Belships is an owner and operator of dry bulk ships on long-term charter to reputable customers. The company also had activities within product tank and ship management in 2014. The product tank activity was terminated in first quarter 2014. Belships ASA is registered in Norway and listed on the Oslo Stock Exchange. The head office is located in Lilleakerveien 4 in Oslo, Norway.
The financial statements have been approved by the Board on 19 March 2015.
The accounts are prepared in accordance with Norwegian Generally Accepted Accounting Principles (NGAAP). The accounts form part of the consolidated accounts of Belships ASA. The consolidated financial statements have been prepared in accordance with IFRS as adopted by EU.
All amounts in the notes are in NOK 1 000 unless otherwise stated.
Belships has obtained approval from Oslo Stock Exchange and Norwegian tax authorities to only publish its financial statements in English.
A) CLASSIFICATION OF BALANCE SHEET ITEMS
Assets intended for long-term ownership or use are classified as fixed assets and others as current assets, with all accounts receivable within one year classified as current assets. Liabilities due within 12 months, are classified as short-term liabilities. Current assets are reported at the lower of cost and net realisable value, while current liabilities are carried at the nominal value at drawdown date.
B) TAXES ON INCOME
Tax expenses consist of tax payable and changes in deferred tax. Deferred tax/tax assets are calculated on all differences between accounting values and tax values of assets and liabilities.
Deferred tax assets are entered in the accounts when it is likely that the company will have sufficient profit for tax purposes in subsequent periods that will enable the company to utilise the tax asset. The companies enter previously unentered deferred tax assets to the extent it has become likely that the company can utilise the deferred tax asset. Similarly, the company will reduce the deferred tax asset to the extent the company no longer regards it as being likely that it can utilize the deferred tax asset.
Deferred tax and deferred tax asset are measured on the basis of expected future tax rates for the companies in the group where temporary differences have occurred.
Deferred tax and deferred tax assets are entered at nominal value and are classified as financial fixed assets (long-term liability) on the balance sheet.
Tax payable and deferred tax are entered directly against equity to the extent the tax items relate to equity transactions.
C) TANGIBLE FIXED ASSETS
Tangible fixed assets are stated at cost, net of accumulated depreciation and accumulated impairment losses. When assets are sold or divested, capitalised value is deducted and any gains or losses are entered in the profit and loss account. Acquisition cost for tangible fixed assets is the purchase price, including expenses directly related to preparing the asset for use. Expenses incurred after the asset has been put to use are entered in the profit and loss account, whereas other expenses which are expected to create future financial gains are capitalised. Other fixed assets are depreciated at the declining balance method. Depreciation period and method are evaluated every year.
Newbuilding contracts are recorded as a fixed asset based on instalments paid to the yard. Building supervision costs and project costs related to the newbuilding contracts are capitalised.
D) INVESTMENTS IN OTHER COMPANIES
Investments in subsidiaries and jointly controlled companies are accounted for in the parent company using the cost method.
E) ACCOUNTS RECEIVABLE
Accounts receivable are booked at nominal amount less expected loss.
F) CASH FLOW STATEMENT
The cash flow statement has been prepared using the indirect method. Liquid assets includes cash, bank deposits (restricted and unrestricted) and other short-term investments which can be converted to cash within 3 months. For restricted deposits, see note 5.
(i) Treasury shares
Own equity instruments that are reacquired (treasury shares) are recognised at cost and deducted from equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the Group’s own equity instruments. Any difference between the carrying amount and the consideration, if reissued, is recognised in share premium. Share options exercised during the reporting period are satisfied with treasury shares.
(ii) Costs related to equity transactions
Transaction costs directly related to equity transactions are charged directly against the equity after tax deductions.
H) EMPLOYEE BENEFITS
Defined contribution pension scheme
All employees are member of the company’s defined contribution scheme. The premium is charged as incurred by operations. Social security tax expense is recognized based on the pension plan payments.
Defined benefit pension scheme
The company has unfunded pension liabilities. These relate to early retirement and pension to persons, that have not been included in the service pension scheme. Pension obligations are estimated by an independent actuary.
Actuarial gains and losses arising from changes in actuarial assumptions are charged and credited to equity through other comprehensive income in the period in which they arise.
A provision is entered in the accounts when the company has a liability (legal or constructive) as a result of a previous event, where it is likely (more likely than not) that there will be a financial settlement as a result of this liability and that the size of the sum can be reliably determined. If the effect is considerable, the provision is calculated by discounting down the expected future cash flow with a discount rate before tax which reflects the market’s evaluation of the time value of money and, if relevant, risks specifically connected to the liability.
Provisions for loss-creating contracts are included when the group’s expected income from a contract is lower than the inevitable costs which were incurred in discharging the obligations of the contract.
J) REVENUE RECOGNITION
Gains will be taken to income when it is likely that transactions will generate future financial gains which will be attributable to the company and the sum can be reliably estimated. Interest rate income is taken to income based on effective interest method according to when it is earned.
Dividend received from subsidiaries is accounted for in the same year as dividend has been accrued for in the subsidiary. If such dividend exceeds the prorata share of retained earnings after the acquisition of the shares, such excess portion represents repayment of capital and reduces the acquisition cost accordingly.
K) TRANSACTIONS IN FOREIGN CURRENCY
Transactions in foreign currency are converted at the rate at the time of the transaction. Monetary items in foreign currency are converted into Norwegian kroner using the rate on the balance sheet date. Non-monetary items which are measured at historical rates expressed in foreign currencies, are converted into Norwegian kroner using the currency rate at the time of the transaction.
Non-monetary items which are measured at market value expressed in foreign currency are converted at the currency rate on the balance sheet date. Currency rate changes are charged against income during the accounting period.
L) CONTINGENT GAINS AND LOSSES
Provisions are made for contingent losses deemed probable and quantifiable. Contingent gains are not recognised.
M) RELATED PARTY TRANSACTIONS
Transactions with related parties are carried out at market terms. See note 15 for further information.
N) EVENTS AFTER THE BALANCE SHEET DATE
New information after the balance sheet date regarding the company’s financial position as of the balance sheet date is taken into consideration in the annual accounts. Events after the balance sheet date that do not affect the company’s financial position as of the balance sheet date, but which will have an impact on the company’s financial position in the future are revealed if significant.
O) USE OF ESTIMATES IN PREPARATION OF THE ANNUAL ACCOUNTS
The management has used estimates and assumptions that have affected assets, debt, income, costs and information on potential liabilities. This applies particularly to pension liabilities, share-based remuneration. Future events can entail a change in these estimates. Estimates and the underlying assumptions are evaluated on an ongoing basis. Changes in accounting estimates are entered in the period when the changes occur. If the changes also apply to future periods, the effect is distributed over the current and future periods.
P) EARNINGS PER SHARE
Earnings per share are calculated by dividing the net result by a weighted, average number of shares in the reporting period. Diluted earnings per share are calculated on the basis the dilution effect of issued options and convertible loans, if any.
Q) SHARE-BASED REMUNERATION
The employees in Belships ASA have received options to purchase shares in the company. The market value of the awarded options is measured at the time of the award and charged to expense over the vesting period as a wage cost with corresponding increase in other paid-in equity. The market value of the options granted is estimated using the Black and Scholes option pricing model.
R) FINANCIAL INSTRUMENTS
Financial instruments are valued at lowest of cost and estimated fair value.