EXMAR NV

Audit Report / Information • Apr 13, 2018

Deloitte.

Exmar NV/SA

Statutory auditor's report to the shareholders' meeting for the year ended 31 December 2017

The original text of this report is in Dutch

Statutory auditor's report to the shareholders' meeting of Exmar NV/SA for the year ended 31 December 2017

(Consolidated fÍnancial statements)

In the context of the statutory audit of the consolidated financial statements of Exmar NV/SA ("the company") and its subsidiaries (jointly "the group"), we hereby submit our statutory audit report to you. This report includes our report on the consolidated financial statements together with our report on other legal, regulatory and professional requirements, These reports are one and indivisible.

We were appointed in our capacity as statutory auditor by the shareholders' meeting of 16 May 20L7, in accordance with the proposal of the board of directors issued upon recommendation of the audit committee. Our mandate will expire on the date of the shareholders' meeting deliberating on the financial statements for the year ending 31 December 20t9. We have audited the consolidated financial statements of Exmar NV/SA for the first time during the financial year referred to in this report.

Report on the audit of the consolidated financial statements

Unqualified opinion

We have audited the consolidated financial statements of the group, which comprise the consolidated statement of financial position as at 31 December 2017, the consolidated statement of profit or loss and consolidated statement of other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flow for the year then ended, as well as the summary of significant accounting policies and other explanatory notes. The consolidated statement of financial position shows total assets of 918 595 (000) USD and the consolidated statement of profit or loss shows a consolidated net profit for the year then ended of 27 952 (000) USD,

In our opinion, the consolidated financial statements of Exmar NV/SA give a true and fair view of the group's net equity and financial position as of 31 December 2O77 and of its consolidated results and its consolidated cash flow for the year then ended, in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union and with the legal and regulatory requirements applicable in Belgium

Basis for the unqualified opinion

We conducted our audit in accordance with International Standards on Auditing (ISA). Our responsibilities under those standards are further described in the "Responsibilities of the statutory auditor for the audit of the consolidated financial statements" section of our report. We have complied with all ethical requirements relevant to the statutory audit of consolidated financial statements in Belgium, including those regarding independence.

We have obtained from the board of directors and the company's officials the explanations and information necessary for performing our audit,

We believe that the audit evidence obtained is sufficient and appropriate to provide a basis for our opin¡on.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key audit matters	How our audit addressed the key audit matters
1. Impairment of property, plant and equipment - Vessels
Property, plant and equipment - Vessels with a carrying amount of 563 021 (000) USD represent 61% of the consolidated balance sheet total as at 31 December 20L7. ¡ Management's assessment of the valuation of propefty, plant and equipment was	We considered the process and the internal o control implemented by management and we carried out testing relating to the design and implementation of management's controls to assess impairment indicators, We obtained external broker reports via a management to evaluate the fair value less

• significant to our audit because this process is complex and requires significant management judgement. Furthermore, there is an increased risk of impairment due to the current low spot and charter rates.
• . We refer to the consolidated financial statements, including notes to the consolidated financial statements: Note 11 Vessels
• cost to sell, where applicable, of the vessels. We obtained a written confirmation from the appraisers on their independence, expertise and valuation basis.
• We tested management's assumptions used in the value in use calculations and we assessed the historical accuracy of management's estimates, where applicable. In challenging these assumptions, we took into account actual results, negotiated contract terms, external data, independent market reports and market conditions. a
• We involved our valuation experts to assist us in the evaluation of the discount rates used by the Group, performed sensit¡vity analysis where considered necessary and assessed the consistency of valuation methodologies applied and assumptions used throughout the Group. a
• Furthermore, we evaluated the adequacy of the Group's disclosures regarding the impairments of property, plant and equipment. a

2. Going Concern

• . The directors of the Group are required to make a rigorous assessment of whether the Group will remain a going concern for a period of at least twelve months from the date of approval of the financial statements and assess whether there are any material uncertainties in relation to the going concern basis of preparation.
• r The Group's liquidity and headroom on its financial covenants are closely linked to changes ¡n spot and charter rates, occupation of the vessels and ongoing investment and divestment programs,
• . Significant management judgement and estimate is required to forecast future cash flows and conclude on whether the Group will have sufficient liquidity and will be able to comply with its financial covenants for the period of at least 12 months from the date of authorizing the financial statements.

• ¡ We refer to the consolidated financial statements, including notes to the consolidated financial statements : Significant judgements and estimates.

• Key audit matters How our audit addressed the key audit matters

• We have assessed the design and implementation of controls related to the assessment of going concern. a
• We challenged the appropriateness and consistency of the assumptions used in the going concern model, in particular the spot and charter rates, the occupation ratio of vessels which are not employed under a time charter, the cash flows from investing and divesting transactions. In challenging these assumptions we took into account actual results, negotiated contract terms, external data, independent market reports and market conditions. o
• We have tested the arithmetic integrity of the calculations including those related to management's sensitivities. We also performed our own sensitivity calculations to test the adequacy of the available headroom and we considered the mitigating actions available to management under these scenarios. a
• We have tested the quality of management forecasting by comparing EBITDA forecasts for prior periods to actual outcomes a
• We have discussed and reviewed the financial covenants and recomputed the available headroom. o
• We evaluated the adequacy of the Group's disclosures regarding the going concern assumption, a

Other matters

The consolidated financial statements for the previous financial year were audited by another statutory auditor who has issued an unqualified opinion with an emphasis of matters paragraph.

Responsibilities of the board of directors for the consolidated financial statements

The board of directors is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with International Financial Reporting Standards (IFRS) 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 ¡s necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error,

In preparing the consolidated financial statements the board of directors is responsible for assessing the group's ability to continue as a going concern, disclosing, as applicable, matters to be considered for going concern and using the going concern basis of accounting unless the board of directors either intends to liquidate the group or to cease operations, or has no other realistic alternative but to do so.

Responsibilities of the statutory auditor for the audit of the consolidated financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISA will always detect a material misstatement when it ex¡sts. M¡sstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with ISA, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our op¡nion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from an error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control; a
• ^a obtain an understanding of internal control relevant to the audit 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;

• evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the board of directors; o

• a conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the group's ability to continue as a going concern. If we conclude that ^a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion, Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the group to cease to continue as a going concern;

• evaluate the overall presentation, structure and content of the consolidated financial statements, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation, a
• obtain sufficient appropriate audit evidence regarding the financial information of the entities and business activities within the group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. a

We communicate with the audit committee regarding, amongst other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide the audit committee with a statement that we have complied with relevant ethical requirements regarding independence, and we communicate with them about all relationships and other matters that may reasonably be thought to bear our independence, and where applicable, related safeguards.

From the matters communicated to the audit committee, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes any public disclosure about the matter,

*

Report on other legal, regulatory and professional requirements

Responsibilities of the board of directors

The board of directors is responsible for the preparation and the content of the directors' report on the consolidated financial statements.

Responsibilities of the statutory auditor

As part of our mandate and in accordance with the Belgian standard complementary (Revised in 2018) to the International Standards on Auditing (ISA), our responsibility is to verify, in all material respects, the director's report on the consolidated financial statements, as well as to report on these matters.

Aspects regarding the directors'report on the consolidated financial statements

In our opinion, after performing the specific procedures on the directors' report on the consolidated financial statements, this report is consistent with the consolidated financial statements for the period ended 31 December 2017 and it has been established in accordance with the requirements of article 119 of the Companies Code.

In the context of our statutory audit of the consolidated financial statements we are also responsible to consider, in particular based on information that we became aware of during the audit, if the directors' report on the consolidated financial statements is free of material misstatement, either by information that is incorrectly stated or otherwise misleading. In the context of the procedures performed, we are not aware of such material misstatement. We do not express any kind of assurance on the directors' report on the consolidated financial statements.

The non-financial information as required by article 119, 5 2 of the Companies Code, has been disclosed in the directors'report on the consolidated financial statements. This non-financial information has been established by the company in accordance with the internationally recognized framework. We do however not express any opinion on the question whether this non-financial information has been established, in all material respects, in accordance with this internationally recognized framework, Furthermore, we do not express any form of assurance conclusion on individual elements that have been disclosed in this non-financial information,

Statements regarding independence

• . Our audit firm and our network have not performed any prohibited services and our audit firm has remained independent from the company during the performance of our mandate.
• . The fees for the additional non-audit services compatible with the statutory audit of the consolidated financial statements, as defined in article I34 of the Companies Code, have been properly disclosed and disaggregated in the notes to the consolidated financial statements.

Other statements

This report is consistent with our additional report to the audit committee referred to in article 11 of Regulation (EU) No 537/2OI4. a

Zaventem, 13 April 2018

The auditor

DELOITTE Bedrijfsrevisoren / Réviseurs d'Entreprises BV o.v.v.e. CVBA / SC s.f.d. SCRL Represented by Gert Vanhees

Deloitte Bedrufsrevisoren / Réviseurs d'Entreprises Burgerlijke vennootschap onder de vorm van een coöperatieve vennootschap met beperkte aansprakelijkheid / Société civile sous forme d'une société coopérative å responsabilité limitée Registered Office: Gateway building, Luchthaven Nationaal I J, B-1930 Zaventem VAT BE 0429.053.863 - RPR Brussel/RPM Bruxelles - IBAN BE 77 23OO 0465 6l2t - BIC GEBABEBB