
| David Lim | 146,158 | 116,158 |
| 1,225,615 | 1,314,911 |
(*) As per 31 December 2014 and 2015, Didier Ryelandt and Paul Young are no longer member of the Executive Committee.
| Ownership | |||||
|---|---|---|---|---|---|
| Country of incorporation |
Company ID | Consolidation method |
2015 | 2014 | |
| CONSOLIDATED COMPANIES | |||||
| Joint ventures | |||||
| Best Progress International Ltd | Hong Kong | Equity method | 50.00% | 50.00% | |
| Blackbeard Shipping Ltd | Hong Kong | Equity method | 50.00% | 50.00% | |
| Croxford Ltd | Hong Kong | Equity method | 50.00% | 50.00% | |
| Estrela Ltd | Hong Kong | Equity method | 50.00% | 50.00% | |
| Excelerate NV | Belgium | 0870.910.441 | Equity method | 50.00% | 50.00% |
| Excelsior BVBA | Belgium | 0866.482.687 | Equity method | 50.00% | 50.00% |
| EXMAR Gas Shipping Ltd | Hong Kong | Equity method | 50.00% | 50.00% | |
| EXMAR LPG BVBA | Belgium | 0501.532.758 | Equity method | 50.00% | 50.00% |
| EXMAR Shipping BVBA | Belgium | 0860.978.334 | Equity method | 50.00% | 50.00% |
| Explorer NV | Belgium | 0896.311.177 | Equity method | 50.00% | 50.00% |
| Express NV | Belgium | 0878.453.279 | Equity method | 50.00% | 50.00% |
| Farnwick Shipping Ltd | Liberia | Equity method | 50.00% | 50.00% | |
| Fertility Development Co. Ltd | Hong Kong | Equity method | 50.00% | 50.00% | |
| Glory Transportation Ltd | Hong Kong | Equity method | 50.00% | 50.00% | |
| Good Investment Ltd | Hong Kong | Equity method | 50.00% | 50.00% | |
| Hallsworth Marine Co. | Liberia | Equity method | 50.00% | 50.00% | |
| Laurels Carriers Inc | Liberia | Equity method | 50.00% | 50.00% | |
| Marching Prospects | Hong Kong | Equity method | 50.00% | 50.00% | |
| Monteriggioni Inc | Liberia | Equity method | 50.00% | 50.00% | |
| Reslea NV | Belgium | 0435.390.141 | Equity method | 50.00% | 50.00% |
| Solaia Shipping Llc | Liberia | Equity method | 50.00% | 50.00% | |
| Splendid Ltd | Hong Kong | Equity method | 50.00% | 50.00% | |
| Talmadge Investments Ltd | British Virgin Islands | Equity method | 50.00% | 50.00% | |
| Universal Crown Ltd | Hong Kong | Equity method | 50.00% | 50.00% | |
| Vine Navigation Co. | Liberia | Equity method | 50.00% | 50.00% | |
| Associates | |||||
| Bexco NV | Belgium | 0412.623.251 | Equity method | 44.91% | 44.91% |
| CMC Belgibo BVBA | Belgium | 0456.815.263 | Equity method | 49.90% | 49.90% |
| Marpos NV | Belgium | 0460.314.389 | Equity method | 45.00% | 45.00% |
| Subsidiaries | |||||
| Belgibo NV | Belgium | 0416.986.865 | Full | 100.00% | 100.00% |
| Caribbean FLNG SAS | Colombia | Full | 100.00% | 100.00% | |
| DV Offshore SAS | France | Full | 100.00% | 100.00% | |
| ECOS SRL | Italy | Full | 60.00% | 60.00% | |
| Electra Offshore Ltd | Hong Kong | Full | 100.00% | 100.00% | |
| Excalibur BVBA (*) | Belgium | 0564.763.001 | Full | 0.00% | 100.00% |
| EXMAR Energy Hong Kong Ltd | Hong Kong | Full | 100.00% | 100.00% | |
| EXMAR Energy Netherlands BV | Netherlands | Full | 100.00% | 100.00% | |
| EXMAR Energy Partners LP (*) | Marshall Islands | Full | 0.00% | 100.00% | |
| EXMAR General Partner Ltd | Hong Kong | Full | 100.00% | 100.00% | |
| EXMAR Holdings Ltd | Liberia | Full | 100.00% | 100.00% | |
| EXMAR Hong Kong Ltd | Hong Kong | Full | 100.00% | 100.00% | |
| EXMAR LNG Holding NV | Belgium | 0891.233.327 | Full | 100.00% | 100.00% |
| EXMAR LNG Infrastructure NV | Belgium | 0555.660.441 | Full | 100.00% | 100.00% |
| Ownership | |||||
|---|---|---|---|---|---|
| Country of incorporation |
Company ID | Consolidation method |
2015 | 2014 | |
| CONSOLIDATED COMPANIES | |||||
| EXMAR LNG Investments Ltd | Liberia | Full | 100.00% | 100.00% | |
| EXMAR Lux SA | Luxembourg | Full | 100.00% | 100.00% | |
| EXMAR Marine NV | Belgium | 0424.355.501 | Full | 100.00% | 100.00% |
| EXMAR Netherlands BV | Netherlands | Full | 100.00% | 100.00% | |
| EXMAR NV | Belgium | 0860.409.202 | Full | 100.00% | 100.00% |
| EXMAR Offshore Company | USA | Full | 100.00% | 100.00% | |
| EXMAR Offshore Ltd | Bermuda | Full | 100.00% | 100.00% | |
| EXMAR Offshore Services SA | Luxembourg | Full | 100.00% | 100.00% | |
| EXMAR Offshore NV | Belgium | 0882.213.020 | Full | 100.00% | 100.00% |
| EXMAR Opti Ltd | Hong Kong | Full | 100.00% | 100.00% | |
| EXMAR Singapore Pte Ltd | Singapore | Full | 100.00% | 100.00% | |
| EXMAR Shipmanagement NV | Belgium | 0442.176.676 | Full | 100.00% | 100.00% |
| EXMAR Shipmanagement India Private Ltd | India | Full | 100.00% | 100.00% | |
| EXMAR Shipping USA Inc | USA | Full | 100.00% | 100.00% | |
| EXMAR (UK) Shipping Company Ltd | Great-Britain | Full | 100.00% | 100.00% | |
| EXMAR VLGC NV (*) | Belgium | 0847.316.675 | Full | 0.00% | 100.00% |
| EXMAR Yachting NV | Belgium | 0546.818.692 | Full | 100.00% | 100.00% |
| Export LNG Ltd | Hong Kong | Full | 100.00% | 100.00% | |
| Exview Hong Kong Ltd | Hong Kong | Full | 100.00% | 100.00% | |
| Finserve BVBA | Belgium | 0449.063.577 | Full | 100.00% | 100.00% |
| Franship Offshore Lux SA | Luxembourg | Full | 100.00% | 100.00% | |
| Internationaal Maritiem Agentschap NV | Belgium | 0404.507.915 | Full | 99.03% | 99.03% |
| Kellett Shipping Inc | Liberia | Full | 100.00% | 100.00% | |
| LNG BargeCo BVBA (*) | Belgium | 0537.347.633 | Full | 0.00% | 100.00% |
| LNG ProviderCo BVBA (*) | Belgium | 0537.348.029 | Full | 0.00% | 100.00% |
| Springmarine Nigeria Ltd | Nigeria | Full | 100.00% | 100.00% | |
| Tecto Cyprus Ltd | Cyprus | Full | 100.00% | 100.00% | |
| Tecto Luxembourg SA | Luxembourg | Full | 100.00% | 100.00% | |
| Travel Plus NV | Belgium | 0442.160.147 | Full | 100.00% | 100.00% |
(*) The subsidiaries indicated with (*) have been liquidated during the accounting year.
| Closing rates | Average rates | |||
|---|---|---|---|---|
| 2015 | 2014 | 2015 | 2014 | |
| EXCHANGE RATES | ||||
| USD | 1.0887 | 1.2141 | 1.1150 | 1.3348 |
| GBP | 0.7340 | 0.7789 | 0.7279 | 0.8077 |
| HKD | 8.4376 | 9.4170 | 8.6438 | 10.3529 |
All exchange rates used are expressed with reference to the EURO.
The worldwide audit and other fees in respect of services provided by KPMG Bedrijfsrevisoren or companies or persons related to the auditors, can be detailed as follows:
| 2015 | 2014 | |
|---|---|---|
| FEES STATUTORY AUDITOR | ||
| Audit services | 430 | 370 |
| Audit related services | 48 | 600 |
| Tax services | 179 | 487 |
| 657 | 1,457 |
The non-audit fees exceed the audit fees for 2014. The Audit Committee has approved the non-audit fees on 2 December 2014. For 2015, the non-audit fees do not exceed the audit fees.
In February 2016 the Douglas Channel LNG Consortium announced the cancellation of further development of the DC LNG project due to the unfavourable market conditions. Following this decision, the costs incurred by EXMAR relating to this project have been expensed in 2015 for a total amount of USD 12.9 million.
In March 2016 EXMAR NV and Pacific Exploration and Production ("PEP") have agreed to terminate the Tolling Agreement for the Caribbean FLNG, originally executed in March 2012 for a term of 15 years as from delivery. This termination agreement stipulates a termination fee payable by PEP in monthly instalments from March 2016 until June 2017 and cancels all obligations and commitments between both parties under the original Tolling Agreement. The Caribbean FLNG is now available for other projects and new employment negotiations are ongoing.
EXMAR has been approached after year end to sell part of its ownership (60%) in the Wariboko barge to its logistical partner Springview.
The Board of Directors, represented by Nicolas Saverys and Patrick De Brabandere, and the Executive Committee, represented by Nicolas Saverys and Miguel de Potter, hereby confirm that, to the best of their knowledge, the consolidated financial statements for the twelve months period ended 31 December 2015, which have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the entities included in the consolidation as a whole, and that the consolidated management report includes a fair overview of the development and performance of the business and the position of the Company and the entities included in the consolidation, together with a description of the principal risks and uncertainties which they are exposed to.
In accordance with the legal requirements, we report to you in the context of our statutory auditor's mandate. This report includes our report on the consolidated financial statements as of and for the year ended December 31, 2015, as defined below, as well as our report on other legal and regulatory requirements.
We have audited the consolidated financial statements of EXMAR NV ("the Company") and its subsidiaries (jointly "the Group"), prepared in accordance with International Financial Reporting Standards as adopted by the European Union, and with the legal and regulatory requirements applicable in Belgium. These consolidated financial statements comprise the consolidated statement of financial position as at December 31, 2015, the consolidated statement of profit or loss and consolidated statement of other comprehensive income and the consolidated statements of changes in equity and cash flows for the year then ended, and notes, comprising a summary of significant accounting policies and other explanatory information. The total of the consolidated statement of financial position amounts to KUSD 926.112 and the consolidated statement of profit or loss and consolidated statement of other comprehensive income shows a profit for the year of KUSD 11.245.
The board of directors is responsible for the preparation of these consolidated financial statements that give a true and fair view in accordance with International Financial Reporting Standards as adopted by the European Union, and with the legal and regulatory requirements applicable in Belgium, and for such internal control as the board of directors determines, is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing (ISAs). Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the statutory auditor's judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the statutory auditor considers internal control relevant to the Group's preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the board of directors, as well as evaluating the overall presentation of the consolidated financial statements.
We have obtained from the Company's officials and the board of directors the explanations and information necessary for performing our audit.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our unqualified opinion.
In our opinion, the consolidated financial statements give a true and fair view of the Group's equity and consolidated financial position as at December 31, 2015 and of its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the European Union, and with the legal and regulatory requirements applicable in Belgium.
Without qualifying our opinion, we draw attention to note 28 of the consolidated financial statements in which the board of directors states that a significant part of the Group's capital commitments is not financed yet.
The board of directors is responsible for the preparation and the content of the annual report on the consolidated financial statements.
In the context of our mandate and in accordance with the Belgian standard which is complementary to the International Standards on Auditing as applicable in Belgium, our responsibility is to verify, in all material respects, compliance with certain legal and regulatory requirements. On this basis, we provide the following additional statement which does not modify the scope of our opinion on the consolidated financial statements:
— The annual report on the consolidated financial statements includes the information required by law, is consistent, in all material respects, with the consolidated financial statements and does not present any material inconsistencies with the information that we became aware of during the performance of our mandate.
Kontich, April 15, 2016
KPMG Bedrijfsrevisoren Statutory Auditor represented by
Filip De Bock Bedrijfsrevisor
The statutory accounts of EXMAR NV are disclosed hereafter in summarised version. The full version will be filed with the National Bank of Belgium and are available on the Company's website (www.exmar.be). In his audit report, the statutory auditor did not express any reservations in respect of the statutory accounts of EXMAR NV.
| 31/12/15 | 31/12/14 | |
|---|---|---|
| ASSETS | ||
| FIXED ASSETS | 668,115 | 702,600 |
| (In-)tangible assets | 1,432 | 1,678 |
| Financial assets | 666,683 | 700,922 |
| CURRENT ASSETS | 236,961 | 203,266 |
| Amounts receivable after one year | 37,511 | 46,111 |
| Amounts receivable within one year | 72,911 | 79,159 |
| Investments | 50,553 | 54,955 |
| Cash and cash equivalents | 75,374 | 21,939 |
| Accrued income and deferred charges | 612 | 1,102 |
| TOTAL ASSETS | 905,076 | 905,866 |
| EQUITY AND LIABILITIES | ||
| EQUITY | 548,198 | 510,510 |
| Capital | 88,812 | 88,812 |
| Share premium | 209,902 | 209,902 |
| Reserves | 100,857 | 101,817 |
| Accumulated profits | 148,627 | 109,979 |
| PROVISIONS AND DEFERRED TAXES | 2,697 | 2,697 |
| Provisions and deferred taxes | 2,697 | 2,697 |
| LIABILITIES | 354,181 | 392,659 |
| Amounts payable after one year | 285,216 | 299,398 |
| Amounts payable within one year | 67,872 | 90,885 |
| Accrued charges and deferred income | 1,093 | 2,376 |
| TOTAL EQUITY AND LIABILITIES | 905,076 | 905,866 |
| 01/01/2015 - 31/12/2015 |
01/01/2014 - 31/12/2014 |
|
|---|---|---|
| INCOME STATEMENT | ||
| Operating income | 4,847 | 7,387 |
| Operating expenses | -23,484 | -14,919 |
| Operating result | -18,637 | -7,532 |
| Financial income | 142,687 | 33,498 |
| Financial expenses | -12,900 | -25,339 |
| Results from ordinary activities before tax | 111,150 | 627 |
| Extra-ordinary income | 0 | 3,660 |
| Extra-ordinary expenses | -53,826 | 0 |
| Result for the year before tax | 57,324 | 4,287 |
| Income tax | -7 | -769 |
| Result for the year | 57,317 | 3,518 |
| APPROPRIATION OF RESULT | ||
| Result to be appropriated | 167,296 | 135,401 |
| Transfer from/(to) capital and reserves | 960 | 11,944 |
| Result to be carried forward | -148,627 | -109,979 |
| Distribution of result | -19,629 | -37,366 |
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