The preparation of the consolidated financial statements in accordance with IFRS requires management

to make judgments, estimates and assumptions that affect the application of the accounting policies and

the reported amounts of assets and liabilities, income and expenses, the accompanying disclosures and the

disclosure of contingent liability. The estimates and related assumptions are based on historical experience and

various other factors that are believed to be reasonable under the circumstances. Actual results may differ from

which have a significant impact on the amounts reported in the consolidated financial statements:

Determining whether EXMAR will exercise purchase options on financed assets requires judgment and

impacts the useful life of the related assets. All facts and circumstances relevant to the assessment are

considered.

The fair value less cost to sell is determined based upon independent valuation reports. The Group engages two

independent valuation specialists to assess fair values at reporting date. The carrying values of the vessels may

not represent the fair market value at any point in time since the market prices of second-hand vessels tend to

fluctuate with changes in charter rates and the cost of new buildings. Historically, both charter rates and vessel

values tend to be cyclical.

The value in use is based upon future cash flows discounted to their present value. In developing estimates of

future cash flows, management makes assumptions about expected operation date (in case of temporarily

unemployed vessels), future charter rates, ship operating expenses, the estimated remaining useful lives of

the fleet and the WACC. These assumptions are based on historical trends as well as future expectations.

Although management believes that the assumptions used to evaluate potential impairment are reasonable

report) and believes these currently do not result in fundamentally changed expectations regarding useful lives

or recoverability of our fleet. In the sensitivity analysis of the annual impairment test of vessels and barges, the

age and emission rating of each particular asset was considered.

interests and the other components of equity related to the subsidiary. Any surplus or deficit arising on the loss

of control is recognized in profit and loss. If the Group retains any interest in the previous subsidiary, then such

interest is measured at fair value at the date the control is lost.

In preparing the individual financial statements, transactions in currencies other than the entities’ functional

currency are recorded at the exchange rate applicable at the date of the transaction.

investment, the cumulative amount is reclassified to profit or loss.

financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable

to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised

immediately in profit or loss.

If a part of an item of property, plant and equipment is replaced, the replacement cost is capitalised and the

carrying amount of the replaced part is derecognized. The costs of the day-to-day servicing of property, plant

and equipment are recognised in the profit or loss statement as incurred.

obligation as result of a past event, that can be estimated reliably and it is probable that an outflow of benefits

will be required to settle the obligation.

The company and/or its joint ventures generate revenues from charterers for the use of its assets. Assets are

chartered using voyage/spot, time or bareboat charters and pool revenue:

▪ Voyage/spot charters: Voyage revenue is recognized over time of spot charters on a load-to-discharge basis.

Progress is determined on time elapsed. Voyage expenses are expensed as occurred. When our vessels

cannot start or continue performing its obligation due to other factors, such as port delays, a demurrage is

calculated. The applicable demurrage rate is stipulated in the contract. As demurrage is often a commercial

discussion between EXMAR and the charterer, the outcome and total compensation receivable for the delay

is not always certain. As such, EXMAR only recognizes the revenue which is highly probable to be received.

No revenue is recognized if the collection of the consideration is not highly probable. The amount of revenue

recognized is estimated based on historical data. The Group updates its estimate on an annual basis.