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YUJIN INTERNATIONAL LTD.

ANNUAL REPORT 2014


And its subsidiary companies

REPORT AND NON-STATUTORY FINANCIAL

STATEMENTS FOR THE

YEAR ENDED 31 DECEMBER 2014

HIGHLIGHTS

Yujin currently owns and operates two vessels, with a combined tonnage of 9,771.

As a result of the sale of the four bunker tankers in 2013 and reduced Ship Management

income for 2014, the consolidated net revenue declined to USD 7.2 million (2013: USD 10.4

million).

Yujin’s Regional Tankers has shown improvement of 13% increase in revenue to USD 5.8

million (2013: USD 5.1 million) and operating profit went up substantially to USD 0.6 million

(2013: USD 0.3 million. This is mainly due to better charter rates with higher fleet utilisation.

Yujin’s chemical tanker has been on continuous spot contract in 2014. Yujin’s bitumen tanker

is on a term contract and her next contract renewal is due in November 2015.

Yujin managed ten vessels as at 31 December 2014, after the sale of one managed ship by

its 3rd

party owner in March 2014.

The full year impact, following the sale of four bunker tankers in 2013 and a reduction in of

managed ships resulted in a decrease in operating profit in Ship Management income for

2014, leading to an overall operating loss of USD 0.1 million (2013: USD 1.1 million)

The directors do not recommend a dividend be paid for the year ended 31 December 2014.


Annual Report 2014

CONTENTS

Chairman’s Statement 4

Directors ’ Prof i le 6

Report of the Directors 7

Statement of Directors ’ Responsib i l i t ies 10

Independent Auditor ’s Report 11

Consol idated Statement of F inanc ia l Pos it ion 13

Consol idated Statement of Comprehens ive Income 14

Consol idated Sta tement of Changes in Equity 15

Consol idated Statement of Cash F lows 16

Notes To The Non-Statutory F inanc ial Statements 17

Sharehold ings – Top 20 57

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Annual Report 2014

CORPORATE INFORMATION

Directors

Keen Whye LEE, Non-Executive Chairman

Captain Chin Chye LIEW, Joint Managing Director

Captain Joseph Siew Chiong TING, Joint Managing Director

Tobias Joseph RAYMOND, Non-Executive Director

Company Secretary

Ms Lathika Devi Amma D/O K R Pillay

Registered Office

400 Orchard Road,

#20-05 Orchard Towers

Singapore 238875

Audit committee

Tobias Joseph RAYMOND (Chairman)

Keen Whye LEE

Remuneration Committee

Keen Whye LEE (Chairman)

Tobias Joseph RAYMOND

Head Office and Principal place of business

400 Orchard Road,

#20-05 Orchard Towers

Singapore 238875

Nominated Adviser and Broker

Cantor Fitzgerald Europe

One Churchill Place

London E14 5R8

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Annual Report 2014

CORPORATE INFORMATION

Non-statutory Auditor to the Company

Crowe Clark Whitehill LLP

St Bride’s House

10 Salisbury Square

London

EC4Y 8EH UK

Statutory Auditors to the Company

CSI & Co. PAC.

10 Anson Road

#12-15 International Plaza

Singapore 079903

Share Registrar

Computershare Investor Services (Jersey) Limited

Queensway House

Hilgrove Street

St Helier

Jersey

JE1 1ES

Depositary

Computershare Investor Services Plc

PO Box 82

The Pavilions

Bridgewater Road

Bristol

BS13 8AE

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Annual Report 2014

CHAIRMAN’S STATEMENT

Yujin, an owner and operator of a fleet of short range tankers providing logistics and ship management services to customers in the chemical and oil industry in the Asia Pacific Region, announces herewith its audited non-statutory annual results in respect of the year ended 31 December 2014 for the purpose of reporting to its shareholders. With the sale of our bunker tankers in 2013 and reduced ship management income, revenue from continuing operations fell by 27% to USD 7.2 million compared to USD 9.9 million in 2013. While there was an improvement in the revenue and operating profit for regional tankers, losses in operating profit from ship management resulted in an overall operating loss of USD 0.1 million. (2013: operating profit of USD 1.1 million).

2014 2013 2014 2013

External customers USD '000 USD '000 USD '000 USD '000

Bunker tankers - 3,139 - 438

Regional tankers 5,778 5,122 559 362

Ship management and other income 1,464 1,685 (667) 287

Continuing operations 7,242 9,946 (108) 1,087

Bunker trade (non core activity) - 409 - 7

7,242 10,355 (108) 1,094

Revenue Operating profit

Comments on the performance of each operating segment: Bunker tankers There is no activity in 2014 due to the sale of the Group’s bunker tankers in 2013. Regional tankers Yujin owns two foreign going vessels; MT Team Bee, a chemical tanker of 4,772 DWT and MT Arcturus, a bitumen tanker of 4,999 DWT. MT Team Bee has been continuously on spot charter contract in 2014. MT Arcturus has been on a term contract since June 2012 and her next contract renewal will be due in November 2015. Due to redeployment of the less efficient small tankers to coastal and inland trade, there was an increase in demand for our Regional tankers contributing to better rates and high usage resulting in a 13% increase in Revenue to USD 5.7 million, as compared to USD 5.1 million in 2013 while operating profit improved substantially to USD 0.5 million compared to a 2013 profit of USD 0.3 million. The increased operating profit was due to better charter rates with higher fleet utilisation.

5

YUJIN INTERNATIONAL LTD. Annual Report 2014

CHAIRMAN’S STATEMENT Ship management and other income Yujin, through its wholly owned subsidiary, JR Orion Services Pte Ltd, managed ten (10) ships as at 31 December 2014 following the sale of one managed ship by its 3rd party Owner in March 2014. The big drop in income for 2014 was mainly due to full year impact of the sale of our four bunker tankers in 2013. Dividend The Board will not recommend any dividends to be made in respect of the year ended 31 December 2014. Summary The Company continues to review opportunities to develop and grow the business with potential strategic partners, with a view to maintaining its AIM listing. The regional shipping market is expected to improve marginally. Freight rates strengthened in some sectors and fuel costs have weakened and expected to remain soft. If freight rates and fuel costs continue to improve, the market for regional tankers remains strong. Lee Keen Whye Chairman Yujin International Ltd 30 June 2015

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Annual Report 2014

DIRECTORS’ PROFILE Keen Whye LEE, Non-Executive Chairman Mr. Lee was appointed as a Non-Executive Director in 2004. Mr. Lee is currently the Managing Director of Strategic Alliance Capital Pte Ltd, a venture capital and investment management advisory company. Prior to this, Mr. Lee was the founder and Managing Director of Rothschild Ventures Asia Pte Ltd, a member of the N M Rothschild & Sons global merchant banking group, from 1990 to 1997. He was also instrumental in launching Arrow Asia Ventures Ltd, a SGD62.2 million (USD42 million) venture capital fund for investments in South East Asia and Asia Pacific Capital GBR, a DM20 million regional development capital fund. Before founding Rothschild Ventures Asia, he was Associate Director of Kay Hian James Capel Pte Ltd, which he joined in 1987 as Head of Research for Singapore and Malaysia. Between 1985 and 1987, Mr. Lee was based in California working with venture capital companies seeking investments in emerging growth companies. Prior to that, he was an Investment Manager with the Government of Singapore Investment Corporation. Mr. Lee currently has board level positions with several SGX-ST listed companies, including Santak Holdings Limited, Vard Holdings Limited and Ntegrator International Ltd. Mr. Lee holds a Master’s degree in Business Administration from Harvard Business School and a Bachelor’s degree in Business Administration from the University of Singapore. Captain Chin Chye LIEW, Joint Managing Director Captain Liew is Joint Managing Director of Yujin. A Qualified Master Mariner (Class 1) with over 34 years of experience in the shipping and logistics industry (encompassing the petrochemical trade, bunker trading, ship chartering and ship management), Captain Liew guides the Group in its business and strategic development. Prior to joining Yujin, Captain Liew was the Group General Manager of Singapore Shipping Corporation Limited, a company listed on the Singapore Stock Exchange, where he oversaw the shipping and logistic businesses. He has acquired extensive business and networking knowledge of the regional shipping business especially in the tanker operations. Captain Liew is a Member of the Chartered Institute of Logistics and Transport. Captain Joseph Siew Chiong TING, Joint Managing Director Captain Joseph Ting is Joint Managing Director of Yujin. A Qualified Master Mariner (Class 1) with over 25 years of shipping experience, Captain Ting’s specialty is in the operational area, focusing on efficiency and operational excellence. Prior to joining Yujin, Captain Ting was the Deputy General Manager of Singapore Shipping Corporation Limited, where he was responsible for the Company’s ship agency and management business. Captain Ting is a Chartered Member of the Institute of Chartered Shipbrokers (UK) and a Chartered Member of the Chartered Institute of Logistics and Transport. Tobias Joseph RAYMOND, Non-Executive Director Mr. Raymond was appointed as a Non-Executive Director in February 2009. Mr. Raymond has 26 years of experience in all aspects of the capital markets. He began his career in corporate finance at Smith Barney, Harris Upham & Co., Inc. in New York. Mr. Raymond relocated to London in 1992 to work as a market maker in financial derivatives products and established futures arbitrage and proprietary trading programmes for an international trading firm. Mr. Raymond began advising on alternative asset investments in 1997, founding Access Equity Management Limited in 2000. Mr. Raymond holds an MBA in finance from UCLA, a J.D. from the University of California, Hastings College of the Law and is a member of the New York and California Bar Associations.

7


Annual Report 2014

DIRECTORS’ REPORT

We are pleased to submit this annual report to the members of the Company together with the audited non-statutory financial statements for the year ended 31 December 2014. Directors The directors in office at the date of this report are as follows: Lee Keen Whye Joseph Ting Siew Chiong Liew Chin Chye Tobias Joseph Raymond Directors’ interests Particulars of interests of directors who held office at the end of the financial year (including those held by their spouses and infant children) in shares, debentures, warrants and share options in the Company and in related corporations (other than wholly-owned subsidiaries) are as follows: Holdings at Holdings at Name of Directors and Corporations in which interests are held

beginning of the year

end of the year

Lee Keen Whye

Yujin International Ltd.

- ordinary shares - interests held - - - deemed interests 808,000 808,000 Joseph Ting Siew Chiong

Yujin International Ltd. - ordinary shares - interests held - -

- deemed interests 5,395,002 5,395,002 Liew Chin Chye

Yujin International Ltd. - ordinary shares - interests held - -

- deemed interests 5,395,002 5,395,002

Tobias Joseph Raymond Yujin International Ltd. - ordinary shares - interests held - - - deemed interests - -

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Annual Report 2014

DIRECTORS’ REPORT

Except as disclosed in this report, no director who held office at the end of the financial year had interests in shares, debentures, warrants or share options of the Company, or of related corporations, either at the beginning of the financial year, or date of appointment if later, or at the end of the financial year. Neither at the end of nor at any time during the financial year, was the Company a party to any arrangement whose objects are, or one of whose objects is, to enable the directors of the Company to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate. Except for salaries, bonuses and fees and those benefits that are disclosed in this report and in note 16 to the non-statutory financial statements, since the end of the last financial year, no director has received or become entitled to receive, a benefit by reason of a contract made by the Company or a related corporation with the director or with a firm of which he is a member, or with a Company in which he has a substantial financial interest. Share options There were no unissued shares of the Company or its subsidiaries under options granted by the Company or its subsidiaries as at the end of the financial year. Audit Committee The members of the Audit Committee during the year and at the date of this report are: Tobias Joseph Raymond (Chairman), non-executive director

Lee Keen Whye, non-executive director The Audit Committee has held three meetings since the last directors’ report. In performing its functions, the Audit Committee met with the Company’s external auditor to discuss the scope of their work, the results of their examination and evaluation of the Company’s internal accounting control system. The Audit Committee also reviewed the following: assistance provided by the Company’s officers to the external auditor;

quarterly financial information and annual financial statements of the Group and the Company

prior to their submission to the directors of the Company for adoption; and

interested person transactions. The Audit Committee has full access to management and is given the resources required for it to discharge its functions. It has full authority and the discretion to invite any director or executive officer to attend its meetings. The Audit Committee also recommends the appointment of the external auditor and reviews the level of audit and non-audit fees. The Audit Committee is satisfied with the independence and objectivity of the external auditor and has recommended to the Board of Directors that the non-statutory auditor be nominated for re-appointment as auditor at the forthcoming Annual General Meeting of the Company.

9


Annual Report 2014

DIRECTORS’ REPORT

Auditor Crowe Clark Whitehill LLP was appointed non-statutory auditor of the Company by the directors for

the purpose of the audit of the Company’s non-statutory consolidated financial statements.

Statement of disclosure to non-statutory auditor Each of the persons who are directors at the time when this Directors’ report is approved has confirmed that:

- so far as that director is aware, there is no relevant audit information which the Group and Company’s non-statutory auditor are unaware, and

- that director has taken all the steps that ought to have been taken as a director in order to be aware and any information needed by the Group and Company’s non-statutory auditor in connection with preparing their report and to establish that the company’s auditor are aware of that information.

Going concern These non-statutory financial statements are prepared on a going concern basis which the directors

believe to be appropriate for the reasons given below and also in note 2(b) to the non-statutory financial statements.

In support of this assumption, the Directors have prepared detailed budgets and cash flow projections

based on continuing operations and the Group’s currently available cash and cash projected to be generated from its operations. Those budgets and cash flow projections include future estimated cash flows generated from operating activities from the ongoing Group trade as well as, where and if required, other source of funding such as those generated from investing or financing activities. These budgets and cash flow projections have been reviewed and approved by the Board of Directors. On behalf of the Board of Directors,

Joseph Ting Siew Chiong

Director

Liew Chin Chye

Director 30 June 2015

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Annual Report 2014

STATEMENT OF DIRECTORS’

RESPONSIBILITIES

In respect of these non-statutory financial statements the directors have agreed they are responsible for preparing the annual report and the non-statutory financial statements. The directors are required to prepare non-statutory financial statements for the Group and Company in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IASB”) (together - “IFRS”). International Accounting Standard 1 requires that financial statements present fairly for each financial year the Group and Company’s financial position, financial performance and cash flows. This requires the faithful representation of the effects of transactions, other events and conditions in accordance with the definitions and recognition criteria for assets, liabilities, income and expenses set out in the International Accounting Standards Board’s “Framework for the Preparation and Presentation of Financial Statements”. In virtually all circumstances, a fair representation will be achieved by compliance with all IFRS. Directors are also required to: - select suitable accounting policies and then apply them consistently; - present information, including accounting policies, in a manner that provides relevant, reliable,

comparable and understandable information; and - provide additional disclosures when compliance with the specific requirements in IFRS is

insufficient to enable users to understand the impact of particular transactions, other events and conditions on the Group and Company’s financial position and financial performance.

The directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Group and the Company. They are also responsible for safeguarding the assets of the Group and the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. In the opinion of the directors, the non-statutory financial statements set out on pages 13 to 57 are drawn up so as to give a true and fair view of the state of affairs of the Group and the Company as at 31 December 2014, and of the results, the changes in equity and cash flows of the Group and the Company for the financial year then ended and at the date of this statement, there are reasonable grounds to believe that the Group and the Company will be able to pay their debts as and when they fall due. On behalf of the Board of Directors, Joseph Ting Siew Chiong Director Liew Chin Chye Director Singapore 30 June 2015

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Annual Report 2014

INDEPENDENT AUDITOR’S REPORT Independent Auditor’s Report to the Members of Yujin International Limited

We have audited the consolidated non-statutory financial statements (“the non-statutory financial statements”) of Yujin International Limited for the year ended 31 December 2014 which comprise the consolidated statement of comprehensive income, the consolidated statement of financial position, the consolidated statement of cash flows, the consolidated statement of changes in equity and related notes.

The financial reporting framework that has been applied in their preparation is International Financial Reporting Standards as issued by the International Accounting Standards Boards (IFRSs). This report is made solely to the company's members, as a body. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of directors and auditor

As explained more fully in the Statement of Directors' Responsibilities, the directors are responsible for the preparation of the non-statutory financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the non-statutory financial statements in accordance with International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors.

Scope of the audit of the non-statutory financial statements

An audit involves obtaining evidence about the amounts and disclosures in the non-statutory financial statements sufficient to give reasonable assurance that the non-statutory financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the company's circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the non-statutory financial statements.

We read all the financial and non-financial information in the Chairman’s statement and Directors’ Report and to identify material inconsistencies with the audited non-statutory financial statements and to identify any information that is apparently misstated based on, or materially inconsistent with, the knowledge acquired by us during the course of our audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

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Annual Report 2014

INDEPENDENT AUDITOR’S REPORT

Opinion on non-statutory financial statements

In our opinion, the non-statutory financial statements:

give a true and fair view of the state of the consolidated affairs as at 31 December 2014 and of its consolidated loss for the year then ended; and

have been properly prepared in accordance with IFRSs.

Crowe Clark Whitehill LLP

Chartered Accountants

St Bride’s House

10 Salisbury Square

London

EC4Y 8EH

30 June 2015 Note: The maintenance and integrity of the Yujin International Limited website is the responsibility of the directors. The work carried out by the auditor does not involve consideration of these matters and, accordingly, the auditor accepts no responsibility for any changes that may have occurred to the non-statutory financial statements since they were initially presented on the website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

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Annual Report 2014

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2014

Note 2014 2013

ASSETS USD USD

Non-current assets

Property, plant and equipment 5 11,529,025 11,248,869

Deferred tax 11 - 200,421

11,529,025 11,449,290

Current assets

Trade and other receivables 6 825,349 1,254,828

Cash and cash equivalents 7 313,748 744,195

1,139,097 1,999,023

Total assets 12,668,122 13,448,313

EQUITY AND LIABILITIES

Equity attributable to equity holders of the Company

Share capital 8 3,317,897 3,317,897

Retained earnings 8 (717,267) (501,180)

Currency translation reserve 1,938,491 2,604,010

Revaluation reserve 3,003,083 1,744,296

7,542,204 7,165,023

Non-controlling interests (260,197) (505,814)

Total equity 7,282,007 6,659,209

Non-current liabilities

Term loan (secured) 9 1,006,562 1,711,562

Deferred tax 11 1,476,853 1,623,238

2,483,415 3,334,800

Current liabilities

Trade and other payables 12 1,444,948 1,853,258

Amount payable from a related company 12 167,102 114,490

Term loan (secured) 9 705,000 705,000

Provisions 10 60,158 80,816

Income tax payable 13 525,492 700,740

2,902,700 3,454,304

Total liabilities 5,386,115 6,789,104

Total equity and liabilities 12,668,122 13,448,313

The financial statements were approved by the Board and authorised for issue on 30 June 2015 and were signed on its behalf by

Joseph Ting Siew Chiong Liew Chin Chye Director Director

The accompanying notes form an integral part of the financial statements.

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Annual Report 2014

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2014

Note 2014 2013

USD USD

Revenue 14 6,345,912 9,367,445

Other income 14 895,739 987,458

7,241,651 10,354,903

Costs and expenses

Cost of sales 3,981,561 4,579,321

Depreciation 5 1,089,676 2,080,476

Directors' fees 16 97,989 93,611

Directors' salary 16 554,451 602,260

Staff costs 15 968,335 1,052,855

Other operating expenses 17 658,233 852,353

(7,350,245) (9,260,876)

Profit from operations (108,594) 1,094,027

Non-operating expenses

Impairment loss on property, plant and equipment 5 - (705,982)

Loss on disposal on property, plant and equipment 17 - (867,038)

Finance costs 18 (40,273) (216,205)

Loss before tax 18 (148,867) (695,198)

Income tax income/(expense) 19 67,921 (423,195)

LOSS FOR THE YEAR (80,946) (1,118,393)

Other comprehensive loss

Foreign currency translation differences for subsidiaries (665,519) (626,559)

Revaluation of property, plant and equipment 5 1,369,263 (1,041,258)

Other comprehensive income for the year, net of tax 703,744 (1,667,817)

TOTAL COMPREHENSIVE INCOME / (LOSS) FOR THE YEAR 622,798 (2,786,210)

Attributable to :

Equity holders of the company 377,181 (2,711,561)

Non-controlling interests 245,617 (74,649)

Total comprehensive income / (loss) for the year 622,798 (2,786,210)

Attributable to :

Equity holders of the company (216,087) (1,043,744)

Non-controlling interests 135,141 (74,649)

Loss for the year (80,946) (1,118,393)

Earnings per share

Basic (in USD) 24 (0.007) (0.03)

Diluted (in USD) 24 (0.007) (0.03)


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Annual Report 2014

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2014

Share Translation Revaluation Retained

Total attributable

to equity holders

Non-

controlling Total

capital reserve reserve earnings of the Company interests equity

USD USD USD USD USD USD USD

Balance at 31 December 2012 3,317,897 3,496,966 2,519,360 542,564 9,876,787 (431,368) 9,445,419

Total comprehensive income/(loss) for the year

Loss for the year - - - (1,043,744) (1,043,744) (74,649) (1,118,393)

Other comprehensive income :

Revaluation of property, plant and equiptment - - (1,041,258) - (1,041,258) - (1,041,258)

Currency translation differences - (892,956) 266,194 - (626,762) 203 (626,559)

Total comprehensive income/(loss) - (892,956) (775,064) (1,043,744) (2,711,764) (74,446) (2,786,210)

Balance at 31 December 2013 3,317,897 2,604,010 1,744,296 (501,180) 7,165,023 (505,814) 6,659,209

Total comprehensive income/(loss) for the year

Loss for the year - - - (216,087) (216,087) 135,141 (80,946)

Other comprehensive income : -

Revaluation of property, plant and equiptment - - 1,258,787 - 1,258,787 110,476 1,369,263

Currency translation differences - (665,519) - - (665,519) - (665,519)

Total comprehensive income/(loss) - (665,519) 1,258,787 (216,087) 377,181 245,617 622,798

Balance at 31 December 2014 3,317,897 1,938,491 3,003,083 (717,267) 7,542,204 (260,197) 7,282,007


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Annual Report 2014

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2014

Note 2014 2013

USD USD

Cash flows from operating activities

Loss before taxation (148,867) (695,198)

Adjustments for:

Bank loan interest 40,273 216,205

Bad debts written off 50,000 31,459

Provision for impairment loss on receivable (trade) 6 34,419 42,301

Impairment loss on property, plant and equipment 5 - 705,982

Depreciation 5 1,089,676 2,080,476

Loss on disposal of property, plant and equipment 5 - 867,038

1,214,368 3,943,461

Operating profit before working capital changes 1,065,501 3,248,263

Decrease in trade and other receivables 345,060 112,935

Decrease in trade and other payables (1,073,829) (2,455,012)

Provisions (20,658) -

(749,427) (2,342,077)

Cash generated from operations 316,074 906,186

Income tax paid 13 (28,621) -

Net cash flows from operating activities 287,453 906,186

Cash flows from investing activities

Purchase of property, plant and equipment 5 (1,862) (611,449)

Proceeds from disposal of property, plant and equipment - 11,147,383

Net cash flows from/(used in) investing activities (1,862) 10,535,934

Cash flows from financing activities

Payment of term loan interest (40,273) (204,185)

Payment of interest to related parties - (19,163)

Payment of term loan financing (705,000) (8,744,187)

Loan from related party (2,205,702)

Amount payable to a related company 52,612 15,948

Net cash flows used in financing activities (692,661) (11,157,289)

Net increase in cash and cash equivalents (407,070) 284,831

Cash and cash equivalents at beginning of year 7 744,195 474,716

Effect of exchange rate changes (23,377) (15,352)

Cash and cash equivalents at end of year 7 313,748 744,195

The accompanying notes form an integral part of the financial statements

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Annual Report 2014

NOTES TO THE NON-STATUTORY FINANCIAL STATEMENTS 31 DECEMBER 2014 These notes form an integral part of the non-statutory financial statements. The non-statutory financial statements were authorised for issue by the Board of Directors on 30 June 2015. 1. General information

Yujin International Ltd (the “Company”) is a company incorporated in Singapore. The address of the Company’s registered office is 400 Orchard Road #20-05 Orchard Towers Singapore 238875.

The non-statutory financial statements of the Company as at and for the year ended 31 December 2014 comprise the Company and its subsidiaries (together referred to as the “Group” and individually as “Group entities”).

The Company is primarily involved in the business of ship owners, shippers, shipping agents, ship chandlers, ship management services. The principal activities of the subsidiaries are stated in note 4 to the financial statements.

2. Basis of preparation (a) Statement of compliance

The non-statutory financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS). The consolidated financial statements have been prepared on the historical cost basis except as otherwise described in the accounting policies below.

(b) Going concern

The non-statutory financial statements have been prepared on the going concern basis of accounting which assumes adequate financial resources will be available to the Group for a period of at least twelve months from the date of approval of these non-statutory financial statements. In support of this assumption, the Directors have prepared detailed budgets and cash flow projections based on continuing operations and the Group’s currently available cash and cash projected to be generated from its operations. Those budgets and cash flow projections include future estimated cash flows generated from operating activities from the ongoing Group trade as well as, where and if required, other source of funding such as those generated from investing or financing activities. These budgets and cash flow projections have been reviewed and approved by the Board of Directors.

(c) Functional and presentation currency

These non-statutory financial statements are presented in United States dollar (“USD”), while the Company’s functional currency is Singapore dollar (“SGD”).

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Annual Report 2014

NOTES TO THE NON-STATUTORY FINANCIAL STATEMENTS 31 DECEMBER 2014 2. Basis of preparation (continued) (d) Use of estimates and judgements

The preparation of the consolidated non-statutory financial statements in conformity with IFRSs requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.

Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment within the next financial year are included in the following notes: • Note 5 - Useful life of depreciable assets

The charge in respect of periodic depreciation is derived after determining an estimate

of an asset’s expected useful life and the expected residual value at the end of its life. Increasing an asset’s expected life or its residual value would result in a reduced depreciation charge in the consolidated income statement. The useful lives and residual values of the Group’s assets are determined by management at the time the asset is acquired and reviewed annually for appropriateness. The lives are based on historical experience with similar assets as well as anticipation of future events which may impact their life such as changes in technology.

Historically changes in useful lives and residual values have not resulted in material

changes to the Group’s depreciation charge.

• Note 18 - Utilisation of Group tax relief and tax losses

The Group’s tax charge on ordinary activities is the sum of the total current and deferred tax charges. The calculation of the Group’s total tax charge necessarily involves a degree of estimation and judgement in respect of certain items whose tax treatment cannot be finally determined until resolution has been reached with the relevant tax authority or, as appropriate, through a formal legal process. The final resolution of some of these items may give rise to material profits, losses and/or cash flows.

Information about critical judgements in applying accounting policies that have the most significant effect on the amounts recognised in the non-statutory financial statements are included in the following notes:

• Note 5 - Valuation of property, plant and equipment

Property, plant and equipment represent a significant proportion of the asset base of the Group’s total assets. Therefore the estimates and assumptions made to determine their carrying value and related depreciation are critical to the Group’s financial position and performance. Management reviews the carrying value of its property, plant and equipment at each balance sheet date, which includes the undertaking of a third party valuation by an independent, professional valuer, who has the necessary expertise to value both bunker and regional tankers.

19


Annual Report 2014

NOTES TO THE NON-STATUTORY FINANCIAL STATEMENTS 31 DECEMBER 2014

2. Basis of preparation (continued) (d) Use of estimates and judgements (continued) • Note 6 - Impairment of trade and other receivables

Management reviews its loans and receivables for objective evidence of impairment at least quarterly. Significant financial difficulties of the debtor, the probability that the debtor will enter bankruptcy, and default or significant delay in payments are considered objective evidence that a receivable is impaired. In determining this, management makes judgement as to whether there is observable data including that there has been a significant change in the payment ability of the debtor, or whether there have been significant changes with adverse effect in the technological, market, economic or legal environment in which the debtor operates in.

(e) Adoption of Standards

Standards issued but not effective and improvements to IFRS’s which become effective at certain later dates are listed below. The Group reasonably expects these standards and interpretations to be applicable at a future date when they become effective.

- IAS 16 and IAS 38

‘Amendments- Clarification of Acceptable Methods of Depreciation and Amortisation’ - IFRS 11 ‘Amendments to Accounting for Acquisitions of Interest in Joint Operations’ - IFRS 14 ‘Regulatory Deferral Accounts’ - IFRS 15 ‘Revenue from Contracts with Customers’ - Amendment to IFRS 1 – Government Loans - Investment Entities (Amendments to IFRS 10, IFRS 12 and IFRS 27) - IFRIC 21 Levies - IAS 36 Amendments Recoverable amounts, Disclosures for non-financial assets.

It is not anticipated that the adoption of these standards and interpretation in future periods will have a material impact on the financial statements when they come into effect.

3. Significant accounting policies

The accounting policies set out below have been applied consistently to all periods presented in these non-statutory financial statements, and have been applied consistently by Group entities.

Certain comparative amounts have been reclassified to confirm with the current year’s presentation.

(a) Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries). Control is achieved where the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The results of subsidiaries acquired or disposed of during the year are included in the consolidated statement of comprehensive income from the effective date of acquisition and up to the effective date of disposal, as appropriate.

20


Annual Report 2014


3. Significant accounting policies (continued)

(a) Basis of consolidation (continued) Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by other members of the Group. All intra-group transactions, balances, income and expenses are eliminated in full on consolidation. Associates are those entities in which the Group has significant influence, but not control, over the financial and operating activities. Investments that are held as part of the Group’s investment portfolio are carried in the balance sheet at fair value even though the Group may have significant influence over those companies. This treatment is permitted by IAS 28 – Investment in Associates, which requires investment held by venture organisations to be excluded from its scope where those investments are designated, upon initial recognition, as at fair value through profit or loss and accounted for in accordance with IAS 39, with changes in fair value recognised in the statement of comprehensive income in the period of change. The Group has no interests in associates through which it carries on its business.

(b) Foreign currency (i) Foreign currency transactions

Transactions in foreign currencies are translated to the respective functional currencies of Group entities at exchange rates at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the end of the reporting period are retranslated to the functional currency at the exchange rate at that date. The foreign currency gain or loss on monetary items is the difference between amortised cost in the functional currency at the beginning of the year, adjusted for effective interest and payments during the year, and the amortised cost in foreign currency translated at the exchange rate at the end of the year.

Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that fair value was determined. Non-monetary items in a foreign currency that are measured in terms of historical costs are translated using the exchange rate at the date of the transaction. Foreign currency differences arising on retranslation are recognised in profit or loss, except for differences arising on the retranslation of available-for-sale equity instruments, a financial liability designated as hedge of the net investment in a foreign operation that is effective, or qualifying cash flow hedges, which are recognised in other comprehensive income.

21


Annual Report 2014



(b) Foreign currency (continued) (ii) Group companies

The assets and liabilities of Group entities that have a functional currency different from the presentation currency, excluding goodwill and fair value adjustments arising on acquisition, are translated to United States dollar at exchange rates at the end of the reporting period. The income and expenses of foreign operations, excluding foreign operations in hyperinflationary economies, are translated to United States dollar at exchange rates at the dates of transactions. Goodwill and fair value adjustments arising on the acquisition of a foreign operation on or after 1 January 2005 are treated as assets and liabilities of the foreign operation and translated at the closing rate. For an acquisition prior to 1 January 2005, the exchange rates at the date of acquisition were used.

Foreign currency differences are recognised in other comprehensive income, and presented in the foreign currency translation reserve (translation reserve) in equity. 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 or 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 significant control, the relevant proportion of the cumulative amount is reattributed to non-controlling interests. When the settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely in the foreseeable future, foreign exchange gains and losses arising from such a monetary item are considered to form part of a net investment in a foreign operation. These are recognised in other comprehensive income, and are presented in the translation reserve in equity.

(c) Financial instruments (i) Non-derivative financial assets

The Group initially recognises loans and receivables and deposits on the date that they are originated. All other financial assets (including assets designated at fair value through profit or loss) are recognised initially on the trade date, which is the date that the Group becomes a party to the contractual provisions of the instrument.

The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of the ownership of the financial asset are transferred. Any interest in transferred financial assets that is created or retained by the Group is recognised as a separate asset or liability.

22


Annual Report 2014



(c) Financial instruments (continued) (i) Non-derivative financial assets (continued)

Financial assets and liabilities are offset and the net amount presented in the statement of financial position 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. Financial instruments are usually categorised as (i) financial assets at fair value through profit and loss, (ii) held-to-maturity financial assets, (iii) loans and receivables, and (iv) available-for-sale financial assets.

During the year, the Group has classified non-derivative financial assets in the following category:

Loans and receivables

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 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.

Loans and receivables comprise cash and cash equivalents, trade and other receivables and amount receivable from a related company.

Cash and cash equivalents

Cash and cash equivalents comprise cash balances and fixed deposits. For the purpose of the statement of cash flows, pledged deposits are excluded whilst bank overdrafts that are repayable on demand and that form an integral part of the Group’s cash management are included in cash and cash equivalents.

Available-for sale financial assets

Available-for sale financial assets are non-derivative financial assets that are designated as available for sale or are not classified in any of the above categories of financial assets. Available-for-sale financial assets are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, they are measured at fair value and changes therein, other than impairment losses and foreign currency differences on available-for-sale debt instruments, are recognised in other comprehensive income and presented in the fair value reserve in equity. When an investment is derecognised, the gain or loss accumulated in equity is reclassified to profit or loss.

Available-for-sale financial assets comprise equity securities and debt securities.

23


Annual Report 2014

NOTES TO THE NON-STATUTORY FINANCIAL STATEMENTS 31 DECEMBER 2014 3. Significant accounting policies (continued) (c) Financial instruments (continued) (ii) Non-derivative financial liabilities

The Group initially recognises debt securities issued and subordinated liabilities on the date that they are originated. All other financial liabilities (including liabilities designated at fair value through profit or loss) are recognised initially on the trade date, which is the date that the Group becomes a party to the contractual provisions of the instrument.

The Group derecognises a financial liability to when its contractual obligations are discharged, cancelled or have expired. Financial assets and liabilities are offset and the net amount presented in the statement of financial position 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.

The Group classifies non-derivative financial liabilities into the other financial liabilities category. Such financial liabilities are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, these financial liabilities are measured at amortised cost using the effective interest method.

Other financial liabilities comprise loans and borrowings, bank overdrafts, trade and other payables, an amount payable to a related company and loans from related parties.

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 cash flows.

(iii) Share capital Ordinary shares

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares are recognised as a deduction from equity, net of any tax effects.

24


Annual Report 2014

NOTES TO THE NON-STATUTORY FINANCIAL STATEMENTS 31 DECEMBER 2014 3. Significant accounting policies (continued)

(d) Property, plant and equipment

(i) Recognition and measurement

Items of property, plant and equipment were initially measured at cost less accumulated depreciation and accumulated impairment losses.

Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed assets include the cost of materials and direct labour, any other costs directly attributable to bringing the assets to a working condition for their intended use, the costs of dismantling and removing the items and restoring the site on which they are located, and capitalised borrowing costs. Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment.

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. The gain or loss on disposal of an item of property, plant and equipment is determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment, and is recognised net within other income/other expenses in profit or loss. When revalued assets are sold, any related amount included in the revaluation reserve is transferred to retained earnings. Vessels are measured at their revalued amounts, being the fair value at the date of revaluation, less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Revaluations are performed with sufficient regularity such that the carrying amount does not differ materially from that which would be determined using fair values at the end of the reporting period.

Any revaluation increase arising on the revaluation of the vessel is recognised in other comprehensive income and accumulated in equity under revaluation reserve, except to the extent that it reverses a revaluation decrease for the same asset previously recognised in profit or loss, in which case the increase is credited to profit or loss to the extent of the decrease previously charged. A decrease in carrying amount arising on the revaluation of vessel is charged to profit or loss to the extent that it exceeds the balance, if any, held in the revaluation reserve relating to a previous revaluation of the vessel.

25


Annual Report 2014

NOTES TO THE NON-STATUTORY FINANCIAL STATEMENTS 31 DECEMBER 2014 3. Significant accounting policies (continued)

(c) Property, plant and equipment (continued) (i) Recognition and measurement (continued)

The accumulated depreciation is eliminated and the net revalued amount is treated as the new gross carrying amount.

The cost of vessels under construction represents all costs attributable to bringing the constructed asset to its working condition and getting it ready for its intended use. The accumulated costs will be reclassified to the appropriate property, plant and equipment account when the vessel is completed. No depreciation charge is provided for equipment under construction until the asset is used in operations. Borrowing costs directly attributable to the construction of the vessels is added to the cost of the vessels until such time as the vessel is ready for use. All other borrowing costs are recognized in the statement of comprehensive income in the period which they relate.

(ii) Subsequent costs

Vessels, which form the major part of the Group’s operating property, plant and equipment, are required to be inspected for operational worthiness every five years with an interim inspection at approximately 30 months into the five yearly inspections. All costs associated with such “dry docking” costs, including operational equipment are depreciated over 30 months (that is between each dry docking). When significant dry docking costs recur prior to the expiry of the depreciated period, the remaining costs of the previous dry docking are written off in the month of the subsequent dry docking. Changes in the expected level of usage could impact the economic useful lives and the residual values of these assets, therefore future depreciation charges could be revised.

The cost of replacing a component of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the component will flow to the Company, and its cost can be measured reliably. The carrying amount of the replaced component is derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred.

(iii) Depreciation

Depreciation is based on the cost of an asset less its residual value. Significant components of individual assets are assessed and if a component has a useful life that is different from the remainder of that asset, that component is depreciated separately.

Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each component of an item of property, plant and equipment. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Group will obtain ownership by the end of the lease term.

26


Annual Report 2014

NOTES TO THE NON-STATUTORY FINANCIAL STATEMENTS 31 DECEMBER 2014 3. Significant accounting policies (continued) (d) Property, plant and equipment (continued)

(iii) Depreciation (continued) The estimated useful lives for the current and comparative years are as follows:

Fully depreciated assets still in use are retained in the non-statutory financial statements. Second hand vessels are depreciated over their estimated remaining useful life of between 10 to 12 years. A second hand vessel, converted to double hull is depreciated over 20 years. All new vessels are depreciated over 30 years.

Depreciation methods, useful lives and residual values are reviewed at the end of each reporting period and adjusted if appropriate.

(e) Impairment

(i) Non-derivative financial assets

A financial asset not carried at fair value through profit or loss is assessed at the end of each reporting period to determine whether there is objective evidence that it is impaired. A financial asset is impaired if objective evidence indicates that a loss event has occurred after the initial recognition of the asset, and that the loss event has a negative effect on the estimated future cash flows of that asset that can be estimated reliably.

Objective evidence that financial assets (including equity securities) are impaired can include default or delinquency by a debtor, restructuring of an amount due to the Group on terms that the Group would not consider otherwise, indications that a debtor or issuer will enter bankruptcy, adverse changes in the payment status of borrowers or issuers in the Group, economic conditions that correlate with defaults or the disappearance of an active market for a security. In addition, for an investment in an equity security, a significant or prolonged decline in its fair value below its cost is objective evidence of impairment.

Loans and receivables

The Group considers evidence of impairment for loans and receivables at both a specific asset and collective level. All individually significant loans and receivables are assessed for specific impairment. All individually significant receivables found not to be specifically impaired are then collectively assessed for any impairment that has been incurred but not yet identified. Loans and receivables that are not individually significant are collectively assessed for impairment by grouping together with similar risk characteristics.

Vessels 10 to 30 years Dry docking 2.5 years Computer software 3 years Office equipment 5 years Office furniture 5 years Office renovation 3 years

27


Annual Report 2014

NOTES TO THE NON-STATUTORY FINANCIAL STATEMENTS 31 DECEMBER 2014 3. Significant accounting policies (continued) (e) Impairment (continued) (i) Non-derivative financial assets (continued)

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 profit or loss and reflected in an allowance account against loans and receivables. Interest on the impaired asset continues to be recognised. When a subsequent event (e.g. repayment by a debtor) causes the amount of impairment loss to decrease, the decrease in the impairment loss is reversed through profit or loss.

(ii) Non-financial assets

The carrying amounts of the Group’s non-financial assets, other than deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. An impairment loss is recognised if the carrying amount of an asset or its related cash-generating unit (CGU) exceeds its estimated recoverable amount.

The recoverable amount of an asset or CGU 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 or CGU. 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 are largely independent of the cash inflows of other assets or CGU.

Impairment losses are recognised in profit or loss.

In respect of other assets, impairment losses recognised in prior periods are assessed at each reporting date for any 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.

(f) Employee benefits (i) Defined contribution plans

A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution pension plans are recognised as an employee benefit expense in profit or loss in the periods during which services are rendered by employees.

28


Annual Report 2014

NOTES TO THE NON-STATUTORY FINANCIAL STATEMENTS 31 DECEMBER 2014 3. Significant accounting policies (continued) (f) Employee benefits (continued) (ii) Short-term employee benefits

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.

(g) Provisions

A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. 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 the risks specific to the liability. The unwinding of the discount is recognised as a finance cost.

(h) Revenue Services

Revenue from a contract to provide services is recognised by reference to the stage of completion of the contract. The stage of completion of the contract is determined as follows: (i) Revenue from time chartering contracts (charter hire income) is recognised on a

time proportionate basis;

(ii) Revenue from voyage charter (freight income) is recognised on a percentage completion basis based on elapsed length of time for each voyage expressed as a percentage of the estimated total length of time for each voyage; and

(iii) Demurrage income represents payments by the charterer when loading or discharging time exceeds the stipulated time in the voyage charter and is recognised when the income can be measured reliably and it is probable that the economic benefits will flow to the Company. The Group recognises revenue from its freight voyages that cross over an accounting period. Revenue contracted for the voyage is apportioned to the period that falls into the accounting period. The voyage period can be estimated accurately based on past experiences of similar voyages.

Sale of goods

Revenue from sale of goods is recognised upon the transfer of significant risks and rewards of ownership of the goods to the customer. Revenue is not recognised to the extent where there are significant uncertainties regarding recovery of the consideration due, associated costs or the possible return of goods.

29


Annual Report 2014

NOTES TO THE NON-STATUTORY FINANCIAL STATEMENTS 31 DECEMBER 2014 3. Significant accounting policies (continued) (i) Lease payments

Payments made under operating leases are recognised in 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.

(j) Finance income and finance cost

Finance income comprises interest income on funds invested. Interest income is recognised as it accrues in profit or loss, using the effective interest method.

Finance costs comprise interest expense on borrowings. 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 as either finance income or finance cost depending on whether foreign currency movements are in a net gain or net loss position.

(k) Income tax

Income tax expense comprises current and deferred tax. Current tax and deferred tax is recognised in profit or loss except to the extent that it relates to a business combination, or items recognised directly in equity or in other comprehensive income. Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using current tax rate.

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. 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 and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously. A deferred tax asset is 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 reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

30


Annual Report 2014

NOTES TO THE NON-STATUTORY FINANCIAL STATEMENTS 31 DECEMBER 2014 3. Significant accounting policies (continued) (k) Income tax (continued)

In the ordinary course of business, there are many transactions and calculations for which the ultimate tax treatment is uncertain. Therefore, the Company recognises tax liabilities based on estimates of whether additional taxes and interest will be due. These tax liabilities are recognised when the Company believes that certain positions may not be fully sustained upon review by tax authorities, despite the Company’s belief that its tax return positions are supportable. The Company believes that its accruals for tax liabilities are adequate for all open tax years based on its assessment of many factors including interpretations of tax law and prior experience. This assessment relies on estimates and assumptions and may involve a series of multifaceted judgements about future events. New information may become available that causes the Company to change its judgment regarding the adequacy of existing tax liabilities, such changes to tax liabilities will impact tax expense in the period that such a determination is made.

(l) Segment reporting

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 the Group’s Chief Operating Decision Maker (“CODM”) to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete information is available. The CODM is the Group Joint Managing Director.

(m) Earnings per share

The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS 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 own shares held. Diluted EPS is determined by adjusting the profit and loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding, adjusted for own shares held, for the effects of all dilutive potential ordinary shares, which comprise convertible notes and share options granted to employees.

31


Annual Report 2014

NOTES TO THE NON-STATUTORY FINANCIAL STATEMENTS 31 DECEMBER 2014 4. The Group’s subsidiaries

The details of subsidiaries are as follow:

Name of Principal Country of

Subsidiary Activities Incorporation

2014 2013 2014 2013

% % USD USD

Yujin Carriers

Pte Ltd

Ship owners, shippers, shipping

agents, ship chandlers and ship

management services Singapore 100 100 172,808 172,808

Yujin Marine

Pte Ltd




Yujin Shipping

Pte Ltd




Yujin Tankers

Pte Ltd




JR Orion

Services

Pte Ltd

Ship management services,

consultancy, ship chartering,

trading of oil and hedging

services Singapore 100 100 138,247 138,247

Yujin Alfa

Pte Ltd




Yujin Bravo

Pte Ltd




Yujin

Chartering

Pte Ltd




services Singapore 100 100 73,252 73,252

Yujin Charlie

Pte Ltd




services Singapore 100 100 - 1

Yujin Delta

Pte Ltd




services Singapore 100 100 - 1

1,198,139 1,198,141

Cost of Percentage of

Equity Held Investment

32


Annual Report 2014

NOTES TO THE NON-STATUTORY FINANCIAL STATEMENTS 31 DECEMBER 2014 5. Property, plant and equipment

Office Office Office Computer Vessels under

Group - 2014 Equipment Furniture Renovation Software Vessels Construction Total


Cost or Valuation

Balance at beginning of year:

At cost 9,286 31,970 51,016 99,556 - - 191,828

At valuation - - - - 11,200,000 - 11,200,000

9,286 31,970 51,016 99,556 11,200,000 - 11,391,828

- Additions - - - 1,862 - - 1,862

- Disposals (370) - - (48,542) - - (48,912)

- Adjustments - - - - - - -

- Revaluation surplus - - - - 1,369,263 - 1,369,263

- Elimination on

revaluation - - - - (1,069,263) - (1,069,263)

- Net exchange

difference - - - - - - -

Balance at end of year 8,916 31,970 51,016 52,876 11,500,000 - 11,644,778

Accumulated depreciation

and impairment

Balance at beginning of

year: 9,285 27,210 47,168 59,296 - - 142,959

- Charge for current

year - 3,555 2,106 14,755 1,069,263 - 1,089,679

- Impairment loss - - - - - - -

- Disposals (370) - - (48,539) - - (48,909)

- Elimination on

revaluation - - - - (1,069,263) - (1,069,263) - Net exchange

difference - 270 369 648 - - 1,287

Balance at end of year 8,915 31,035 49,643 26,160 - - 115,753

Net Book Value

At end of year 1 935 1,373 26,716 11,500,000 - 11,529,025

At beginning of year 1 4,760 3,848 40,260 11,200,000 - 11,248,869

33

YUJIN INTERNATIONAL LTD. Annual Report 2014

NOTES TO THE NON-STATUTORY FINANCIAL STATEMENTS 31 DECEMBER 2014 5. Property, plant and equipment (continued)

Office Office Office Computer Vessels under

Group - 2013 Equipment Furniture Renovation Software Vessels Construction Total


Cost or Valuation

Balance at beginning of year:

At cost 10,831 33,141 52,885 70,139 - 14,209,116 14,376,112

At valuation - - - - 20,271,597 - 20,271,597

10,831 33,141 52,885 70,139 20,271,597 14,209,116 34,647,709

- Additions - - - 40,696 535,200 - 575,896

- Disposals (1,176) - - (8,646) (6,554,952) (14,209,116) (20,773,890)

- Adjustments - - - - (1,041,258) - (1,041,258)

- Revaluation deficit - - - - (1,821,298) - (1,821,298) - Elimination on

revaluation - - - - - - -

- Net exchange

difference (369) (1,171) (1,869) (2,633) (189,289) - (195,331)

Balance at end of year 9,286 31,970 51,016 99,556 11,200,000 - 11,391,828


and impairment

Balance at beginning of

year: 10,830 24,312 39,509 66,269 - - 140,920

- Charge for current year - 3,799 9,159 3,752 2,063,766 - 2,080,476

- Impairment loss (1,176) - - (8,436) (948,450) - (958,062)

- Disposals - - - - 705,982 - 705,982 - Elimination on

revaluation - - - - (1,821,298) - (1,821,298)

- Net exchange

difference (369) (901) (1,500) (2,289) - - (5,059)

Balance at end of year 9,285 27,210 47,168 59,296 - - 142,959

Net Book Value

At end of year 1 4,760 3,848 40,260 11,200,000 - 11,248,869

At beginning of year 1 8,829 13,376 3,870 20,271,597 14,209,116 34,506,789

34


Annual Report 2014

NOTES TO THE NON-STATUTORY FINANCIAL STATEMENTS 31 DECEMBER 2014 5. Property, plant and equipment (continued)

During the year, the Group a) acquired property, plant and equipment with an aggregate cost of USD 1,862 (2013:

USD acquired 575,895) of which USD NIL (2013: USD NIL) was acquired by means of term loan facilities. Cash payments of USD 1,862 (2013: USD 611,448) were made for purchase of property, plant and equipment.

b) had revalued the two (2013: two) operating vessels based on the valuation reports

verified by a firm of independent professional valuers, on an open market basis. The cumulative valuation surplus amounting to USD 1,369,263 (deficit in 2013: USD 13,902) has been transferred to the revaluation reserves of the Group (note 8).

In the previous year, the Group a) disposed of four of its vessels for a consideration of USD11,147,383 to third parties.

Loss on disposal of USD1,021,561 was taken up in the Statement of Comprehensive Income.

b) reversed the revaluation reserve of USD1,027,356 for the disposal of the vessels.

The carrying amount of the vessels would have been USD 9,209,195 (2013: USD 10,278,458) had the vessel been carried at cost less accumulated depreciation and impairment loss.

The Group’s vessels are mortgaged to the bank to obtain term loan facility (note 10).

35


Annual Report 2014

NOTES TO THE NON-STATUTORY FINANCIAL STATEMENTS 31 DECEMBER 2014 6. Trade and other receivables

The credit period for trade receivables ranges from 30 to 60 days. No interest is charged on outstanding trade receivables. The amount receivable from subsidiaries are unsecured, interest-free and repayment on demand.

The Group and the Company’s exposure to credit and currency risks, and impairment losses relating to trade and other receivables are disclosed in note 22.

7. Cash and cash equivalents

Cash and cash equivalents consist of cash on hand and with banks as follows:

2014 2013

USD USD

Cash on hand 7,099 10,018

Cash at bank 306,649 734,177

Balance per Statement of

Financial Position 313,748 744,195 Balance as per Statement of

Cash Flows 313,748 744,195

Trade receivables 582,064 923,593

Other receivables 50,022 172,514

Deposits 72,307 75,699

Prepayments 153,911 125,323

858,304 1,297,129

Less: Impairment losses

- Balance at beginning of year (42,301) -

- Current year 9,346 (42,301)

- Balance at end of the year (32,955) (42,301)

Total trade and other receivables 825,349 1,254,828

Prepayments 153,911 125,323

Loans and receivables 22 671,438 1,129,505

Total trade and other receivables 825,349 1,254,828

36


Annual Report 2014

NOTES TO THE NON-STATUTORY FINANCIAL STATEMENTS 31 DECEMBER 2014 8. Capital and reserves

i) Share Capital

2014 2013

USD USD

Fully paid ordinary shares with no par value:

Balance at beginning of year 3,317,897 3,317,897

Issued during year - -

Balance at end of year 3,317,897 3,317,897

Number of shares 30,000,010 30,000,010 All shares rank equally with regard to the Company’s residual assets. Ordinary shares The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company. At 31 December 2014, the Group and the Company have no Share Option Scheme.

ii) Translation reserve

The translation reserve comprises foreign currency differences arising from the translation of the non-statutory financial statements of foreign operations.

iii) Revaluation reserve

The revaluation reserve relates to the revaluation of the six operating vessels during the year. 2014 2013 USD USD (i) Composition: Revaluation reserve 3,003,083 1,744,296 (ii) Movements: - At beginning of year 1,744,296 2,519,360

- Revaluation surplus/(deficit) on property, plant and equipment (note 5) 1,258,787 (775,064)

- At end of year 3,003,083 1,744,296

The Company has taken up the valuation surplus of USD 1,258,787 (2013: deficit of USD 775,064) in the Revaluation reserve, while the balance of USD 110,476 (2013: USD NIL) is included in the non-controlling interests, totaling USD 1,369,263 (2013: USD 775,064) (note 5).

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Annual Report 2014

NOTES TO THE NON-STATUTORY FINANCIAL STATEMENTS 31 DECEMBER 2014 9. Term loans

2014 2013

USD USD

Within one year 705,000 705,000

Due within 2 to 5 years 1,006,562 1,711,562

Due after 5 years - -

1,006,562 1,711,562

1,711,562 2,416,562

Term loans

- secured 1,711,562 2,416,562

- unsecured - -

1,711,562 2,416,562

Group

(i) The term loans are secured by:

- A first priority legal mortgage on the Group’s vessels (note 5);

- An assignment of all rights, earnings and benefits of the vessel (on a notification basis) in a form acceptable to the bank;

- The assignment of insurance policies covering Hull and Machinery, War Risks, Mortgagee Interest and Protection and Indemnity in respect of the vessel, in a form acceptable to the bank;

- Joint and several guarantee from the Company’s directors; and

- Corporate guarantee from the holding company and certain subsidiaries.

The loans are repayable in 60 monthly installments from the date of last draw down after the completed vessel has been delivered. Effective interest varies from 1.90% to 1.92% (2013: 1.91% to 1.96% per annum). Interests are charged and paid monthly. 10. Provisions Unutilised leave Bonus Total USD USD USD At beginning of year 38,195 42,621 80,816 Provision made during the year 44,448 - 44,448 Provision used during the year (38,195) (26,911) (65,106)

At end of year 44,448 15,710 60,158

Provision for unutilised leave was made on unutilized staff leave balances as at year end based on the Group’s annual leave policy.

38


Annual Report 2014


11. Deferred tax

Note 2014 2013

USD USD

Deferred tax liabilities:

Opening balance 1,623,238 2,902,658

Translation difference - (26,613)

Temporary differences movement 19 (146,385) (1,252,807)

Closing balance 1,476,853 1,623,238

Deferred tax assets:

Opening balance 200,421 1,167,692

Translation difference - -

Temporary differences movement 19 (200,421) (967,271)

Closing balance - 200,421 Deferred tax liability refers to the difference between the net book value of the vessels and their tax written down values. Deferred tax asset relates to excess capital allowances claimed for the vessels and has been recognised to the extent that it is probable that the unused capital allowances claimed will be subsequently utilised.

12. Trade and other payables

Note 2014 2013

USD USD

Trade payables 473,094 930,914

Other payables 82,829 109,168

Advance billings 406,122 318,305

Accruals 482,903 494,871

1,444,948 1,853,258

Amount payable to related company

- Trade - -

- Non-trade 167,102 114,490

167,102 114,490

Total trade and other payables 1,612,050 1,967,748

Advance billings 406,122 318,305

Other financial liabilities 22 1,205,928 1,649,443

Total trade and other payables 1,612,050 1,967,748

39


Annual Report 2014

NOTES TO THE NON-STATUTORY FINANCIAL STATEMENTS 31 DECEMBER 2014 12. Trade and other payables (continued)

The amount payable to, a related company in which the directors have substantial financial interest, and subsidiaries are unsecured, interest-free and repayable on demand.

The Group and the Company’s exposure to currency and liquidity risk related to trade and other payables are disclosed in note 22.

13. Income tax payable This comprises:

Note 2014 2013

USD USD

Balance at the beginning of year 700,740 -

Add: Current year provision 19 - 670,846

Add:(Over)/Under-provision in prior year 19 (121,957) 29,894

Less: Translation difference (24,670) -

554,113 700,740

Less: Payments (28,621) -

Add: Tax refund - -

Balance at the end of year 525,492 700,740

14. Income

The amount of each significant category of income recognised during the financial year is as follows:

2014 2013

USD USD

Revenue

- sale of goods 0 409,369

- rendering of services 6,345,912 8,958,076

6,345,912 9,367,445

Other income

- interest 6 8

- others 895,733 987,450

895,739 987,458

7,241,651 10,354,903 The reporting revenue excludes the Goods and Services tax, disbursements of payments on behalf of related parties and agency transactions which comprise of procurement of supplies on behalf of Principals amounting to USD 2,396,576 (2013: USD 5,360,007). The recovery of procurement is on cost basis amounting to USD 2,396,576 (2013: USD 5,360,007).

40


Annual Report 2014

NOTES TO THE NON-STATUTORY FINANCIAL STATEMENTS 31 DECEMBER 2014 15. Employee benefits expense Group

2014 2013

USD USD

Medical fees 9,124 7,581

Recruitment costs 974 -

Staff defined contribution plan 90,267 100,289

Staff insurance 30,253 22,927

Staff salaries and bonus 837,717 922,058

968,335 1,052,855

16. Directors’ salary

Short term Post

Employee Employment

Year 2014 Benefits Benefits Total

USD USD USD

Joseph Ting Siew Chiong 277,094 8,785 285,879

Liew Chin Chye 277,093 6,589 283,682

Lee Keen Whye 41,449 - 41,449

Tobias Joseph Raymond 41,430 - 41,430

Total 637,066 15,374 652,440

Short term Post

Employee Employment

Year 2013 Benefits Benefits Total

USD USD USD

Joseph Ting Siew Chiong 300,692 9,508 310,200

Liew Chin Chye 300,692 7,131 307,823

Lee Keen Whye 38,440 - 38,440

Tobias Joseph Raymond 39,408 - 39,408

Total 679,232 16,639 695,871

41


Annual Report 2014

NOTES TO THE NON-STATUTORY FINANCIAL STATEMENTS 31 DECEMBER 2014 17. Other operating expenses

2014 2013

USD USD

Fees payable to the company's auditor for the audit of the

Company's annual accounts 35,539 42,101

Fees payable to the company's auditor and its associates

for other services:

- Audit of the accounts of subsidiaries 38,690 39,317

Bank charges 2,308 77,138

Entertainment 29,352 43,197

Office rental 233,649 219,314

Professional fee 88,424 98,921

Telephone expenses 30,500 39,072

Travelling expenses 56,907 58,407

Other administrative expenses 142,864 234,886

658,233 852,353

18. (Loss)/Profit for the year The following items have been including in arriving at the (loss)/profit for the year:

Note 2014 2013

USD USD

Depreciation 5 1,089,676 2,080,477

Directors' fees 97,989 93,611

Impairment loss on property,plant and equipment 5 - 705,982

Loss on disposal on property,plant and equipment 5 - 867,038

Staff costs 15 968,335 1,052,855

Directors salary 16 554,451 602,260

Contributions to defined contribution plan, included

in employee benefits expenses 15&16 105,641 116,928

Provision for impairment loss on receivable (trade) 6 34,419 42,301

Bad debts written off (trade) - 31,459

Bad debts written off (non-trade) 50,000 -

Finance costs :

- Bank loan interest 40,273 197,042

- Interest paid to related parties - 19,163

40,273 216,205

42


Annual Report 2014

NOTES TO THE NON-STATUTORY FINANCIAL STATEMENTS 31 DECEMBER 2014 19. Income tax income / (expense)

Note 2014 2013

Current year income/(expense) USD USD

Current year 13 - (670,846)

Adjustment for prior year 13 (121,957) (29,894)

(121,957) (700,740)

Deferred tax income/(expense)

Deferred tax liability 11 (146,385) 1,252,807

Deferred tax asset 11 200,421 (967,271)

Exchange on translation - (7,991)

54,036 277,545

(67,921) (423,195)

2014 2013

USD USD

Profit/(loss) for the year (80,946) (1,118,393)

Total income tax (income)/expense (67,921) 423,195

Profit/(loss) before tax (148,867) (695,198)

Income tax expenses at statutory rate (25,307) (118,184)

Translation differences - (8,395)

Non-deductible items 177,180 710,841

Non-taxable items (108,965) (122,786)

Effect on taxable income on sale of asset - 725,536

Effect utilisation of capital allowance (210,004) (196,782)

Effect on partial tax exemption - (82,767)

Effect on tax incentives (3,886) (101,147)

Utilisation of tax losses/capital allowances - (174,479)

Under/(over) provision in prior year (121,958) 29,894

Current year losses for which no deferred

tax asset was recognised 225,019 39,009

Group relief to be utilised - -

Deferred tax movement - (277,545)

Total income tax expense (67,921) 423,195

43


Annual Report 2014

NOTES TO THE NON-STATUTORY FINANCIAL STATEMENTS 31 DECEMBER 2014 19. Income tax income/ (expense) (continued)

The Group and the Company has estimated tax timing differences from capital allowances available for offsetting against future taxable income as follows:

2014 2013

USD USD

Unabsorbed Tax Losses

- Amount at beginning of year 1,938,616 2,214,232

- Over/Underprovision in prior year (267,490) 522,874

- Translation difference (2,582) -

- Amount in current year 796,111 (355,076)

- Amount utilised in current year - (443,414)

- Group relief to be utilised - -

- Amount at end of year 2,464,655 1,938,616

2014 2013

USD USD

Unabsorbed Capital Allowances

- Amount at beginning of year 5,006,762 8,113,597

- Translation difference (1,847) -

- Overprovision in prior year (622,088) (2,573,225)

- Amount in current year 4,961 623,935

- Amount utilised in current year (1,235,324) (1,157,545)

- Amount at end of year 3,152,464 5,006,762

The Company will apply for Group Relief (GR) for Singapore companies under section 37C. To qualify for GR, both the transferor and the claimant of the loss items have to:

(i) be Singapore-incorporated companies; (ii) belong to the same Group of companies and maintain 75% shareholding threshold; and (iii) have the same accounting year-end.

The realisation of the future income tax benefits from the tax loss carry forwards and timing differences are available for an unlimited future period subject to there being no substantial change in shareholders as required by provisions in the Income Tax Act. Where provision for deferred tax arising from timing differences has been offset against the above tax loss carry forwards, such provision for deferred tax will be required to be set up when the tax losses are utilised in the future.

44


Annual Report 2014

NOTES TO THE NON-STATUTORY FINANCIAL STATEMENTS 31 DECEMBER 2014 20. Operating lease commitments

(i) Leases as lessee

Rental expenses for all operating leases for the year amounted to USD 240,626 (2013: USD 225,903) for the Group.

At the statement of financial position date, the Group was committed to making the following payments in respect of operating leases with a term of more than one year:

Leases which expire:

2014 2013

USD USD

Within one year 199,626 196,169

Between one and five years 72,539 241,620

More than 5 years - -

272,165 437,789

(ii) Leases as lessor Non-cancellable operating lease rentals are receivable as follows:

2014 2013

USD USD

Within one year 2,036,421 1,808,730

Between one and five years - -

More than 5 years - -

2,036,421 1,808,730

45


Annual Report 2014

NOTES TO THE NON-STATUTORY FINANCIAL STATEMENTS 31 DECEMBER 2014 21. Related party transactions (a) Parent and ultimate controlling party

The Company is a company listed by shares on AIM, a market operated by the London Stock Exchange. The substantial shareholder is Kavita Capital Ltd. a company incorporated in the British Virgins Islands which holds 51.3 % of total shareholding.

(b) Significant transactions with related parties

The Company has significant transactions with related parties on terms agreed between the parties as follows:

2014 2013

USD USD

Services

Charter Hire 4,197,500 4,197,500

Broker Commission charged by a Subsidiary - 362,960

Accounting fees charged by a Subsidiary 151,504 191,245

Management fees charged by Related company 204,000 357,565

(c) Transactions with key management personnel

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including any director (whether executive or otherwise) of that entity. At the year end the Key Management personnel included directors only. Transactions with directors are disclosed in Note 16.

46


Annual Report 2014

NOTES TO THE NON-STATUTORY FINANCIAL STATEMENTS 31 DECEMBER 2014 22. Financial instruments

(a) Categories of financial instruments

The following table sets out the financial instruments as at the statement of financial position date:

Note 2014 2013

USD USD

Financial assets :

Loans and receivables 6 671,438 1,129,505

Cash and cash equivalents 7 313,748 744,195

985,186 1,873,700

Financial liabilities :

Other financial liabilities 12 1,205,928 1,649,443

Term loans 9 1,711,562 2,416,562

2,917,490 4,066,005

(b) Fair values of financial assets and financial liabilities

The carrying amounts of the financial assets and financial liabilities approximate to their fair values.

(c) Credit risk (i) Exposure to credit risk

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date was:

2014 2013

USD USD

Loans and receivables 627,951 1,129,505

Cash and cash equivalents 313,748 744,195

941,699 1,873,700

Carrying amount

47


Annual Report 2014

NOTES TO THE NON-STATUTORY FINANCIAL STATEMENTS 31 DECEMBER 2014 22. Financial instruments (continued) (c) Credit risk (continued)

(ii) Impairment losses The ageing of loans and receivables at the reporting date was:

Impairment Impairment

Gross losses Gross losses

2014 2014 2013 2013

USD USD USD USD

Group

Not past due 78,843 - 454,516 -

Past due 1-30days 201,559 - 240,924 -

Past due 31-180 days 20,507 - 264,814 -

Past due 181-365 days 53,981 - 52,254 -

More than one year 121,516 (32,955) 159,298 (42,301)

476,406 (32,955) 1,171,806 (42,301)

The movement in the allowance for impairment in respect of loans and receivables during the year was as follows:

Carrying amount

2014

USD 2013 USD

At beginning of year 42,301 -

Current year Adjustment (9,346) 42,301

At end of year 32,955 42,301

Trade receivables that are determined to be impaired at the statement of financial position date relate to debtors that are in financial difficulties and have defaulted on payments. Based on historic default rates, the Company believes that, apart from the above, no impairment allowance is necessary. The allowance account in respect of loans and receivables is used to record impairment losses unless the Company is satisfied that no recovery of amount owing is possible; at that point, the amounts are considered irrecoverable and are written off against the financial asset directly. At 31 December 2014, the Company does not have any collective impairment on its loans and receivables (2013: NIL).

48


Annual Report 2014

NOTES TO THE NON-STATUTORY FINANCIAL STATEMENTS 31 DECEMBER 2014 22. Financial instruments (continued) (c) Credit risk (continued)

(ii) Impairment losses (continued) The movement in the allowance for impairment in respect of loans and receivables during the year was as follows: Trade receivables that are determined to be impaired at the statement of financial position date relate to debtors that are in financial difficulties and have defaulted on payments. Based on historic default rates, apart from the above, no impairment allowance is necessary. The allowance account in respect of loans and receivables is used to record impairment losses unless the Company is satisfied that no recovery of the amount owing is possible; at that point, the amounts are considered irrecoverable and are written off against the financial asset directly.

(d) Liquidity risk

The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the impact of netting agreements:

Carrying

amount Total <12 months 1 - 2 years 2 - 5 years > 5 years

Group USD USD USD USD USD USD

2014

Other financial liabilities 1,205,928 (1,205,928) (1,205,928) - - -

Term loans (secured) 1,711,562 (1,745,793) (719,100) (719,100) (307,593) -

2013

Other financial liabilities 1,649,443 (1,649,443) (1,649,443) - - -

Term loans (secured) 2,416,562 (2,464,893) (719,000) (719,000) (1,026,693) -

Contractual cash flows

49


Annual Report 2014

NOTES TO THE NON-STATUTORY FINANCIAL STATEMENTS 31 DECEMBER 2014 22. Financial instruments (continued) (e) Currency risk

(i) Exposure to currency risk

The Group is exposed to the following financial instruments that are denominated in a currency other than the functional currency of the respective entities. The currencies giving rise to foreign currency risk are the United States dollar and Singapore dollar. The Group’s exposure to the various currencies is as follows:

United States dollar

Singapore dollar Total

USD USD USD

Group

2014

Loans and receivables 44,329 - 44,329

Cash and cash equivalents 14,485 50,341 64,826

Other financial liabilities (206,773) - (206,773)

Term loans - - -

(147,959) 50,341 (97,618)

Group

2013 162,748 29,454 192,202

Loans and receivables 20,925 93,014 113,939

Cash and cash equivalents (46,199) (23,517) (69,716)

Other financial liabilities - - -

Term loans

137,474 98,951 236,425

(ii) Sensitivity analysis

A 10% strengthening of the United States dollar against the following currencies at the reporting date would increase (decrease) profit or loss and equity by the amounts shown below. This analysis is based on foreign currency exchange rate variances that the Group considered to be reasonable possible at the end of the reporting period. This analysis assumes that all other variables, in particular interest rates, remain constant. The analysis is performed on the same basis for 2012, albeit that the reasonably possible foreign exchange rate variances were different, as indicated below:

2014 2013 2014 2013

Group $ $ $ $

Singapore Dollar (5,034) (9,895) - -

Profit or Loss Equity

50


Annual Report 2014

NOTES TO THE NON-STATUTORY FINANCIAL STATEMENTS 31 DECEMBER 2014 22. Financial instruments (continued) (e) Currency risk (continued)

(ii) Sensitivity analysis (continued)

A 10% weakening of the United States dollar against the above currency at the reporting date would have had the equal but opposite effect to the amounts shown above, on the basis that all other variables remain constant.

f) Interest rate risk

(i) Exposure to interest rate risk

At the reporting date, the interest rate profile of the interest-bearing financial instruments was:

Nominal

interest rates 2014 2013 2014 2013

USD USD USD USD

Fixed rate instruments

Financial assets

- Cash and cash

equivalents 0.01% 313,748 744,195 14,216 111,167

Financial liabilities - - - - -

313,748 744,195 14,216 111,167

Variable rate instruments

Financial assets - - - -

Financial liabilities

- Term loans 1.5% to 1.75% (1,711,562) (2,416,562) - -

plus SIBOR

(1,711,562) (2,416,562) - -

Group Carrying amount Company Carrying amount

(ii) Sensitivity Analysis

The sensitivity analysis below have been determined based on exposure to interest rates for the non-derivative instruments at the end of the reporting period and the stipulated change taking place at the beginning of the financial year and held constant throughout the reporting period in the case of instruments that have floating rates. At 31 December 2014, if interest rates at that date had been 100 basis points lower with all other variables held constant, pre-tax profit for the year would have been USD 17,116 and USD NIL (2013: USD 24,166 and USD NIL) higher for the Group and Company respectively, arising mainly as a result of lower interest expense on variable borrowings.

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Annual Report 2014

NOTES TO THE NON-STATUTORY FINANCIAL STATEMENTS 31 DECEMBER 2014 23. Financial risk management (a) Overview The Group has exposure to the following risks from its use of financial instruments:

credit risk

liquidity risk

market risk (currency and interest rate)

This note presents information about the Group’s exposure to each of the above risks, the Group’s objectives, policies and processes for measuring and managing risk, and the Group’s management of capital. Further quantitative disclosures are included throughout these non-statutory financial statements.

Risk management framework

The Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk management framework.

The Group’s risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group’s activities.

Credit risk

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Group’s receivables from customers and investment securities.

Trade and other receivables The Group has one major customer which accounted for approximately 39% of its revenue in 2014 (2013: 39%).

The Group establishes an allowance for impairment that represents its estimate of incurred losses in respect trade and other receivables. The main components of this allowance are a specific loss component that relates to individually significant exposures, and a collective loss component established for groups of similar assets in respect of losses that have been incurred but not yet identified. The collective loss allowance is determined based on historical data of payment statistics for similar financial assets.

Cash and cash equivalents

The Group held cash and cash equivalents of USD 313,748 at 31 December 2014 (2013: USD 744,195), which represents its maximum credit exposure on these assets. The cash and cash equivalents are held with reputable bank and financial institution.

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Annual Report 2014

NOTES TO THE NON-STATUTORY FINANCIAL STATEMENTS 31 DECEMBER 2014 23. Financial risk management (continued) (a) Overview (continued) Liquidity risk

Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation. At the year end the group had net current liabilities of USD 1,763,603 (2013: USD 1,455,281). The group has a steady inflow of income from term charter of four vessels and ship management segment. The directors believe that the group will have sufficient cash and other resources to fund its activities and to continue its operations for the foreseeable future and for the group to continue to meet its liabilities as they fall due. See note 2(b).

Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Group's income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

Currency risk

The Group is exposed to currency risk on sales, purchases and borrowings that are denominated in a currency other than the functional currency of the Company, primarily the US Dollars (USD), but also Singapore dollar (SGD). The currencies in which these transactions primarily are denominated are USD and SGD.

Interest rate risk

The Group adopts a policy of ensuring that majority of its exposure to changes in interest rates on borrowings is on a fixed-rate basis, taking into account assets with exposure to changes in interest rates.

(b) Capital management

The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. Capital consists of share capital and reserves and retained earnings of the Group. The Board of Directors monitors the return of capital as well as the level of dividends to ordinary shareholders.

The primary objective of the Group and the Company’s capital management are to ensure that it maintains healthy capital ratios in order to support its business and maximise shareholder value.

53


Annual Report 2014

NOTES TO THE NON-STATUTORY FINANCIAL STATEMENTS 31 DECEMBER 2014 23. Financial risk management (continued) (b) Capital management (continued)

The Directors actively and regularly review and manage the Group’s capital structure to ensure optimal capital structure and shareholder returns, taking into consideration the future capital requirements of the Group. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, issue new shares or return capital to shareholders. No changes were made in the objectives, policies or processes during the year. The Group and the Company monitor capital using gearing ratios, by dividing net debt with total equity. The Group and the Company’s policy are to keep the gearing ratio within the range of gearing ratios of similar industry in order to secure access to finance at a reasonable cost. The Group’s net debt to adjusted equity ratio at the end of the reporting period was as follows: There were no changes in the Group's approach to capital management during the year. The Company is not subject to externally imposed capital requirements.

2014 2013

USD USD

Total debt 5,386,115 6,789,104

Less : Cash and cash equivalents (313,748) (744,195)

Net debt 5,072,367 6,044,909

54


Annual Report 2014


24. Loss per share

The calculation of basic earnings per share and diluted earnings per share at 31 December 2014 was based on the loss attributable to ordinary shareholders of USD 216,087 (2013: USD 1,043,744 loss) and a weighted average number of ordinary shares, calculated as follows:

2014 2013

No. of shares No. of shares

Issued ordinary shares at beginning of the year 30,000,010 30,000,010

Weighted number of shares issued during the year - -

Weighted average number of ordinary shares

in issue during the year 30,000,010 30,000,010

Basic loss per share : USD 0.007 2013: USD 0.03 Diluted loss per share : USD 0.007 2013: USD 0.03

25. Segment reporting

For management purposes, the Group is organised into operating segments based on the type of customers served and has three segments plus a non-core activity which is being done on an ad-hoc basis as follows: (a) Bunker tankers: Our customers are principally bunker traders operating in the port of

Singapore. These traders charter the Group’s ships to supply bunker fuel to ships calling at the port.

(b) Regional tankers: Yujin’s customers are manufacturers and traders of chemicals, including bitumen and vegetable oils, mainly palm oils. Yujin provides logistics support to these customers by transporting their products mainly within the Asia Pacific region.

(c) Ship management and other related activities: The Group, through its ship management

company JR Orion Services Pte. Ltd, provides crew and technical management as well as ancillary services to ship owners.

(d) Bunker trade: Yujin is allocated an amount of bunker fuel by suppliers for its own use.

Yujin occasionally sells off any excess over its own requirements. This non-core activity is being done at the request of customers on ad hoc basis.

55


Annual Report 2014

NOTES TO THE NON-STATUTORY FINANCIAL STATEMENTS 31 DECEMBER 2014 25. Segment reporting (continued)

2014 2013 2014 2013

External customers USD '000 USD '000 USD '000 USD '000

Bunker tankers - 3,139 - 438

Regional tankers 5,778 5,122 559 362

Ship management and other income 1,464 1,685 (667) 287

Continuing operations 7,242 9,946 (108) 1,087

Bunker trade (non core activity) - 409 - 7

7,242 10,355 (108) 1,094

Revenue Operating profit

Property, plant and equipment (In USD ' 000)

01-Jan-14 Additions Disposals AdjustmentsRevaluation 31-Dec-14

Bunker tankers - - - - - -

Regional tankers 11,200 - - (1,069) 1,369 11,500

Ship management and others 192 2 (49) - 145

Total 11,392 2 (49) (1,069) 1,369 11,645

01-Jan-14 Additions Disposals Adjustments

Impairmen

t loss 31/12/201


Regional tankers - 1,069 - (1,069) - -

Ship management and others 143 20 (47) - 116

Total 143 1,089 (47) (1,069) - 116

01-Jan-14 Additions Disposals AdjustmentsRevaluation 31-Dec-14


Regional tankers 11,200 (1,069) - - 1,369 11,500

Ship management and others 49 (18) (2) - - 29

Total 11,249 (1,087) (2) - 1,369 11,529

At cost


Net book value

56


Annual Report 2014

NOTES TO THE NON-STATUTORY FINANCIAL STATEMENTS 31 DECEMBER 2014 25. Segment reporting (continued)

Property, plant and equipment (In USD ' 000)

01-Jan-13 Additions Disposals Adjustments Revaluation 31-Dec-13

Bunker tankers 7,772 - (6,555) (190) (1,027) -

Regional tankers 26,709 535 (14,209) (1,821) (14) 11,200

Ship management and others 167 41 (10) (6) 192

Total 34,648 576 (20,774) (2,017) (1,041) 11,392

01-Jan-13 Additions Disposals Adjustments

Impairment

loss 31-Dec-13

Bunker tankers - 948 (948) - - -

Regional tankers - 1,115 - (1,821) 706 -

Ship management and others 141 17 (10) (5) - 143

Total 141 2,080 (958) (1,826) 706 143

01-Jan-13 Additions Disposals Adjustments Revaluation 31-Dec-13

Bunker tankers 7,772 (948) (5,607) (190) (1,027) -

Regional tankers 26,708 (580) (14,209) - (720) 11,200

Ship management and others 26 24 - (1) - 49

Total 34,506 (1,504) (19,816) (191) (1,747) 11,249

At cost


Net book value

Additions in the rigional tankers segment in 2014 and 2013 relate to dry docking expenditure and exchanges differences. Impairment loss and total liabilities are not disclosed on a segmental basis because that information is not provided to the Chief Operating Decision maker of the group. Geographical segments: The assets and operations of the Company are primarily located in Singapore, except the regional tankers which ply in the oceans in the Asia Pacific region, but may occasionally sail beyond if needed.

57


Annual Report 2014

SHAREHOLDINGS Top 20 holders of Ordinary Shares as at 8 May 2015

Rank Name Units % of Units

1 KAVITA CAPITAL LTD 15,385,005 51.28

2 J TING PTE LTD 5,395,002 17.98

3 SEO PTE LTD 5,395,002 17.98

4 COMPUTERSHARE COMPANY NOMINEES LTD 1,031,942 3.44

5 MEDAN FINANCIAL LIMITED 850,000 2.83

6 LEE KEEN WHYE 808,000 2.69

7 ONG SAU YIN 510,000 1.70

8 WORLD STAR PTE LTD 230,000 0.77

9 MS QUEK WEI LING ADELE 100,000 0.33

10 SEOW BOON ANN 84,000 0.28

11 MR CHOW MING HON COLIN 10,001 0.03

12 MR MICHAEL SIM HENG HUAT 10,000 0.03

13 KWAN KUM LIN 10,000 0.03

14 MAGDALENE CHOONG NYUK LING 10,000 0.03

15 KARTHIK MENON 10,000 0.03

16 VERONICA CHAN TENG NGO 10,000 0.03

17 CHONG ZHONG SHENG 10,000 0.03

18 OON CHI YAN 10,000 0.03

19 LIM BEE YONG 10,000 0.03

20 MS PEH SIEW LAN 9,000 0.03

Totals : Top 20 holders of ORD-ORDINARY

SHARES 29,887,952 99.63

Total Remaining Holders Balance 112,058 0.37

Total units 30,000,010 100.00

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