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					               Nominated Adviser and Broker




  Hellenic Carriers Limited
                  Admission Document




Lead Manager
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt about the contents of this document, you should
consult a person authorised under the Financial Services and Markets Act 2000 (as amended) (“FSMA”) who specialises in advising on the acquisition of shares and
other securities.
This document comprises an AIM admission document drawn up in accordance with the AIM Rules for Companies published by London Stock Exchange plc. This document
does not constitute a prospectus for the purposes of the Prospectus Rules and has not been approved by or filed with the Financial Services Authority. No application has been
made to list the Ordinary Shares on any exchange other than AIM. This document is a prospectus for the purposes of the Companies (Jersey) Law 1991 (as amended) and the
Companies (General Provisions) (Jersey) Order 2002 (“GPO”).
Application has been made for the Ordinary Shares to be admitted to trading on AIM. The Ordinary Shares are not traded on any other stock exchange. AIM is a market                   Sch2(e)
designed primarily for emerging or smaller companies to which a higher investment risk tends to be attached than to larger or more established companies. AIM
securities are not admitted to the Official List of the Financial Services Authority. A prospective investor should be aware of the risks of investing in such companies
and should make the decision to invest only after careful consideration and, if appropriate, consultation with an independent financial adviser. The rules of AIM are
less demanding than those of the Official List of the Financial Services Authority and furthermore the London Stock Exchange plc has not itself examined or
approved the contents of this document.
Each AIM company is required pursuant to the AIM Rules for Companies to have a nominated adviser. The nominated adviser is required to make a declaration to the London
Stock Exchange plc on admission in the form set out in Schedule 2 to the AIM Rules for Nominated Advisers.
Hellenic Carriers Limited (the “Company”), together with the Directors, whose names appear on page 11, accept responsibility for the information contained in this document.          AnnI(1.1)
To the best of the knowledge and belief of the Company and its Directors, the information contained in this document is in accordance with the facts, and there is no other
material information the omission of which is likely to affect the import of such information. In connection with this document, no person is authorised to give any information      AnnI(1.2)
or make any representation other than as contained in this document.
                                                                                                                                                                                      AnnIII(1.1)
Your attention is also drawn to the discussion of risks and other factors which should be considered in connection with an investment in the Ordinary Shares, set
out in “Risk Factors” in Part IV of this document. Notwithstanding this prospective investors should read the whole text of this document.                                            AnnIII(1.2)



                                  HELLENIC CARRIERS LIMITED                                                                                                                           SchI(a)
                                                                                                                                                                                      SchI(b)(AR)
                       (Incorporated in Jersey under the Companies (Jersey) Law 1991 (as amended),
                                                                                                                                                                                      AnnI(5.1.1)
                                               with registered number 98805)
                                                                                                                                                                                      AnnI(5.1.2)
                                                               Admission to trading on AIM

                                                                                      and

         Placing of 13,684,970 Ordinary Shares of US$0.001 each at 212 pence per Ordinary Share                                                                                       Ann III(7.2))


                                                                                       by
                                                                                                                                                                                      Sch 2(e)
                                            JEFFERIES INTERNATIONAL LIMITED
                                     Nominated Adviser, Global Co-ordinator and Bookrunner
                                                  NBG International Limited, Lead Manager

                            SHARE CAPITAL IMMEDIATELY FOLLOWING THE PLACING                                                                                                           AnnI (21.1.1a.)
                                                                                                                                                                                      AnnI(21.1.1a.)
       Authorised                                                                                                               Issued and fully paid                                 AnnI(2.1.1b.)
    Number    Amount US$                                                                                                      Number          Amount US$
100,000,000                  100,000                             ordinary shares of US$0.001                                45,616,851                      45,616.85                 AnnI(21.1.1.c.)

The Placing is conditional, inter alia, on Admission taking place on or before 30 November 2007 (or such later date as the Company and Jefferies International Limited
(“Jefferies”) may agree being no later than 31 December 2007). The Placing Shares will, following allotment, rank in full for all dividends or other distributions hereafter
declared, made or paid on the Ordinary Shares and will rank pari passu in all other respects with all other Ordinary Shares in issue on Admission.
The contents of this document are not to be construed as legal, financial or tax advice. Each prospective investor should consult his, her or its own legal adviser, financial
adviser or tax adviser for legal, financial or tax advice.
Jefferies, which is authorised and regulated by the Financial Services Authority, is acting as the Company’s nominated adviser in connection with the proposed admission of
the Ordinary Shares to trading on AIM. Its responsibilities as the Company’s nominated adviser under the AIM Rules for Nominated Advisers are owed solely to London Stock
Exchange plc and are not owed to the Company or to any Director or to any other person in respect of his, her or its decision to acquire or subscribe for Ordinary Shares in
reliance on any part of this document. No representation or warranty, express or implied, is made by Jefferies as to any of the contents of this document (without limiting the
statutory rights of any person to whom this document is issued). Jefferies, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is
advising the Company and no one else in relation to the Placing and Admission and will not be responsible to any other person for providing the protections afforded to the
customers of Jefferies, nor for providing advice in relation to the Placing and Admission or any of the contents of this document or any other matter.
Apart from the responsibilities and liabilities, if any, which may be imposed on Jefferies by FSMA or the regulatory regime established thereunder or under the regulatory
regime of any other jurisdiction where exclusion of liability under the relevant regulatory regime would be illegal, void or unenforceable, Jefferies accepts no responsibility
whatsoever for the contents of this document or for any statement made or purported to be made by it, or on its behalf, in connection with the Company, the Ordinary Shares,
the Placing or Admission. Jefferies accordingly disclaims all and any liability whether arising in tort, contract or otherwise (save as referred to above) which it may otherwise
have in respect of such document or any such statement.
This document does not constitute, and may not be used for the purposes of, an offer or any invitation to subscribe for any Ordinary Shares by any person in any jurisdiction;
(a) in which such offer of invitation is not authorised; or (b) in which the person making such offer or invitation is not qualified to do so; or (c) to any person to whom it is
unlawful to make such offer or invitation. The distribution of this document and the Placing in certain jurisdictions may be restricted. Accordingly, persons outside the United
Kingdom into whose possession this document comes are required by the Company and Jefferies to inform themselves about and to observe any restrictions as to the Placing
and the distribution of this document under the laws and regulations of any territory in connection with any application for Ordinary Shares, including obtaining any requisite
governmental or other consent and observing any other formality prescribed in such territory. No action has been taken or will be taken in any jurisdiction by the Company or
Jefferies that would permit a public offering of the Ordinary Shares in any jurisdiction where action for that purpose is required, nor has any such action been taken with respect
to the possession or distribution of this document.
In relation to the United Kingdom, this document is being distributed only to, and is directed only at: (i) persons who have professional experience in matters relating to
investments falling within Article 19 (5) of the Financial Services and Markets Act 2000 (Financial Promotions) Order 2005, as amended (the “Order”); (ii) high net worth
companies, unincorporated associations and other bodies falling within Article 49 (2) (a) to (d) of the Order; and (iii) person to whom it may otherwise lawfully be distributed
(all such person together with qualified investors (as defined in the Prospectus Directive (Directive 2003/71/EC) (the “Prospectus Directive”) being referred to as “relevant
persons”). This document must not be acted on or relied on in the United Kingdom by persons who are not relevant persons. Any investment or investment activity to which
this document relates is available only in the United Kingdom to relevant persons, and will be engaged in only with such persons.
In any European Economic Area (“EEA”) Member State that has implemented Directive 2003/71/EC (together with any applicable measures in any Member State, the
“Prospectus Directive”), this communication is only addressed to and is only directed at: (a) qualified investors in that Member State within the meaning of the Prospectus
Directive; and (b) other persons who are permitted to purchase the Ordinary Shares pursuant to an exemption from the Prospectus Directive and other applicable regulations.
By receiving this document and not returning it immediately, you are deemed to warrant to the Company and Jefferies that you fall within the categories of persons described
above.
This document has been prepared on the basis that Placing and Admission will be made pursuant to an exemption under the Prospectus Directive, as implemented in the
Member States of the EEA, from the requirement to produce a prospectus for offers of shares. Accordingly, any person making or intending to make any offer within the EEA
of the Ordinary Shares which are the subject of the Placing contemplated in this document should only do so in circumstances in which no obligation arises for the Company
or Jefferies to produce a prospectus for such offer. Neither the Company nor Jefferies has authorised, nor do they authorise the making of any offer of Ordinary Shares through
any financial intermediary, other than offers made by a financial intermediary with the consent of Jefferies and other than offers made by Jefferies which constitute the final
placement of Ordinary Shares contemplated in this document.
The distribution of this document outside the United Kingdom may be restricted by law and therefore persons outside the United Kingdom into whose possession this document
comes should inform themselves about and observe any restrictions as to the Placing, the Ordinary Shares or the distribution of this document. The Ordinary Shares have not
been, nor will be, registered in the United States under the Securities Act, or qualified for sale under the laws of any state or jurisdiction of the United States or under the
securities laws of Canada, Australia or Japan and they may not be offered or sold directly or indirectly within the United States, Canada, Australia or Japan or to, or for the
account or benefit of any US resident or any national, citizen or resident of Canada, Australia or Japan. The Ordinary Shares may not be offered or sold within the United States
except in a transaction that is exempt from, or not subject to, the registration requirements of the Securities Act. The Ordinary Shares are being offered and issued only outside
the United States in offshore transactions complying with Regulation S. Each purchaser of Ordinary Shares, in making a purchase will be deemed to have made certain
acknowledgments and representations are set out in the section headed “Placing Information-Selling Restrictions” in Part III of this document. This document does not
constitute an offer to sell or issue or the solicitation of an offer to buy or subscribe for Ordinary Shares in any jurisdiction in which such offer or solicitation is unlawful and
any failure to comply with these restrictions may constitute a violation of applicable securities laws in such jurisdictions.
The Ordinary Shares have not been and will not be offered or sold to the public in France (“Appel Public à L’épargne”), and no offering or marketing materials relating to the
Ordinary Shares must be made available or distributed in any way that would constitute, directly or indirectly, an offer to the public in the Republic of France.
The Ordinary Shares may only be offered or sold in France to qualified investors (“investisseurs qualifiés”), as defined in and in accordance with articles l. 411-1, l. 411-2,
d.411-1 and d.411-2 of the French Code Monétaire et Financier.
Prospective investors are informed that:
(a)        this document has not been submitted for clearance to the French Financial Market Authority (Autorité des Marchés Financiers);
(b)        in compliance with articles l.411-1; l.411-2, d.411-1 through d.411-3, d.734-1, d.744-1, d.754-1 and d.764-1 of the French Code Monétaire et Financier, any
           investors subscribing for the Ordinary Shares should be acting for their own account; and
(c)        the direct and indirect distribution or sale to the public of the Ordinary Shares acquired by them may only be made in compliance with articles l.411-1, l.411-2, l.412
           1 and l.621-8 of the French Code Monétaire et Financier.
This document has not been produced in accordance with the prospectus requirements laid down in the Norwegian Securities Trading Act 1997. This document has not been
approved or disapproved by, or registered with, neither the Oslo Stock Exchange nor the Norwegian Registry of Business Enterprises. The Ordinary Shares have not been and
will not be sold to the public in Norway.
This material is only and exclusively addressed to the addressees and can not be distributed, offered or presented, either directly of indirectly to other persons or entities
domiciled in Norway.
The Ordinary Shares will not be distributed and offered, directly or indirectly, to the public in Switzerland and this document may not be publicly distributed or otherwise made
publicly available in Switzerland. This document does not constitute a public offering prospectus as that term is understood pursuant to art. 652a or art. 1156 of the Swiss Code
of Obligations. The Company has not applied nor will it apply for a listing of the Ordinary Shares on the SWX Swiss Exchange or any other exchange or regulated securities
market in Switzerland, and consequently, the information presented in this document does not necessarily comply with the information standards set out in the relevant listing
rules.
This document has been prepared solely for the benefit of the limited number of prospective investors to whom it has been addressed and delivered and may not, in any
circumstances, be used for any other purpose or be viewed as a document for the benefit of the public. It has been prepared solely for informational purposes to assist such
prospective investors in meeting an evaluation of the Company and the Ordinary Shares. This document does not purport to contain all the information an interested party may
desire. In all cases, interested parties should conduct their own investigation, analysis and evaluation of the Company, the terms of the Placing including the merits and risks
of the investment in the Ordinary Shares, and the data set further in this document. The reproduction, distribution or transmission of this document (either in whole or in part)
without the prior written consent of the Company and Jefferies is prohibited.
In connection with the Placing, Jefferies and any of its affiliates, acting as investors for their own accounts, may subscribe for Ordinary Shares in the Placing and in that capacity
may retain, purchase, sell, offer to sell or otherwise deal in for their own accounts such securities and any other securities of the Company or related investments and may offer
or sell such securities or other investments other than in connection with the Placing.
Accordingly, references in this document to the Ordinary Shares being issued, offered or subscribed or otherwise dealt in should be read as including any issue or offer to, or
subscription, dealing or placing by Jefferies and any of its affiliates acting as an investor for their own accounts. Jefferies does not intend to disclose the extent of any such
investments or transactions other than in accordance with any legal or regulatory obligation to do so.
This document includes statements that are, or may be deemed to be, “forward-looking statements”. These forward-looking statements can be identified by the use of forward-
looking terminology, including the terms “believes”, “estimates”, “anticipates”, “projects”, “expects”, “intends”, “may”, “will”, “seeks” or “should” or, in each case, their
negative or other variations or comparable terminology, or by discussions of strategy, plans, aims, objectives, goals, future events or intentions. These forward-looking
statements include all matters that are not historical facts. They appear in a number of places throughout this document and include statements regarding the Company’s
intentions, beliefs or current expectations concerning, amongst other things, its results of operations, financial condition, liquidity, prospects, growth, strategies and the industry
in which the Company operates.
By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future.
Forward-looking statements are not guarantees of future performance. The Company’s actual results of operations, financial condition and liquidity, and the development of
the business sector in which the Company and its subsidiary undertakings (the “Group”) operates, may differ materially from those suggested by the forward-looking statements
contained in this document. In addition, even if the Company’s results of operations, financial condition and liquidity, and the development of the industry in which the Group
operates, are consistent with the forward-looking statements contained in this document, those results or developments may not be indicative of results or developments in
subsequent periods.
Prospective investors are advised to read, in particular, the parts of this document entitled Part IV “Risk Factors”, Part II “Business Description” and Part IV “Financial
Information” for a more complete discussion of the factors that could affect the Group’s future performance and the industry in which the Group operates. In light of these
risks, uncertainties and assumptions, the events described in the forward-looking statements in this document may not occur.
Other than in compliance with the Company’s obligations under the AIM Rules for Companies, the Company undertakes no obligation to update or revise publicly any forward-
looking statements, whether as a result of new information, future events or otherwise.
A copy of this document has been delivered to the Registrar of Companies in Jersey in accordance with Article 5 of the GPO, and he has given, and has not withdrawn, his
consent to its circulation. The Jersey Financial Services Commission has given, and has not withdrawn, its consent under Article 2 of the Control of Borrowing (Jersey) Order
1958 to the issue of securities in the Company. It must be distinctly understood that, in giving these consents, neither the Registrar of Companies in Jersey nor the Jersey
Financial Services Commission takes any responsibility for the financial soundness of the Company or the correctness of any statements made, or opinions expressed, with
regard to it.
If you are in any doubt about the contents of this document you should consult your stockbroker, bank manager, lawyer, accountant or other financial adviser.
The Directors have taken all reasonable care to ensure that the facts stated in this document are true and accurate in all material respects, and that there are no other facts the
omission of which would make misleading any statement in this document, whether of facts or of opinion. All the Directors accept responsibility accordingly.
It should be remembered that the price of securities and the income from them can go down as well as up.
The contents of the Company’s website or any website directly or indirectly linked to the Company’s website do not form part of this document.




                                                                                          2
                                            CONTENTS
                                                                  Page
Definitions                                                         4

Glossary                                                            7

Directors and advisers                                             11

Placing statistics                                                 13

Expected timetable                                                 13

Key information                                                    14

PART I        Industry description                                 21

PART II       Business description                                 45

PART III      Placing information                                  60

PART IV       Risk factors                                         63

PART V        Selected financial information and operating data    80

PART VI       Financial information                                83

PART VII      Unaudited interim financial information             105

PART VIII     Pro forma financial information                     122

PART IX       Additional information                              124




                                                     3
                                          DEFINITIONS
The following definitions apply throughout this document, unless the context requires otherwise:

“2006 Act”                             the Companies Act 2006 (UK) (as amended)

“Admission”                            the admission of the Ordinary Shares, issued and to be issued
                                       pursuant to the Placing, to trading on AIM

“AIM”                                  AIM a market operated by the London Stock Exchange

“AIM Rules”                            the AIM Rules for Companies published by the London Stock
                                       Exchange governing admission to AIM

“Arkadia”                              Arkadia Maritime Corp., a company originally incorporated in
                                       Liberia and domesticated in the Marshall Islands

“Articles”                             the articles of association of the Company

“Bedat”                                Bedat Holdings Limited, a company incorporated in Cyprus

“Board”                                the board of Directors including a duly constituted committee of the
                                       board of Directors

“City Code”                            the City Code on Takeovers and Mergers

“Combined Code”                        The Combined Code on Corporate Governance published in June
                                       2006 by the Financial Reporting Council

“Companies Law”                        the Companies (Jersey) Law 1991 (as amended)

“Company”                              Hellenic Carriers Limited, a company incorporated in Jersey with
                                       company number 98805

“Controlling Shareholders”             Fotini Karamanlis and Konstantinos Karamanlis

“Corpus”                               Corpus Holdings Inc., a company incorporated in the Marshall
                                       Islands

“CREST”                                the relevant system (as defined in the CREST Regulations) operated
                                       by Euroclear in accordance with which securities may be held or
                                       transferred in uncertificated form

“CREST Regulations”                    Companies (Uncertificated Securities) (Jersey) Order 1999
                                       including (i) any enactment or subordinate legislation which amend
                                       or supersedes the same and; (ii) any applicable rules made by the
                                       same regulations or any enactment or subordinate legislation for the
                                       time being in force

“Drewry”                               Drewry Shipping Consultants Limited

“Directors”                            the directors of the Company on Admission, whose names are set
                                       out on page 11, and thereafter the directors of the Company from
                                       time to time

“Disclosure and Transparency Rules”    the Disclosure and Transparency Rules (UK) of the FSA (as
                                       amended)

“Enlarged Issued Share Capital”        the Ordinary Shares in issue following the Placing

“Euroclear”                            Euroclear UK and Ireland Limited, a company incorporated under
                                       the laws of England and Wales


                                                    4
“Faith”                                Faith Holdings Inc., a company incorporated in the Marshall Islands

“FK Group”                             Fotini Karamanlis, Faith and for so long as Fotini Karamanlis holds
                                       directly or indirectly at least 50% of its issued share capital, Bedat

“FSA”                                  the UK Financial Services Authority

“GOI”                                  Government of India

“Group”                                the Company, HSC and the Ship Owning Companies together with
                                       any subsidiaries of the Company from time to time

“Hellenic Carriers Corporation S.A.”   Hellenic Carriers Corporation S.A., a company incorporated in
                                       Liberia

“HSC”                                  Hellenic Shipmanagement Corporation, a company incorporated in
                                       the Marshall Islands

“IFRS”                                 International Financial Reporting Standards

“ISIN”                                 International Securities Identification Number

“Jefferies”                            Jefferies International Limited

“KK Group”                             Konstantinos Karamanlis, Corpus and for so long as Konstantinos
                                       Karamanlis holds directly or indirectly 50% of its issued share
                                       capital, Bedat

“Liberia”                              the Republic of Liberia

“LM”                                   Maltese Lira

“London Stock Exchange”                London Stock Exchange plc

“Mantinia”                             Mantinia Shipping Company S.A., a company incorporated in
                                       Panama

“Mantinia Management                   the agreements dated 26 October 2007 between HSC and Mantinia
Agreements”                            pursuant to which HSC sub-contracts certain of the ship
                                       management services it provides to the Ship Owning Companies as
                                       described in the section headed “Management of our fleet” in Part
                                       II of this document

“Marshall Islands”                     the Republic of the Marshall Islands

“Nestos”                               Nestos Shipping Corp., a company originally incorporated in
                                       Liberia and domesticated in the Marshall Islands

“Official List”                        the Official List of the FSA

“Ordinary Shares”                      registered ordinary shares of US$0.001 each in the share capital of
                                       the Company with ISIN JE00B2904G88

“Pandinia”                             Pandinia Trading Limited, a company incorporated in Cyprus

“Patmos”                               Patmos Shipping Co. Ltd., a company incorporated in Malta with
                                       company number C29345

“Placing”                              the conditional placing by Jefferies of the Placing Shares, pursuant
                                       to the Placing Agreement




                                                      5
“Placing Agreement”                     the placing agreement entered into between the Company, Faith,
                                        Corpus, Bedat, the Controlling Shareholders, the Directors and
                                        Jefferies on 27 November 2007, as described in paragraph 11.1 of
                                        Part IX of this document

“Placing Price”                         212 pence per Placing Share

“Placing Shares”                        13,684,970 Ordinary Shares to be placed pursuant to the Placing

“Prospectus Directive”                  EU Prospectus Directive (2003/71/EC)

“Prospectus Rules”                      the Prospectus Rules issued by the UK Listing Authority, being the
                                        FSA acting as the competent authority for the purposes of Part VII
                                        of the Financial Services and Markets Act 2000, as amended from
                                        time to time

“QCA Guidelines”                        The Quoted Companies Alliance guidelines to AIM listed
                                        companies on corporate governance, as amended from time to time

“Reorganisation Agreement”              the reorganisation agreement entered into between the Company,
                                        Faith, Corpus and Bedat dated 27 November 2007 as described in
                                        section 11.8 of Part IX of this document

“Reorganisation”                        the reorganisation to be carried out pursuant to the Reorganisation
                                        Agreement

“Shareholders”                          holders of Ordinary Shares

“Ships”                                 the three panamax vessels: M/V Hellenic Sea, M/V Hellenic Sky,
                                        M/V Hellenic Breeze, the one handymax vessel: M/V Hellenic
                                        Horizon, and one supramax vessel contracted to be acquired and
                                        scheduled for delivery between 1 March and 30 April 2008: M/V
                                        Aegean Hawk (to be renamed M/V Konstantinos D)

“Ship Owning Companies”                 the five companies which own or have agreed to acquire the Ships
                                        being Arkadia, Nestos, Patmos, Thasos and Vergina (each a “Ship
                                        Owning Company”)

“Taxes Act”                             the Income and Corporation Taxes Act 1988

“Thasos”                                Thasos Shipping Co Ltd., a company incorporated in Malta with
                                        company number C31071

“Total Capitalisation”                  market capitalisation of the Company at the Placing Price plus pro
                                        forma net debt

“United States” or “US”                 the United States of America, its territories and possessions, any
                                        state of the United States and the District of Columbia

“Vergina”                               Vergina Shipping Ltd, a company incorporated in the Marshall
                                        Islands

In this document all references to times and dates are in reference to those observed in London.

In this document the symbols “£” and “p” refer to pounds and pence sterling respectively and $ or US$ refers   AnnIII(4.4)

to US dollars.




                                                     6
                                        GLOSSARY
The following glossary of shipping related terms apply throughout this document unless the context
otherwise requires.

“address commissions”               the commission payable to a charterer usually expressed as a
                                    percentage of the charter rate

“annual survey”                     the inspection of a vessel by a classification society surveyor, on
                                    behalf of a flag state, that takes place every year

“bareboat charter”                  (also known as “a demise charter”) the contract for hire of a vessel
                                    under which the vessel owner is usually paid a fixed charter rate for
                                    a certain period of time during which the charterer is responsible for
                                    the operating costs and voyage costs of the vessel as well as
                                    arranging for crewing

“beam”                              the width at the widest point, or a point alongside a ship at the mid-
                                    point of its length

“brokerage commissions”             the commissions payable to a ship broker usually expressed as a
                                    percentage of the charter rate

“bulk carriers”                     vessels which are specially designed and built to carry large
                                    volumes of cargo in bulk form

“bunkers”                           heavy fuel oil and diesel oil used to power a vessel’s engines

“capesize”                          a dry bulk carrier vessel in excess of 100,000 dwt

“charter”                           the hire of a vessel for a specified period of time or to carry a cargo
                                    for a fixed fee from a loading port to a discharging port

“charter rate”                      a sum of money paid to the vessel owner by a charterer under a time
                                    charterparty for the use of a vessel, usually expressed on a per day
                                    basis

“charterer”                         the individual or company hiring a vessel

“charterparty”                      the contract for a charter

“classification society”            an independent organisation that certifies that a vessel has been built
                                    and maintained in accordance with the rules of such organisation
                                    and complies with the applicable rules and regulations of such
                                    vessel’s country of registry and the international conventions to
                                    which that country is subject

“commercial management”             the management of the employment, or chartering, of a vessel and
                                    associated functions, including seeking and negotiating
                                    employment for vessels, billing and collecting revenues

“compound annual growth rate”       the year on year growth rate over a multiple-year period. The
or “CAGR”                           formula for calculating CAGR is (current value/base value)^
                                    (1/number of years) -1

“contracts of affreightment”        this is an arrangement under which the vessel owner and charterer
                                    agree terms for the carriage of a designated volume of a given
                                    commodity on a specified route, with such shipments being carried
                                    out on a regular basis. The total volumes of cargo to be carried may
                                    require the vessel owner to use several different ships to fulfil such


                                                 7
                                 a charter. Hence, the agreement does not normally specifically
                                 identify the tonnage that will be used to fulfil its terms, but will tend
                                 to define general requirements (e.g. maximum permissible age).
                                 Under the terms of a contract of affreightment, freight is normally
                                 paid on an agreed US$ per tonne basis, with the vessel owner then
                                 meeting all voyage, operating and capital costs incurred in the
                                 execution of such a charter

“dwt”                            deadweight tonne, a unit of a vessel’s capacity for cargo, fuel oil,
                                 stores and crew, measured in metric tonnes of 1,000 kilogrammes;
                                 a vessel’s dwt or total deadweight is the total weight the vessel can
                                 carry when loaded up to her summer draft

“derrick”                        a simple crane that is typically used for moving cargo onto or from
                                 a ship

“DPA”                            designated person ashore

“draft”                          vertical distance between the waterline and the bottom of the
                                 vessel’s keel

“dry bulk”                       non-liquid cargoes of commodities shipped in an unpackaged state

“dry docking”                    the removal of a vessel from the water for inspection and/or repair
                                 of its submerged parts

“freight”                        a sum of money paid to a vessel owner by a charterer for performing
                                 a voyage charter expressed either per tonne or as a lump sum

“geared vessel”                  a vessel that has cargo-handling cranes and derricks installed on its
                                 main deck for loading and discharging cargo to serve ports without
                                 suitable lifting equipment, geared vessels are mainly in the
                                 handysize and handymax sizes

“handymax”                       a dry bulk carrier vessel of approximately 30,000 to 59,999 dwt

“handysize”                      a dry bulk carrier vessel of approximately 10,000 to 29,999 dwt

“hull”                           the shell or body of a vessel

“hull and machinery insurance”   a physical damage insurance policy designed to cover physical loss
                                 or damage arising from a marine peril

“IISI”                           International Iron and Steel Institute

“intermediate survey”            the inspection of a vessel by a classification society surveyor which
                                 takes place between two and three years before and after each
                                 special survey for such vessel pursuant to the rules of international
                                 conventions and of the relevant classification society

“IMO”                            International Maritime Organisation, a United Nations agency that
                                 issues international trade standards for shipping

“ISM Code”                       the International Management Code for the Safe Operation of Ships
                                 and for Pollution Prevention, as adopted by the IMO, which among
                                 other things, requests vessel owners to obtain a safety management
                                 certification for each vessel they manage

“long-term time charter”         a time charter that lasts more than 12 months




                                              8
“MARPOL Annex VI”                    the annex relating to air pollution in the International Convention
                                     for the Prevention of Pollution From Ships, 1973

“newbuilding”                        a new vessel under construction

“OPA”                                the United States Oil Pollution Act of 1990 (as amended)

“off-hire”                           the period a vessel is unable to perform the services for which it is
                                     required under a time charter. Off-hire periods typically include
                                     days spent undergoing repairs and dry docking whether scheduled
                                     or not scheduled

“operating cost”                     the cost of operating a vessel that is incurred during a charter,
                                     primarily consisting of crewing costs, insurance premiums, spare
                                     parts and repair and maintenance costs

“orderbook”                          a reference to currently placed orders for the construction of vessels

“panamax”                            a vessel of approximately 60,000 to 99,999 dwt with a maximum
                                     length, beam and draft capable of passing fully loaded through the
                                     Panama Canal (maximum beam 32.2 metres)

“period charter”                     see time charter

“protection and indemnity            insurance obtained through a mutual association formed by
insurance”                           shipowners to provide liability insurance protection from large
                                     financial loss to one member through contributions towards that loss
                                     by all members

“Safety of Life at Sea Convention”   the International Convention for the Safety of Life at Sea of 1974,
                                     as amended, adopted under the auspices of the IMO

“scrapping”                          the disposal of old or damaged vessel tonnage by way of sale as
                                     scrap metal

“short-term time charter”            a time charter which lasts less than 12 months

“sister ships”                       vessels of the same specification that were built by the same
                                     shipyard

“special survey”                     the inspection of a vessel by a classification society surveyor that
                                     takes place every five years

“spot charter”                       the immediate chartering of a vessel usually for single voyages

“spot market”                        the market for spot charters

“strict liability”                   liability that is imposed without regard to fault

“supramax”                           a new class of handymax dry bulk carrier of approximately 50,000
                                     to 59,999 dwt

“TCE”                                time charter equivalent, a standard industry measure of the average
                                     daily revenue performance of a vessel. The TCE rate achieved on a
                                     given voyage is expressed in US$/day and is generally calculated by
                                     subtracting voyage expenses, including bunkers and port charges,
                                     from voyage revenue and dividing the net amount (time charter
                                     equivalent revenues) by the round-trip voyage duration




                                                  9
“technical management”   the management of the operation of a vessel, including physically
                         maintaining the vessel, maintaining necessary certifications,
                         supervising and arranging repairs and supplying necessary stores,
                         spares, and lubricating oils, responsibilities also generally include
                         selecting, engaging and training crew, and arranging necessary
                         insurance coverage

“time charter”           a contract for the hire of a vessel under which the vessel owner is
                         paid a charter rate on a per day basis for a certain period of time, the
                         vessel owner being responsible for providing the crew and paying
                         operating costs while the charterer is responsible for paying the
                         voyage costs (including bunkers) and the charterer being
                         responsible for any delays at port or during the voyage, save for
                         certain exceptions such as loss of time arising from vessel
                         breakdown and routine maintenance

“time charter days”      the number of days of a time charter

“tonne”                  1,000 kilogrammes

“tonne mile”             calculated by multiplying the volume of cargo moved on each route
                         by the distance of the voyage

“voyage charter”         a contract for the hire of a vessel under which the vessel owner is
                         paid freight on the basis of moving cargo from a loading port to a
                         discharge port, the vessel owner being responsible for paying both
                         operating costs and voyage costs and the charterer being typically
                         responsible for any delay at the loading or discharging ports

“voyage costs”           expenses incurred due to a vessel travelling to a destination such as
                         fuel costs, port and canal fees, and commissions

“war risk insurances”    a type of insurance which covers damage due to acts of war,
                         including invasion, insurrection, rebellion and hijacking. Some
                         policies also cover damage due to weapons of mass destruction

“weighted average age”   average age of a fleet of vessels given by the sum of the individual
                         age of each vessel in the fleet weighted by that vessel’s dwt in
                         proportion to the dwt of the whole fleet. The formula for calculating
                         weighted average age is the sum of (age of vessel multiplied by dwt
                         of vessel divided by dwt of fleet)




                                      10
                              DIRECTORS AND ADVISERS
Directors                         Graham Roberts, Chairman (non-executive)                       AnnI(1.2)

                                  Fotini Karamanlis, Chief Executive Officer
                                  Dimitris Sfakianakis, Chief Financial Officer
                                  Charlotte Stratos, Independent non-executive Director
                                  Dimos Kapouniaridis, Independent non-executive Director

Registered office                 Walker House                                                   AnnI(5.1.4)

                                  PO Box 72
                                  28-34 Hill Street
                                  St. Helier
                                  Jersey JE4 8PN

Principal management office       51, Akti Miaouli Street
                                  185 36 Piraeus
                                  Greece

Secretary and Administrator       Walker (Jersey) Limited                                        AnnIII(5.4.1)

                                  Walker House
                                  PO Box 72
                                  28-34 Hill Street
                                  St. Helier
                                  Jersey JE4 8PN

Nominated adviser, global co-     Jefferies International Limited
ordinator and bookrunner          Vintners Place
                                  68 Upper Thames Street
                                  London EC4V 3BJ

Lead manager                      NBG International Limited
                                  Old Change House
                                  128 Queen Victoria Street
                                  London EC4V 4BJ

Reporting accountants             Ernst & Young (Hellas) Certified Auditors – Accountants S.A.   AnnI(2.1)

                                  11th KLM National Road
                                  Athens-Lamia
                                  Metamorphossi
                                  14451
                                  Greece

Statutory auditors                Ernst & Young LLP                                              AnnI(2.1)

                                  Unity Chambers
                                  28 Harkett Street
                                  St. Helier
                                  Jersey JE1 1EY

Solicitors to the Company         as to English law                     as to Jersey law
                                  Norton Rose LLP                       Walkers
                                  3 More London Riverside               Walker House
                                  London SE1 2AQ                        PO Box 72
                                                                        28-34 Hill Street
                                                                        St. Helier
                                                                        Jersey JE4 8PN




                                              11
Solicitors to Jefferies   Ashurst LLP
                          Broadwalk House
                          5 Appold Street
                          London EC2A 2HA

Bankers                   Calyon
                          9 Quai Du President Paul Doumer
                          92920 La Defense Cedex
                          Paris
                          France

                          National Bank of Greece S.A.
                          2 Bouboulinas Street and Akti Miaouli
                          185 36 Piraeus
                          Greece

Registrars                Capita Registrars (Jersey) Limited      AnnIII(4.3)

                          Victoria Chambers
                          Liberation Square
                          1/3 The Esplanade
                          St. Helier
                          Jersey JE2 3QA

Consultants               Investments and Finance Limited
                          10 Skouze Street
                          185 36 Piraeus
                          Greece

                          Poten Capital Services, LLC
                          885 Third Avenue
                          Floor 20
                          New York
                          NY 10022
                          USA




                                      12
                                    PLACING STATISTICS
Placing Price                                                                                  212 pence

Number of new Ordinary Shares to be placed on behalf of the Company                           13,684,970

Number of Ordinary Shares in issue after the Placing and Admission                            45,616,851

Market capitalisation of the Company at the Placing Price                                   £96.7 million

New Ordinary Shares as a percentage of Enlarged Issued Share Capital                               30.0%     AnnIII(9.1)


Gross proceeds of the Placing available to the Company                                      £29.0 million

Estimated net proceeds of the Placing available to the Company                              £26.8 million    AnnIII(8.1)


AIM Symbol                                                                                           HCL

ISIN for the Ordinary Shares                                                              JE00B2904G88


                                  EXPECTED TIMETABLE
Publication of this document                                                           27 November 2007

Admission and dealings in the Ordinary Shares to commence on AIM                       30 November 2007      AnnIII(4.7)


CREST accounts credited in respect of the Placing Shares by                            30 November 2007

Despatch of definitive share certificates (where applicable) by                        14 December 2007


Each of the times and dates in the Expected Timetable is subject to change. All references to times are to
London time unless otherwise stated. Temporary documents of title will not be issued.




                                                     13
                                      KEY INFORMATION
This summary highlights information contained elsewhere in this document. It does not contain all of the
information investors should consider before investing in the Ordinary Shares. The following information
is derived from, qualified in its entirety by, and should be read in conjunction with, the full text of this
document. Investors should read the whole document and not rely solely on the information in this “Key
Information’’ section or any other information summarised in this document.

Any decision to invest in Ordinary Shares should be based on consideration of this document as a whole.

Please refer to Part IV of this document for a discussion of certain risk factors that should be taken into
account when considering whether to subscribe for Ordinary Shares.

Information on the Company
We are a company incorporated in Jersey that owns and operates a fleet of dry bulk vessels that transport iron
ore, coal, grain, steel products, cement, alumina, and other dry bulk cargoes worldwide. Our fleet currently
consists of four vessels, comprising three panamax vessels and one handymax vessel. We have also
contracted to acquire a supramax vessel which is scheduled for delivery between 1 March and 30 April 2008.
Including the new supramax vessel to be delivered, our five dry bulk carriers have an aggregate carrying
capacity of 298,761 dwt. The weighted average age of this fleet as at 1 November 2007 was 13.2 years.

During the year ended 31 December 2006, the Group generated revenues and operating profit of
approximately US$15.1 million and US$7.0 million respectively. During this period, the Group owned an
average of 2.6 vessels. During the six months ended 30 June 2007, the Group generated revenues and
operating profit of approximately US$12.8 million and US$7.8 million respectively. During this period the
Group owned an average of 3.0 vessels. The Group did not pay any taxes on corporate profits during these
periods.

Our competitive strengths
We believe that we possess a number of strengths that give us a competitive advantage, namely:

•     Long-standing experience of ship owning.

•     Established group with long-term, high-quality customer relationships.

•     A modern, high-quality fleet of dry bulk vessels.

•     High standards of operations.

•     Balanced chartering strategy generating stable cash flow through period charters.

•     Strong balance sheet for growth.

•     An experienced management team with a proven track record.

Our business strategy
Our primary objective is to manage our fleet in a manner that allows us to maintain profitability across the
shipping cycle and thus maximise returns for our Shareholders. To accomplish this objective we have
identified the following strategies which build upon our existing strengths:

•     Accretive growth through vessel acquisitions.

•     Operate a modern, high-quality fleet of dry bulk carriers.

•     Deliver an outstanding service to customers through highly efficient operations with optimal fleet
      utilisation.

•     Balanced chartering of our vessels in a manner that provides us with stable cash flows.


                                                      14
•     Attraction and retention of blue-chip customers.

Risk factors

Prospective investors should carefully consider the following risk factors:

General risk factors
•     An investment in shares listed on AIM is likely to carry a higher risk than an investment in a share
      listed on the Official List.

•     Our share price could be volatile and there may not be a liquid market for the Ordinary Shares.

Risks relating to our industry
•     The seaborne transportation industry is cyclical and volatile, and this may lead to reductions in our
      charter rates, vessel values and results of operations.

•     An economic slowdown in the Asia Pacific region could have a material adverse effect on our
      business, results of operations, cash flows and financial position.

•     We operate in a highly competitive international market and may be adversely affected by
      competitors’ activities.

•     Changes in the economic and political environment in China and policies adopted by the government
      to regulate its economy may have a material adverse effect on our business, financial condition and
      results of operations, cash flows and financial position.

•     Charter rates for vessels in the dry bulk sector are at levels that remain high relative to historic levels
      and may decrease in the future, which may have an adverse effect on our earnings and ability to pay
      dividends.

•     We may depend on spot charters in volatile shipping markets.

•     An over-supply of dry bulk carrier capacity may lead to reductions in charter rates and profitability.

•     The market value of our vessels, which are at historically high levels, may fluctuate significantly, and
      we may incur losses if we sell vessels following a sharp decline in their market value.

•     Our revenues are subject to seasonal fluctuations, which may have a material adverse effect on our
      financial condition and ability to pay dividends.

•     We may have to pay tax on United States source income, which would reduce our profits.

•     Our industry is subject to complex laws and regulations, including environmental regulations that can
      adversely affect the cost, manner or feasibility of doing business.

•     Capital expenditure and other costs necessary to operate and maintain our vessels may increase due
      to changes in government regulations, safety or other equipment standards and customer requirements
      adversely affecting our profitability.

•     Our vessels may suffer damage due to the inherent operational risks of the seaborne transportation
      industry and we may experience unexpected dry-docking or repair costs, which may adversely affect
      our business and financial condition.

•     Our insurance may not be adequate to cover losses that may result from our operations due to the
      inherent operational risks of the seaborne transportation industry.

•     We may be subject to funding calls by our protection and indemnity clubs, and our clubs may not have
      enough resources to cover claims made against them.




                                                      15
•     Increased inspection procedures, tighter import and export controls and new security regulations
      could increase costs and disrupt our business.

•     Rising fuel prices may adversely affect our profits.

•     The operation of dry bulk carriers has certain unique operational risks.

•     Maritime claimants could arrest our vessels, which would interrupt our business.

•     Governments could requisition our vessels during a period of war or emergency, resulting in loss of
      revenues.

•     Terrorist attacks and international hostilities can affect the seaborne transportation industry, which
      could adversely affect our business.

•     Compliance with safety and other vessel requirements imposed by classification societies may be
      costly and could reduce our net cash flows and net income.

•     The smuggling of drugs or other contraband onto our vessels may lead to governmental claims against
      us.

Risks relating to the Company
•     We may be unable to retain key management personnel and other employees, which may negatively
      impact the effectiveness of our management and results of operations.

•     We currently rely on Mantinia to manage the technical and operational aspects of our fleet.

•     There may be a delay in delivery of M/V Aegean Hawk (to be renamed M/V Konstantinos D) and we
      may decide not to take delivery of this vessel if it is not “in class”.

•     Labour interruptions could disrupt our business.

•     As we expand our business, we may need to improve our operating and financial systems and will
      need to recruit suitable employees and crew for our vessels.

•     Our earnings may be adversely affected if we do not successfully employ our vessels on long-term
      time charters or take advantage of favourable opportunities involving short-term or spot market
      charter rates.

•     Our revenues may be adversely affected if we do not successfully employ our vessels.

•     Our charterers may terminate or default on their charters, which could adversely affect our results of
      operations and cash flow.

•     The ageing of our fleet may result in increased operating costs in the future, which could adversely
      affect our earnings.

•     We may have difficulty managing our planned growth properly.

•     Purchasing and operating secondhand vessels may result in increased operating costs and reduced
      fleet utilisation.

•     In the highly competitive international shipping industry, we may not be able to compete for charters
      with new entrants or established companies with greater resources.

•     We cannot assure you that we will pay dividends.

•     We are a holding company, and we will depend on the ability of our subsidiaries to distribute funds
      to us in order to satisfy our financial obligations or to make dividend payments.




                                                    16
•     Unless we set aside reserves or are able to borrow funds for vessel replacement, at the end of a vessel’s
      useful life our revenues will decline, which would adversely affect our business, results of operations
      and financial condition.

•     Investments in derivative instruments such as forward freight agreements could result in losses.

•     We will depend upon a few significant customers for a large part of our revenues and the loss of one
      or more of these customers could adversely affect our financial performance.

•     A sharp decline in the market value of our vessels could lead to a default under our loan agreement
      and the loss of our vessels through foreclosure.

•     We cannot assure you that we will be able to borrow amounts under our existing or future loan
      agreements and restrictive covenants in our loan agreements may impose financial and other
      restrictions on us.

•     Our ability to obtain additional debt financing may be dependent on the performance of our then
      existing charters and the creditworthiness of our charterers.

•     We do not have committed financing in place for the M/V Aegean Hawk (to be renamed
      M/V Konstantinos D).

•     We cannot assure you that we will be able to refinance any indebtedness incurred under our loan
      agreements.

•     Because we will generate all of our revenues in US dollars but will incur a significant portion of our
      expenses in other currencies, exchange rate fluctuations could have an adverse impact on our results
      of operations.

•     HM Revenue & Customs in the UK may determine that we are resident for the purposes of
      UK corporation tax.

•     Our tax exempt status may be subject to challenge.

Risks relating to the Placing
•     Following the Placing, our current largest Shareholders will effectively control the outcome of matters
      on which our Shareholders are entitled to vote and have specific powers to appoint members of the
      Board and have significant influence over board decisions.

•     Sales of substantial amounts of Ordinary Shares in the future may adversely affect our share price
      which may also be volatile for other reasons.

•     There has been no prior public trading in our Ordinary Shares and our share price may be subject to
      wide fluctuations.

•     We may be exposed to foreign jurisdiction taxation.

•     The City Code will not apply to the Company and therefore Shareholders may not receive the
      protections provided by the City Code in the event of a takeover offer for the Company.




                                                     17
Selected financial information and operating data
The table below sets out the Company’s summary financial information and operating data for the periods
indicated.

                          As at and for As at and for As at and for As at and for As at and for
                             the period     the period     the period   the 6 month    the 6 month
                                 ended          ended          ended period ended period ended
                          31 December 31 December 31 December               30 June        30 June
                                  2004            2005           2006          2006           2007
                               (audited)      (audited)      (audited)   (unaudited)    (unaudited)
                        (thousand US$) (thousand US$) (thousand US$) (thousand US$) (thousand US$)
Income Statement Data:
Revenue                         12,437         13,235         15,102          5,982         12,792
EBITDA                            8,204          9,496          9,711         3,801          9,365
Operating profit before
finance costs                     6,542          7,756          6,999         2,789          7,775
Profit for the period             6,155          7,061          5,361         2,274          6,952
Balance Sheet Data:
Total Assets                             27,505              28,509               47,243                  N/A              47,561
Cash Flow Data:
Net cash flow from
operating activities                      8,798                5,190              10,587                2,438                7,190
Fleet Data:
Average number of vessels(1)                 2.0                  2.0                 2.6                  2.2                  3.0
Number of vessels at
end of each period                             2                     2                   3                   3                    3
Note:
(1) Average number of vessels is the number of vessels that constituted our fleet for the relevant period, as measured by the sum of
    the numbers of days each vessel was a part of our fleet during the period divided by the number of calendar days in the period.


Current trading and prospects
During the period since 1 July 2007, our business has performed in line with management expectations and
fleet utilisation rates have remained consistent with those rates achieved in the three month period that ended
on 30 June 2007. With the delivery of a supramax vessel to be delivered between 1 March and 30 April 2008
and all of our current vessels fixed on time-charters, our management is confident about the Group’s
prospects for the current financial year.

The Placing
The Placing will comprise the issue of 13,684,970 new Ordinary Shares by the Company to new investors.
Under the Placing, all Placing Shares will be issued at the Placing Price.

The Placing, which is fully underwritten by Jefferies, is conditional, inter alia, upon the admission of the
Ordinary Shares to trading on AIM by 30 November 2007, or such later time (being no later than
31 December 2007) as Jefferies and the Company may agree.

Reasons for the Placing and use of proceeds
The Placing is expected to raise approximately US$60 million for the Company, before expenses. After the
expenses of the Placing and Admission, estimated in total at approximately US$4.5 million (excluding VAT,
if applicable), the Placing is expected to raise approximately US$55.5 million.

We expect to use approximately US$31 million of the net proceeds of the Placing for part payment for the
supramax, M/V Aegean Hawk (to be renamed M/V Konstantinos D), and for the remainder to be used for



                                                                18
working capital purposes, to partially reduce indebtedness and, if the prevailing market conditions are
favourable to do so, the funding of future vessel acquisitions.

Dividend policy
As a Jersey company, the Company may only pay dividends out of: (a) realised profits less realised losses;
(b) realised revenue profits less revenue losses (whether realised or not), provided that, immediately after,
the Company will be able to discharge its liabilities as they fall due; or (c) with the approval of a special
resolution of the Shareholders, from unrealised profits less losses (whether realised or not), provided that the
Directors reasonably believe that, immediately thereafter the Company will be able to carry on business and
be able to discharge its liabilities as they fall due until the expiry of the period of one year immediately
following the date on which the distribution is proposed to be made.

As the Company is a holding company, with no material assets other than the shares of its subsidiaries, its
ability to pay dividends will depend on the earnings and cash flow of those subsidiaries and their ability to
pay dividends to the Company. If there is a material decline in the international dry bulk shipping charter
market, the Company’s net profits would be adversely affected and would therefore limit the Company’s
ability to pay dividends. The payment of dividends is not guaranteed or assured.

The Company intends to adopt a dividend policy which will reflect its long-term net profits and cash flow
potential, maintaining an appropriate level of dividend cover taking into account the likely effects of the
shipping cycle and the need to retain cash to reinvest in vessel acquisitions. Following the Placing, the
Company anticipates that it will initially adopt an annual dividend payment ratio of in excess of 50% of its
net profits.

The appropriate level of dividend payout will be appraised by reference to the US dollar net profits of the
Group. However, the amount payable to investors will be declared in US dollars but paid in pounds sterling,
such amount to be calculated by reference to the exchange rate prevailing on the date of payment.
Furthermore, the net profits of the Group which will be taken into account for such calculation will exclude
any gain or loss on the sale of vessels and any unrealised gains or losses on derivatives. The use of any capital
surpluses arising from vessel sales will be considered in the light of, amongst other things, the return on
capital available from reinvesting such proceeds in further ships and the most appropriate timing of any such
reinvestment.

The Company intends to pay an interim dividend in or around October of each financial year in respect of
the profits arising during the first six months of that financial year, and a final dividend in or around April in
respect of the profits arising during the last six months of the prior financial year. It is expected that the first
dividend to be declared by the Company following Admission will be in or around April 2008 in respect of
profits arising during the period from Admission to 31 December 2007.

In November 2007, the Ship Owning Companies declared an extraordinary interim dividend to their existing
shareholders of approximately US$12.5 million in aggregate. Such dividend will be payable to such
shareholders in or around November 2007.

Relationship with Fotini Karamanlis and Konstantinos Karamanlis

General
Following Admission, Faith (a company controlled by our Chief Executive Officer Fotini Karamanlis),
Corpus, Pandinia (both companies controlled by Konstantinos Karamanlis) and Bedat (a company controlled
as to 50% by Fotini Karamanlis and 50% by Konstantinos Karamanlis) will own, in aggregate,
approximately 72.3% of the Enlarged Issued Share Capital. Ms. Karamanlis and Mr. Karamanlis have
indicated that they have no current intention to reduce the level of their shareholdings following Admission.

As further described in section 11.3 of Part IX of this document, Faith, Corpus and Bedat have agreed with
Jefferies and the Company, subject to certain customary exceptions, not to dispose of any Ordinary Shares
for a period of nine months from the date of Admission.




                                                        19
Relationship Agreements
The Company has entered into the Relationship Agreements with each of the FK Group (the “FK
Relationship Agreement”) and the KK Group (the “KK Relationship Agreement”) to regulate our ongoing
relationships with the FK Group and the KK Group. Both Relationship Agreements automatically terminate
in circumstances where the Board considers the FK Group and the KK Group to be acting in concert if: (a)
the aggregate direct and indirect holding of the FK Group and the KK Group falls below 30%; or (b) any
Shareholder (or group of shareholders acting in concert) holds more shares, in aggregate, than the FK Group
and the KK Group in aggregate. The relevant Relationship Agreement also terminates in circumstances
where the Board has failed within 15 days of the relevant event to pass a resolution confirming that the FK
Group and the KK Group are acting in concert if: (a) the aggregate direct and indirect holding of the FK
Group (in the case of the FK Relationship Agreement) or the KK Group (in the case of the KK Relationship
Agreement) alone falls below 30%; or (b) any Shareholder (or group of Shareholders acting in concert) holds
more shares in aggregate than the aggregate direct and indirect holding of the FK Group (in the case of the
FK Relationship Agreement) or the KK Group (in the case of the KK Relationship Agreement) alone.

Under the terms of the Relationship Agreements, the FK Group and the KK Group each have the right, for
as long as they each hold at least 12% of the issued share capital in the Company to nominate a non-executive
Director. Such non-executive Director shall, if elected by the Board, be entitled to hold the post of Chairman.
For as long as either one of the FK Group or the KK Group holds over 30% of the issued share capital in the
Company that group has the right for their appointee Director to hold the position of Chief Executive Officer
or Chief Financial Officer. However, if both the FK Group and the KK Group hold over 30% of the issued
share capital in the Company they shall jointly have the right to appoint two Directors (one of whom shall
have the right to hold the position of Chief Executive Officer or Chief Financial Officer and the other of
whom shall be a non-executive Director, such non-executive Director shall be appointed to the post of
Chairman unless the Board decides otherwise). Fotini Karamanlis is currently deemed (and will for as long
as she remains a Director be deemed) to be the appointee of the FK Group. These rights survive termination
of the Relationship Agreements. Similar rights are contained in the Articles to be adopted immediately prior
to Admission.

The FK Group and the KK Group have each agreed to procure, so far as they reasonably can, that at least
one Director on the Board shall be independent of them.

The Relationship Agreements also provide for all transactions between the Company, on the one hand, and
the FK Group and the KK Group or their associates, on the other hand, to be conducted at arm’s length and
on a normal commercial basis.

The FK Group and the KK Group have also agreed in the Relationship Agreements to various restrictions
including not to engage in our core activity of owning and operating dry bulk vessels of the type used by the
Group whilst the Relationship Agreements are in effect other than through the Company.

These restrictions do not however apply in the event that the Board declines an opportunity to acquire any
ships and/or acquire any interest and/or make any investment (provided at least one Director who is
independent of the FK Group or the KK Group (as the case may be) and is an independent non-executive
Director has approved such decision) in which case the FK Group or the KK Group (as the case may be)
and/or any of its associates may make such an acquisition during the four month period following such
decision to terms no more favourable that those offered to the Company. Ms. Karamanlis’s husband is not
an associate for the purposes of the FK Relationship Agreement.

Further details of the Relationship Agreements are given in sections 13.2 of Part IX of this document.




                                                      20
                                                          PART I

                                        INDUSTRY DESCRIPTION
All the information and data presented in this section, including the analysis of the various sectors of the dry
bulk shipping industry, has been provided by Drewry. Drewry has advised that the statistical and graphical
information contained herein is drawn from its database and other sources. In connection therewith, Drewry
has advised that: (i) certain information in Drewry’s database is derived from estimates or subjective
judgments; (ii) the information in the databases of other maritime data collection agencies may differ from
the information in Drewry’s database; (iii) whilst Drewry has taken reasonable care in the compilation of
the statistical and graphical information and believes it to be accurate and correct, data compilation is
subject to limited audit and validation procedures and may accordingly contain errors; (iv) Drewry, its
agents, officers and employees do not accept liability for any loss suffered in consequence of reliance on such
information or in any other manner; and (v) the provision of such data, graphs and tables does not obviate
the need to make appropriate further inquiries.

Introduction
The marine industry is a vital link in international trade, with ocean going vessels representing the most
efficient, and often the only means of transporting large volumes of basic commodities and finished products.
Seaborne cargo is categorised as dry cargo or liquid cargo.

Dry cargo includes dry bulk cargo, container cargo and non container cargo. Dry bulk cargo is shipped in
dry bulk carriers, while container cargo is shipped in 20 or 40 foot containers on specialised container ships.
Non-container cargo includes other dry cargo that cannot be shipped in a container due to size, weight or
handling requirements, such as large manufacturing equipment or large industrial vehicles. Most of this
cargo will be shipped in general cargo/multi-purpose vessels. Liquid cargo includes crude oil, refined oil
products, liquefied gases, chemicals and associated products, all of which are shipped in tankers.

                                         World seaborne trade: 2001 and 2006

                               General cargo                                        General cargo
                                   6%                                                   7%
                      Container                                            Container
                        10%                                                  14%


                                                      Dry Bulk                                             Dry Bulk
                                                        34%                                                  33%




                   Liquids                                              Liquids
                 (Oil/Gases/                                          (Oil/Gases/
                  Chemical)                                            Chemical)
                     50%                                                  46%



                                    2001                                                 2006
                           Total = 6.3 billion tons                             Total = 8.3 billion tons

Source: Drewry

In 2006, approximately 8.3 billion tonnes of cargo of all types was transported by sea, of which 4.5 billion
tonnes was accounted for by dry cargo and 3.8 billion tonnes was liquids. Collectively, in the period 2001 to
2006 the CAGR in world seaborne trade was 5.7%. However, as the figures in the following table indicate,
there are considerable variations in the rate of growth depending on the commodity concerned.




                                                                 21
                               Seaborne trade growth rates: 2001 to 2006
                                             (CAGR – %)
        14



        12



        10



        8



        6                                                      12.4


        4
                                         6.9
                   5.3
        2                                                                            4.1


        0

                  Dry bulk          General cargo            Container              Liquids

Source: Drewry

                                 World seaborne trade: 2001 and 2006
                                                                                                       2006
                                                  Tonnes         Tonnes         CAGR%                % total
                                                (millions)     (millions)     2001–2006       seaborne trade
                                                    2001              2006
All cargo
  Dry cargo                                        3,196         4,500             7.1                 54.3
  Liquid cargo                                     3,092          3,782             4.1                45.7
                                               ––––––––       ––––––––        ––––––––            ––––––––
Total                                              6,288          8,282             5.7               100.0

Dry cargo
                                               –––––––– ––––––––              ––––––––            ––––––––
  Dry bulk                                          2,142             2,771          5.3               33.4
  Major bulks                                       1,252             1,685          6.1               20.4
  of which
     Coal                                           565             701             4.4                 8.5
     Iron ore                                       452             722             9.8                 8.7
     Grain                                          235             262             2.2                 3.2
  Minor bulks                                       890           1,086             4.1                13.1
                                               ––––––––       ––––––––        ––––––––            ––––––––
  Container cargo                                   648           1,161            12.4                14.0
                                               ––––––––       ––––––––        ––––––––            ––––––––
  Non container/General cargo                       406             568             6.9                 6.9

Source: Drewry
                                               –––––––– ––––––––              ––––––––            ––––––––
Dry bulk vessel demand
The international dry bulk shipping industry provides seaborne transportation of certain commodities in bulk
form used in many basic industries and construction. Dry bulk cargo can be further defined as either major
bulk cargo or minor bulk cargo, all of which is shipped in dry bulk carriers. Major bulk cargo includes iron
ore, coal and grain. Minor bulk cargo includes agricultural products, mineral cargo (including metal
concentrates), cement, forest products, metal products and all other dry bulk commodities carried in bulk
carriers. In 2006, the major bulks accounted for 61% of the 2.8 billion tonnes of dry bulk cargo that was
moved by sea.



                                                     22
                                            World dry bulk trade: 2001 and 2006
             Other minor bulks                   Coal                 Other minor bulks                  Coal
                   42%                           26%                        40%                          25%




                                                  Iron ore                                               Iron ore
                                                    21%                                                    26%
                                   Grain                                              Grain
                                   11%                                                 9%

                                  2001                                                    2006
                         Total = 6.3 billion tons                                Total = 2.8 billion tons


Source: Drewry

The demand for dry bulk carriers is determined by the volume and geographical distribution of seaborne dry
bulk trade, which in turn is influenced by trends in the global economy. During the 1980’s seaborne dry bulk
trade grew on average by just over 1% per annum. In the 1990’s the average increase in trade was just under
3% per annum. However, as the chart below illustrates between 2001 and 2006, seaborne dry bulk trade
increased from 2.1 to 2.8 billion tonnes, equivalent to a compound annual growth rate (CAGR) of 5.3%,
thereby creating significant increases in the requirement for dry bulk carriers.

                                           Dry bulk trade: Growth rates by period
                                                        (CAGR – %)
       6


       5



       4



       3
                                                                                                   5.3
       2

                                                              2.8
       1
                            1.2
       0

                          1980’s                             1990’s                             2001-2006

Source: Drewry

The most important commodities within the dry bulk sector are iron ore, coal and grain (includes wheat,
coarse grains and soybeans). Other key cargoes include agricultural products (e.g. fertilizers), steel products,
forest products, metals, cement, and a wide range of other minerals such as petroleum coke, bauxite, alumina
and phosphate rock, all of which form part of the category referred to as minor bulks. The changes in
seaborne trade in each of these main product groups in the period 2001 to 2006 is shown by the following
table.




                                                              23
                                             Dry bulk seaborne trade
                                                 (million tonnes)
                                     2001              2002       2003        2004        2005         2006
Coal                                  565               570           619      650          675          701
Iron ore                              452               484           524      587          660          722
Grain                                 235               245           240      248          253          262
Minor bulks                           890               920           957    1,025        1,049        1,086

Total
                              –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
                                     2,142         2,219         2,340       2,510        2,637        2,771
Year-on-year change                  1.6%          3.6%          5.5%        7.3%         5.1%         5.1%
Source: Drewry

The following chart illustrates the changes in seaborne trade between the major and minor bulks in the period
2001 to 2006.

                               Dry bulk trade development: 2001 to 2006
                                            (million tonnes)
    3,000


                                                     5.3%
                                              CAGR =
    2,500



    2,000



    1,500



    1,000



      500



       0
               2001           2002              2003           2004         2005          2006


                           Minor bulks            Grain          Iron ore          Coal

Source: Drewry

Iron ore
Iron ore is used as a raw material for the production of steel, along with limestone and coking (or
metallurgical) coal. Steel is the most important construction and engineering material in the world. Global
steel production has risen from just under 900 million tonnes in 2001 to 1,250 million tonnes in 2006 as
illustrated by the following chart.




                                                          24
                                        World steel production: 2001 to 2006
                                                  (million tonnes)
       1,400


       1,200


       1,000


        800


        600


        400


        200


          0

                  2001               2002            2003          2004                 2005         2006


Source: IISI

                                      Global steel production: 1996 and 2006
                                                                                                EU
                                               EU                           Others             14%
                     Others                   20%                            20%
                      25%


                                                                 India 4%
                                                                 South
               India 3%                             China        Korea                               China
                 South                              14%           4%                                 35%
                 Korea                                            Russia
                  5%                                               6%

                      Russia                                                US
                       7%                   Japan                           8%
                                US           14%                                     Japan
                               13%                                                    10%

                                 1996                                                   2006


Source: IISI

Iron ore is a vital component of steel making and in 2006 approximately 722 million tonnes of iron ore were
exported worldwide, with the main importers being China, the European Union, Japan and South Korea.
Australia and Brazil together account for approximately two-thirds of global iron ore exports. Although both
have seen strong demand from China, whereas Australia has benefited the most. For example, between 2004
and 2005 Australia accounted for 30% of every extra tonne of iron ore imported by China, compared to a
corresponding figure of 20% for Brazil.

However, although Brazilian exports to China have grown more slowly, the contribution to tonne mile
demand has been greater due to the longer distances between origin and destination. India is also becoming
a major exporter of iron ore. Unlike Australia and Brazil, which tend to export primarily in the larger
capesize vessels, much of India’s exports are in smaller panamax and handymax vessels (for a description of
vessel types see the section headed “Dry bulk carrier supply – vessel types”). The growth in Chinese iron ore
imports has been the main driving force behind the recent strength of the dry bulk shipping market and
although the principal impact has been felt in the demand for capesize and panamax bulk carriers, there has
been a positive ripple effect which has been felt in both the handymax and handysize sectors.

Coal
Coal is an abundant commodity. At current production rates, coal reserves would provide approximately 200
years of supply, compared with approximately 41 years for oil and 67 years for natural gas. In addition, coal
is mined in more than 50 countries, with no world dependence on any one region.



                                                            25
International seaborne movements of coal have risen from 565 million tonnes in 2001 to 701 million tonnes
in 2006, equivalent to a CAGR of 4.4%. Coal is divided into two categories: thermal (or steam) coal and
coking (or metallurgical) coal. Thermal coal is used mainly for power generation. Coking coal is used to
produce coke to feed blast furnaces in the production of steel. In 2006, total steam coal trade amounted to
491 million tonnes, with coking coal accounting for the remaining 210 million tonnes of trade.

Asia’s rapid industrial development has also contributed to strong demand for steam coal. Expansion in air-
conditioned office and factory space, along with industrial use, has raised demand for electricity, of which
nearly half is generated from coal-fired plants, thus increasing demand for thermal coal. Furthermore, the
high cost of oil and gas has lead to increasing development of coal fired electricity plants across the world,
especially in Asia. The main importers and exporters of steam coal are shown below.

                                   World steam coal importers and exporters: 2006
                                   Imports                                          Exports


                                                                                               Australia
                                                                                Others           23%
                                                  EU                             13%
                                                 20%

                 Others
                  36%                                                Columbia
                                                                       12%



                                                       Japan                                               China
                                                        18%         S.Africa                                11%
                                                                      14%



                          Taiwan
                                           S.Korea
                           12%     China                                                 Indonesia
                                             12%
                                    2%                                                      27%



Source: Drewry

The main coal importers are Europe, Japan, South Korea and Taiwan, while the main exporters are Australia,
Indonesia, South Africa and Colombia. China is the largest producer of coal in the world, and for many years
it was a major exporter. Nevertheless, Chinese imports of coal are on the increase. Coal imports have also
been boosted by the decision to close small scale and unsafe mines. As China generates some 78% of its
electricity from coal, growing Chinese imports of coal may well remain a feature of the market for some time
to come.

Metallurgical coal accounted for 8% of seaborne trade in 2006. Future prospects are heavily tied to the steel
industry. It is used within the blast furnace to impart its carbon into the iron, giving the final steel product
more strength and flexibility. Because coking coal is of higher quality than thermal coal (i.e. more carbon
and less impurities), its price is higher and its trade more volatile.

Grain
Grains include wheat, coarse grains (corn, barley, oats, rye and sorghum), and oil seeds extracted from
different crops such as soybeans and cotton seeds. In general, wheat is used for human consumption, while
coarse grains are used as feed for livestock. Oil seeds are used to manufacture vegetable oil for human
consumption or for industrial use, while their protein-rich residue is used as a raw material in animal feed.

Total grain production is dominated by the United States. Argentina is the second largest producer, followed
by Canada and Australia. In terms of imports, the Asia-Pacific region (excluding Japan) ranks first, followed
by Latin America, Africa and the Middle East.

International trade fluctuates considerably. Grains have a long history of price volatility, governmental
intervention and are affected by weather conditions, each of which strongly impact trade volumes. Demand
for wheat and course grains is fundamentally linked in the long-term to population growth and rising per



                                                               26
capita income. With Asia experiencing rapid economic growth and increasing standards of living, it is
expected that meat consumption will increase, leading to rising demand for animal feed.

International trade in grains is dominated by four key exporting regions: North America, South America,
Oceania and Europe (including the former Soviet Union). These regions collectively account for over 90%
of global exports. Large importers are typically Asia, North Africa (Egypt), the Middle East and more
recently India.

Minor bulks
The balance of dry bulk trade, minor bulks, subdivides into two types of cargo. The first type includes
secondary bulks or free-flowing cargo, such as agricultural cargoes, bauxite and alumina, fertilizers and
cement. Second are the so-called neo-bulks, which include non-free flowing or part manufactured cargo that
is principally forest products and steel products including scrap.

Trade in minor bulks constituted approximately 40% of total seaborne dry bulk trade in 2006. Steel scrap
trade has grown the fastest, as scrap is the key input for steel makers using the “electric arc furnace” means
of production.

Seaborne trade in minor bulks has grown from 890 million tonnes in 2001 to 1,086 million tonnes in 2006,
equivalent to a CAGR of 4.1%. Apart from the overall increase in trade, minor bulks have at times also
received a boost from structural shifts within the shipping market. A case in point is the recent change in
legislation which has reduced the fleet of tankers able to carry vegetable oils, and in turn lifted the demand
for bulk carriers able to carry vegetable products in bulk unprocessed form.

Asian dry bulk trade trends
Historically, certain economies have acted as the “primary driver” of dry bulk trade. In the 1990’s Japan was
the driving force, when buoyant Japanese industrial production stimulated demand for imported bulk
commodities. More recently China, and to a lesser extent, India have been the main drivers behind the recent
increase in seaborne dry bulk trade, as high levels of economic growth in both countries (see table below)
have generated increased demand for imported raw materials.

The following table illustrates China’s and India’s gross domestic product growth rate compared to that of
other regions of the world during the periods indicated.

                                     Real GDP growth: 2001 to 2006
                                       (% change previous period)
Years                               2001         2002          2003          2004          2005        2006P
Global Economy                        2.4          3.0           4.1           5.3          4.7           5.2
US                                    0.3          1.6           2.7           3.9          3.2           3.3
Europe                                1.7          1.1           1.1           2.1          1.6           2.8
Japan                                 0.4         -0.3           1.8           2.7          1.9           2.2
China                                 7.5          8.3          10.0          10.1         10.4          10.7
India                                 4.4          4.7           7.4           7.0          8.7           9.2
P = provisional
Source: Drewry

China
Steel and iron ore
On a commodity basis, Chinese steel production and consumption has been the key driver of the recent dry
bulk boom, supported by the iron ore trades. From approximately 220 million tonnes of crude steel output
in 2003, Chinese production rose to approximately 270 million tonnes in 2004 (up 22.7% per annum) and to
approximately 350 million tonnes in 2005 (up 29.6% per annum). In 2006, production is estimated to have




                                                     27
increased by a further 20%, taking total output to 420 million tonnes. Almost single handed, this factor has
been responsible for fuelling the recent surge in dry bulk shipping.

                      World steel production and Chinese market share: 2000 to 2006

     1,400                                                                                                    40

                                                                                                              35
     1,200

                                                                                                              30
     1,000
                                                                                                              25
      800
                                                                                                              20
      600
                                                                                                              15

      400
                                                                                                              10

      200                                                                                                     5

        0                                                                                                     0

               2000           2001           2002          2003           2004           2005          2006


                      World steel production million tonnes (left axis)          China % share (right axis)


Source: Drewry
While the global steel industry was affected by the ‘China factor’, significant structural changes were also
seen taking effect in the Asia-Pacific region. Over the last five years, steel production in China has grown at
an average annual rate of almost 23%, compared to global production increasing by an average 7.8% per
annum. As a result of the growth in steel production, Chinese imports of iron ore have also increased
substantially.

Chinese iron ore imports for 2006 are placed at 327 million tonnes, an increase of 18.9% over 2005 imports
of 275 million tonnes. They have increased at a CAGR of 28.6% since 2001.


                                       Chinese iron ore imports: 2001 to 2006
                                                  (million tonnes)
       350


       300


       250


       200


       150


       100


        50


         0

               2001             2002                2003           2004              2005             2006



Source: Drewry

Chinese imports of iron ore have traditionally come from Australia, Brazil, India, South Africa and Peru.
Since 2000, the share of Australian and South African ore has declined, with Indian and Brazilian market
shares rising. This shift in origins is borne out by the more rapidly increasing tonne miles for iron ore
compared to the overall dry bulk market, something which has benefited the larger ships in the bulk carrier
fleet. However, as noted before, panamax and handymax bulk carriers have also benefited from the growth
in bulk trades, especially from and to other countries such as India.


                                                           28
               World seaborne iron ore trades and Chinese market share: 2001 to 2006

        800                                                                                                 50

                                                                                                            45
        700
                                                                                                            40
        600
                                                                                                            35
        500
                                                                                                            30

        400                                                                                                 25

                                                                                                            20
        300
                                                                                                            15
        200
                                                                                                            10
        100                                                                                                 5

         0                                                                                                  0
              2000          2001           2002          2003          2004           2005           2006


                     Total seaborne trade million tonnes (left axis)          China % share (right axis)


Source: Drewry

China is also becoming a significant net importer of coal as it struggles to meet the power generation needs
of its fast growing economy. This has also provided fresh employment opportunities for dry bulk carriers and
this trend is set to continue as coal fired power stations are by far the single largest source of energy
generation in China.

India
India is emerging as a major force in the dry bulk shipping market. A combination of a buoyant economy
and a rapidly expanding industrial base have stimulated foreign trade in bulk commodities, both in terms of
imports and exports. In turn this has created demand for shipping services which is increasingly being met
by a fast growing maritime sector within India.

Steel
India’s rapid economic growth is driving its demand for steel. Increased demand from sectors such as
infrastructure, real estate and automobiles, at home and abroad, has put India’s steel industry on the world
map. According to the IISI, India is now the seventh largest producer of steel in the world with an overall
production of about 43 million tonnes in 2006, as compared to its production of 22 million tonnes in 1996.
Over the past five years, India’s steel output has grown nearly 9.4% per year, while global crude steel output
has increased by approximately 7.8% per year.

Even though India is now one of the world’s top ten steelmakers, its domestic output is insufficient to meet
the domestic demand in all sectors of its economy. In 2005, 4.7 millon tonnes of steel were imported,
compared with only 2.2 million tonnes ten years earlier. There are several reasons for this: firstly, steel
consumption is rising as a consequence of the upsurge in economic growth. Secondly, there is demand for
high-quality products, which India cannot supply in sufficient quantities for the foreseeable future.

Iron ore
India’s iron ore industry is developing quickly. Production has risen from 67 million tonnes in 1996 to
154 million tonnes in 2006 and there has also been a corresponding uplift in export volumes.

India is already the second largest exporter of iron ore to China and ahead of traditional suppliers such as
Brazil. An overview of India’s major trade partners for iron ore exports is provided below. Historically, Japan
was the major consumer of Indian iron ore, but it has since been replaced by China.




                                                          29
                         Indian iron ore production and exports: 1999 to 2006
                                            (million tonnes)
        180


        160


        140


        120


        100


         80


         60


         40


         20


         0

               1999       2000          2001           2002          2003        2004     2005   2006


                                 Iron ore production          Iron ore exports to China

Source: GOI

Coal
Coal is a major commodity in the Indian economy. It accounts for more than one-third of primary energy
consumption, while over 54% of domestic power generation is now from coal-fired power plants. In 2006,
Indian coal production increased by 4.5% over 2005. Even so, India was faced with a coal deficit of 21.2
million tonnes and 28 million tonnes of oil equivalent in 2005 and 2006 respectively, which had to be met
by imports transported by sea in dry bulk carriers.

Indian consumption of coal in 2006–2007 is placed by government sources at 473 million tonnes, an increase
of 25% on the previous year. Power generation now accounts for over 70% of domestic demand and power
generation is now the fastest growing consumer of coal. Indian domestic coal is not considered to be of good
quality because of the presence of inorganic impurities. All additional reasons for greater reliance on
increasing coal imports.

Indian coal imports were just short of 40 million tonnes in 2005–2006 and have more than doubled in the
last decade. The CAGR for coal imports since the late 1990’s is now running close to 12% and given the
projections of Indian energy consumption look set to rise further.




                                                              30
                                       Indian coal imports: 1999 to 2006
                                                (million tonnes)
        45


        40


        35


        30


        25


        20


        15


        10


         5


         0

                1999            2000    2001      2002          2003         2004             2005   2006


Source: Ministry of Coal, GOI

India’s current coking coal requirements are estimated to be above 0.7 tonnes for every one tonne of steel.
Domestic output is clearly insufficient to meet the steel industry’s demands, thus paving the way for imports.
Of the key suppliers of coking coal to India, Australia dominates on account of physical proximity and the
high quality of the mineral. The other major suppliers include China and the US.

Imported thermal coal is preferred by the power sector due to its high calorific value and low ash content as
compared to domestic coal. An increasing number of power stations in India are now bringing about
technological upgrading in the plants to blend imported coal, which is more efficient than domestic coal. The
key exporters of thermal coal to India are shown below.

    Indian Coking Coal Imports: 2001 to 2005:                 Indian Thermal Coal Imports: 2001 to 2005:
                (% market share)                                          (% market share)
                  US 2%    China 3%
                                                                                    China
                                                                                    21%




                                                                       Australia                            Indonesia
                                                                         12%                                   57%

                                                                          US 1%


                                                                               South Africa
                          Australia                                                9%
                            95%



Source: Ministry of Coal, GOI

Currently the coal handling capacity at major Indian ports is only 46 million tonnes per annum. In addition,
there is further coal handling capacity at minor ports which is estimated to be approximately 15 million
tonnes. Given that power generation capacity in India is set to rise significantly, imports of coal will also
have to rise. As such there is insufficient port infrastructure to handle the imports of coal in the coming years
and port facilities will need to be enhanced in terms of handling bigger vessels, ensuring better cargo
handling facilities, better cargo storage facility and also allocating more dedicated berths for coal.

Tonne mile demand
The extent to which increases in dry bulk trade have affected demand for dry bulk carriers is shown in
estimates of tonne mile demand. Tonne mile demand is calculated by multiplying the volume of cargo moved


                                                         31
on each route by the distance of the voyage. The following chart below detail the changes in tonne mile
demand generated by seaborne trade in major and minor dry bulk cargoes.

                                          Tonne mile demand: 1990 to 2006 (1)
                                                 (Billion tonne miles)

     16,000

     14,000


     12,000

     10,000


      8,000

      6,000

      4,000

      2,000

          0
              1990          1992     1994          1996         1998        2000      2002          2004          2006


                                                  Minor bulks          Major bulks


(1) All dry bulk vessels, including those below 10,000 dwt.
Source: Drewry

Between 2001 and 2006, overall tonne mile demand in the dry bulk sector for vessels above 10,000 dwt
increased from 9,723 billion tonne miles to 13,579 billion tonne miles, equivalent to a CAGR of 6.9%. In
the 1990’s, the average annual increase in tonne mile demand in both the major and minor bulks was just
2.2%. and the steep increase in dry bulk shipping demand in the period 2001 to 2006 reflects both the overall
increase in movements and the rise in long haul movements, especially for commodities such as iron ore.

                     Annual changes dry bulk trade and tonne mile demand: 2000 to 2006
                                                    (%)
         12


         10


          8


          6


          4


          2


          0

                     2000          2001            2002         2003          2004           2005          2006


                                                                                            (1)
                                            Dry bulk trade              Tonne mile demand

(1) Excludes vessels below 10,000 dwt
Source: Drewry




                                                             32
                                         Dry bulk carrier demand (1)
Tonne miles (billions)                2001       2002        2003                  2004                2005         2006
Coal                              2,532           2,531             2,852         3,319           3,565             3,716
Iron Ore                          2,580           2,741             3,050         3,463           3,905             4,259
Grain                             1,319           1,218             1,251         1,277           1,301             1,347
Minor Bulks                       3,292           3,481             3,610         3,919           4,021             4,257
                                –––––––         –––––––           –––––––       –––––––         –––––––           –––––––
Total                             9,723           9,971            10,763        11,978          12,792            13,579
                                ––––––– ––––––– ––––––– ––––––– ––––––– –––––––
(1) Excludes vessels below 10,000 dwt
Source: Drewry

                          Dry bulk carrier demand by ship type: 2001 to 2006
                                          (Billion tonne miles)
    16,000


    14,000
                                                   01 -2 00   6 = 6. 9%
                                        C A G R 20
    12,000


    10,000


     8,000


     6,000


     4,000


     2,000


         0
                 2001          2002             2003               2004           2005                 2006


                          Handysize          Handymax               Panamax              Capesize

Source: Drewry

Tonne mile demand has increased in all sectors of the dry bulk fleet. As the following charts indicate demand
for handymax and panamax bulk carriers tends to be spread across a wide range of commodities and vessel
employment is thus less dependent on a small range of cargoes, as is the case with capesize bulk carriers.

                           Handymax bulk carrier tonne mile demand: 2007
                                       (Billion tonne miles)
     2,000




     1,500




     1,000




        500




         0

              Iron ore         Coal             Grain         Bauxite/Alumina   Phosrock            Minor bulks

Source: Drewry




                                                        33
                                Panamax bulk carrier tonne mile demand: 2007
                                            (Billion tonne miles)
     2,000




     1,500




     1,000




       500




         0

              Iron ore            Coal           Grain         Bauxite/Alumina      Phosrock    Minor bulks

Source: Drewry
A comparison of annual changes in supply and demand in each of the main sectors of the dry bulk fleet in
the period 2001 to 2006 reveals that demand grew faster than supply in the fleet as a whole. This explains
why the freight market has improved so dramatically during this period.

                               Dry bulk carrier supply and demand: 2001 to 2006
                                                   (CAGR %)
         9

         8

         7

         6

         5
                                                                                    8.4
         4                                                     7.8
                                                                                                       6.9
         3                                 5.7                                5.9
                         4.4         4.5                                                       4.6
         2                                               4.0

         1

         0
                 -0.2
        -1
                 Handysize           Handymax            Panamax            Capesize                 All

                                                 Supply              Demand

Source: Drewry

Within dry bulk trades there are certain main trading routes for major dry bulk commodities between
exporting and consuming regions. Coal is mainly shipped from Australia, Indonesia and China to the Far
East and Europe, whereas iron ore is mainly shipped from Australia and Brazil to China, Japan and Europe.
Grain is mainly shipped from the US Gulf, Brazil or Argentina to Europe and the Far East. The following
map represents the major global dry bulk trade routes.




                                                          34
                                         Major dry bulk seaborne trade routes




                 Major coal trades                      Major grain trades       Major iron ore trades

                 Australia – Japan                      US Gulf- Latin America   Australia – Japan
                 Australia – W. Europe                  US Gulf - Japan          Australia – China
                 S. Africa – W. Europe                  US Gulf – Asia           Brazil – China
                 China – S. Korea                       Argentina - Brazil       Brazil – W. Europe
                 Colombia – W. Europe
                 China - Japan

Source: Drewry

Dry bulk carriers are one of the most versatile elements of the global shipping fleet in terms of employment
alternatives. They seldom operate on round trip voyages and the norm is often triangular or multi-leg
voyages. Hence, trade distances assume greater importance in the demand equation and increases in long
haul shipments will have greater impact on overall vessel demand.

Dry bulk carrier supply

Vessel types
The global dry bulk carrier fleet is divided into four categories based on a vessel’s carrying capacity. These
categories are:
•     Capesize. Capesize vessels have carrying capacities of 100,000 dwt or more. These vessels generally
      operate along long haul iron ore and coal trade routes. Only the largest ports around the world possess
      the infrastructure to accommodate vessels of this size.
•     Panamax. Panamax vessels have a carrying capacity of between 60,000 and 99,999 dwt. These
      vessels are designed to meet the physical restrictions of the Panama Canal locks (hence their name
      “Panamax”- the largest vessels able to transit the Panama Canal), making them more versatile than
      larger vessels. These vessels carry coal, grains, and, to a lesser extent, minerals such as
      bauxite/alumina and phosphate rock. As the availability of capesize vessels has dwindled, panamaxes
      have also been used to haul iron ore cargoes.
•     Handymax/Supramax. Handymax vessels have a carrying capacity of between 30,000 and 59,999
      dwt. These vessels operate on a large number of geographically dispersed global trade routes, carrying
      primarily grains and minor bulks. The standard vessels types are usually built with 25–30 tonne cargo
      gear, enabling them to discharge cargo where grabs are required (particularly industrial minerals), and
      to conduct cargo operations in countries and ports with limited infrastructure. This type of vessel
      offers good trading flexibility and can therefore be used in a wide variety of bulk and neobulk trades,
      such as steel products. The term supramax is a relatively new sub category, which covers vessels
      between 50,000 and 59,999 dwt.
•     Handysize. Handysize vessels have a carrying capacity of up to 29,999 dwt. These vessels are almost
      exclusively carrying minor bulk cargo. Increasingly, ships of this type operate on regional trading
      routes, and may serve as trans-shipment feeders for larger vessels. Handysize vessels are well suited
      for small ports with length and draft restrictions. Their cargo gear enables them to service ports
      lacking the infrastructure for cargo loading and unloading.


                                                          35
Current fleet
In September 2007, the world fleet of dry bulk carriers consisted of 6,654 vessels, totaling 386.6 million dwt
in capacity. It should be noted, however, that these figures are based on pure dry bulk carriers, and exclude
a small number of combination carriers.

                                   Dry bulk carrier fleet: September 2007
                                                                   % of Total                          % of Total
                                                Number of               Fleet Total Capacity                Fleet
Size Category            Deadweight tonnes        Vessels           (number)    (million dwt)                (dwt)
Capesize                 100,000 >                   748                 11.2            127.6              33.0
Panamax                  60,000–99,999             1,467                 22.1            107.2              27.7
Handymax                 30,000–59,999             2,504                 37.6            108.0              28.0
Handysize                10,000–29,999             1,935                 29.1             43.8              11.3
                                                 –––––––             –––––––           –––––––          –––––––
Total                                              6,654              100.0%             386.6           100.0%
                                                 –––––––             –––––––           –––––––          –––––––
Source: Drewry

Naturally the fleet has developed in size to meet the increases in seaborne trade and vessel demand. In the
period 2001 to 2006, the CAGR in supply, expressed in terms of deadweight tonnes, was 4.6%. This
compares with an increase in tonne mile employment of 6.9% and it helps to explain why the freight market
has tightened and freight rates have risen.

                       Dry bulk carrier fleet development: 2001 to September 2007
                                               (Million Dwt)
        450


        400
                                                  01-200      6 = 4.6%
        350                               CAGR 20

        300

        250


        200

        150


        100

         50


          0
                2001        2002         2003          2004         2005        2006        Sep 2007


                           Handysize        Handymax            Panamax         Capesize

Source: Drewry




                                                       36
Age profile
The average age of dry bulk carriers in service is approximately 15 years. The figure below shows the age
profiles of the overall dry bulk fleet. The bulge in the mid 1980’s represents trading vessels that were ordered
in response to the strong freight markets of earlier in the decade. Similar bulges can be seen in the late 1990’s
(in response to a strengthened market in the middle of the decade) and at present.

                                Dry bulk carrier age profile: September 2007
        70                                                                                                                       700



        60                                                                                                                       600



        50                                                                                                                       500



        40                                                                                                                       400



        30                                                                                                                       300



        20                                                                                                                       200



        10                                                                                                                       100




         0                                                                                                                       0
             1976    1980          1985           1990           1995              2000          2005             2010   2012+


                             Fleet: mdwt (left)                         Fleet: number of vessels (right)
                             Orderbook: mdwt (left)                     Orderbook: number of vessels (right)

Source: Drewry

Orderbook
The supply of dry bulk carriers is dependent on the delivery of new vessels and the removal of vessels from
the global fleet, either through scrapping or loss. As of September 2007, the global dry bulk orderbook
amounted to 173.3 million dwt, or 44.8% of the existing dry bulk fleet.

                                Dry bulk carrier orderbook: September 2007
                                                                                                       Total
                                              Number of                      % of Fleet            Capacity               % of Fleet
Size Category               Deadweight tonnes   Vessels                       (number)          (million dwt)                  (dwt)
Capesize                    100,000 >                        472                    63.1                   87.8                      68.8
Panamax                     60,000–99,999                    448                    30.5                   36.2                      33.8
Handymax                    30,000–59,999                    985                    39.3                   46.8                      43.3
Handysize                   10,000–29,999                    119                     6.2                    2.5                       5.7
                                                         –––––––                –––––––                 –––––––                  –––––––
Total                                                      2,024                  30.4%                   173.3                    44.8%
                                                         –––––––                –––––––                 –––––––                  –––––––
Source: Drewry

Although the current orderbook is quite large by historical standards, delivery times for newbuildings have
been extended, because of the high level of new ships on order in other sectors such as tankers and
containers.




                                                            37
              Dry bulk carrier orderbook: September 2007 by scheduled year of delivery
                                            (million dwt)
      70



      60



      50



      40



      30



      20



      10



       0
                2007E                   2008E               2009E                2010E               2011E


                  Capesize                                  Panamax                                  Handymax

Source: Drewry

As the figures below indicate, in 2003 most of the dry bulk carriers on order were due to be delivered within
two years, whereas today a far greater proportion of the total orderbook will be delivered after two years.

                                Dry bulk carrier orderbook by period of delivery
                                                      (%)
                               +12 Months
                                  2.6%
              13 – 24 Months
                                                                                                       Up to
                  16.8%
                                                                                                     12 Months
                                                                                                       32.7%
                                                                    +12 Months
                                                                      41.9%




                                                  Up to
                                                12 Months
                                                  80.6%

                                                                                          13 – 24 Months
                                                                                              25.4%

                Dry Bulk Orderbook: January 2003                         Dry Bulk Orderbook: January 2007

Source: Drewry

Vessel scrapping
Vessel owners often conclude that it is more economical to scrap a vessel that has exhausted its useful life
than to upgrade the vessel to maintain it “in-class.” A vessel is deemed to be “in-class” if the surveyors of a
classification society determine that the vessel conforms to the standards and rules of that classification
society. Customers, insurance companies and other industry participants use the survey and classification
regime to obtain reasonable assurance of a vessel’s seaworthiness, and vessels must be certified as in-class
in order to continue to trade and be admitted to ports worldwide.

Due to recent strength in the dry bulk shipping industry, scrapping was very low in 2004 and 2005, but it
picked up a little in 2006 as the freight market weakened. All commercial vessels thus have a finite life and
the average age at which a dry bulk carrier has been scrapped over the last five years has been approximately
26 years.




                                                             38
In all of the major fleet sectors there are quite large blocks of tonnage in excess of twenty years of age, with
41.5% of the dry bulk fleet above 20,000 dwt over twenty years of age (see chart below), so the level of
tonnage on order needs to be set against the amount of tonnage that is likely to be scrapped.

                                 Dry bulk carrier supply: September 2007
                                               (million dwt)
      100



       80



       60



       40



       20



        0
                   Handysize             Handymax                  Panamax                 Capesize

                                                  Over 20 Years   On Order


Source: Drewry

Port congestion
Supply of dry bulk carrier capacity is also affected by the operating efficiency of the global fleet. In recent
years the growth in trade has led to port congestion, with ships at times being forced to wait outside port to
either load or discharge due to limited supply of berths at major ports. Recent indicative delays in loading at
Australian iron ore and coal ports are shown below.

                                      Australian coal port average delays
                                                    (days)
      25



      20



      15



      10



       5



       0
            Jan        Mar     May         July         Sep       Nov         Jan   Mar         May
            2006       2006    2006        2006         2006      2006       2007   2007        2007


Based on delays in Newcastle, Haypoint, Gladstone and Dalrymple Bay
Source: Drewry




                                                           39
                                 Australian iron ore port average delays
                                                  (days)
      14


      12


      10


       8


       6


       4


       2


       0
           Jan       Mar       May       July      Sep       Nov        Jan       Mar       May
           2006      2006      2006      2006      2006      2006      2007       2007      2007


Based on delays in Dampier, Port Headland & Port Walcott
Source: Drewry

At Australian coal ports the delays in mid 2007 had risen to over 20 days, while at the major iron ore ports
there were delays of between six to eight days.

Based on a capesize bulk carrier trading iron ore on a round voyage pattern from Australia to China, a ten
day delay for loading on each voyage would reduce the overall transportation capacity of the vessel by 30%.
Hence, it is easy to see that delays at major bulk carrier loading ports have reduced the amount of available
shipping capacity in the sector, and in doing so have led to a much tighter balance between overall supply
and demand.

Dry bulk carrier freight market
Dry bulk carriers are employed in the market through a number of different chartering options. The general
terms typically found in these types of contracts are described below.

•     A bareboat charter involves the use of a vessel usually over longer periods of time ranging up to
      several years. In this case, all voyage related costs, including vessel fuel, or bunkers, and port dues as
      well as all vessel operating expenses, such as day-to-day operations, maintenance, crewing and
      insurance, transfer to the charterer’s account. The owner of the vessel receives monthly charter hire
      payments on a per day basis and is responsible only for the payment of capital costs related to the
      vessel.

•     A time charter involves the use of the vessel, either for a number of months or years or for a trip
      between specific delivery and redelivery positions, known as a trip charter. The charterer pays all
      voyage related costs. The owner of the vessel receives semi-monthly charter hire payments on a per
      day basis and is responsible for the payment of all vessel operating expenses and capital costs of the
      vessel.

•     A single or spot voyage charter involves the carriage of a specific amount and type of cargo on a
      load-port to discharge-port basis, subject to various cargo handling terms. Most of these charters are
      of a single or spot voyage nature, as trading patterns do not encourage round voyage trading. The
      owner of the vessel receives one payment derived by multiplying the tonnes of cargo loaded on board
      by the agreed upon freight rate expressed on a per cargo tonne basis. The owner is responsible for the
      payment of all expenses including voyage, operating and capital costs of the vessel.

•     A contract of affreightment, or COA, relates to the carriage of multiple cargoes (of a given
      commodity) over the same route and enables the COA holder to nominate different ships to perform
      individual voyages. Essentially, it constitutes a number of voyage charters to carry a specified amount
      of cargo during the term of the COA, which usually spans a number of years. All of the ship’s


                                                      40
       operating, voyage and capital costs are borne by the ship owner. The freight rate normally is agreed
       on a US$ per cargo tonne basis.

Charter hire rates fluctuate by varying degrees amongst the dry bulk carrier size categories. The volume and
pattern of trade in a small number of commodities (major bulks) affect demand for larger vessels. Because
demand for larger dry bulk vessels is affected by the volume and pattern of trade in a relatively small number
of commodities, charter hire rates (and vessel values) of larger ships tend to be more volatile. Conversely,
trade in a greater number of commodities (minor bulks) drives demand for smaller dry bulk carriers.
Accordingly, charter rates and vessel values for those vessels are subject to less volatility. Charter hire rates
paid for dry bulk carriers are primarily a function of the underlying balance between vessel supply and
demand, although at times other factors, such as sentiment may play a role. Furthermore, the pattern seen in
charter rates is broadly mirrored across the different charter types and between the different dry bulk carrier
categories.

In the time charter market, rates vary depending on the length of the charter period and vessel specific factors
such as age, speed and fuel consumption. In the voyage charter market, rates are influenced by cargo size,
commodity, port dues and canal transit fees, as well as delivery and redelivery regions. In general, a larger
cargo size is quoted at a lower rate per tonne than a smaller cargo size. Routes with costly ports or canals
generally command higher rates than routes with low port dues and no canals to transit. Voyages with a load
port within a region that includes ports where vessels usually discharge cargo or a discharge port within a
region that includes ports where vessels load cargo also are generally quoted at lower rates. This is because
such voyages generally increase vessel utilisation by reducing the unloaded portion (or ballast leg) that is
included in the calculation of the return charter to a loading area.

Within the dry bulk shipping industry, the charter hire rate references most likely to be monitored are the
freight rate indices issued by the Baltic Exchange. These references are based on actual charter hire rates
under charter entered into by market participants as well as daily assessments provided to the Baltic
Exchange by a panel of major shipbrokers. The Baltic Panamax Index is the index with the longest history.

                                            Baltic Exchange freight indices
                                                     (Index points)
   16,000                                                                                                           40,000


   14,000                                                                                                           35,000


   12,000                                                                                                           30,000


   10,000                                                                                                           25,000


    8,000                                                                                                           20,000


    6,000                                                                                                           15,000


    4,000                                                                                                           10,000


    2,000                                                                                                           5,000


        0                                                                                                           0

            1999      2000        2001       2002       2003        2004       2005      2006        2007



                   Baltic Capesize Index (BCI) - left axis                 Baltic Panamax Index (BPI) - left axis
                   Baltic Supramax Index (BSI) - left axis                 Baltic Handymax Index (BHMI) - right axis
             The BSI replaced the BHMI on 3 January 2006, although the index has been calculated since 1 July 2005

Source: Baltic Exchange




                                                               41
The following chart illustrates one-year time charter rates for capesize, panamax, handymax, and handysize
dry bulk carriers between January 1996 and September 2007.

     Dry bulk carrier one year time charter rates (5-10 year old ships): 1996 to September 2007
                                        (US dollars per day)
    140,000


    120,000


    100,000


     80,000


     60,000


     40,000


     20,000


          0
              1996   1997          1998   1999       2000      2001    2002    2003     2004   2005      2006       2007


                                     Capesize                Panamax             Handymax               Handysize
Source: Drewry

Dry bulk charter rates for all vessel sizes follow a similar pattern. In 2003 and 2004, rates for dry bulk
carriers of all sizes strengthened appreciably to historically high levels. The driver of this dramatic upsurge
in charter rates was primarily the high level of demand for raw materials in China. Rates in 2005 started out
at slightly lower levels and declined further over the summer, before a rally late in the year. During the first
half of 2006, rates dipped albeit to levels above historical highs prior to 2003. Since July 2006, rates have
rebounded strongly and in September 2007 were at record levels.

                             Dry bulk carrier trip charter rates: 2000 to September 2007
                                                  (US dollars per day)
    80,000

    70,000


    60,000

    50,000


    40,000

    30,000

    20,000

    10,000


         0
             2000           2001           2002             2003        2004          2005       2006           2007


                                                  Panamax FE/E. Australia Round voyage time
                                                  Handymax FE/Australia Round voyage time

Source: Drewry

Dry bulk carrier prices

Newbuilding prices
Newbuilding prices are determined by a number of factors, including the underlying balance between
shipyard output and capacity, raw material costs, freight markets and sometimes exchange rates. In the period
2003 to 2007 high levels of new ordering were recorded across all sectors of shipping. As a result, most of
the major shipyards in Japan, South Korea and China have full orderbooks until the end of 2009.


                                                                       42
The following charts indicate the change in newbuilding prices for dry bulk carriers in the period from 1999.
As can be seen newbuilding prices have increased significantly since 2003, due to tightness in shipyard
capacity, high levels of new ordering and stronger freight rates.

                          Dry bulk carrier newbuilding prices: 1999 to September 2007
                                             (Millions of US dollars)
      100




       80




       60




       40




       20




        0
            1999    2000            2001          2002            2003         2004      2005          2006          2007


                              Capesize                     Panamax               Handymax               Handysize
Source: Drewry

Secondhand values
In the secondhand market, the steep increase in newbuilding prices and the strength of the charter market
have also affected values, to the extent that prices rose sharply in 2004/2005, before dipping in the early part
of 2006, only to rise once more as the year came to a close. In 2007 prices have remained very firm, and as
a result of trends in the freight market have also risen to record highs.
The following table presents the average prices for ten year old secondhand dry bulk carriers for the periods
indicated.
                                     Dry bulk carrier secondhand prices –
                          10 year old ships (period averages): 1997 to September 2007
                                             (Millions of US dollars)
       70


       60


       50


       40


       30


       20


       10


        0
            1997   1998      1999          2000          1997      2002       2003    2004      2005          2006     2007

                                                                Panamax          Handymax
Source: Drewry

Despite the steep increase in newbuilding prices, the strength of the charter market was the primary influence
for secondhand vessel prices. Consequently in 2005 and now again in 2007, demand for modern vessels has
resulted in secondhand prices for some modern (five years old and less) capesize, panamax, handymax, and



                                                                         43
handysize dry bulk carriers exceeding those of current newbuilding contract prices for vessels due for
delivery in two to three years.

                                       Handymax bulk carrier
             Newbuilding, secondhand prices and time charter rates: 1999 to September 2007
     50                                                                                                      50,000

                                                                                                             45,000

     40                                                                                                      40,000

                                                                                                             35,000

     30                                                                                                      30,000

                                                                                                             25,000

     20                                                                                                      20,000

                                                                                                             15,000

     10                                                                                                      10,000

                                                                                                             5,000

      0                                                                                                      0

          1999     2000       2001        2002         2003        2004        2005        2006       2007


                          Newbuild $Million (Left axis)                   Secondhand $Million (left axis)
                          TC Rate $/Day (right axis)

Source: Drewry

The graph above shows the prices for newbuilding handymax bulk carriers and comparable vessels of ten
years of age, together with one year time charter rates for ten year old ships. Throughout much of the typical
market cycle, a higher price will be attached to the newbuilding vessel (which will be delivered several years
after an order is placed) than to a secondhand ship (which has depreciated and has a reduced remaining
economic useful life). However, in times of heightened positive sentiment, this normal relationship can
become inverted with prices for modern ships (say up to five years) commanding a higher price than the
comparable newbuilding order. The rationale for this shift relates to market timing, the secondhand vessel
can be delivered within a prompt timeframe and will be in the buyer’s hands to achieve strong earnings.
Whereas the newbuilding vessel may not be in the buyer’s hands until delivery two or three years in the
future.

The price differential in favour of secondhand dry bulk tonnage has been exacerbated as shipyards have been
booked up further into the future, with dry bulk orders but also with tankers and containerships. Another
effect of the positive sentiment in the dry bulk markets has been the increasing market for “newbuilding re-
sales” where owners have been able to book substantial profits on reselling vessels that are about to deliver-
typically within a matter of months. Prices for such vessels are substantially above the price for a new vessel
order because the “resale” will typically be earning money for the buyer (the new owner) within a matter of
months.




                                                              44
                                                PART II

                                  BUSINESS DESCRIPTION
Unless otherwise stated, the financial information relating to the Company set out in this part of the
document has been extracted without material adjustment from the financial information in Parts VI and VII
of this document.

Introduction
We are a company incorporated in Jersey that owns and operates a fleet of dry bulk vessels that transport iron
ore, coal, grain, steel products, cement, alumina, and other dry bulk cargoes worldwide. Our fleet currently
consists of four vessels, comprising three panamax vessels and one handymax vessel. We have also
contracted to acquire a supramax vessel which is scheduled for delivery between 1 March and 30 April 2008.
Including the new supramax vessel to be delivered, our five dry bulk carriers have an aggregate carrying
capacity of 298,761 dwt. The weighted average age of this fleet as at 1 November 2007 was 13.2 years.

During the year ended 31 December 2006, the Group generated revenues and operating profit of
approximately US$15.1 million and US$7.0 million respectively. During this period, the Group owned an
average of 2.6 vessels. During the six months ended 30 June 2007, the Group generated revenues and profits
from operations of approximately US$12.8 million and US$7.8 million respectively. During this period the
Group owned an average of 3.0 vessels. The Group did not pay any taxes on corporate profits during these
periods.

Our competitive strengths
We believe that we possess a number of strengths that give us a competitive advantage in the shipping
industry:

•     Long-standing experience of ship owning. The Company’s founders and their family and affiliates
      have been involved in shipping since the early 1950’s over three generations with a history of
      profitability through various shipping cycles generated from efficient operations and well timed
      acquisitions.

•     Established group with long-term, high-quality customer relationships. We have developed an
      extensive network of long-term business relationships with large, established charterers of dry bulk
      carriers, such as Bunge S.A., Baumarine AS, Mitsui O.S.K. Lines Limited, Oldendorff Carriers
      GmbH & Co. KG, Armada Bulk Carriers Ltd, Dampskibsselskabet Norden A/S, Swissmarine
      Services S.A., China National Chartering Corporation, Cosco Bulk Carrier Co. Ltd and Dayeang
      Shipping Co. Ltd. This strong, established customer base limits default risk, provides the opportunity
      for repeat business and, we believe, assists us in securing favourable employment for our vessels.

•     A modern, high-quality fleet of dry bulk vessels. We have a modern fleet consisting of vessels
      (including our fifth vessel to be delivered between 1 March and 30 April 2008) with a weighted
      average age of approximately 13.2 years as at 1 November 2007. All our Ships were built to high
      specifications in established, leading shipyards and are subject to high standards of maintenance. We
      believe that owning a well maintained, modern, high-quality fleet:

      •      reduces operating costs and fuel consumption;
      •      allows us to secure favourable financing terms by enhancing lenders’ confidence in their
             collateral;
      •      increases the reliability of our fleet by reducing the likelihood of breakdowns and periods of
             off-hire;
      •      reduces potential liabilities by enabling us to perform charters within the agreed parameters;
             and




                                                     45
      •      provides us with a competitive advantage in securing favourable time charters from charterers
             who prefer vessels that have greater fuel efficiency than older vessels and can serve with fewer
             interruptions due to breakdowns, thus maximising utilisation.

•     High standards of operation. We, along with Mantinia, to whom our technical and operational
      management is outsourced (further details of which are set out in the section headed “Management of
      our fleet – Mantinia” in this Part II) operate our fleet under a stringent safety management system and
      have an excellent operating track record. Our fleet has not suffered any groundings, collisions or
      material damages to date. We believe that this track record positively affects our relationships with
      high-quality charterers and has the additional benefit of maintaining low levels of vessel insurance
      premiums.

•     Balanced chartering strategy generating stable cash flow through period charters. Almost all of our
      Ships are currently fixed on period charters of one to two years with remaining terms, as at
      1 November 2007, of four to 26 months (including the M/V Aegean Hawk, to be renamed M/V
      Konstantinos D), based on latest expiration dates. Period chartering such as this assists predictable and
      visible cash flows and high utilisation rates. On the basis of our current charter party contracts, the
      current coverage for the remainder of 2007, 2008 and the 6 months ending 30 June 2009 (in terms of
      available days and based on the latest charter expiration dates) is 100%, 66% and 38%, respectively.
      The aggregate revenue from these charter party contracts for the eighteen month period ending
      30 June 2009 is expected to be approximately US$55.4 million. We monitor charter market conditions
      and may also consider reducing the length of our new charters to less than one year to take advantage
      of the benefits of shorter-term vessel employment.

•     Strong balance sheet for growth. Following the completion of the Placing we expect to have a ratio
      of net indebtedness to Total Capitalisation of approximately 17% (based on the pro forma information
      given in Part VIII of this document). We believe that our low level of net debt following completion
      of the Placing provides financial flexibility for future vessel acquisitions and the implementation of
      our growth strategy.

•     An experienced management team with a proven track record. Our executive management team is led
      by our Chief Executive Officer Fotini Karamanlis, who has over 12 years experience in the shipping
      industry. We believe that the members of our management team are skilled at recognising
      opportunities for the purchase and sale of vessels and together with Mantinia have the technical,
      financial and managerial expertise to safely and efficiently operate a large fleet of dry bulk carriers,
      including the ability to acquire vessels on a selective and well timed basis. Our management team also
      has a history of being able to strategically monitor developments in the shipping industry and secure
      employment for our vessels according to prevailing market conditions. We believe the experience of
      our management team in the shipping industry has enabled us to be profitable throughout the shipping
      cycle in the past and will assist us in our goal of maximising future returns while continuing to grow
      our business.

Our business strategy
Our primary objective is to manage our fleet in a manner that allows us to maintain profitability across the
shipping cycle and thus to maximise returns for our Shareholders. To accomplish this objective, we have
identified the following strategies, which build upon our existing strengths:

•     Accretive growth through vessel acquisitions. We intend to grow our fleet through timely and selective
      acquisitions of second-hand, modern, high-quality dry bulk carriers ideally less than 12 years old in
      a disciplined manner that is accretive to our cash flow and dependent on our assessment of the
      shipping cycle. We do not currently plan to target newbuilding vessels due to the current long delivery
      times, but could consider them in the future when market conditions warrant. We intend to use our
      strong balance sheet, cash flow from operations, the proceeds of the Placing and future senior debt
      facilities to fund acquisitions of additional vessels that we believe will be accretive to our cash flow.




                                                     46
•     Operate a modern, high-quality fleet of dry bulk carriers. Initially, we will continue to focus on the
      panamax and handymax dry bulk vessel sizes as we believe that they will enable us to transport a
      wider variety of cargoes and to pursue a greater number of chartering opportunities than larger vessels
      while maintaining better economies of scale than handysize vessels, but might consider acquisitions
      of other vessel sizes in other sectors or the same sector should conditions warrant.

•     Deliver an outstanding service to customers through highly efficient operations with optimal fleet
      utilisation. Through our strong, in-house commercial management team (and by outsourcing technical
      and operational management to Mantinia for an initial term of 12 months renewable automatically)
      we intend to continue to ensure that our vessels are operated in a cost-efficient and effective manner
      without compromising the quality or safety of our fleet or our operations. We intend to actively
      monitor and control our vessel operating expenses by utilising regular inspection and maintenance
      programmes, employing and retaining qualified crew members. We believe that such an approach to
      vessel management will assist us in maintaining a high fleet utilisation rate and securing attractive
      employment for our vessels.

•     Balanced chartering of our vessels in a manner that provides us with stable cash flows. We intend to
      employ our vessels primarily on time charters with terms of between one and two years that provide
      relatively stable cash flows and high utilisation rates. We will continue to monitor developments in the
      dry bulk shipping market on a regular basis and negotiate our charter terms accordingly. We believe
      that factors governing the supply of and demand for dry bulk carriers may cause charter rates for dry
      bulk carriers to strengthen in the near term, thereby providing us opportunities to renew our time
      charters or enter into new time charters at similar or higher rates following the expiration of their
      respective terms. We intend to keep our vessels fully employed and to secure repeat business with
      charterers by providing well maintained vessels and dependable service.

•     Attraction and retention of blue-chip customers. We consider customer relationships to be an
      important factor in maximising profitability throughout market cycles and growing our business. We
      have developed a network of business relationships with established, reputable charterers of dry bulk
      carriers as well as other key counterparties in the shipping industry (for example banks, insurers and
      brokers). This strong, established customer base limits default risk, provides the opportunity for repeat
      business and we believe that it assists us in securing favourable employment for our vessels upon the
      expiration of their charters.

History
The Company was incorporated on 26 September 2007 and, following the Reorganisation (as detailed in
section 11.8 of Part IX of this document), will be the holding company of the Group. The Company’s
founders and their family and affiliates have been involved in shipping since the early 1950’s. Mantinia (the
company to which part of our management services will be sub-contracted) was established in 1971 and was
one of the first companies in Greece to establish close working relationships with national and international
oil companies such as Shell and Pertamina. Mantinia continues to manage our founders’ oil tanker interests
and currently operates a fleet of two tanker vessels. In 2000, our founders made their first investment in the
dry bulk sector. The Group’s first vessel, a panamax, was delivered in 2002 with further vessels acquired in
2003 and 2006. In November 2007, the Group took delivery of its fourth vessel and first handymax. In
November 2007 the Group contracted to acquire a supramax vessel which is scheduled to be delivered
between 1 March and 30 April 2008.

Our fleet
Our fleet consists of four vessels, comprising three panamax vessels and one handymax vessel. We have also
contracted to acquire a supramax vessel which is scheduled for delivery between 1 March and 30 April 2008.
The Ships have cargo-carrying capacities ranging from 44,809 to 69,601 dwt. We own each of our Ships
through separate, wholly-owned subsidiaries of the Company which are incorporated in the Marshall Islands
and Malta. Two of our vessels are flagged in Malta, one in Liberia and one in Greece. The new supramax
vessel will be acquired for US$62 million by Vergina (a wholly-owned subsidiary of the Company
incorporated in the Marshall Islands) and will be flagged in Liberia (it is currently flagged in Panama).


                                                     47
Our dry bulk carriers transport major bulk cargoes (such as grain, coal and iron-ore) and minor bulk cargoes
(such as bauxite, phosphate, sugar, cement, steel products and alumina) along worldwide shipping routes.

The following table presents certain information concerning the Ships in our fleet.
                                         Dry bulk                                                  Carrying
                                           vessel            Year               Month of           capacity                 Vessel
Vessel                                       type            built               delivery              (dwt)                  flag
M/V Hellenic Breeze                     panamax              1993             May 2006                69,601               Liberia
M/V Hellenic Sky                        panamax              1994             May 2003                68,591                Malta
M/V Hellenic Sea                        panamax              1991           March 2002                65,434                Malta
M/V Hellenic Horizon                  handymax               1995        November 2007                44,809               Greece
M/V Aegean Hawk(1)                     supramax              2000       March/April 2008(2)           50,326               Liberia(3)
Notes:
(1) It is intended that the acquisition of M/V Aegean Hawk (to be renamed M/V Konstantinos D) will be financed by approximately
    US$31 million of the net proceeds of the Placing and the remainder through a new debt facility which will be obtained following
    Admission.
(2) Expected months of delivery.
(3) M/V Aegean Hawk (to be renamed M/V Konstantinos D) is currently flagged in Panama but will be reflagged in Liberia.

Chartering of our fleet

We currently charter our Ships to customers under time charters. A time charter involves the hiring of a
vessel from its owner for a period of time pursuant to a contract under which the vessel owner places its ship
(including its crew and equipment) at the disposal of the charterer. Under a time charter, the charterer
typically pays a fixed daily charter rate and bears all voyage expenses, including the cost of bunkers (i.e. fuel)
and port and canal charges. Subject to any restrictions in the contract, the charterer determines the type and
quantity of cargo to be carried and the ports of loading and discharging. Whilst the technical and operational
management of the vessels remains our ultimate responsibility we have outsourced such management to
Mantinia. Under a time charter we are generally responsible for the vessel’s operating expenses, including
the cost of crewing, insuring, repairing and maintaining the vessel, the cost of spares and consumable stores,
tonnage taxes and other miscellaneous expenses.
We strategically monitor developments in the shipping industry on a regular basis and, subject to market
demand, negotiate the charter hire periods for our vessels according to prevailing market conditions and our
expectations of future market conditions. Almost all of our Ships are currently fixed on period charters with
remaining terms, as at 1 November 2007 (including M/V Aegean Hawk to be renamed M/V Konstantinos
D), of between four and 26 months based on latest expiration dates.
Our strategy is to fix charters with customers whom we perceive as blue-chip, thereby minimising the risk
of default by our charterers. We also consider the type of product they tend to carry and the routes along
which they trade.
The following table sets out the principal terms of our current charters.
                                                                   Charter          Charter
                                                                 expiration       expiration          Charter          Aggregate
                               Charter       Charter start             date             date        rate (US$        commissions
Vessel                            type               date          (earliest)         (latest)        per day)(1)        payable
M/V Hellenic Breeze      Time charter          10/07/2007       9/01/2008        10/03/2008            45,000                  5%
M/V Hellenic Sky         Time charter          12/11/2006      28/08/2008        27/11/2008            23,000                  5%
M/V Hellenic Sea         Time charter           1/10/2007      30/03/2009        30/05/2009            37,500               4.75%
M/V Hellenic Horizon     Time charter           8/11/2007(2)   20/01/2008        20/04/2008            25,750               6.25%
M/V Aegean Hawk          Time charter            Between       28/02/2010        14/07/2010            64,250(3)               5%
(to be renamed                                  1/03/2008
M/V Konstantinos D)                        and 15/05/2008
Notes:
(1) The latest charter expiration date represents the last day on which the charterer may redeliver the vessel to us upon the
    termination of the charter assuming that all options for additional hire periods under charter are exercised.



                                                                48
(2) M/V Hellenic Horizon was delivered, with an existing charter, on 8 November 2007.
(3) For the period from the date of delivery to the 365th day of the charter and thereafter at a rate of US$48,250 per day.

In connection with the arrangement of a charter, we generally pay brokerage commissions calculated as a
percentage of the daily charter rate to unaffiliated ship brokers and to brokers associated with the charterer
as well as charterer’s address commissions. The total amount of these commissions historically has varied
between 3.75% and 6.25% of the daily charter rate payable under the charter depending on the number of
brokers involved in the transaction and the address commissions that the charterers charge.

Our customers
Our assessment of a charterer’s financial condition and reliability is an important factor in negotiating
employment for our vessels. Our strategy is to charter our vessels to major operators, trading houses
(including commodities traders), major shipping companies and major producers and government-owned
entities rather than to more speculative or undercapitalised entities. The Group’s current customers include
Armada Bulk Carriers Ltd, China National Chartering Corporation, Dayeang Shipping Co. Ltd and San Juan
Navigation Corp.

Management of our fleet

General
Our executive management team, which currently includes our two executive Directors and two senior
managers, is led by our Chief Executive Officer, Fotini Karamanlis. Full details of our Directors and senior
management are outlined in the section headed “Directors and senior management” in this Part II of this
document.

HSC
The day-to-day commercial and financial management of our fleet is the responsibility of our wholly-owned
subsidiary, HSC which has ship management agreements in place with each of our four current vessel-
owning companies, and a ship management agreement in the same form will be entered into by Vergina in
relation to M/V Aegean Hawk (to be renamed M/V Konstantinos D) on delivery of that vessel. The initial
term of these agreements is for 12 months from the date of commencement and thereafter they each continue
automatically unless terminated by either party on two months’ notice. Under these ship management
agreements, HSC provides the relevant wholly-owned subsidiary with the following specific services (in
addition to those services which are sub-contracted by HSC to Mantinia as detailed below):
•       commercial management services including the negotiation of charter parties;
•       crew management services including the selection and engagement of crew for the vessels;
•       technical management services including providing personnel to supervise the maintenance of the
        vessels;
•       accounting services;
•       supervising the sale and purchase of vessels in accordance with the ship owning company’s
        instructions; and
•       arranging for the provision of bunker fuel.

Mantinia
The day-to-day technical and operational management of our fleet is currently sub-contracted by HSC to
Mantinia, a company which is ultimately majority controlled by the Controlling Shareholders. Mantinia has
an outsourcing agreement in relation to each of the Ship Owning Companies (other than Vergina in relation
to which HSC will enter into an agreement with Mantinia in the same form in relation to M/V Aegean Hawk
(to be renamed M/V Konstantinos D) on delivery of that vessel) (the “Mantinia Management Agreements”)
in place with HSC which have been negotiated on arm’s length terms and are based on the Baltic and
International Maritime Council (BIMCO) Standard Ship Management Agreement. The initial term of these
agreements is for 12 months from the date of commencement. After the time-period specified by the


                                                                49
Mantinia Management Agreements has expired, such agreements will continue automatically unless
terminated by either party on two months’ notice. There is a provision that if notice to terminate is given by
Mantinia during the second 12-month period after its commencement, such notice will only be effective at
the end of such second 12-month period. Under the Mantinia Management Agreements, Mantinia provides
HSC with the following specific services in relation to each of the Ships:

•     attending to the maintenance, repairs, modifications, supply and classification requirements of our
      vessels;

•     attending to the due and regular operation and performance of our vessels and following operations
      concerning loading and discharging, settlements of claims and surveys;

•     attending to all matters concerning contracts relating to the supply of the bunkers, lubricants and other
      kind of materials, stores and provisions;

•     negotiating and executing contracts for the modification or repairs in shipyards worldwide subject to
      the prior consent of the vessel-owning company and its final approval and generally performing every
      and all actions necessary for the accomplishment of the above or in connection therewith;

•     arranging insurance for all our vessels;

•     recruiting and employing seamen and arranging for the execution of the contracts of employment; and

•     attending to all matters concerning social security provisions concerning our vessels’ crews.

The monthly fees which are payable in arrears from HSC to Mantinia in respect of each of the Mantinia
Management Agreements amount to US$19,167 per vessel. If any of the Mantinia Management Agreements
are terminated, other than by reason of Mantinia’s default (other than if the vessel is lost, sold or otherwise
disposed of) Mantinia is entitled to receive three months of fees. In such circumstances, Mantinia shall also
be entitled to severance costs up to a maximum of US$45,000.

We intend to develop in-house technical and operational capabilities and to terminate this arrangement
within two years of Admission.

Crew and employees
We currently have six shore based employees, our Chief Executive Officer, Fotini Karamanlis, our Chief
Financial Officer, Dimitris Sfakianakis, and our Commercial Manager, Anastasios Pantelias, two accounting
officers, one administrator and, following Admission, it is our intention to employ a financial reporting
manager. In addition in November 2007, we employed approximately 95 seafarers to crew our Ships. The
recruitment is currently outsourced by Mantinia to a manning agent in the Philippines called Bright Maritime
Corporation S.A., which was founded in 1994 and provides more than 5,000 seamen to about 320 vessels in
total. The outsourcing of crew recruitment helps to ensure that all our Ships will be crewed with experienced
seamen who have the qualifications and licences required by international regulations and shipping
conventions. The total number of employees of the Group at the end of the last three financial years was 54
in 2004, 45 in 2005 and 69 in 2006. All were ship crew.

Competition
Our business fluctuates in line with the main patterns of trade of the major dry bulk cargoes and varies
according to changes in the supply and demand for these cargoes. We operate in markets that are highly
competitive and based primarily on supply and demand. We compete for charters on the basis of price, vessel
specification, vessel location and condition of the vessel, as well as on our reputation as an owner and
operator.




                                                      50
Permits and authorisations

General
We are required by various governmental and quasi-governmental agencies to obtain certain permits,
licences and certificates with respect to our Ships. The kinds of permits, licences and certificates required
depend upon several factors, including the commodity transported, the waters in which the vessel operates,
the nationality of the vessel’s crew and the age of the vessel. We have been able to obtain all the permits,
licences and certificates currently required to permit our Ships to operate worldwide.
All insurance underwriters make it a condition for insurance coverage that a vessel be certified as being “in
class” by a recognised international classification society. All of our Ships are certified as being “in class”.
All new and second-hand vessels that we purchase must be certified as being “in class” prior to their delivery
under the standard purchase contracts and memoranda of agreement. Under the terms of those contracts and
agreements if a vessel is not so certified on the date of delivery, we have no obligation to take delivery of the
vessel.
All our Ships are ISM Code-certified and comply with Annex VI to the International Convention for the
Prevention of Pollution from Ships.

Current developments
We believe that the heightened level of environmental and quality concerns among regulators, insurance
underwriters and charterers is leading to more stringent inspection and safety requirements for all vessels
and may accelerate the scrapping of older vessels throughout the dry bulk shipping industry but we do not
expect this to occur during current freight market levels. Increasing environmental concerns have created a
demand for vessels that conform to stricter environmental standards. We are required to maintain operating
standards for all of our vessels that emphasise operational safety, quality maintenance, continuous training
of our officers and crews and compliance with United States, national and international regulations. To the
best of our knowledge, the operation of our Ships is in compliance with applicable environmental laws and
regulations applicable to us and in force as of the date of this document.

Risk of loss and liability insurance

General
The operation of any dry bulk vessel includes risks such as mechanical failure, collision, property loss, cargo
loss or damage and business interruption due to political circumstances in foreign countries, hostilities and
labour strikes. In addition, there is always an inherent possibility of marine disaster, including oil spills and
other environmental mishaps, and the liabilities arising from owning and operating vessels in international
trade.

Hull and machinery and war risks insurance
We maintain marine hull and machinery and war risks insurance, which cover the risk of actual or
constructive total loss, for all of our Ships. We review this insurance from time to time to ensure that our
Ships are each covered to their market value.

Protection and indemnity insurance
We maintain protection and indemnity insurance in respect of oil pollution of up to an absolute coverage
limit of US$1 billion per event. Furthermore, we maintain protection and indemnity insurance in respect of
claims by crew, passengers and other persons up to an absolute coverage limit of US$3 billion per event.

OPA
OPA, which imposes virtually unlimited liability upon owners, operators and demise charterers of vessels
trading in the United States exclusive economic zone for certain oil pollution accidents in the United States,
has made liability insurance more expensive for ship owners and operators trading in the United States
market.
We currently maintain pollution liability coverage insurance in relation to OPA.


                                                       51
Freight demurrage and defence
We maintain freight demurrage and defence insurance with a maximum limit of US$5 million for each of
our vessels.

Property
We do not own any real estate; however, HSC does rent furnished office space in Piraeus, Greece within a
building in which Mantinia, a related party through common control, also leases space. The rental contract
runs for an initial term of six months (from 11 October 2007).

Exchange controls
Under Jersey, Maltese, Marshall Islands, and Greek law, there are currently no restrictions on the export or
import of capital, including foreign exchange controls or restrictions that affect the remittance of dividends,
interest or other payments to non-resident holders of our Ordinary Shares.

Directors and senior management

Directors
The Board currently comprises two executive Directors and three non-executive Directors. Details of the
Directors, their roles and their backgrounds are as follows:

Graham Roberts (Age 57), Chairman and non-executive Director
Graham Roberts will be appointed as a Director and our chairman on Admission. Between 2002 and 2006,
Mr. Roberts was chief executive and main board director of PD Ports Plc, where he successfully directed its
flotation in 2004 on AIM and subsequent sale to Babcock & Brown Infrastructure Limited in 2005. Prior to
that, Mr. Roberts held chief executive posts at London Luton Airport, MTL (Merseyside Transport) Limited
and Servisair plc. Mr. Roberts was also a senior executive at NFC plc (later renamed Exel plc) for over
25 years, and was a member of its board from 1989 until he left the company in 1997. In total he has over
35 years experience in the transportation sector.
Mr. Roberts remains a non-executive director of PD Ports plc and of Tees Valley Regeneration Limited
(where he serves as non-executive chairman).

Fotini Karamanlis (Age 36), Chief Executive Officer
Ms. Karamanlis is Chief Executive Officer of the Company. She is responsible for strategy, vessel
acquisitions, chartering and financing.
Ms. Karamanlis has 12 years shipping experience and has been with companies associated with the Group
since 1999. From 1998 to 1999, Ms. Karamanlis worked on the sale and purchase desk of Galbraiths
Shipbrokers in London and before that was a shipping lawyer with Norton Rose in London and Greece.
Ms. Karamanlis qualified as a Solicitor of the High Court of England and Wales in 1997 and is a member of
the legal committee of the Association of Greek Ship-Owners. Ms. Karamanlis is an independent non-
executive member of the board of directors of Piraeus Bank S.A., a company listed on the Athens Stock
Exchange and a member of the board of directors of the Karamanlis Foundation.
Ms. Karamanlis holds a law degree from the University of Athens and a LLM from the University of
Cambridge.

Dimitris Sfakianakis (Age 37), Chief Financial Officer
Prior to joining the Company in October 2007, Mr. Sfakianakis was Vice President of the shipping
department of ABN AMRO Bank in Greece actively managing for eight years a number of client
relationships. From 1996 to 1999, Mr. Sfakianakis worked as a shipping officer of the Piraeus Shipping
Centre of National Westminster Bank. From 1993 to 1995, Mr. Sfakianakis was responsible for a number of
client relationships at AFPELI Maritime, a ship broker based in Piraeus.




                                                      52
Mr. Sfakianakis holds a Bsc in Economics from the London School of Economics and Political Science and
a Msc in Shipping, Trade and Finance from City University Business School.

Charlotte Stratos (Age 53) Non-executive Director
In 1987, Mrs. Stratos established the Representative Office in Greece of Banque Indosuez which
subsequently became Calyon Corporate and Investment Bank. Mrs. Stratos was the managing director and
Head of Global Greek Shipping at Calyon Corporate and Investment Bank until September 2007. She is a
non-executive member of the Banking Executive of Emporiki Bank S.A. and a member of the board of
Gyroscopic Fund Limited (a fund of hedge funds).

From 1976 to 1986, Mrs. Stratos held various positions with Bankers Trust Company (now Deutsche Bank)
in London and New York.

Dimos Kapouniaridis (Age 35), Non-executive Director
Mr. Kapouniaridis is a director in the corporate finance group of EFG Telesis Finance S.A. in Athens.

Mr. Kapouniaridis obtained a BA (major in Economics) from Hamilton College in New York in 1996 and
joined Salomon Brothers as a financial analyst working in the New York and Los Angeles offices. In 1999,
he moved to Dresdner Kleinwort Benson in New York as an associate in the mergers and acquisitions group.
In 2000 he returned to Salomon Smith Barney in New York as an associate before joining EFG Telesis
Finance S.A. in 2002.

Senior management
Brief biographies of our senior management team, all of whom are employed by HSC are set out below:

Anastasios Pantelias (Age 38), Commercial Manager
Mr. Pantelias started his career as a trainee at European Navigation Inc. in Athens before joining Galbraiths
Shipbrokers in London in 1993.

In 1999, Mr. Pantelias set up and managed the Singapore office of Elka Trading Asia Pte Limited, a company
operating in brokering (of tankers and oil products), business development and sale and purchase within the
shipping industry, which he managed until 2004 when he joined Mantinia as commercial manager. His
employment transferred from Mantinia to HSC on 1 November 2007.

Mr. Pantelias has a BSc in Business Economics from City of London Polytechnic.

Dimitris Babousis (Age 35), Senior Accounting Officer
Before joining HSC on 1 November 2007, Mr. Babousis worked for Mantinia, as a Senior Accounting
Officer, since 2004. He started his career with Universe Maritime in 1998 before joining chartered
accountants Moore Stephens in 2000.

It is intended that a new financial reporting manager will be appointed by the Company following
Admission.

In addition, the following people employed by Mantinia provide management services to us under the
Mantinia Management Agreements:

Ioannis Zarkadis (Age 61), General and Financing Manager
Mr. Zarkadis is responsible for the day-to-day operation of Mantinia. He has more than 31 years of
experience in the shipping industry having worked for Faros Shipping and Laurel Ship Transport as well as
other shipping companies.

Mr. Zarkadis holds a degree in Business Administration and Shipping Organisation from the University of
Piraeus.




                                                     53
Capt. Nikolaos Tsarouchis (Age 54), Operations Manager
Captain Tsarouchis is a graduate of the School of Master Mariners in Greece and has 18 years shipboard
experience. He joined Mantinia from Seachem Tankers (Ceres Hellenic Group) where he held the position
of operations manager for a number of years with responsibility for running a fleet of 26 chemical tankers
and gas carriers.
As an operations manager, Mr. Tsarouchis, is responsible for the operations of the Mantinia managed
vessels.

Nikolaos Arkadis (Age 47), Technical Manager
Mr. Arkadis is Mantinia’s technical manager, responsible for the overall performance of the fleet, including
all aspects of technical operations, maintenance and repair. Mr. Arkadis is a graduate of Marine and
Mechanical Engineering from the University of Newcastle with 25 years experience in the shipping industry
working with established names such as Evaland Shipping, Lyras Brothers and in Marmaras Navigation.

Capt. Nikolaos Athanasakos (Age 33), Crew Manager
Captain Athanasakos is Mantinia’s crew manager with responsibility of all of Mantinia’s seagoing personnel.
He is a graduate from the Greek National Maritime Academy and has a Captain Class B Diploma. During
his five years of shipboard experience, he held the positions of apprentice officer, second officer and chief
mate.

Rea Mitropoulou (Age 36), Legal Department Manager
Ms. Mitropoulou is a graduate of Athens Law School and the University of Cambridge (LLM) and a
qualified lawyer in Athens and Piraeus. She specialises in all aspects of shipping law and has more than
twelve years’ experience from major Greek shipping law firms as well as being an in-house lawyer of a
major shipyard.
Ms. Mitropoulou participates actively in national and international shipping law seminars and published a
number of works in that area. As Mantinia’s in-house legal adviser she is responsible for providing advice
on all legal matters including, agreements with various parties (i.e. charterers, suppliers, banks, etc), legal
claims and other legal documentation such as incorporation, directors and shareholders certificates.

Vicky Kaila (Age 40), Quality Assurance Manager
Ms. Kaila operates as HSC’s DPA under the terms of the Mantinia Management Agreements. As HSC’s DPA
Ms Kaila is responsible for the implementation, monitoring and auditing of HSC’s safety management (ISM)
procedures for its vessels, in connection with the ISM certification issued to HSC.
Before joining Mantinia in 2004, Ms. Kaila worked in a variety of capacities within the shipping industry,
including a position with the American Bureau of Shipping. More recently, Ms. Kaila has specialised in the
field of safety management.
Ms. Kaila is a graduate of Naval Architecture and Marine Engineering from the University of Athens and has
over thirteen years of experience in the shipping sector.

Directors of the Ship Owning Companies
Dimitris Sfakianakis, Anastasios Pantelias and Ioannis Zarkadis are all directors of each of the Ship Owning
Companies.

Equity participation
Graham Roberts intends to subscribe for 70,755 new Ordinary Shares in the Placing. Pandinia (a company
controlled by Konstantinos Karamanlis) also intends to subscribe for 1,044,619 new Ordinary Shares in the
Placing.
Further details of the interests of the Directors in Ordinary Shares are set out in section 5.1 of Part IX of this
document.



                                                       54
Corporate governance

Combined Code
We support high standards of corporate governance. We confirm that following Admission, we intend
(having regard to our size and nature) to comply, so far as we consider practicable and appropriate, with the
Combined Code taking into account the recommendations of the Quoted Companies Alliance referred to
below.
The Combined Code is a code of desirable corporate governance practices and procedures for public
companies trading on markets in the UK, and is based on recommendations made by a number of committees
which have been set up from time to time to consider corporate governance best practice in the UK. On a
strict interpretation of the Combined Code, it applies only to companies which are admitted to the Official
List and it is therefore up to an AIM company’s directors and its nominated adviser to decide the extent to
which the AIM listed company will comply with the Combined Code.
The Quoted Companies Alliance has also published corporate governance guidelines for AIM listed
companies. These guidelines acknowledge that compliance with certain of the provisions of the Combined
Code will be inappropriate for, or take longer to implement by, AIM listed companies because of their nature
and resources.
The QCA Guidelines recommend that there be a formal schedule of matters specifically reserved for the
board’s decision and that the board be supplied with information in a timely manner so as to enable it to
discharge its duties. We have adopted a schedule of matters reserved for the Board in a form similar to that
recommended by the QCA Guidelines. The QCA Guidelines also recommend that the roles of chairman and
chief executive should not be exercised by the same individual and that a company has at least two
independent non-executive directors (one of whom should be the chairman). Furthermore, all directors
should be submitted for re-election at regular intervals subject to continued satisfactory performance. The
QCA Guidelines also recommend the establishment of Audit, Remuneration and Nomination Committees
and that the Audit and Remuneration Committees should comprise at least two members all of whom should
be independent non-executive directors.
The Board has concluded Charlotte Stratos is an independent non-executive director. Until September 2007
Charlotte Stratos was the Managing Director and Head of Global Greek Shipping of the representative office
of Calyon Corporate and Investment Bank in Greece (“Calyon”). The Group has outstanding loans from
Calyon and accordingly Mrs. Stratos could be regarded as having had within the last three years a material
business relationship with the Company as a senior employee of Calyon which is a circumstance falling
within the Combined Code provision A.3.1 as one which may be taken into account when assessing a
director’s independence. After due and careful consideration the Board resolved that as Charlotte Stratos was
no longer with Calyon and is now pursuing various other interests, and given her independent character and
expertise of non-executive positions they consider her to be sufficiently independent to be regarded as an
independent non-executive director.
We will not comply with the QCA Guidelines in all respects. In particular, it is intended that our Chief
Executive Officer will sit on the Nomination Committee.
The Combined Code states that the period of an executive director’s service contract (or the length of notice
required to terminate such a contract) should be one year or less and that if it is necessary to offer longer
contract or notice periods to new directors recruited from outside, such periods should reduce to one year or
less after the initial period. The initial period of our Chief Executive Officer’s service contract is two years,
thereafter it is terminable on six months’ notice. In addition, the service contract contains a 24 month notice
period in the event the Company terminates it following a change of control (further details are set out in
section 5.4 of Part IX of this document). In addition, our Chief Financial Officer has a consultancy agreement
with the Company (described in section 5.5 of Part IX of this document) that cannot be terminated, without
cause, before 31 October 2009.
Directors appointed by the FK Group or the KK Group are not subject to retirement by rotation.




                                                       55
Committees
We have established an Audit Committee, a Remuneration Committee and a Nomination Committee.

The Audit Committee comprises our two independent non-executive Directors and our non-executive
Chairman. It is responsible for ensuring that our financial performance is properly reported on and monitored
and for reviewing internal control systems and the auditors’ reports relating to our accounts. The Combined
Code recommends that all members of the Audit Committee be non-executive directors, independent in
character and judgement and free from any relationship or circumstances which may, or could or would be
likely to, or which appears to affect their judgment. The Board considers that the Company complies with
the Combined Code in this respect.

The Remuneration Committee comprises our two independent non-executive Directors and our non-executive
Chairman. It is responsible for determining and agreeing with the Board the framework for the remuneration
of the Chief Executive Officer, all other executive Directors, the Company Secretary and such other members
of the executive management as it is designated to consider. It is furthermore responsible for determining the
total individual remuneration packages of each Director including, where appropriate, bonuses, incentive
payments and share options. The Remuneration Committee will also liaise with the Nomination Committee
to ensure that the remuneration of newly appointed executives is within our overall policy.

The Nomination Committee comprises one independent non-executive Director, our non-executive
Chairman and our Chief Executive Officer. It is responsible for reviewing the structure, size and composition
of the Board, preparing a description of the role and capabilities required for a particular appointment and
identifying and nominating candidates to fill Board positions as and when they arise.

We have adopted a share dealing code for Directors and relevant employees and will take proper steps to
ensure compliance by the Directors and those employees.

Takeovers
Although the Company is incorporated in Jersey, our central management and control is not in Jersey or any
other part of the UK and the Company is therefore not subject to the City Code and the Panel on Takeovers
and Mergers would not regulate any takeover of the Company. However, the Board recognises the
importance of the protections afforded to Shareholders which are enshrined in the City Code.

Accordingly, we have incorporated certain provisions into the Articles which we will adopt immediately
prior to Admission in order to regulate certain acquisitions of Ordinary Shares so as to provide Shareholders
with protections similar to certain of those contained in the City Code. These provisions are summarised in
section 4.2.12 of Part IX of this document.

In summary, the Articles to be adopted immediately prior to Admission prohibit a person and his concert
parties from acquiring control of the Company without first making an offer to all Shareholders to acquire
their Ordinary Shares at a price which is not less than the highest price paid by that person or its concert
parties for an Ordinary Share in the 12 month period preceding that offer.

The Board has concluded that for the purposes of the takeover provisions contained in the Articles, the
Controlling Shareholders are currently deemed to be acting in concert.

In the event that the Board believes that any of the above circumstances has occurred, it may determine that
some or all of the Ordinary Shares acquired in breach of the Articles to be adopted immediately prior to
Admission will not carry any voting rights or right to any dividend or other distribution for a particular period
of time or require that such Ordinary Shares are sold.

As well as the takeover provisions included in the Articles to be adopted immediately prior to Admission, it
is the Directors’ intention (subject to applicable law and their fiduciary duties), in the event of a takeover
offer for the Ordinary Shares, to:
(i)    treat Shareholders equally;




                                                       56
(ii)    not provide information to some Shareholders which is not provided to all Shareholders (other than
        information provided by the Company in confidence to a bona fide potential offeror or vice versa);
(iii)   provide sufficient information to Shareholders to enable them to reach properly informed decisions in
        respect of an offer;
(iv)    not take any action to actively frustrate a bona fide takeover offer without Shareholder consent; and
(v)     disregard their personal or family shareholdings.

Pre-emption rights
Under Jersey law, Shareholders do not have statutory pre-emption rights. We have therefore incorporated
such rights into the Articles to be adopted immediately prior to Admission. These rights may however be
disapplied by way of a special resolution of the Company (i.e. a majority of two-thirds of voting
Shareholders). By special resolution passed on 22 November 2007, the pre-emption rights were disapplied
in respect of 15% of the Enlarged Issued Share Capital until the next annual general meeting of the
Company. Further details of the statutory pre-emption rights are set out in section 4.2.1 of Part IX of this
document.

Shareholder notifications of interests
As a Jersey incorporated company, we are not subject to the provisions of the Disclosure and Transparency
Rules and, consequently, Shareholders would not ordinarily be subject to any requirement to disclose to us
the level of their interests in Ordinary Shares. However, in accordance with the Guidance to AIM Rule 17
for companies incorporated outside Great Britain whose shares are admitted to trading on AIM, we have
elected to incorporate certain provisions of the Disclosure and Transparency Rules and the 2006 Act into the
Articles to be adopted immediately prior to Admission, further details of which are set out in section 4.2.11
of Part IX of this document.

General
Following Admission, Faith (a company controlled by our Chief Executive Officer Fotini Karamanlis),
Corpus, Pandinia (both companies controlled by Konstantinos Karamanlis) and Bedat (a company controlled
as to 50% by Fotini Karamanlis and 50% by Konstantinos Karamanlis) will own, in aggregate,
approximately 72.3% of the Enlarged Issued Share Capital. Ms. Karamanlis and Mr. Karamanlis have
indicated that they have no current intention to reduce the level of their shareholdings following Admission.

As further described in section 11.3 of Part IX of this document, Faith, Corpus and Bedat have agreed with
Jefferies and the Company, subject to certain customary exceptions, not to dispose of any Ordinary Shares
for a period of nine months from the date of Admission.

Relationship Agreements with Controlling Shareholders
The Company has entered into the Relationship Agreements with each of the FK Group (the “FK
Relationship Agreement”) and the KK Group (the “KK Relationship Agreement”) to regulate our ongoing
relationships with the FK Group and the KK Group. Both Relationship Agreements automatically terminate
in circumstances where the Board considers the FK Group and the KK Group to be acting in concert if: (a)
the aggregate direct and indirect holding of the FK Group and the KK Group falls below 30%; or (b) any
Shareholder (or group of shareholders acting in concert) holds more shares, in aggregate, than the FK Group
and the KK Group in aggregate. The relevant Relationship Agreement also terminates in circumstances
where the Board has failed within 15 days of the relevant event to pass a resolution confirming that the FK
Group and the KK Group are acting in concert if: (a) the aggregate direct and indirect holding of the FK
Group (in the case of the FK Relationship Agreement) or the KK Group (in the case of the KK Relationship
Agreement) alone falls below 30%; or (b) any Shareholder (or group of Shareholders acting in concert) holds
more shares in aggregate than the aggregate direct and indirect holding of the FK Group (in the case of the
FK Relationship Agreement) or the KK Group (in the case of the KK Relationship Agreement) alone.




                                                      57
Under the terms of the Relationship Agreements, the FK Group and the KK Group each have the right, for
as long as they each hold at least 12% of the issued share capital in the Company to nominate a non-executive
Director. Such non-executive Director shall, if elected by the Board, be entitled to hold the post of Chairman.
For as long as either one of the FK Group or the KK Group holds over 30% of the issued share capital in the
Company that group has the right for their appointee Director to hold the position of Chief Executive Officer
or Chief Financial Officer. However, if both the FK Group and the KK Group hold over 30% of the issued
share capital in the Company they shall jointly have the right to appoint two Directors (one of whom shall
have the right to hold the position of Chief Executive Officer or Chief Financial Officer and the other of
whom shall be a non-executive Director, such Director shall be appointed to the post of Chairman unless the
Board decides otherwise). Fotini Karamanlis is currently deemed (and will for as long as she remains a
Director be deemed) to be the appointee of the FK Group. These rights survive termination of the
Relationship Agreements. Similar rights are contained in the Articles to be adopted immediately prior to
Admission.

The FK Group and the KK Group have each agreed to procure, so far as they reasonably can, that at least
one Director on the Board shall be independent of them.

The Relationship Agreements also provide for all transactions between the Company, on the one hand, and
the FK Group and the KK Group or their associates, on the other hand, to be conducted at arm’s length and
on a normal commercial basis.

The FK Group and the KK Group have also agreed in the Relationship Agreements to various restrictions
including not to engage in our core activity of owning and operating dry bulk vessels of the type used by the
Group whilst the Relationship Agreements are in effect other than through the Company.

These restrictions do not however apply in the event that the Board declines an opportunity to acquire any
ships and/or acquire any interest and/or make any investment (provided at least one Director who is
independent of the FK Group or the KK Group (as the case may be) and is an independent non-executive
Director has approved such decision) in which case the FK Group or the KK Group (as the case may be)
and/or any of its associates may make such an acquisition during the four month period following such
decision on terms no more favourable that those offered to the Company. Ms. Karamanlis’s husband is not
an associate for the purposes of the FK Relationship Agreement.

Further details of the Relationship Agreements are given in sections 13.2 of Part IX of this document.

Reasons for the Placing and use of proceeds
The Placing is expected to raise approximately US$60 million for the Company, before expenses. After the
expenses of the Placing and Admission, estimated in total at approximately US$4.5 million (excluding VAT,
if applicable), the Placing is expected to raise approximately US$55.5 million.

We expect to use approximately US$31 million of the net proceeds of the Placing for part payment for the
supramax, M/V Aegean Hawk (to be renamed M/V Konstantinos D), and for the remainder to be used for
working capital purposes, to partially reduce indebtedness and, if the prevailing market conditions are
favourable to do so, the funding of future vessel acquisitions.

Dividend policy
As a Jersey company, we may only pay dividends out of: (a) realised profits less realised losses; (b) realised
revenue profits less revenue losses (whether realised or not), provided that, immediately after, we will be able
to discharge our liabilities as they fall due; or (c) with the approval of a special resolution of the
Shareholders, from unrealised profits less losses (whether realised or not), provided that the Directors
reasonably believe that, immediately thereafter we will be able to carry on business and be able to discharge
our liabilities as they fall due until the expiry of the period of one year immediately following the date on
which the distribution is proposed to be made.

As we are a holding company, with no material assets other than the shares of our subsidiaries, our ability
to pay dividends will depend on the earnings and cash flow of those subsidiaries and their ability to pay


                                                      58
dividends to us. If there is a material decline in the international dry bulk shipping charter market our net
profits would be adversely affected and would therefore limit our ability to pay dividends. The payment of
dividends is not guaranteed or assured.

We intend to adopt a dividend policy which will reflect our long-term net profits and cash flow potential,
maintaining an appropriate level of dividend cover taking into account the likely effects of the shipping cycle
and the need to retain cash to reinvest in vessel acquisitions. Following the Placing, we anticipate that we
will initially adopt an annual dividend payment of a minimum of 50% of net profits.

The appropriate level of dividend payout will be appraised by reference to the US dollar net profits of the
Group. However, the amount payable to investors will be declared in US dollars but paid in pounds sterling,
such amount to be calculated by reference to the exchange rate prevailing on the date of declaration.
Furthermore, the net profits of the Group which will be taken into account for such calculation will exclude
any gain or loss on the sale of vessels and any unrealised gains or losses on derivatives. The use of any capital
surpluses arising from vessel sales will be considered in the light of, amongst other things, the return on
capital available from reinvesting such proceeds in further vessels and the most appropriate timing of any
such reinvestment.

We intend to pay an interim dividend in or around October of each financial year in respect of the profits
arising during the first six months of that financial year, and a final dividend in or around April in respect of
the profits arising during the last six months of the prior financial year. We expect to declare that the first
dividend following Admission in or around April 2008 in respect of profits arising during the period from
Admission to 31 December 2007.

In November 2007, the Ship Owning Companies declared an extraordinary interim dividend to their existing
shareholders of approximately US$12.5 million in aggregate. Such dividend will be payable to such
shareholders in or around November 2007.

Effect of Jersey domicile
We are a Jersey company. Jersey law and practice relating to companies is not the same as English law
applicable to a public limited company incorporated under the 2006 Act. In particular, the majority required
to pass a special resolution of Shareholders is two-thirds of such Shareholders as (being entitled to do so)
vote in person or, where proxies are allowed, by proxy.

Taxation
Information regarding Jersey and UK taxation in relation to Admission and the Placing is set out in section
10 of Part IX of this document. These details are, however, intended only as a general guide to the current
tax position under UK and Jersey taxation law. If you are in any doubt as to your tax position you should
consult an appropriate independent financial adviser immediately.

Further information
Your attention is drawn to the additional information in Part IX of this document.




                                                       59
                                                 PART III

                                  PLACING INFORMATION

1.    The Placing                                                                                                  AnnII(5.1.3)

The Placing will comprise the issue of 13,684,970 new Ordinary Shares by the Company to new investors.
Under the Placing, all Placing Shares will be issued at the Placing Price.

The Placing, which is fully underwritten by Jefferies, is conditional, inter alia, upon the admission of the
Ordinary Shares to trading on AIM by 30 November 2007, or such later time as Jefferies and the Company
may agree being no later than 31 December 2007.                                                                    AnnIII(4.7)


Further details of the Placing Agreement pursuant to which Jefferies has agreed, as agent for the Company,
to conditionally place the Placing Shares are set out in section 11.1 of Part IX of this document.

2.    Use of proceeds                                                                                              AnnIII(3.4)
                                                                                                                   AnnIII(8.1)
The Placing is expected to raise approximately US$60 million for the Company, before expenses. After the
expenses of the Placing and Admission, estimated in total at approximately US$4.5 million (excluding VAT),
the Placing is expected to raise approximately US$55.5 million.

We expect to use approximately US$31 million of the net proceeds of the Placing for part payment for the
supramax, M/V Aegean Hawk (to be renamed M/V Konstantinos D), and for the remainder to be used for
working capital purposes, to partially reduce indebtedness and, if the prevailing market conditions are
favourable to do so, the funding of future vessel acquisitions.

3.    Allocation and dealing arrangements                                                                          AnnIII(4.7)

The Placing is subject to the satisfaction of certain conditions contained in the Placing Agreement, which are
typical for an agreement of this nature. Certain conditions are related to events which are outside our control
and the control of the Directors and Jefferies. Further details of the Placing Agreement are described in
section 11.1 of Part IX of this document.

It is expected that Admission will take place and unconditional dealings in the Ordinary Shares will
commence on AIM at 8.00 a.m. (London time) on 30 November 2007. Settlement of dealings from that date
will be on a three day rolling basis. These dates and times may be changed.

Each prospective investor will be required to undertake to pay the Placing Price for the Ordinary Shares sold
or issued to such prospective investor in such manner as shall be directed by Jefferies.

It is expected that Ordinary Shares allocated to prospective investors in the Placing will be delivered in
uncertificated form and settlement will take place through CREST on Admission. No temporary documents
of title will be issued. Dealings in advance of crediting of the relevant CREST stock account shall be at the
risk of the person concerned.

Monies received from applicants pursuant to the Placing will be held in accordance with the terms of the
application procedures issued by Jefferies until such time as the Placing becomes unconditional in all
respects. If the Placing does not become unconditional in all respects by 30 November 2007 (or such later
date as Jefferies and the Company may agree being no later than 31 December 2007), application monies
will be returned to applicants as soon as practicable at their own risk and without interest prior to delivery
of the Ordinary Shares. The period within which the Placing applications may be accepted pursuant to the
Placing are set out in the Placing Agreement and in the placing letters sent to placees.

4.    Lock-in arrangements                                                                                         Sch2(f)
                                                                                                                   AnnIII(7.3)
Each of Corpus, Bedat, Faith and Graham Roberts have agreed, subject to certain customary exceptions, not
to offer or otherwise dispose of, or agree to offer or otherwise dispose of, directly or indirectly, whether for


                                                      60
consideration or not: (a) any Ordinary Shares (or any legal or beneficial interest in any Ordinary Shares); or
(b) any securities of the Company that are substantially similar to Ordinary Shares including any securities
that are convertible into or exchangeable for, or that represent the right (whether conditional or not) to receive
Ordinary Shares or any such similar securities; or (c) do anything with the same or substantially the same
economic effect as any of the transactions in (a) or (b) (including a derivatives transaction), in each case
without the prior written consent of Jefferies and the Company for a period of nine months following
Admission.
Furthermore, the Company has agreed not to issue or sell Ordinary Shares or related securities for a period
of nine months after Admission without the prior written consent of Jefferies.

5.     CREST                                                                                                         AnnIII(4.3)

CREST is a paperless procedure enabling securities to be evidenced otherwise than by a certificate and
transferred otherwise than by a written instrument. The Articles permit the holding of Ordinary Shares to be
evidenced in uncertificated form and in accordance with the Companies (Uncertificated Securities) (Jersey)
Order 1999. The Company has applied for the Ordinary Shares to be admitted to CREST and it is expected
that the Ordinary Shares will be so admitted and accordingly enabled for settlement in CREST on the date
of Admission. It is expected that Admission will become effective and dealings in the Ordinary Shares will
commence on 30 November 2007. Accordingly, settlement of transactions in Ordinary Shares following
Admission may take place within the CREST system if any Shareholder so wishes. Further information is
set out in the placing letters used in connection with the Placing.
CREST is a voluntary system and Shareholders who wish to receive and retain share certificates will be able
to do so. Persons acquiring shares as a part of the Placing may elect to receive Ordinary Shares in
uncertificated form if, but only if, that person is a “system-member” (as defined in the CREST Regulations)
in relation to CREST.

6.     Selling Restrictions                                                                                          AnnIII(4.8)

The distribution of this document and the Placing of the Ordinary Shares in certain jurisdictions may be
restricted by law. Persons outside of the UK into whose possession this document comes should inform
themselves about and observe any such restrictions. Failure to comply with these restrictions may constitute
a violation of applicable securities laws in such jurisdictions.

European Economic Area
No Ordinary Shares have been offered or sold, or will be offered or sold, to the public in any member state
of the European Economic Area which has implemented the Prospectus Directive prior to Admission, except
(a) to legal entities which are authorised or regulated to operate in financial markets or, if not so authorised
or regulated, whose corporate purpose is solely to invest in securities; (b) to any legal entity which has two
or more of (i) an average of at least 250 employees during the last financial year; (ii) a total balance sheet of
more than €43 million; and (iii) an annual net turnover of more than €50 million as shown in its last annual
or consolidated accounts; or (c) in any other circumstances which do not require the publication by the
Company of a prospectus pursuant to Article 3 of the Prospectus Directive.

United States
The Ordinary Shares are being offered only outside the United States to investors in offshore transactions in
reliance on Regulation S. Each purchaser of Ordinary Shares will be deemed to have represented and agreed
that:
(a)    it is aware that the Ordinary Shares have not been and will not be registered under the Securities Act
       or with any securities regulatory authority of any state or other jurisdiction of the United States; and

(b)    it is purchasing the Ordinary Shares in an offshore transaction meeting the requirements of
       Regulation S.




                                                       61
In addition, until the expiry of 40 days after the commencement of the Placing, an offer or sale of Ordinary
Shares within the United States by a dealer (whether or not participating in the Placing) may violate the
registration requirements of the Securities Act.

France
The Ordinary Shares have not been and will not be offered or sold to the public in France (‘‘Appel Public à
L’épargne’’), and no offering or marketing materials relating to the Ordinary Shares must be made available
or distributed in any way that would constitute, directly or indirectly, an offer to the public in the Republic
of France.

The Ordinary Shares may only be offered or sold in France to qualified investors (‘‘investisseurs qualifiés’’),
as defined in and in accordance with articles l. 411-1, l. 411-2, d. 411-1 and d. 411-2 of the French Code
Monétaire et Financier.

Prospective investors are informed that:

(a)   this document has not been submitted for clearance to the French Financial Market Authority
      (Autorité des Marchés Financiers);

(b)   in compliance with articles l.411-1; l.411-2, d.411-1 through d.411-3, d.734-1, d.744-1, d.754-1 and
      d.764-1 of the French Code Monétaire et Financier, any investors subscribing for the Ordinary Shares
      should be acting for their own account; and

(c)   the direct and indirect distribution or sale to the public of the Ordinary Shares acquired by them may
      only be made in compliance with articles l.411-1, l.411-2, l.412-1 and l.621-8 of the French Code
      Monétaire et Financier.

Norway
This document has not been produced in accordance with the prospectus requirements laid down in the
Norwegian Securities Trading Act 1997. This document has not been approved or disapproved by, or
registered with, neither the Oslo Stock Exchange nor the Norwegian Registry of Business Enterprises.

This material is only and exclusively addressed to the addressees and cannot be distributed, offered or
presented, either directly of indirectly to other persons or entities domiciled in Norway.

Switzerland
The Ordinary Shares will not be distributed and offered, directly or indirectly, to the public in Switzerland
and this document may not be publicly distributed or otherwise made publicly available in Switzerland. This
document does not constitute a public offering prospectus as that term is understood pursuant to art. 652a or
art. 1156 of the Swiss Code of Obligations. The Company has not applied nor will it apply for a listing of
the Ordinary Shares on the SWX Swiss Exchange or any other exchange or regulated securities market in
Switzerland, and consequently, the information presented in this document does not necessarily comply with
the information standards set out in the relevant listing rules.




                                                      62
                                                 PART IV

                                           RISK FACTORS                                                             AnnI(4)
                                                                                                                    AnnIII(2)
                                                                                                                    AnnIII(2.1)
The Directors consider the following risks to be the most significant for potential investors. The following
factors do not purport to be a complete list or explanation of all the risk factors involved in investing in us.
In particular, our performance may be affected by changes in the market and/or economic conditions, in
legal, regulatory and tax requirements. Prospective investors should be aware that an investment in the
Ordinary Shares involves a higher than normal degree of risk. In addition to the other information contained
in this document, the following risk factors should be considered carefully in evaluating whether to make an
investment in the Ordinary Shares. Prospective investors should carefully consider the other information in
this document.

Our business, financial condition or results of operations could be materially and adversely affected by
any of these risks. The trading price of the Ordinary Shares could decline due to any of these risks and
investors could lose all or part of their investment. Additional risks and uncertainties not presently known
to us or the Directors or that we or the Directors currently deem immaterial may also impair our business
operations.

General risk factors

An investment in shares listed on AIM is likely to carry a higher risk than an investment in shares listed
on the Official List.
The value of the Ordinary Shares may go down as well as up. Furthermore, an investment in a share that is
traded on AIM is likely to carry a higher risk than an investment in a share listed on the Official List.

The market price of the Ordinary Shares may not reflect the underlying value of our assets. The market in
the Ordinary Shares may be illiquid or subject to sudden or large fluctuations and it may be difficult for
investors to sell their Ordinary Shares and they may receive less than the amount originally invested.

Our share price may be volatile and there may not be a liquid market for the Ordinary Shares.
The share price of publicly traded companies can be highly volatile. The price at which the Ordinary Shares
will be quoted and the price which investors may realise for their Ordinary Shares will be influenced by a
large number of factors, some specific to us and our operations and some which may affect quoted
companies generally. These factors could include the performance of our marketing programmes, large
purchases or sales of the Ordinary Shares, currency fluctuations, legislative changes and general economic
conditions.

Admission to AIM should not be taken as implying that there will be a liquid market for the Ordinary Shares.
It may be more difficult for an investor to realise his investment on AIM than to realise an investment in a
company whose shares are quoted on the Official List.

Prior to Admission there has been no public market in the Ordinary Shares. Whilst we are applying for the
admission of the Ordinary Shares to trade on AIM, there can be no assurance that an active trading market
for the Ordinary Shares will develop, or if developed, that it will be maintained. AIM is a market for
emerging or smaller growing companies and may not provide the liquidity normally associated with the
Official List or other exchanges.

Risks relating to our industry

The seaborne transportation industry is cyclical and volatile, and this may lead to reductions in our
charter rates, vessel values and results of operations.
The international seaborne transportation industry is both cyclical and volatile in terms of charter rates and
profitability. The degree of charter rate volatility for vessels has varied widely. Fluctuations in charter rates
result from changes in the supply and demand for vessel capacity and changes in the supply and demand for


                                                       63
energy resources, commodities, semi-finished and finished consumer and industrial products internationally
carried at sea. The factors affecting the supply and demand for vessels are outside of our control, and the
nature, timing and degree of changes in industry conditions are unpredictable.

Factors that influence demand for vessel capacity include:

•     supply and demand for energy resources, commodities, semi-finished and finished consumer and
      industrial products;

•     changes in the production of energy resources, commodities, semi-finished and finished consumer and
      industrial products;

•     the location of regional and global production and manufacturing facilities;

•     the location of consuming regions for energy resources, commodities, semi-finished and finished
      consumer and industrial products;

•     the globalisation of production and manufacturing;

•     global and regional economic and political conditions;

•     developments in international trade;

•     changes in seaborne and other transportation patterns, including the distance cargo is transported by
      sea;

•     environmental and other regulatory developments;

•     currency exchange rates; and

•     weather.

Factors that influence the supply of vessel capacity include:

•     the number of newbuilding deliveries;

•     the scrapping rate of older vessels;

•     vessel casualties;

•     the price of steel;

•     changes in environmental and other regulations that may limit the useful lives of vessels;

•     the number of vessels that are out of service; and

•     port or canal congestion.

We anticipate that the future demand for our vessels and charter rates will be dependent upon continued
economic growth in China, India and the rest of the world, seasonal and regional changes in demand and
changes to the capacity of the world fleet. We believe the capacity of the world fleet is likely to increase and
there can be no assurance that economic growth will continue at a rate sufficient to utilise this new capacity.
Adverse economic, political, social or other developments could negatively impact charter rates and
therefore have a material adverse effect on our business, results of operations and ability to pay dividends.

A further risk is inherent in the danger of delays in scheduled dry docking or special survey especially in
ship yards in the Far East (in particular China) due to an increase in ship building activities in the region.

An economic slowdown in the Asia Pacific region could have a material adverse effect on our business,
results of operations, cash flows and financial position.
A significant number of the port calls made by our vessels are likely to involve the loading or discharging of
raw materials and semi-finished products in ports in the Asia Pacific region. As a result, a negative change


                                                      64
in economic conditions in any Asia Pacific country, but particularly in China, India or Japan, may have an
adverse effect on our business, financial position and results of operations, as well as our future prospects.
In particular, in recent years, China and India have been among the world’s fastest growing economies in
terms of gross domestic product. The current growth rates may not be sustained. Moreover, any slowdown
in the economies of the European Union, the United States or certain Asian countries may adversely effect
economic growth in China, India and elsewhere. Our business, financial position and results of operations,
as well as its future prospects, will likely be materially and adversely affected by an economic downturn in
any of these countries.

We operate in a highly competitive international market and may be adversely affected by competitors’
activities.
The shipping industry is highly fragmented with many charterers, owners and operators of vessels and is
characterised by intense competition. Although we believe that no single competitor has a dominant position
in the markets in which we compete, the trend towards consolidation in the industry is creating an increasing
number of global enterprises capable of competing in multiple markets, which may result in a greater
competitive threat to us. Our competitors may be better positioned to devote greater resources to the
development, promotion and employment of their businesses than we are.

Competition for charters can be intense and depends on price as well as on the location, size, age, condition
and acceptability of the vessel and its operator to the charterer. Competition may increase in some or all of
our principal markets with the entry of new competitors. We may not be able to continue to compete
successfully or effectively with our competitors and our competitive position may be eroded in the future,
which could have an adverse effect on our business, financial condition and results of operations.

Changes in the economic and political environment in China and policies adopted by the government to
regulate its economy may have a material adverse effect on our business, financial condition and results
of operations, cash flows and financial position.
The Chinese economy differs from the economies of most countries belonging to the Organisation for
Economic Cooperation and Development, or OECD, in respects such as structure, government involvement,
level of development, growth rate, capital reinvestment, allocation of resources, rate of inflation and balance
of payments position. Prior to 1978, the Chinese economy was a planned economy. Since 1978, increasing
emphasis has been placed on the utilisation of market forces in the development of the Chinese economy.
Annual and five year State Plans are adopted by the Chinese government in connection with the development
of the economy. Although state-owned enterprises still account for a substantial portion of the Chinese
industrial output, in general, the Chinese government is reducing the level of direct control that it exercises
over the economy through State Plans and other measures. There is an increasing level of freedom and
autonomy in areas such as allocation of resources, production, pricing and management and a gradual shift
in emphasis to a “market economy” and enterprise reform. Limited price reforms were undertaken, with the
result that prices for certain commodities are principally determined by market forces. Many of the reforms
are unprecedented or experimental and may be subject to revision, change or abolition based upon the
outcome of such experiments. We cannot assure you that the Chinese government will continue to pursue a
policy of economic reform.

The level of imports to and exports from China could be adversely affected by changes to these economic
reforms by the Chinese government, as well as by changes in political, economic and social conditions or
other relevant policies of the Chinese government, such as changes in laws, regulations or export and import
restrictions, all of which could, adversely affect our business, operating results and financial condition.

Charter rates for vessels in the dry bulk sector are at levels that remain high relative to historic levels and
may decrease in the future, which may have an adverse effect on our earnings and ability to pay dividends.
The industry’s current upward trend may be at or near its peak and charter rates in certain sectors are at or
near historically high levels. According to Drewry, charter rates for dry bulk carriers reached historically high
levels during the period between late 2004 and early 2005 but declined in certain sectors significantly from
these levels during the rest of 2005. Charter rates for dry bulk carriers have, in some sectors, since doubled



                                                       65
the levels reached in late 2004 and early 2005. If the seaborne transportation industry, which has been highly
cyclical, is depressed in the future when our charters expire, or at a time when we may want to sell a vessel,
our earnings and available cash flow may be adversely affected. We cannot assure you that we will be able
to successfully charter our vessels in the future or renew our existing charters at rates sufficient to allow us
to operate our business profitably, meet our obligations including payment of debt service to our lenders or
to pay dividends to our Shareholders. Our ability to renew the charters on our vessels on the expiration or
termination of our current charters and vessel values will depend upon, among other things, economic
conditions in the sectors in which our vessels operate at that time, changes in the supply and demand for
vessel capacity and changes in the supply and demand for the seaborne transportation of energy resources,
commodities, semi-finished and finished consumer and industrial products.

We may depend on spot charters in volatile shipping markets.
The Directors may choose to charter certain of our vessels on a spot charter basis. Although dependence on
spot charters is not unusual in the shipping industry, the spot charter market is highly competitive and spot
charter rates may fluctuate significantly based upon available charters and the supply of and demand for
seaborne shipping capacity. Whilst the spot charter market may enable us to benefit if industry conditions
strengthen, we must consistently procure spot charter business. Conversely, such dependence makes us
vulnerable to declining market rates for spot charters and to the off-hire periods including ballast passages.
The Directors cannot give assurances that future available spot charters will enable us to operate our vessels
profitably.

The spot charter market is highly competitive and rates within this market are subject to volatile fluctuations
while longer-term time charters provide income at pre-determined, but lower than current spot levels, rates
over more extended periods of time. There can be no assurance that we will be successful in keeping our
vessels fully employed in these short-term markets or that future spot rates will be sufficient to enable the
vessels to be operated profitably. A significant decrease in charter rates would adversely affect our
profitability and cash flows and the market value of our vessels.

An over-supply of dry bulk carrier capacity may lead to reductions in charter rates and profitability.
The market supply of dry bulk carriers has been increasing, and the number of dry bulk carriers on order is
near historic highs. An over-supply of dry bulk carrier capacity may result in a reduction of charter rates. If
such a reduction occurs, we may only be able to recharter our vessels at reduced and possibly unprofitable
rates or we may not be able to charter these vessels at all.

The market value of our vessels, which are at historically high levels, may fluctuate significantly, and we
may incur losses if we sell vessels following a sharp decline in their market value.
According to Drewry, values for all sizes of dry bulk carriers are currently at historically high levels. If the
seaborne transportation industry, which historically has been highly cyclical, does not maintain these high
levels in the future, the market value of our vessels will decline.

The market value of our vessels may increase and decrease depending on a number of factors including:
•     prevailing level of charter rates;
•     general economic and market conditions affecting the shipping industry;
•     competition from other shipping companies;
•     types and sizes of vessels;
•     supply and demand for vessels;
•     other modes of transportation;
•     cost of newbuildings;
•     change to law or governmental or other regulations; and
•     technological advances.


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In addition, as vessels grow older, they generally decline in value. If the market value of our vessels declines,
we may incur losses if we sell one or more of our vessels, we may not be in compliance with certain
provisions of our loan agreements and we may not be able to refinance our debts or obtain additional
financing, all of which would adversely affect our business and financial condition. If we sell any vessel at
a time when vessel prices have fallen and before we have recorded an impairment adjustment to our financial
statements, the sale may be at less than the vessel’s depreciated book value in our financial statements,
resulting in a loss and a reduction in earnings.

Our revenues are subject to seasonal fluctuations, which may have an adverse effect on our earnings and
ability to pay dividends.
Our fleet consists of dry bulk carriers operating in markets that have historically exhibited seasonal variations
in demand and, as a result, in charter rates. This seasonality may result in quarter-to-quarter volatility in our
operating results. The dry bulk sector is typically stronger in the autumn and winter months in anticipation
of increased consumption of coal and other raw materials in the northern hemisphere during the winter
months (although the Latin American grain season of mid March to end June has also been a traditionally
strong season for dry bulk shipping). As a result, revenues from our dry bulk carriers may be weaker during
the quarters ended 30 June and 30 September, and, conversely, we expect our revenues from our dry bulk
carriers may be stronger in quarters ended 31 December and 31 March. Seasonality in the dry bulk sector
could materially affect our operating results and cash available for dividends in the future.

We may have to pay tax on United States source income, which would reduce our profits.
Under the United States Internal Revenue Code of 1986 (the “Code”), 50% of the gross shipping income of
a vessel-owning or chartering company, such as our subsidiaries, that is attributable to transportation that
begins or ends, but that does not both begin and end, in the United States is characterised as United States
source shipping income and such income is subject to a 4% United States federal income tax without
allowance for deduction, unless that corporation qualifies for exemption from tax under section 883 of the
Code and the United States Treasury regulations promulgated thereunder.

After Admission, we expect that each of our subsidiaries will qualify for this statutory tax exemption and we
will take this position for United States federal income tax return reporting purposes. However, our
subsidiaries’ eligibility to qualify for exemption is dependent on certain circumstances related to the
ownership of our shares which are beyond our control and on interpretations of existing United States
Treasury regulations and we can therefore give no assurance that our subsidiaries will in fact be eligible to
qualify for exemption under section 883 of the Code after Admission. In addition, changes to the Code, the
United States Treasury regulations or the interpretation thereof by the United States Internal Revenue Service
or the courts could adversely affect our ability to take advantage of the exemption under section 883 of the
Code.

If our subsidiaries are not entitled to this exemption under section 883 of the Code for any taxable year, our
subsidiaries would be subject for those years to a 4% United States federal income tax on US-source
shipping income. The imposition of this taxation could have a negative effect on our business and would
result in decreased profits.

Our industry is subject to complex laws and regulations, including environmental regulations that can
adversely affect the cost, manner or feasibility of doing business.
Our operations are subject to numerous laws and regulations in the form of international conventions and
treaties, national, state and local laws and national and international regulations in force in the jurisdictions
in which our vessels operate or are registered, which can significantly affect the ownership and operation of
our vessels. These requirements include but are not limited to: International US Oil Pollution Act 1990
(OPA), International Convention for the Safety of Life at Sea (SOLAS) 1974, International Convention on
Load Lines 1966, International Convention for the Prevention of Pollution from Ships 1973, Protocol 1978,
International Convention on Civil Liability for Bunker Oil Pollution Damage 2001, International Convention
on Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious
Substances by Sea (HNS) 1996, International Convention on Civil Liability for Oil Pollution Damage (CLC)



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1969, International Convention on the Establishment of an International Fund for Compensation for Oil
Pollution Damage (Fund) 1971 and Marine Transportation Security Act 2002. Compliance with such laws,
regulations and standards, where applicable, may require installation of costly equipment or operational
changes and may affect the resale value or useful lives of our vessels. We may also incur additional costs in
order to comply with other existing and future regulatory obligations, including, but not limited to, costs
relating to air emissions, the management of ballast waters, maintenance and inspection by Flag, Class and
port authorities, costs relating to MARPOL Annex VI with regard to compulsory use of bunkers with lower
sulphur content in emission control areas, elimination of tin-based paint, development and implementation
of emergency procedures and insurance coverage or other financial assurance of our ability to address
pollution incidents. These costs could have a material adverse effect on our business, results of operations,
cash flows and financial condition and our ability to pay dividends.

A failure to comply with applicable laws and regulations may result in administrative and civil penalties,
criminal sanctions or the suspension or termination of our operations. Environmental laws often impose strict
liability for remediation of spills and releases of oil and hazardous substances, which could subject us to
liability without regard to whether we were negligent or at fault. Under OPA, for example, owners, operators
and bareboat charterers are jointly and severally strictly liable for the discharge of oil within the 200-mile
exclusive economic zone around the United States. An oil spill could result in significant liability, including
fines, penalties, criminal liability and remediation costs for natural resource damages under other federal,
state and local laws, as well as third-party damages. We are required to satisfy insurance and financial
responsibility requirements for potential oil (including marine fuel) spills and other pollution incidents.
Although we have arranged insurance to cover certain environmental risks, there can be no assurance that
such insurance will be sufficient to cover all such risks or that any claims will not have a material adverse
effect on our business, results of operations, cash flows and financial condition and our ability to pay
dividends.

The operation of our vessels is affected by the requirements set forth in the ISM Code. The ISM Code
requires shipowners, ship managers and bareboat charterers to develop and maintain an extensive “Safety
Management System” that includes the adoption of a safety and environmental protection policy setting forth
instructions and procedures for safe operation and describing procedures for dealing with emergencies. The
failure of a shipowner or bareboat charterer to comply with the ISM Code may subject it to increased
liability, may invalidate existing insurance or decrease available insurance coverage for the affected vessels
and may result in a denial of access to, or detention in, certain ports. As of the date of this document, each
of our vessels is ISM Code-certified.

Capital expenditure and other costs necessary to operate and maintain our vessels may increase due to
changes in governmental regulations, safety or other equipment standards and customer requirements
adversely affecting our profitability.
Changes in governmental regulations, safety or other equipment standards, as well as compliance with
standards imposed by maritime self-regulatory organisations and customer requirements or competition,
may require us to make additional expenditures. In order to satisfy these requirements, we may, from time
to time, be required to take our vessels out of service for extended periods of time, with corresponding losses
of revenues. In the future, market conditions may not justify these expenditures or enable us to operate some
or all of our vessels profitably during the remainder of their economic lives.

Our vessels may suffer damage due to the inherent operational risks of the seaborne transportation
industry and we may experience unexpected dry-docking or repair costs, which may adversely affect our
business and financial condition.
Our vessels and their cargoes will be at risk of being damaged or lost because of events such as marine
disasters, bad weather, business interruptions caused by mechanical failures, grounding, fire, explosions and
collisions, human error, war, terrorism, piracy and other circumstances or events. These hazards may result
in death or injury to persons, loss of revenues or property, environmental damage, higher insurance rates,
damage to our customer relationships and reputation, delay or rerouting.




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If our vessels suffer damage, they may need to be repaired at a dry-docking facility. The costs of drydock
repairs are unpredictable and may be substantial. We may have to pay dry-docking costs that our insurance
does not cover in full. The loss of earnings while these vessels are being repaired and repositioned, as well
as the actual cost of these repairs, would decrease our earnings. In addition, space at dry-docking facilities
is sometimes limited and not all dry-docking facilities are conveniently located. We may be unable to find
space at a suitable dry-docking facility or our vessels may be forced to travel to a dry-docking facility that
is not conveniently located to our vessels’ positions. The loss of earnings while these vessels are forced to
wait for space or to steam to more distant dry-docking facilities would decrease our earnings.

Our insurance may not be adequate to cover losses that may result from our operations due to the inherent
operational risks of the seaborne transportation industry.
We carry insurance to protect us against most of the accident-related risks involved in the conduct of our
business, including marine hull and machinery insurance, war risk insurance, protection and indemnity
insurance, which includes pollution risks, crew insurance and war risk insurance. However, we may not be
adequately insured to cover losses from our operational risks, which could have a material adverse effect on
us. Additionally, our insurers may refuse to pay particular claims and our insurance may be voidable by the
insurers if we take, or fail to take, certain action, such as failing to maintain certification of our vessels with
applicable maritime regulatory organisations. Any significant uninsured or underinsured loss or liability
could have a material adverse effect on our business, results of operations, cash flows and financial condition
and our ability to pay dividends. It may also result in protracted legal litigation. In addition, we may not be
able to obtain adequate insurance coverage at reasonable rates in the future during adverse insurance market
conditions.

We currently maintain, for each of our Ships, pollution liability coverage insurance for US$1 billion per
incident. If damages from a catastrophic spill exceed our insurance coverage, it would have a materially
adverse effect on our business, results of operations and financial condition and our ability to pay dividends.

As a result of the 11 September 2001 terrorist attacks, the US response to the attacks and related concern
regarding terrorism, insurers have increased premiums and reduced or restricted coverage for losses caused
by terrorist acts generally. Accordingly, premiums payable for terrorist coverage have increased substantially
and the level of terrorist coverage has been significantly reduced.

In addition, we do not currently carry and may not carry loss-of-hire insurance, which covers the loss of
revenue during extended vessel off-hire periods, such as those that occur during an unscheduled dry-docking
due to damage to the vessel from accidents. Accordingly, any loss of a vessel or extended vessel off-hire, due
to an accident or otherwise, could have a material adverse effect on our business, results of operations and
financial condition and our ability to pay dividends.

We may be subject to funding calls by our protection and indemnity clubs, and our clubs may not have
enough resources to cover claims made against them.
We are indemnified for legal liabilities incurred while operating our Ships through membership of protection
and indemnity associations, or P&I clubs. P&I clubs are mutual insurance clubs whose members must
contribute to cover losses sustained by other club members. The objective of a P&I club is to provide mutual
insurance based on the aggregate tonnage of a member’s vessels entered into the club. Claims are paid
through the aggregate premiums of all members of the club, although members remain subject to calls for
additional funds if the aggregate premiums are insufficient to cover claims submitted to the club. Claims
submitted to the club may include those incurred by members of the club, as well as claims submitted by
other P&I clubs with which our club has entered into interclub agreements. We cannot assure you that the
P&I clubs to which we belong will remain viable or that we will not become subject to additional funding
calls which could adversely affect us.

Increased inspection procedures, tighter import and export controls and new security regulations could
increase costs and disrupt our business.
International shipping is subject to various security and customs inspection and related procedures in
countries of origin and destination and trans-shipment points. Inspection procedures can result in the seizure


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of the cargo and contents of our vessels, delays in the loading, offloading or delivery and the levying of
customs duties, fines or other penalties against us.

It is possible that changes to inspection procedures could impose additional financial and legal obligation on
us. Furthermore, changes to inspection procedures could also impose additional costs and obligations on our
customers and may, in certain cases, render the shipment of certain types of cargo impractical. Any such
changes or developments may have a material adverse effect on our business, financial condition, results of
operations and our ability to pay dividends.

Rising fuel prices may adversely affect our profits.
Whilst we currently have no charters under which we are bearing the cost of fuel (bunkers), fuel is a
significant, if not the largest, expense if vessels are under voyage charter. As a result, an increase in the price
of fuel may adversely affect our profitability. The price and supply of fuel is unpredictable and fluctuates
based on events outside our control, including geopolitical events, supply and demand for oil and gas, actions
by OPEC and other oil and gas producers, war and unrest in oil producing countries and regions, regional
production patterns and environmental concerns. Further, fuel may become much more expensive in the
future, which may reduce the profitability and competitiveness of our business versus other forms of
transportation, such as truck or rail.

The operation of dry bulk carriers has certain unique operational risks.
The operation of certain ship types, such as dry bulk carriers, has certain unique risks. With a dry bulk carrier,
the cargo itself and its interaction with the ship can be a risk factor. By their nature, dry bulk cargoes are
often heavy, dense, easily shifted, and react badly to water exposure. In addition, dry bulk carriers are often
subjected to battering during unloading operations with grabs, jackhammers (to pry encrusted cargoes out of
the hold), and small bulldozers. This may cause damage to the vessel. Vessels damaged due to treatment
during unloading procedures may be more susceptible to breach to the sea. Hull breaches in dry bulk carriers
may lead to the flooding of the vessels holds. If a dry bulk carrier suffers flooding in its forward holds, the
bulk cargo may become so dense and waterlogged that its pressure may buckle the vessels bulkheads leading
to the loss of a vessel. If we are unable to adequately maintain our vessels we may be unable to prevent these
events. Any of these circumstances or events may have a material adverse effect on our business, financial
condition, results of operations and ability to pay dividends. In addition, the loss of any of our vessels could
harm our reputation as a safe and reliable vessel owner and operator.

Maritime claimants could arrest our vessels, which would interrupt our business.
Crew members, suppliers of goods and services to a vessel, shippers of cargo and other parties may be
entitled to a maritime lien against that vessel for unsatisfied debts, claims or damages. In many jurisdictions,
a maritime lienholder may enforce its lien by arresting a vessel through foreclosure proceedings. The arrest
or attachment of one or more of our vessels could interrupt our business or require us to pay large sums of
funds to have the arrest lifted, which would have a negative effect on our cash flows.

In addition, in some jurisdictions, such as South Africa, under the “sister ship” theory of liability, a claimant
may arrest both the vessel which is subject to the claimant’s maritime lien and any “associated” vessel, which
is any vessel owned or controlled by the same owner. Claimants could try to assert “sister ship” liability
against one vessel in our fleet for claims relating to another of our ships.

Governments could requisition our vessels during a period of war or emergency, resulting in loss of
revenues.
A government could requisition for title or seize our vessels. Requisition for title occurs when a government
takes control of a vessel and becomes the owner. Also, a government could requisition our vessels for hire.
Requisition for hire occurs when a government takes control of a vessel and effectively becomes the
charterer at dictated charter rates. Generally, requisitions occur during a period of war or emergency.
Government requisition of one or more of our vessels may have a material adverse effect on our business,
financial condition, results of operations and ability to pay dividends.




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Terrorist attacks and international hostilities can affect the seaborne transportation industry, which could
adversely affect our business.
We conduct most of our operations outside of the United States, and our business, results of operations, cash
flows, financial condition and ability to pay dividends may be adversely affected by changing economic,
political and government conditions in the countries and regions where our vessels are employed or
registered. Moreover, we operate in a sector of the economy that is likely to be adversely impacted by the
effects of political instability, terrorist or other attacks, war or international hostilities. Terrorist attacks such
as the attacks on the United States on 11 September 2001, the bombings in Madrid on 11 March 2004 and
in London on 7 July 2005 and the continuing response of the United States to these attacks, as well as the
threat of future terrorist attacks, continue to contribute to world economic instability and uncertainty in
global financial markets. Future terrorist attacks could result in increased volatility of the financial markets
in the United States and globally and could result in an economic recession in the United States or the world.
These uncertainties could also adversely affect our ability to obtain additional financing on terms acceptable
to us or at all.

In the past, political conflicts have also resulted in attacks on vessels, such as the attack on the M/T Limburg
in October 2002, mining of waterways and other efforts to disrupt international shipping, particularly in the
Arabian Gulf region. Acts of terrorism and piracy have also affected vessels trading in regions such as the
South China Sea and certain areas of costal Africa. Any of these occurrences could have a material adverse
impact on our business, financial condition, results of operations and ability to pay dividends.

Compliance with safety and other vessel requirements imposed by classification societies may be costly
and could reduce our net cash flows and net income.
The hull and machinery of every commercial vessel must be classed by a classification society authorised by
its country of registry. The classification society certifies that a vessel is safe and seaworthy in accordance
with the applicable rules and regulations of the country of registry of the vessel and the Safety of Life at Sea
Convention. All of our Ships are currently enrolled with the Bureau Veritas and Nippon Kaiji Kyokai.

Vessels must undergo annual surveys, intermediate surveys and special surveys. In lieu of a special survey,
a vessel’s machinery may be on a continuous survey cycle, under which the machinery would be surveyed
over a five-year period. Our Ships are on special survey cycles for hull inspection and (other than M/V
Hellenic Sky) continuous survey cycles for machinery inspection. Every vessel over 15 years of age is also
required to be dry docked every two to three years for inspection of its underwater parts. Vessels of less than
15 years age can undergo intermediate survey afloat by approved divers without requiring dry docking
subject to vessels carrying in water survey notation.

If any vessel does not maintain its class and/or fails any annual, intermediate or special survey, the vessel
may be unable to trade between ports and may be unemployable which could trigger the violation of certain
covenants in relation to our debt finance arrangements. Such an occurrence could have a material adverse
impact on our business, financial condition, results of operations and ability to pay dividends.

The smuggling of drugs or other contraband onto our vessels may lead to governmental claims against
us.
We expect that our vessels will call at ports where smugglers attempt to hide drugs and other contraband on
vessels, with or without the knowledge of crew members. To the extent that our vessels are found with
contraband, whether inside or attached to the hull of our vessel, and whether with or without the knowledge
of any of our crew, we may face governmental or other regulatory claims which could have an adverse effect
on our business, results of operations, cash flows, financial condition and ability to pay dividends.

Risks relating to the Company

We may be unable to attract and retain key management personnel and other employees, which may
negatively impact the effectiveness of our management and results of operations.
Our success depends to a significant extent upon the abilities and efforts of our management team, and in
particular on the experience, abilities, business relationships and efforts of our Directors. Although we have


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entered into service agreements in relation to the services of our Directors and other members of our senior
management (with the exception of a Financial Reporting Manager who will be engaged following
Admission), there is no guarantee that such agreements will not be terminated or will be honoured. Our
success will depend upon our ability to hire and retain key members of our management team and to hire
new members as may be necessary. The loss of any of these individuals, could adversely affect our business
prospects and financial condition, although we do not rely solely on any one individual. Difficulty in hiring
and retaining replacement personnel could have a similar effect. We do not intend to maintain “key man” life
insurance for any of our senior management.

We currently rely on Mantinia to manage the technical and operational aspects of our fleet.
We currently sub-contract the technical and operational management of our fleet, including crewing,
maintenance and repair, to Mantinia. The loss of Mantinia’s services or its failure to perform its obligations
to us could materially and adversely affect the results of our operations. Although we may have rights against
Mantinia if it defaults on its obligations to us, shareholders will have no recourse directly against Mantinia.
Further, we expect that we will need to seek approval from our lenders to change our technical and
operational manager. Mantinia will also be providing similar services for vessels owned by other shipping
companies including companies with which they are affiliated. These responsibilities and relationships could
create conflicts of interest between Mantinia’s performance of its obligations to us, on the one hand, and
Mantinia’s performance of its obligations to its other clients on the other hand (although all other vessels
currently operated by Mantinia for other clients are tankers and not dry bulk carriers). These conflicts may
arise in connection with the crewing, supply provisioning and operations of the vessels in our fleet versus
vessels owned by other clients of Mantinia.

Mantinia is privately held company and there is little or no public information about it.

Our Chief Executive Officer is a shareholder of Mantinia which may create a conflict of interest.

There may be a delay in delivery of M/V Aegean Hawk (to be renamed M/V Konstantinos D) and we may
decide not to take delivery of this vessel if it is not “in class”.
We currently expect to take delivery of our new supramax vessel M/A Aegean Hawk (to be renamed
M/V Konstantinos D) between 1 March and 30 April 2008. However any delay in its delivery could cause a
reduction in potential revenue and our ability to pay dividends. If the vessel upon delivery, is not certified
“in class”, then we will not be obliged to take delivery. If we decide not to take delivery of the vessel because
the vessel is not “in class” then this would lead to a reduction in our potential revenue and our ability to pay
dividends.

Labour interruptions could disrupt our business.
Our Ships are manned by masters, officers and crews and each crew member enters into individual
employment agreements with us. Our employment agreements with our crew may not prevent labour
interruptions and are subject to renegotiation in the future. Any labour interruptions, including our failure to
renegotiate employment agreements with our crew members successfully, could disrupt our operations and
could have a material adverse effect on our business, results of operations, cash flows, financial condition
and ability to pay dividends.

As we expand our business, we may need to improve our operating and financial systems and will need to
recruit suitable employees and crew for our vessels.
Our current operating and financial systems may not be adequate as we implement our plans to expand the
size of our fleet, and our attempts to improve those systems may be ineffective. In addition, as we seek to
expand our fleet, we will need to recruit suitable additional seafarers and shore based administrative and
management personnel. We cannot guarantee that we or our crewing agent will be able to hire suitable
employees as we expand our fleet. This task will be made more difficult by our strategy of maintaining
experienced, high-quality crews. If we or our crewing agent encounters business or financial difficulties, we
may not be able to adequately staff our vessels. If we are unable to develop and maintain effective financial
and operating systems or to recruit suitable employees as we expand our fleet, our financial performance


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may be adversely affected and, among other things, the amount of cash available for distribution as dividends
to our shareholders may be reduced.

Our earnings may be adversely affected if we do not successfully employ our vessels on long-term time
charters or take advantage of favourable opportunities involving short-term or spot market charter rates.
Our strategy involves a combination of long-term time charters one to two years with calculated shorter term
exposure to take advantage of a favourable rate environment. As at 1 November 2007, our dry bulk carriers
were employed on charters with remaining terms of four to 26 months, including the M/V Aegean Hawk (to
be renamed M/V Konstantinos D) based on latest charter expiration dates. Although time charters with
durations of between one and two years provide relatively steady streams of revenue, our vessels committed
to such charters may not be available for rechartering or for spot market voyages when such employment
would allow us to realise the benefits of comparably more favourable charter rates. In addition, in the future,
we may not be able to enter into new time charters on favourable terms. While current charter rates are high,
the market is volatile, and in the past charter rates have declined below operating costs of vessels. If we are
required to enter into a charter when charter rates are low, or unable to take advantage of short-term
opportunities in the charter market, our earnings could be adversely affected. We cannot assure you that
future charter rates will enable us to operate our vessels profitably.

Our revenues may be adversely affected if we do not successfully employ our vessels.
We intend to employ the majority of our vessels on fixed rate period charters. While current charter rates are
high relative to historic rates, the charter market is volatile, and in the past, charter rates for vessels have
declined below operating costs of vessels. If our vessels become available for employment in the spot market
or under new period charters during periods when charter rates have fallen, we may have to employ our
vessels at depressed charter rates which would lead to reduced or volatile earnings. We cannot assure you
that future charter rates will be at a level that will enable us to operate our vessels profitably or to pay
dividends.

Our charterers may terminate or default on their charters, which could adversely affect our results of
operations and cash flow.
Each of our charters gives the charterer the right to terminate the charter on the occurrence of stated events
or the existence of specified conditions, such as, amongst other things, a total loss or constructive total loss
of the related vessel or its requisition for hire, or the failure of the vessel to meet specified performance
criteria. In addition, the ability of each of our charterers to perform its obligations under a charter will depend
on a number of factors that are beyond our control. These factors may include general economic conditions,
the condition of a specific shipping market sector, the charter rates received for specific types of vessels and
various operating expenses. The costs and delays associated with the default of a charterer of a vessel may
be considerable and may adversely affect our business, results of operations, cash flows and financial
condition.

We cannot predict whether our charterers will, upon the expiration of their charters, recharter our vessels on
favourable terms or at all. If our charterers decide not to recharter our vessels, we may not be able to recharter
them on terms similar to the terms of our current charters or at all. In the future, we may also employ our
dry bulk carriers on the spot charter market, which is subject to greater rate fluctuation than the time charter
market. If we receive lower charter rates under replacement charters or are unable to recharter all of our
vessels, this may adversely affect our business, results of operations, cash flows and financial condition.

The ageing of our fleet may result in increased operating costs in the future, which could adversely affect
our earnings.
In general, the cost of maintaining a vessel in good operating condition increases with the age of the vessel.
As at 1 November, 2007, the five vessels (including for these purposes M/V Aegean Hawk (to be renamed
M/V Konstantinos D) in our fleet had a weighted average age of 13.2 years. As our fleet ages, we will incur
increased costs. Older vessels are typically less fuel efficient and more costly to maintain than more recently
constructed vessels due to improvements in engine technology. Cargo insurance rates increase with the age
of a vessel, making older vessels less desirable to charterers. Governmental regulations, safety or other


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equipment standards related to the age of vessels may require expenditures for alterations or the addition of
new equipment, to our vessels and may restrict the type of activities in which our vessels may engage. We
cannot assure you that, as our vessels age, further market conditions will justify those expenditures or enable
us to operate our vessels profitably during the remainder of their useful lives.

We may have difficulty managing our planned growth properly.
Any future acquisitions of additional vessels will impose additional responsibilities on our management and
staff and may require us to increase the number of our personnel. We believe that our internal infrastructure
and the provision of services by Mantinia will allow future growth if required. In the event of a future
acquisition of additional vessels, we may also have to increase our customer base to provide continued
employment for the new vessels.

We intend to continue to grow our business through disciplined acquisitions of second-hand vessels that meet
our selection criteria and in the future newbuilding vessels if we can negotiate attractive purchase prices and
favourable delivery dates. Our future growth will primarily depend on:

•      locating and acquiring suitable vessels;

•      identifying and consummating acquisitions;

•      enhancing our customer base;

•      managing our expansion; and

•      obtaining required financing on acceptable terms.

Growing any business by acquisition presents numerous risks, such as undisclosed liabilities and obligations,
the possibility that indemnification agreements will be unenforceable or insufficient to cover potential losses
and difficulties associated with imposing common standards, controls, procedures and policies, obtaining
additional qualified personnel, managing relationships with customers and integrating newly acquired assets
and operations into existing infrastructure. We cannot give any assurance that we will be successful in
executing our growth plans or that we will not incur significant expenses and losses in connection with our
future growth.

Purchasing and operating second-hand vessels may result in increased operating costs and reduced fleet
utilisation.
While we have the right to inspect previously owned vessels prior to our purchase of them, such an
inspection does not provide us with the same knowledge about their condition that we would have if these
vessels had been built for and operated exclusively by us. A second-hand vessel may have conditions or
defects that we are not aware of when we buy the vessel and which may require us to incur costly repairs to
the vessel. These repairs may require us to put a vessel into dry-dock, which would reduce our fleet
utilisation. Furthermore, we usually do not receive the benefit of warranties on second-hand vessels.

In the highly competitive international shipping industry, we may not be able to compete for charters with
new entrants or established companies with greater resources.
We employ our vessels in a highly competitive market that is capital intensive and highly fragmented.
Competition arises primarily from other vessel owners, some of whom have substantially greater resources
than we do. Competition for the transportation of cargo by sea is intense and depends on price, location, size,
age, condition and the acceptability of the vessel and its operators to the charterers. Due in part to the highly
fragmented market, competitors with greater resources could enter the shipping industry and operate larger
fleets through consolidation or acquisitions and may be able to sustain lower charter rates and offer higher
quality vessels than we are able to offer.

We cannot assure you that we will pay dividends.
There can be no assurance that dividends will be paid in the anticipated amounts and frequency set forth in
this document or at all. Our policy is to declare and pay semi-annual dividends to shareholders each April


                                                       74
and October. However, we may incur other expenses or liabilities that would reduce or eliminate the cash
available for distribution as dividends, including as a result of the risks described in this Part IV. Our loan
agreements may also prohibit our declaration and payment of dividends under some circumstances.

Under certain of the loan facilities entered into by the Ship Owning Companies, the payment of dividends is
subject to certain restrictions. In particular, loans from Calyon to Patmos and Nestos require that those
companies provide financial statements evidencing that they maintain sufficient cash balances to meet their
respective debt service obligations and the running expenses of the Ships they own for the next three months.
In addition, these loans also prevent the Company from paying dividends if an event of default has occurred
and is continuing. Further details of these loans are given in section 12 of Part IX of this document. There is
no guarantee that Nestos and Patmos will be able to satisfy these restrictions or that the Company will not
suffer an event of default. In such circumstances, the Company may be prevented from paying dividends in
accordance with the dividend policy stated in this document or at all.

In addition, the declaration and payment of dividends will be subject at all times to the discretion of our
Board. The timing and amount of dividends will depend on our earnings, financial condition, cash
requirements and availability, fleet renewal and expansion, restrictions in our loan agreements, the provisions
of Jersey law affecting the payment of dividends and other factors. Jersey laws prohibits the payment of
dividends other than from: (a) realised profits less realised losses; (b) realised revenue profits less revenue
losses (whether realised or not), provided that, immediately after, the Company will be able to discharge its
liabilities as they fall due; or (c) with the approval of a special resolution of the shareholders, from unrealised
profits less losses (whether realised or not), provided that the Directors reasonably believe that, immediately
after, the Company will be able to carry on business and be able to discharge its liabilities as they fall due
until the expiry of the period of one year immediately following the date on which the distribution is
proposed to be made.

We are a holding company, and we will depend on the ability of our subsidiaries to distribute funds to us
in order to satisfy our financial obligations or to make dividend payments.
We are a holding company and our subsidiaries, which are all directly wholly-owned by us, will conduct all
of our operations and own all of our operating assets. We have no significant assets other than the equity
interests in our wholly-owned subsidiaries. As a result, our ability to make dividend payments depends on
our subsidiaries and their ability to distribute funds to us. If we are unable to obtain funds from our
subsidiaries, our Board may exercise its discretion not to pay dividends. As mentioned above, we and our
subsidiaries will be permitted to pay dividends under our loan facility only subject to certain conditions for
so long as no event of default has occurred and no event has occurred or circumstance arisen which with the
giving of notice or the lapse of time or the satisfaction of any other condition would constitute an event of
default under the loan facility. In addition, we are subject to limitations on the payment of dividends under
Jersey laws discussed above and our subsidiaries are subject to limitations on the payment of dividends under
Marshall Islands law and Maltese law.

Unless we set aside reserves or are able to borrow funds for vessel replacement at the end of a vessel’s
useful life our revenues will decline, which would adversely affect our business, results of operations and
financial condition.
Unless we maintain reserves or are able to borrow or raise funds for vessel replacement we will be unable
to replace the Ships in our fleet upon the expiration of their remaining useful lives, which we expect to range
from 25 years to 30 years, depending on the type of vessel. Our cash flows and income are dependent on the
revenues earned by the chartering of our vessels to customers. If we are unable to replace the Ships in our
fleet upon the expiration of their useful lives, it will have a material adverse effect on our business, results
of operations, financial condition and ability to pay dividends. Any reserves set aside for vessel replacement
may not be available for dividends.

Investments in derivative instruments such as forward freight agreements could result in losses.
From time to time, we may take positions in derivative instruments including forward freight agreements
(“FFA”s). FFAs and other derivative instruments may be used to hedge a vessel owner’s exposure to the



                                                        75
charter market by providing for the sale of a contracted charter rate along a specified route and period of
time. Upon settlement, if the contracted charter rate is less than the average of the rates, as reported by an
identified index, for the specified route and time period, the seller of the FFA is required to pay the buyer an
amount equal to the difference between the contracted rate and the settlement rate, multiplied by the number
of days in the specified period. Conversely, if the contracted rate is greater than the settlement rate, the buyer
is required to pay the seller the settlement sum. If we take positions in FFAs or other derivative instruments
and do not correctly anticipate charter rate movements over the specified route and time period, we could
suffer losses in the settling or termination of the FFA. This could adversely affect our results of operation
and cash flow.

We will depend upon a few significant customers for a large part of our revenues and the loss of one or
more of these customers could adversely affect our financial performance.
We expect to derive a significant part of our revenue from a small number of customers. For the year 2007,
we expect that substantially all of our revenues will be derived from seven customers. If one or more of these
customers is unable to perform under one or more charters with us and we are not able to find a replacement
charter, or if a customer exercises certain rights to terminate the charter, we could suffer a loss of revenues
that could materially adversely affect our business, financial condition, results of operations and cash
available for distribution as dividends to our Shareholders.

We could lose a customer or the benefits of a time charter if, among other things:
•      the customer fails to make charter payments because of its financial inability, disagreements with us
       or otherwise;
•      the customer terminates the charter because we fail to deliver the vessel within a fixed period of time,
       the vessel is lost or damaged beyond repair, there are serious deficiencies in the vessel or prolonged
       periods of off-hire, or we default under the charter.

If we lose a key customer, we may be unable to obtain charters on comparable terms or may become subject
to the volatile spot market, which is highly competitive and subject to significant price fluctuations. The loss
of any of our customers, time charters or vessels, or a decline in payments under our charters, could have a
material adverse effect on our business, results of operations and financial condition and our ability to pay
dividends.

A sharp decline in the market value of our vessels could lead to a default under our loan agreements and
the loss of our vessels through foreclosure.
Following the Placing, we expect to be able to continue to comply with all of the Group loan arrangements
detailed at section 12 of Part IX of this document. However, should our charter rates or vessel values
materially decline in the future due to any of the reasons discussed in the risk factors set forth above or
otherwise, we may be required to take action to reduce our debt or to act in a manner contrary to our business
objectives to meet these ratios and satisfy the loan provisions. Events beyond our control, including changes
in the economic and business conditions in the shipping sectors in which we operate, may affect our ability
to comply with these covenants. We cannot assure you that we will satisfy this requirement or that our
lenders will waive any failure to do so.

We cannot assure you that we will be able to borrow amounts under our existing or future loan
agreements and restrictive covenants in our loan agreements may impose financial and other restrictions
on us.
Each of our loan agreements imposes operating and financial restrictions on us. These restrictions may limit
our ability to, among other things:
•      incur additional indebtedness, including through the issuance of guarantees;
•      create or permit liens on our assets;
•      sell our vessels or the capital stock of our subsidiaries;



                                                       76
•     engage in mergers or acquisitions;
•     change the flag or classification society of our vessels;
•     pay dividends (as described under the risk factor headed “We cannot assure you that we will pay
      dividends”);
•     make capital expenditures; and
•     change the management of our vessels or terminate or materially amend the management agreement
      relating to each vessel.

These restrictions could limit our ability to finance our future operations or capital needs, make acquisitions
or pursue available business opportunities. A breach of any of the covenants in a loan agreement could result
in a default under such loan agreement. If a default occurs under such loan agreement, the lender could elect
to declare the relevant outstanding debt, together with accrued interest and other fees, to be immediately due
and payable and proceed against the collateral securing that debt, which could constitute all or substantially
all of our assets securing that debt.

Therefore, our discretion is limited because we may need to obtain consent from our lenders in order to
engage in certain corporate actions. Our lenders’ interests may be different from ours, and we cannot
guarantee that we will be able to obtain our lenders’ consent when needed. This may prevent us from taking
actions that are in our best interest.

Pursuant to the loan agreement between National Bank of Greece S.A. and Arkadia and Thasos (details of
which are set out at section 12.7 of Part IX of this document) if (i) Fotini Karamanlis and Konstantinos
Karamanlis cease to be the ultimate beneficial owners of at least 40% of the issued share capital of the
Company and/or (ii) any of the Vessel Owning Companies and/or HSC ceases to be a wholly owned
subsidiary of the Company, then there is an event of default. Furthermore, pursuant to the loan agreements
between Calyon and Nestos and Patmos (details of which are set out at sections 12.1 to 12.6 inclusive of Part
IX of this document), if without the prior written consent of Calyon, Fotini Karamanlis and Konstantinos
Karamanlis cease to have the power to direct the Company’s policies (through a material reduction in their
shareholdings) and they are no longer being represented in an executive position on the Board then Nestos
and Patmos are obliged to prepay the loans within 60 days of notice from Calyon.

We cannot guarantee that these Shareholders will not reduce their shareholding below this level and if, as a
result, we are in default under these loans and repayment is demanded, we cannot guarantee that alternative
financing can be obtained on similar terms or at all.

Our ability to obtain additional debt financing may be dependent on the performance of our then existing
charters and the creditworthiness of our charterers.
The actual or perceived credit quality of our charterers, and any defaults by them, may materially affect our
ability to obtain the additional capital resources required to purchase additional vessels or may significantly
increase our costs of obtaining such capital. Our inability to obtain additional financing at anticipated costs
or at all may materially affect our results of operation and our ability to implement our business strategy.

We do not have committed financing in place for the M/V Aegean Hawk (to be renamed
M/V Konstantinos D).

We intend to partially finance the acquisition of the M/V Aegean Hawk (to be renamed M/V Konstantinos
D) utilising approximately US$31 million from the net proceeds of the Placing. The remainder is intended
to be financed through a new debt facility which will be obtained following Admission. As such, we currently
do not have committed debt facilities in place for the M/V Aegean Hawk (to be renamed M/V Konstantinos
D). Our inability to obtain additional financing at anticipated costs or at all may affect our results of
operations and our ability to implement our business strategy.




                                                      77
We cannot assure you that we will be able to refinance any indebtedness incurred under our loan
agreements.
We intend to partially finance our future fleet expansion programme with additional secured indebtedness.
While we may refinance amounts drawn under our loan agreements or secure new debt facilities with the net
proceeds of future debt and equity offerings, we cannot assure you that we will be able to do so at an interest
rate or on terms that are acceptable to us or at all. If we are not able to refinance these amounts with the net
proceeds of debt and equity offerings at an interest rate or on terms acceptable to us or at all, we will have
to dedicate a portion of our cash flow from operations to pay the principal and interest of this indebtedness.
If we are not able to satisfy these obligations, we may have to undertake alternative financing plans. The
actual or perceived credit quality of our charterers, any defaults by them, and the market value of our fleet,
among other things, may materially affect our ability to obtain alternative financing. In addition, debt service
payments under our loan agreements or alternative financing may limit funds otherwise available for
working capital, capital expenditures, the payment of dividends and other purposes. If we are unable to meet
our debt obligations, or if we otherwise default under our loan agreements or an alternative financing
arrangement, our lenders could declare the debt, together with accrued interest and fees, to be immediately
due and payable and foreclose on our fleet, which could result in the acceleration of other indebtedness that
we may have at such time and the commencement of similar foreclosure proceedings by other lenders.

Because we will generate all of our revenues in US dollars but will incur a significant portion of our
expenses in other currencies, exchange rate fluctuations could have an adverse impact on our results of
operations.
We will generate all of our revenues in US dollars but we expect that portions of our future expenses will be
incurred in currencies other than the US dollar. This difference could lead to fluctuations in net profit due to
changes in the value of the US dollar relative to the other currencies, in particular the Euro. Expenses
incurred in foreign currencies against which the US dollar falls in value can increase, decreasing our
revenues. For example, between the beginning of January and the end of September 2007, the value of the
US dollar declined by 6.59% as compared to the Euro. Further declines in the value of the US dollar could
lead to higher expenses payable by us.

HM Revenue & Customs in the UK may determine that we are resident in the UK for the purposes of UK
corporation tax.
The Company is incorporated in accordance with the laws of Jersey. It is our intention that we are and should
remain centrally managed and controlled in Greece at all times through HSC’s established branch in Greece
(although at Admission the Board will have two UK citizens one of whom, our Chairman, is a UK resident
as non-executive directors) and that we should never be or become resident in the UK for the purposes of
UK corporation tax. A company which is resident in the UK for UK corporation tax purposes will be subject
to UK corporation tax on its world-wide income profits and chargeable gains. Were HM Revenue & Customs
in the UK to determine that the Company is resident in the UK for the purposes of UK corporation tax, this
could adversely affect the Company’s financial condition and results of operations.

Our tax exempt status may be subject to challenge.
The Company is incorporated in Jersey and has been granted tax exempt status in this jurisdiction. The
Directors intend to maintain this status for as long as such status is available. Should any tax authority
challenge the status the Directors intend to defend our tax position. However, a successful challenge may
result in our profits being subject to applicable tax which may be at a higher rate than under our current
status.

Legislation has been adopted by the States of Jersey which will, on and from 1 January 2009, introduce a
standard rate of corporation tax of 0% applicable to all companies (other than any “financial services
company” (as defined therein) and certain specified Jersey utility companies). As at the date of this
document, the Company is neither a “financial services company” nor such a specified utility company.




                                                      78
Risks relating to the Placing
Following the Placing, our current largest Shareholders may effectively control the outcome of matters
on which our Shareholders are entitled to vote and have specific powers to appoint members of the Board
and have significant influence over board decisions.
Faith, Corpus, Pandinia and Bedat who will in aggregate hold approximately 72.3% of the Enlarged Issued
Share Capital may effectively control the outcome of matters on which our Shareholders are entitled to vote,
including the election of directors and other significant corporate actions. In particular, investors should note
that under Jersey law the majority required to pass a special resolution of Shareholders is two-thirds of such
Shareholders as (being entitled to do so) vote in person or, where proxies are allowed, by proxy. Under the
provisions of the Relationship Agreements (further details of which are contained in section 13.2 of Part IX
of this document) and the Articles (further details of which are contained in section 4.2.13 of Part IX of this
document), the FK Group and the KK Group have rights (depending on the level of their shareholdings) to
appoint Directors to the Board and for such Directors to hold certain executive positions. As a result, the
Controlling Shareholders have significant influence over the Board.

Sales of substantial amounts of Ordinary Shares in the future may adversely affect our share price which
may also be volatile for other reasons.
We are unable to predict whether substantial amounts of our Ordinary Shares in addition to those which will
be available in the Placing will be sold in the open market following the termination of the lock-in
arrangements (further details of which are contained in section 4 of Part III of this document). Any sales of
substantial amounts of our Ordinary Shares in the public market, or the perception that such sales might
occur, could materially and adversely affect the market price of our Ordinary Shares.

There has been no prior public trading in our Ordinary Shares and share price may be subject to wide
fluctuations.
Prior to Admission, there has been no public trading market for our Ordinary Shares. The Placing Price has
been agreed between us and Jefferies and may not be indicative of the market price for Ordinary Shares
following Admission. The trading price of Ordinary Shares may be subject to wide fluctuations in response
to many factors, including those referred to in this Part IV as well as stock market fluctuations and general
economic conditions or changes in political sentiment that may adversely affect the market price of our
Ordinary Shares, regardless of our actual performance or conditions in our key markets.

We may be exposed to foreign jurisdiction taxation.
Our operations and activities and those of our subsidiaries in jurisdictions outside the jurisdictions in which
they are incorporated could expose us to income taxes outside their jurisdictions of incorporation which may
substantially adversely affect our business, financial condition and prospects. This will depend, in part, on
the nature of our income and operations in these jurisdictions (carried on by employees or service providers
on our behalf). There can be no guarantee that the activities of employees, officers, service providers and/or
agents (including our operating subsidiaries) will not expose us to income taxes in foreign jurisdictions on
part or all of our income which could have a material adverse effect on our business, financial condition,
prospects and ability to pay dividends. However, it is the intention of the Directors to conduct our affairs so
that the central management and control of the Company is not exercised in the UK and so that we do not
carry out any trade in the UK (whether or not through a permanent establishment situated there). On this
basis, we should not be resident in the UK for taxation purposes, or liable for UK taxation on its income and
gains (other than certain income deriving from a UK source).

The City Code will not apply to the Company and therefore Shareholders may not receive the protections
provided by the City Code in the event of a takeover offer for the Company.
The City Code will not apply to the Company and therefore, a takeover of the Company will not be regulated
by the UK takeover authorities. The Articles will, from Admission, contain certain takeover protections
which seek to replicate many of the protections available under the City Code, although these will not
provide the full protections of the City Code. The relevant provisions of the Articles are summarised in
section 4 of Part IX of this document.



                                                       79
                                                         PART V

                          SELECTED FINANCIAL INFORMATION
The table below sets out the Company’s summary financial information and operating data for the three
years ended 31 December 2006 and the six month periods ended 30 June 2006 and 30 June 2007. The
selected financial information has been extracted without material adjustment from Part VI “Financial
information” for the three years ended 31 December 2006 and Part VII “Unaudited interim financial
information” for the six month periods ended 30 June 2006 and 30 June 2007 and has been prepared in
accordance with IFRS. As this is only a summary, investors are advised to read the whole of this document
and not rely solely on the information summarised below.

SELECTED FINANCIAL INFORMATION
                                                As at and        As at and         As at and         As at and        As at and
                                                    for the          for the           for the          for the          for the
                                             period ended     period ended      period ended          6 month          6 month
                                             31 December      31 December       31 December      period ended     period ended
                                                      2004             2005              2006    30 June 2006     30 June 2007
                                                  (audited)        (audited)         (audited)     (unaudited)      (unaudited)
                                                                        (in thousands of US dollars)
Income Statement Data:
Revenue                                            12,437           13,235           15,102             5,982           12,792
Voyage expenses                                      (768)            (534)            (876)             (291)            (643)
Vessels operating expenses                         (3,078)          (2,952)          (4,102)           (1,711)          (2,539)
Management fees payable to
   a related party                                   (400)             (400)            (523)            (220)            (300)
Other income                                           13               147              110               41               55
EBITDA                                              8,204             9,496            9,711            3,801            9,365
Depreciation                                       (1,148)           (1,145)          (2,109)            (726)          (1,362)
Depreciation of dry docking costs                    (514)             (595)            (603)            (286)            (228)
Operating profit before finance costs               6,542             7,756            6,999            2,789            7,775
Interest expense                                     (384)             (743)          (1,720)            (616)            (945)
Interest income                                        50                63              108               83              122
Foreign exchange losses                               (53)              (15)             (26)              18                –
Profit for the period                               6,155             7,061            5,361            2,274            6,952

Balance Sheet Data:
                                                ––––––––         ––––––––         ––––––––          ––––––––         ––––––––
Total assets                                       27,505           28,509           47,243               NA            47,561
Long-term debt, net of
  unamortised arrangement fees                     11,415           19,390           30,285               NA            28,494
Total sharholders’ equity                          14,664            8,525           15,686               NA            17,438

Cash Flow Data:
                                                ––––––––         ––––––––         ––––––––          ––––––––         ––––––––
Net cash flow from operating activities             8,798             5,190           10,587            2,438            7,190
Net cash flow used in investing activities         (1,169)               63          (21,508)         (21,533)             122
Net cash flow from financing activities            (5,154)           (5,876)          10,886           18,998           (7,918)




                                                              80
OPERATING DATA
The following information is unaudited
                                                 As at and       As at and       As at and        As at and        As at and
                                                    for the         for the         for the          for the          for the
                                              period ended    period ended    period ended         6 month          6 month
                                              31 December     31 December     31 December     period ended     period ended
                                                      2004            2005            2006    30 June 2006     30 June 2007
Fleet Data:
Average number of vessels(1)                           2.0             2.0              2.6             2.2              3.0
Ownership days(2)                                     732             730              950             398              543
Operating days                                         670             729             923             371              543
Number of vessels at end of period                       2               2                3               3                3
Weighted average age of fleet (in years)(3)           11.8            12.8            13.8            13.3             14.3
Fleet utilisation(4)                                99.1%           99.9%            100%            100%             100%
Average Daily Results:
Average daily vessel operating
  expenses (US dollars)(5)                           4,205           4,044           4,318            4,299            4,676
Time charter equivalent (TCE)
  rate (US dollars)(6)                              17,262          17,399          15,413          15,340           22,374

Notes:
(1)      Average number of vessels is the number of vessels that constituted our fleet for the relevant period,
         as measured by the sum of the number of days each vessel was a part of our fleet during the period
         divided by the number of calendar days in the period.

(2)      Ownership days are the aggregate number of days in a period during which each vessel in our fleet
         has been owned by us.

(3)      We calculate the average age of the fleet by aggregating the individual age of each vesssel in the fleet
         at the period and weighted by each vessel’s deadwight tonnage in proportion to the deadweight
         tonnage of the whole fleet at the period end.

(4)      We calculate fleet utilisation by dividing the number of our operating days during a period by the
         number of our available days during the period. The shipping industry uses fleet utilisation to
         measure a company’s efficiency in finding suitable employment for its vessels and minimising the
         amount of days that its vessels are off-hire for reasons other than scheduled repairs or repairs under
         guarantee, vessel upgrades, special surveys or vessel positioning. Operating days are the number of
         available days in a period less the aggregate number of days that our vessels are off-hire due to any
         reason, including unforeseen circumstances. The shipping industry uses operating days to measure
         the aggregate number of days in a period during which vessels actually generate revenues.

(5)      Average daily vessel operating expenses, which include crew wages and related costs, the cost of
         insurance, expenses relating to repairs and maintenance, the costs of spares and consumable stores,
         tonnage taxes and other miscellaneous expenses, are calculated by dividing vessel operating expenses
         by ownership days for the relevant period.

(6)      TCE rates are defined as our time and voyage charter revenues less voyage expenses during a period
         divided by the number of our available days during the period, which is consistent with industry
         standards. Voyage expenses include port charges, bunker (fuel oil and diesel oil) expenses, canal
         charges and commissions. TCE rate is a standard shipping industry performance measure used
         primarily to compare daily earnings generated by vessels on time charters with daily earnings
         generated by vessels on voyage charters, because charter hire rates for vessels on voyage charters are
         generally not expressed in per day amounts while charter hire rates for vessels on time charters are
         generally expressed in such amounts. The following table reflects the calculation of our TCE rates for
         the periods presented in respect of our continuing operations.




                                                              81
                                        As at and        As at and        As at and         As at and        As at and
                                            for the          for the          for the          for the          for the
                                     period ended     period ended     period ended          6 month          6 month
                                     31 December      31 December      31 December      period ended     period ended
                                              2004             2005             2006    30 June 2006     30 June 2007
                                          (audited)        (audited)        (audited)     (unaudited)      (unaudited)
                                                 (in thousands of US dollars, except for TCE rates which
                                                      are expressed in US dollars, and availabe days)
Time charter revenues                      12,437           13,235           15,102            5,982           12,792
Less: voyage expenses                        (768)            (534)            (876)            (291)            (643)
Time charter equivalent revenues           11,669           12,701           14,226            5,691           12,149
Available days(1)                             676              730              923              371              543
Time charter equivalent (TCE) rate         17,262           17,399           15,413           15,340           22,374

Note:
(1) Available days are the number of our ownership days less the aggregate number of days that our vessels
    are off-hire due to scheduled repairs or repairs under guarantee, vessel upgrades or special surveys and
    the aggregate amount of time that we spend positioning our vessels. The shipping industry uses available
    days to measure the number of days in a period during which vessels should be capable of generating
    revenues.




                                                      82
                                                 PART VI

                                 FINANCIAL INFORMATION                                                             AnnI(19)
                                                                                                                   AnnI(20.1)
                                                                                                                   AnnI(20.3)

COMBINED FINANCIAL INFORMATION                                                                                     AnnI(2.1)

For the years ended 31 December 2004, 2005 and 2006                                                                AnnI(20.4.1)
                                                                                                                   AnnIII(10.2)
Set out below is the full text of a report received from Ernst & Young (Hellas) Certified Auditors –
                                                                                                                   AnnI(5.2.1)
Accountants S.A., the reporting accountants, on the financial information.
                                                                                                                   AnnI(5.2.2)
                                                                                                                   AnnIII(10.2)




The Directors                                                                              27 November 2007
Hellenic Carriers Limited
Walker House
28-34 Hill Street
St Helier
Jersey JE4 8PN

Dear Sirs

HELLENIC CARRIERS LIMITED

We report on the financial information set out in Part VI of the Admission Document issued by Hellenic
Carriers Limited on the date of this letter (“AIM Admission Document”). This financial information relates
to those companies which are to become subsidiaries of Hellenic Carriers Limited as a result of the
Reorganisation (namely, HSC, Patmos, Thasos, Nestos, Arkadia and Vergina, together the “Hellenic
Business”) and has been prepared for inclusion in the AIM Admission Document dated 27 November 2007
of Hellenic Carriers Limited on the basis of the accounting policies set out in notes 1 and 2 to the financial
information. This report is required by Schedule Two of the AIM Rules for Companies and is given for the
purpose of complying with that schedule and for no other purpose.

Save for any responsibility arising under Schedule Two of the AIM Rules for Companies to any person as
and to the extent there provided, to the fullest extent permitted by law we do not assume any responsibility
and will not accept any liability to any other person for any loss suffered by any such other person as a result
of, arising out of, or in connection with this report or our statement, required by and given solely for the
purposes of complying with Schedule Two of the AIM Rules for Companies, consenting to its inclusion in
the AIM Admission Document.

Responsibilities
The Directors of Hellenic Carriers Limited are responsible for preparing the financial information on the
basis of preparation set out in notes 1 and 2 to the financial information.

It is our responsibility to form an opinion as to whether the financial information gives a true and fair view,
for the purposes of the AIM Admission Document, and to report our opinion to you.

Basis of opinion
We conducted our work in accordance with Standards for Investment Reporting issued by the Auditing
Practices Board in the United Kingdom. Our work included an assessment of evidence relevant to the
amounts and disclosures in the financial information. It also included an assessment of significant estimates
and judgments made by those responsible for the preparation of the financial information and whether the



                                                      83
accounting policies are appropriate to the entity’s circumstances, consistently applied and adequately
disclosed.

We planned and performed our work so as to obtain all the information and explanations which we
considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the
financial information is free from material misstatement whether caused by fraud or other irregularity or
error.

Our work has not been carried out in accordance with auditing or other standards and practices generally
accepted in other jurisdictions and accordingly should not be relied upon as if it had been carried out in
accordance with those standards and practices.

Opinion
In our opinion, the financial information gives, for the purposes of the AIM Admission Document dated
27 November 2007, a true and fair view of the combined state of affairs of the Hellenic Business as at the
date stated and of its combined profits, cash flows and changes in equity for the years then ended in
accordance with the basis of preparation set out in notes 1 and 2 to the financial information.

Declaration
For the purposes of Paragraph (a) of Schedule Two of the AIM Rules for Companies we are responsible for
this report as part of the AIM Admission Document and declare that we have taken all reasonable care to
ensure that the information contained in this report is, to the best of our knowledge, in accordance with the
facts and contains no omission likely to affect its import. This declaration is included in the AIM Admission
Document in compliance with Schedule Two of the AIM Rules for Companies.

Yours faithfully


Ernst & Young (Hellas) Certified Auditors – Accountants S.A.




                                                     84
COMBINED INCOME STATEMENTS
For the years ended 31 December 2004, 2005 and 2006

                                                                           Year ended 31 December
                                                                  2004               2005          2006
                                                  Notes        US$’000            US$’000       US$’000
Revenue                                                          12,437           13,235         15,102
                                                              ––––––––         ––––––––       ––––––––
Expenses and other income
Voyage expenses                                       3            (768)            (523)          (832)
Voyage expenses – related party                   3, 16               –              (11)           (44)
Vessel operating expenses                             3          (3,078)          (2,952)        (4,102)
Management fees – related party                      16            (400)            (400)          (523)
Depreciation                                          6          (1,148)          (1,145)        (2,109)
Depreciation of dry-docking costs                     6            (514)            (595)          (603)
Other income                                                         13              147            110
                                                              ––––––––         ––––––––       ––––––––
Operating profit                                                  6,542            7,756          6,999
Finance expense                                         4          (384)            (743)        (1,720)
Finance income                                                       50               63            108
Foreign currency loss, net                                          (53)             (15)           (26)
                                                              ––––––––         ––––––––       ––––––––
                                                                   (387)            (695)        (1,638)
Profit for the year                                               6,155            7,061          5,361
                                                              ––––––––         ––––––––       ––––––––




The accompanying notes are an integral part of the combined financial information.




                                                   85
COMBINED BALANCE SHEETS
As at 31 December 2004, 2005 and 2006

                                                                               31 December
                                                                  2004             2005          2006
                                                  Notes        US$’000          US$’000       US$’000
ASSETS
Non-current assets
Vessels                                                 6        20,706          18,966         37,870
                                                              ––––––––        ––––––––       ––––––––
                                                                 20,706          18,966         37,870
                                                              ––––––––        ––––––––       ––––––––
Current assets
Inventories                                                         114              86            206
Trade receivables                                     7              18             367            147
Due from related parties                             16             897          4,136          3,870
Prepaid expenses and other assets                     8             245              52             60
Restricted cash                                      11               –               –            223
Cash and cash equivalents                            10          5,525           4,902          4,867
                                                              ––––––––        ––––––––       ––––––––
                                                                  6,799           9,543          9,373
                                                              ––––––––        ––––––––       ––––––––
TOTAL ASSETS                                                    27,505          28,509         47,243

EQUITY AND LIABILITIES
                                                              ––––––––        ––––––––       ––––––––
Equity attributable to shareholders of
Hellenic Carriers Limited
Capital contributions                                12           8,326          8,326         15,326
Retained earnings                                                 6,338             199            360
                                                              ––––––––        ––––––––       ––––––––
Total equity                                                     14,664           8,525         15,686
                                                              ––––––––        ––––––––       ––––––––
Non-current liabilities
Long-term debt                                       13           9,649          16,924         26,702
Other non current liabilities                         9               –               –             32
                                                              ––––––––        ––––––––       ––––––––
                                                                  9,649          16,924         26,734
                                                              ––––––––        ––––––––       ––––––––
Current liabilities
Trade payables                                                      918             333            564
Current portion of long-term debt                    13           1,766           2,466          3,583
Accrued liabilities and other payables               14              75             179            316
Deferred revenue                                                    433              82            360
                                                              ––––––––        ––––––––       ––––––––
                                                                  3,192           3,060          4,823
                                                              ––––––––        ––––––––       ––––––––
Total Liabilities                                                12,841          19,984         31,557
                                                              ––––––––        ––––––––       ––––––––
TOTAL EQUITY AND LIABILITIES                                    27,505          28,509         47,243
                                                              ––––––––        ––––––––       ––––––––



The accompanying notes are an integral part of the combined financial information.




                                                   86
COMBINED STATEMENTS OF CHANGES IN EQUITY
For the years ended 31 December 2004, 2005 and 2006

                                                                 Capital        Retained       Total
                                                           contributions        earnings      equity
                                                               US$’000          US$’000     US$’000
At 1 January 2004                                                8,326            3,183       11,509
Profit for the year                                                   –           6,155        6,155
Dividends to equity shareholders                                      –          (3,000)      (3,000)
                                                              ––––––––        ––––––––     ––––––––
At 31 December 2004                                              8,326            6,338       14,664
Profit for the year                                                   –           7,061        7,061
Dividends to equity shareholders                                      –         (13,200)     (13,200)
                                                              ––––––––        ––––––––     ––––––––
At 31 December 2005                                              8,326              199        8,525
Profit for the year                                                   –           5,361        5,361
Shareholders’ contributions                                       7,000               –        7,000
Dividends to equity shareholders                                      –          (5,200)      (5,200)
                                                              ––––––––        ––––––––     ––––––––
At 31 December 2006                                             15,326              360       15,686
                                                              ––––––––        ––––––––     ––––––––




The accompanying notes are an integral part of the combined financial information.




                                                   87
COMBINED CASH FLOW STATEMENTS
For the years ended 31 December 2004, 2005 and 2006

                                                                          Year ended 31 December
                                                                      2004          2005        2006
                                                          Notes    US$’000       US$’000    US$’000
Operating activities
Profit for the year                                                   6,155          7,061        5,361
                                                                  ––––––––       ––––––––      ––––––––
Adjustments to reconcile profit to net cash
flows from operations:
Depreciation                                                          1,148          1,145         2,109
Depreciation of dry-docking costs                                       514            595           603
Finance expense                                                         384            743        1,720
Finance income                                                          (50)           (63)         (108)
Foreign currency loss, net                                               53             15            26
                                                                  ––––––––       ––––––––      ––––––––
                                                                      8,204          9,496         9,711
(Increase)/decrease in inventories                                       (2)            28          (120)
(Increase)/decrease in trade receivables and
   prepaid expenses                                                    (201)           (156)        212
(Increase)/decrease in due from related parties                         (59)         (3,239)        266
Increase/(decrease) in trade payables and accrued
   liabilities and other payables                                       530           (588)          241
Increase/(decrease) in deferred revenue                                 326           (351)          277
                                                                  ––––––––       ––––––––      ––––––––
Net cash flows from operating activities                              8,798          5,190        10,587
Investing activities
Acquisition/improvement of vessels                                        –             –        (20,760)
Dry-docking costs                                                    (1,219)            –           (856)
Interest received                                                        50            63            108
                                                                  ––––––––       ––––––––      ––––––––
Net cash flows (used in)/from investing activities                   (1,169)           63        (21,508)
Financing activities
Proceeds from issue of long -term debt                                    –         15,971       13,955
Repayment of long-term debt                                          (1,790)        (8,020)       (3,075)
Restricted cash                                                           –              –          (223)
Interest paid                                                          (364)          (627)       (1,571)
Shareholders’ contributions                                               –              –         7,000
Dividends paid                                                       (3,000)       (13,200)       (5,200)
                                                                  ––––––––       ––––––––      ––––––––
Net cash flows (used in)/provided by financing
activities                                                           (5,154)        (5,876)      10,886
Net increase/(decrease) in cash and cash equivalents                  2,475           (623)          (35)
                                                                  ––––––––       ––––––––      ––––––––
Cash and cash equivalents at 1 January                                3,050          5,525         4,902

Cash and cash equivalents at 31 December                    10
                                                                  –––––––– –––––––– ––––––––
                                                                      5,525          4,902         4,867
                                                                  –––––––– –––––––– ––––––––


The accompanying notes are an integral part of the combined financial information.




                                                     88
NOTES TO THE COMBINED FINANCIAL INFORMATION
(amounts in thousands of US dollars)

1.    Formation, Basis of Presentation and General Information
Hellenic Carriers Limited (the “Company”) was incorporated under the laws of Jersey on 26 September
2007. Pursuant to a reorganisation agreement it will become, immediately prior to Admission to AIM, the
holding company for six companies (altogether the “Contributed Companies”). These companies are HSC,
five vessel owning companies, Patmos, Thasos, Nestos and Arkadia and Vergina, a company established to
serve as a vessel owning company of M/V Aegean Hawk (to be renamed M/V Konstantinos D), expected to
be delivered between 1 March and 30 April 2008. Prior to the reorganisation, the Company and the
Contributed Companies were wholly owned by Faith, Corpus and Bedat who in turn are wholly owned by
Ms. Fotini Karamanlis and Mr. Konstantinos Karamanlis, respectively. Ms. Fotini Karamanlis and Mr.
Konstantinos Karamanlis are siblings acting together in such a manner so as to collectively control all
entities. The reorganisation involves the contribution of Faith, Corpus and Bedat’s shares in the Contributed
Companies to the Company, in exchange for Ordinary Shares of the Company.

HSC was incorporated under the laws of the Marshall Islands on 17 September 2007 to serve as the
management company of the vessel owning companies.

Following the reorganisation, the Contributed Companies will be wholly owned subsidiaries of the
Company. Faith, Corpus and Bedat will jointly be the Company’s controlling parties and Ms. Fotini
Karamanlis and Mr. Konstantinos Karamanlis will be jointly the ultimate controlling parties of the Company.

Prior to the Admission Date, the Company did not control any of the Contributed Companies and
consequently the Company is not permitted by IAS27, “Consolidated and Separate Financial Statements”,
to present consolidated financial information. Accordingly the financial information, which has been
prepared specifically for the purpose of the admission document, is prepared on a basis that combines the
results and assets and liabilities of the Contributed Companies (together “the Combined Entity”) by applying
the principles underlying the consolidation procedures of IAS27 for each of the three years to 31 December
2004, 2005, 2006 and as at those dates. Internal transactions within the Combined Entity have been
eliminated on combination.

The combined financial information has been prepared in accordance with the requirements of Schedule Two
of the AIM Rules for Companies and in accordance with this basis of preparation. The basis of preparation
describes how the financial information has been prepared in accordance with International Financial
Reporting Standards as adopted by the European Union (IFRSs as adopted by the EU) except as described
below.

IFRSs as adopted by the EU, do not provide for the preparation of combined financial information, and
accordingly in preparing the combined financial information certain accounting conventions commonly used
for the preparation of historical financial information for inclusion in admission documents as described in
the Annexure to SIR 2000 (Investment Reporting Standard applicable to public reporting engagements on
historical financial information) issued by the UK Auditing Practices Board have been applied. The
application of these conventions results in the following material departures from IFRSs as adopted by the
EU. In other respects IFRSs as adopted by the EU have been applied.

•     As explained above, the historical financial information is prepared on a combined basis and therefore
      does not comply with the requirements of IAS 27.

•     Earnings per share is not disclosed as required by IAS 33, Earnings per share as the historical financial
      information has been prepared on a combined basis, rather than a legal consolidation.

•     The combined financial information does not constitute a set of general purpose financial statements
      under paragraph 3 of IAS 1 and consequently there is no explicit and unreserved statement of
      compliance with IFRS as contemplated by paragraph 14 of IAS 1.




                                                     89
The address of the registered office of the Company is Walker House, 28-34 Hill Street, St. Helier, JE4 8PN,
Jersey. The address of the principal office of the Company is 51 Akti Miaouli, Piraeus, Greece.

The annual combined financial information was authorised for issue in accordance with a resolution of the
Board of Directors on 9 November 2007.

The combined financial information includes the accounts of the following companies:

                                         Country of                    Date of
Company                                  Incorporation                 Incorporation             Activity
Hellenic Shipmanagement
Corporation                              Marshall Islands              17 September 2007         Management Company

Vessel Owning                            Country of                    Vessel Delivery
Company                                  Incorporation                 Date                      Vessel Owned
Patmos Shipping Company Ltd.             Malta                         27 March 2002             M/V Hellenic Sea
Thasos Shipping Company Ltd.             Malta                         14 July 2003              M/V Hellenic Sky
Nestos Shipping Corp.                    Liberia but                   25 May 2006               M/V Hellenic Breeze
                                         redomiciled to the
                                         Marshall Islands
Arkadia Maritime Corp.                   Liberia but                   8 November 2007           M/V Hellenic Horizon
                                         redomiciled to the
                                         Marshall Islands
Vergina Shipping Limited                 Marshall Islands              (1)                       (1)
(1) On 10 October 2007, Vergina Shipping Limited entered into an agreement for the purchase of the dry bulk vessel M/V Aegean
    Hawk (to be renamed M/V Konstantinos D). The vessel is expected to be delivered in March or April 2008.

The principal business of the Combined Entity is the ownership and operation of a fleet of dry bulk vessels,
providing maritime services for the transportation of dry cargo products on a worldwide basis. The
Combined Entity conducts its operations through its vessel owning companies.

2.     Summary of significant accounting policies
(a)    Basis of preparation: The combined financial information has been prepared on a historical cost
       basis, except for derivative financial instruments which are presented at fair values. The Combined
       Entity has applied IFRS 1 First Time Adoption of International Financial Reporting Standards for the
       preparation of this financial information, and has therefore applied the same accounting policies
       which comply with each IFRS effective at 31 December 2006 throughout all periods presented. The
       Combined Entity did not present financial information for previous periods. The combined financial
       information is presented in US dollars and all financial values are rounded to the nearest thousand
       (US$000).

(b)    Basis of Combination: The combined financial information comprises the financial information of
       the Contributed Companies on a basis that combines the results and assets and liabilities of the
       Combined Entities by applying consolidation principles. The individual financial information of the
       Contributed Companies is prepared in accordance with IFRS and adopted by the European Union
       (“EU”), for the same reporting date, and using consistent accounting policies. All material internal
       balances and transactions have been eliminated on combination.

(c)    Business combinations between companies under common control: Business combinations between
       companies under common control are excluded from the scope of IFRS 3 and are accounted for in a
       manner akin to a pooling of interest.

(d)    Use of Estimates: The preparation of combined financial information requires management to make
       estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of
       contingent assets and liabilities at the date of the combined financial information and the reported
       amounts of revenues and expenses during the year. Actual results could differ from those estimates.



                                                             90
      The estimates and assumptions that have the most significant effect on the amounts recognised in the
      combined financial information, are estimations in relation to useful lives of vessels (vessels have a
      carrying amount of US$20,706, US$18,966 and US$37,870 as at 31 December 2004, 2005 and 2006,
      respectively) and provision for doubtful trade receivables (trade receivables have a carrying amount
      of US$18, US$367 and US$147 as at 31 December 2004, 2005 and 2006, respectively).

(e)   Revenues and Related Expenses: The Combined Entity generates its revenues from charterers for the
      charter hire of its vessels. Vessels are chartered using time charters, where a contract is entered into
      for the use of a vessel for a specific period of time and a specified daily charter hire rate. If a time
      charter agreement exists and collection of the related revenue is reasonably assured, revenue is
      recognised on a straight line basis over the period of the time charter. Such revenues are treated in
      accordance with IAS 17 as lease income as explained in note 2 (v) below. Associated voyage
      expenses, which primarily consist of commissions, are recognised on a pro-rata basis over the
      duration of the period of the time charter.

      Deferred revenue relates to cash received prior to the balance sheet date and is related to revenue
      earned after such date. Deferred revenue also includes the value ascribed to time charter agreements
      assumed upon the purchase of a vessel, if any. This ascribed amount is amortised over the remaining
      term of the time charter and the amortised portion for the period is included in revenue for the period.

      Vessel voyage expenses primarily consisting of port, canal and bunker expenses that are unique to a
      particular charter and are paid for by the charterer under time charter arrangements or by the
      Combined Entity under voyage charter arrangements. Furthermore, voyage expenses include
      commission on income. This commission is paid by the Combined Entity. The Combined Entity
      defers bunker expenses under voyage charter agreements and amortises them over the related voyage
      charter to the extent revenue has been recognised. Port and canal costs are accounted for on an actual
      basis. Other operating expenses are accounted on an accrual basis.

(f)   Foreign Currency Translation: The functional currency of the Combined Entity is the US dollar,
      which is also the presentation currency of the Combined Entity, because the Combined Entity’s
      vessels operate in international shipping markets, whereby the US dollar is the currency used for
      transactions. Transactions involving other currencies during the year are converted into US dollars
      using the exchange rates in effect at the time of the transactions. At the balance sheet dates, monetary
      assets and liabilities, which are denominated in currencies other than the US dollar, are translated into
      the functional currency using the year-end exchange rate. Gains or losses resulting from foreign
      currency transactions are included in foreign currency gain or loss in the combined income
      statements.

(g)   Cash and Cash Equivalents: The Combined Entity considers highly liquid investments such as time
      deposits and certificates of deposit with an original maturity of three months or less to be cash
      equivalents.

(h)   Restricted Cash: Certain of the Combined Entity’s loan agreements require the Combined Entity to
      deposit funds into a loan retention account in the name of the borrower. The amount deposited is
      equivalent to the monthly portion of the next principal and interest payment. The amount is not freely
      available to the Combined Entity, and it is used for repaying interest and principal on the loan.

(i)   Inventories: Inventories consist of lubricants and victualling and are stated at the lower of cost or net
      realisable value. Cost is determined by the first-in first-out method. Since all vessels were under time-
      charter agreements no inventory of bunkers is shown as of 31 December 2004, 2005 and 2006.

(j)   Trade Receivables: The amount shown as trade receivables at each balance sheet date includes
      estimated recoveries from charterers for hire, freight and demurrage billings, net of an allowance for
      doubtful accounts. Trade receivables are recognised and carried at the lower of their original invoiced
      value and recoverable amount. At each balance sheet date, all potentially uncollectible accounts are
      assessed individually for the purpose of determining the appropriate allowance for doubtful accounts.




                                                     91
(k)   Insurance Claims: The Combined Entity recognises insurance claim recoveries for insured losses
      incurred on damage to vessels. Insurance claim recoveries are recorded, net of any deductible
      amounts, at the time the Combined Entity’s vessels suffer insured damages, if the Combined Entity
      can make a reliable estimate of the amount to be reimbursed following the insurance claim and the
      amounts are virtually certain to be received. Claims are submitted to the insurance company, which
      may increase or decrease the claim amount. Such adjustments are recorded in the year they become
      known and have not been material to the combined financial position or results of operation in the
      years ended 31 December 2004, 2005 and 2006.

(l)   Vessels: The vessels are stated at cost, net of accumulated depreciation and any accumulated
      impairment loss. Vessel cost consists of the contract price for the vessel and any material costs
      incurred upon acquisition of the vessel (initial repairs, improvements, delivery costs and other direct
      costs to prepare the vessel for its initial voyage). Subsequent costs for major improvements are also
      capitalised when the recognition criteria are met. The cost of each of the Combined Entity’s vessels
      is depreciated beginning when the vessel is ready for its intended use, on a straight-line basis over the
      vessels’ remaining economic useful life, after considering the estimated residual value. Management
      estimates the useful life of new vessels at 25 years, which is consistent with industry practice.
      Acquired second-hand vessels are depreciated from the date of their acquisition over their remaining
      estimated useful life. The remaining useful life of the Combined Entity’s vessels is between 10 and
      13 years. A vessel is derecognised upon disposal or when no future economic benefits are expected
      from its use. Any gain or loss arising on derecognition of the vessel (calculated as the difference
      between the net disposal proceeds and the carrying amount of the vessel) is included in the combined
      income statement in the year the vessel is derecognised.

      From time to time the Combined Entity’s vessels are required to be dry-docked for inspection and re-
      licensing at which time major repairs and maintenance that cannot be performed while the vessels are
      in operation are generally performed. When each dry-dock is performed the Combined Entity
      recognises the costs associated with dry-docking in the carrying amount of the vessel as a replacement
      and depreciates these costs on a straight-line basis over the year until the next scheduled dry-docking,
      generally 2.5 years. In the cases whereby the dry-docking takes place earlier than 2.5 years since the
      previous one, the carrying amount of the previous dry-docking is derecognised. In the event of a
      vessel sale, the respective carrying values of dry-docking costs are written-off at the time of sale.

      At the date of acquisition of a second-hand vessel, management estimates the cost of a future similar
      inspection and uses this as an indication of the existing inspection component cost to be depreciated
      on a straight-line basis over the remaining period to the estimated dry-docking date.

(m)   Impairment of vessels: The Combined Entity’s vessels are reviewed for impairment in accordance
      with IAS 36, “Impairment of Assets.” Under IAS 36, the Combined Entity assesses at each reporting
      date whether there is an indication that a vessel may be impaired. If such an indication exists, the
      Combined Entity makes an estimate of the vessel’s recoverable amount. Any impairment loss of the
      vessel is assessed by comparison of the carrying amount of the asset to its recoverable amount.
      Recoverable amount is the higher of the vessel’s fair value less costs to sell and its value in use.

      If the recoverable amount is less than the carrying amount of the vessel, the asset is considered
      impaired and an impairment loss is recognised equal to the amount required to reduce the carrying
      amount of the vessel to its then recoverable amount. Fair value of the vessels is determined by
      independent marine appraisers. If on receipt of valuation from the independent marine appraiser, an
      impairment is indicated, the Combined Entity then proceeds to calculate the vessels’ value in use.

      The value in use calculation is made at the individual vessel level since separately identifiable cash
      flow information is available for each vessel. In developing estimates of future cash flows, the
      Combined Entity makes assumptions about future charter rates, vessel operating expenses, and the
      estimated remaining useful lives of the vessels. These assumptions are based on historical trends as
      well as future expectations. The Combined Entity regularly reviews its vessels for impairment on a
      vessel by vessel basis. No impairment loss was recognised by the Combined Entity for the years ended
      31 December 2004, 2005 and 2006.


                                                     92
(n)   Long-term debt: Long-term debt is initially recognised at the fair value of the consideration received
      net of issue costs directly attributable to the borrowing. After initial recognition, long-term debt is
      subsequently measured at amortised cost using the effective interest rate method. Amortised cost is
      calculated by taking into account any issue costs, and any discount or premium on settlement.

      Gains and losses are recognised in net profit or loss when the liabilities are derecognised or impaired,
      as well as through the amortization process.

(o)   Borrowing costs: The borrowing costs are expensed to the income statement, except for borrowing
      costs on loans specifically used to finance the construction, or reconstruction of vessels which are
      capitalised during the construction period.

(p)   Derivative financial instruments and hedging. The Combined Entity uses derivative financial
      instruments such as interest rate swaps to hedge its risks associated with interest rate fluctuations.
      Such derivative financial instruments are initially recognised at fair value on the date on which a
      derivative contract is entered into and are subsequently remeasured at fair value. Derivatives are
      carried as assets when the fair value is positive and as liabilities when the fair value is negative.

      The fair value of interest rate swap contracts is determined by reference to market values for similar
      instruments.

      Any gains or losses arising from changes in the fair value of derivatives that do not qualify for hedge
      accounting are taken to the income statement.

(q)   Segment Reporting: The Combined Entity reports financial information and evaluates its operations
      by charter revenues and not, for example, by (i) the length of ship employment for its customers, i.e.
      spot or time charters; or (ii) type of vessel. Management, including the chief operating decision maker,
      reviews operating results solely by revenue per day and operating results of the fleet and thus the
      Combined Entity has determined that it operates under one reportable segment. Furthermore, when
      the Combined Entity charters a vessel to a charterer, the charterer is free to trade the vessel worldwide
      and, as a result, the disclosure of geographic information is impracticable.

(r)   Provisions and Contingencies: Provisions are recognised when the Combined Entity has a present
      legal or constructive obligation as a result of past events, it is probable that an outflow of resources
      embodying economic resources will be required to settle the obligation, and a reliable estimate of the
      amount of the obligation can be made. Provisions are reviewed at each balance sheet date and adjusted
      to reflect the present value of the expenditure expected to be required to settle the obligation.
      Contingent liabilities are not recognised in the financial information but are disclosed unless the
      possibility of an outflow of resources embodying economic benefits is remote. Contingent assets are
      not recognised in the financial information but are disclosed when an inflow of economic benefits is
      probable.

(s)   Offsetting of Financial Assets and Liabilities
      Financial assets and liabilities are offset and the net amount is presented in the balance sheet only
      when the Combined Entity has a legally enforceable right to set off the recognised amounts and
      intends either to settle such asset and liability on a net basis or to realise the asset and settle the
      liability simultaneously.

(t)   Derecognition of Financial Assets and Liabilities

      (i)    Financial assets
             A financial asset (or, where applicable a part of a financial asset or part of a group of similar
             financial assets) is derecognised where:

             •      the rights to receive cash flows from the asset have expired;




                                                     93
             •      the Combined Entity retains the right to receive cash flows from the asset, but have
                    assumed an obligation to pay them in full without material delay to a third party under
                    a “pass-through” arrangement; or

             •      the Combined Entity has transferred their rights to receive cash flows from the asset and
                    either (a) have transferred substantially all the risks and rewards of the assets, or (b) have
                    neither transferred nor retained substantially all the risks and rewards of the asset, but
                    has transferred control of the asset.

             Where the Combined Entity has transferred its rights to receive cash flows from an asset and
             has neither transferred nor retained substantially all the risks and rewards of the asset nor
             transferred control of the asset, the asset is recognised to the extent of the Combined Entity’s
             continuing involvement in the asset. Continuing involvement that takes the form of a guarantee
             over the transferred asset is measured at the lower of the original carrying amount of the asset
             and the maximum amount of consideration that the Combined Entity could be required to
             repay.

      (ii)   Financial liabilities
             A financial liability is derecognised when the obligation under the liability is discharged or
             cancelled or expires. Where an existing financial liability is replaced by another from the same
             lender on substantially different terms, or the terms of an existing liability are substantially
             modified, such an exchange or modification is treated as a derecognition of the original liability
             and the recognition of a new liability, and the difference in the respective carrying amounts is
             recognised in profit or loss.

(u)   Leases – where the Combined Entity is the lessee
      Leases where a significant portion of the risks and rewards of ownership are retained by the lessor are
      classified as operating leases. Payments made under operating leases are charged to the combined
      income statement on a straight-line basis over the period of the lease.

(v)   Leases – where the Combined Entity is the lessor
      Leases of vessels where the Combined Entity does not transfer substantially all the risks and benefits
      of ownership of the vessel are classified as operating leases. Lease income on operating leases is
      recognised on a straight line basis over the lease term. Contingent rents are recognised as revenue in
      the period in which they are earned.

(w)   IFRS and IFRIC Interpretations not yet effective: The Combined Entity has not applied the
      following IFRS and IFRIC Interpretations that have been issued but are not yet effective:

      –      IFRS 7, Financial Instruments: Disclosures, and a complementary amendment to IAS 1,
             Presentation of Financial Statements – Capital Disclosures (effective for financial years
             beginning on or after 1 January 2007). The Combined Entity assessed the impact of IFRS 7
             and the amendment to IAS 1 and concluded that the main additional disclosures will be the
             sensitivity analysis to market risk and the capital.

      -      IAS 23, Borrowing Costs – revised (effective for financial years beginning on or after
             1 January 2009). It is not expected to affect the combined financial position. This Standard has
             not yet been endorsed by the EU.

      -      IAS 1, Presentation of financial statements – revised (effective for financial years beginning
             on or after 1 January 2009). It is not expected to affect the combined financial position. This
             Standard has not yet been endorsed by the EU.

      -      IFRS 8, Operating Segments (effective for financial years beginning on or after 1 January
             2009). It is not relevant to the Combined Entity’s operations. This Standard has not yet been
             endorsed by the EU.


                                                      94
      -     IFRIC 7, Applying the Restatement Approach under IAS 29 Financial Reporting in
            Hyperinflationary Economies (effective for financial years beginning on or after 1 March
            2006). It is not relevant to the Combined Entity’s operations.

      -     IFRIC 8, Scope of IFRS 2 (effective for financial years beginning on or after 1 May 2006). It
            is not relevant to the Combined Entity’s operations.

      -     IFRIC 9, Reassessment of Embedded Derivatives (effective for financial years beginning on
            or after 1 June 2006). It is not relevant to the Combined Entity’s operations.

      -     IFRIC 10, Interim Financial Reporting and Impairment (effective for financial years
            beginning on or after 1 November 2006). It is not expected to affect the combined financial
            position.

      -     IFRIC 11, IFRS 2-Group and Treasury Share Transactions (effective for financial years
            beginning on or after 1 March 2007). It is not relevant to the Combined Entity’s operations.

      -     IFRIC 12, Service Concession Arrangements (effective for financial years beginning on or
            after 1 January 2008). It is not relevant to the Combined Entity’s operations. This
            Interpretation has not yet been endorsed by the EU.

      -     IFRIC 13, Customer Loyalty Programs (effective for financial years beginning on or after 1
            July 2008). It is not relevant to the Combined Entity’s operations. This Interpretation has not
            yet been endorsed by the EU.

      -     IFRIC 14, The limit on a defined benefit asset, minimum funding requirements and their
            interaction (effective for financial years beginning on or after 1 January 2008). It is not
            relevant to the Combined Entity’s operations. This Interpretation has not yet been endorsed by
            the EU.

3.    Voyage & vessel operating expenses
The amounts in the accompanying combined income statement are analysed as follows:

Voyage expenses
                                                                          Year ended 31 December
                                                                   2004             2005         2006
                                                                US$’000         US$’000       US$’000
Voyage expenses                                                     768             523              832
Voyage expenses – related party                                       –              11               44
                                                               ––––––––        ––––––––         ––––––––
                                                                    768             534              876

Voyage expenses consist of:
                                                               ––––––––        ––––––––         ––––––––
Port charges                                                         88              34               43
Bunkers (fuel costs)                                                 58            (185)              26
Commissions                                                         622             685              807
                                                               ––––––––        ––––––––         ––––––––
Total voyage expenses:                                              768             534              876
                                                               ––––––––        ––––––––         ––––––––




                                                   95
Vessel operating expenses
                                                                     Year ended 31 December
                                                                2004           2005         2006
                                                             US$’000       US$’000       US$’000
Vessel Operating Expenses
Crew wages and related costs                                    1,301          1,247           1,509
Other crew expenses                                               175             132             174
Deck stores                                                        63              37              68
Crew victualling                                                   99              99             125
Repairs & maintenance                                             231             235             349
Spares                                                            229             215             275
Engine stores                                                     101              33              73
Lubricants                                                        215             220             459
Insurance                                                         408             433             558
Other operating expenses                                          245             284             497
Taxes (other than income tax)                                      11              17              15
                                                            ––––––––        ––––––––        ––––––––
Total vessel operating expenses:                                3,078           2,952           4,102
                                                            ––––––––        ––––––––        ––––––––
4.      Finance Expense
The amounts in the accompanying combined income statement are analysed as follows:

                                                                        Year ended 31 December
                                                                2004              2005         2006
                                                             US$’000          US$’000       US$’000
Interest payable on long-term borrowings                         373             719           1,673
Amortisation of debt discount                                     11              24               15
Loss on fair value of derivatives                                  –               –               32
                                                            ––––––––        ––––––––        ––––––––
Total                                                            384             743            1,720
                                                            ––––––––        ––––––––        ––––––––
5.      Dividends declared
Dividends declared and paid for each of the financial years ended 31 December 2004, 2005 and 2006 were
US$3,000, US$13,200 and US$5,200, respectively.




                                                 96
6.      Vessels
Vessels consisted of the following at 31 December:

                                                                   2004             2005             2006
                                                                US$’000          US$’000          US$’000
Vessel Cost, excluding dry-docking component
At 1 January                                                      21,987           21,987           21,987
Additions                                                              –                –          20,760
                                                               ––––––––         ––––––––         ––––––––
At 31 December                                                    21,987           21,987           42,747
                                                               ––––––––         ––––––––         ––––––––
Accumulated Depreciation
At 1 January                                                      (1,137)          (2,285)          (3,430)
Depreciation charge for the year                                  (1,148)          (1,145)          (2,109)
                                                               ––––––––         ––––––––         ––––––––
Accumulated depreciation                                          (2,285)          (3,430)          (5,539)
                                                               ––––––––         ––––––––         ––––––––
Net carrying amount of vessels, excluding dry
docking component                                                 19,702           18,557           37,208

Dry-docking component cost
At 1 January                                                         856            2,075            2,075
Additions                                                         1,219                 –              856
                                                               ––––––––         ––––––––         ––––––––
At 31 December                                                     2,075            2,075            2,931
                                                               ––––––––         ––––––––         ––––––––
Accumulated Depreciation
At 1 January                                                        (557)          (1,071)          (1,666)
Depreciation charge for the year                                    (514)            (595)            (603)
                                                               ––––––––         ––––––––         ––––––––
Accumulated depreciation                                          (1,071)          (1,666)          (2,269)
                                                               ––––––––         ––––––––         ––––––––
Net carrying amount of dry-docking component                       1,004              409              662

Net carrying amount of vessels at 1 January
                                                               ––––––––
                                                                  21,149
                                                                                ––––––––
                                                                                   20,706
                                                                                                 ––––––––
                                                                                                    18,966

Net carrying amount of vessels at 31 December
                                                               ––––––––
                                                                  20,706
                                                                                ––––––––
                                                                                   18,966
                                                                                                 ––––––––
                                                                                                    37,870
                                                               ––––––––         ––––––––         ––––––––
Acquisitions
On 25 May 2006, M/V Hellenic Breeze (ex. Rubin Energy) was acquired, a dry bulk vessel of 69,601 dwt
built in 1993 for US$21,000 (including US$240 of unamortised dry-docking component).

Vessel additions include the cost of acquisition of the vessels (net of unamortised dry-docking component).

7.      Trade receivables
                                                                                31 December
                                                                   2004             2005             2006
                                                                US$’000          US$’000          US$’000
Charterers                                                           18              367              147
                                                               ––––––––         ––––––––         ––––––––
Total                                                                18              367              147
                                                               ––––––––         ––––––––
The total balance of charterers as at 31 December 2006 was collected within January 2007.
                                                                                                 ––––––––




                                                     97
8.      Prepaid Expenses and other assets
                                                                                  31 December
                                                                     2004             2005             2006
                                                                  US$’000          US$’000          US$’000
Insurance claim                                                       186                –                –
Other                                                                  59               52               60
                                                                 ––––––––         ––––––––         ––––––––
Total                                                                 245               52               60
                                                                 ––––––––         ––––––––         ––––––––
9.      Other non-current liabilities
The amounts in the accompanying balance sheets at 31 December are analysed as follows:

                                                                     2004             2005             2006
                                                                  US$’000          US$’000          US$’000
Fair value of derivative instruments                                    –                –               32
                                                                 ––––––––         ––––––––         ––––––––
Variability can appear in floating rate assets, floating rate liabilities or from certain types of forecasted
transactions, and can arise from changes in interest rates or currency exchange rates. During 2006, the
Combined Entity entered into an interest rate swap for one of its bank loans representing approximately 44%
of its outstanding bank loans. The notional amount of this contract amounted to US$14 million. Under the
swap agreement, the Combined Entity exchanges variable to fixed interest rates for a period of two years
(May 2006 to May 2008) at 6.43%. The Combined Entity did not designate the swap agreement as an
accounting hedge and accordingly, gains or losses resulting from changes in the fair value of this derivative
instrument, which approximated US$32 loss for the year ended 31 December 2006, are recorded in finance
expense in the combined income statement. The fair value of the derivative financial instruments at
31 December 2006 (a liability of US$32), was included in other non-current liabilities in the accompanying
2006 combined balance sheets.

10.     Cash and cash equivalents
                                                                                  31 December
                                                                     2004             2005             2006
                                                                  US$’000          US$’000          US$’000
Cash at bank                                                         1,118            1,214            4,205
Short-term deposits                                                  4,407           3,688               662
                                                                 ––––––––         ––––––––         ––––––––
                                                                     5,525            4,902            4,867
                                                                 ––––––––         ––––––––         ––––––––
Cash at banks earns interest at floating rates based on daily bank deposit rates. Short-term deposits are made
for varying periods of between one day and three months, depending on the immediate cash requirements of
the Combined Entity, and earn interest at the respective short-term deposit rates. Interest earned during the
years ended 31 December 2004, 2005 and 2006 amounted to US$50, US$63 and US$108 and is included in
the accompanying combined income statements.

11.     Restricted Cash
                                                                     2004             2005             2006
                                                                  US$’000          US$’000          US$’000
Restricted cash                                                         –                –              223
                                                                 ––––––––         ––––––––         ––––––––
The restricted cash concerns the amounts held in bank accounts of the vessel owning companies that were
retained for the future instalment of Combined Entity’s loans. See also note 13.




                                                     98
12.    Capital contributions
Capital contributions represent the contribution of the Combined Entity’s shareholders to the acquisition of
the Combined Entity’s vessels.

13.    Long-term Debt
The amounts in the accompanying combined balance sheets are analysed as follows:
                                                                           31 December
                                                        2004                   2005                 2006
                                                       US$’000               US$’000              US$’000
Bank Loan                   Vessel(s)               Amount     Rate %     Amount    Rate %     Amount Rate %
a. Issued 31 July 2005,
   maturing 31 January
   2014                     M/V Hellenic Sky                              15,500    5.44%      13,500    6.40%
                                                          –         –
b. Issued 8 July 2003,
   maturing 08 July 2011    M/V Hellenic Sky         6,820      3.23%          –         –          –       –
c. Issued 29 March 2002,
   maturing 22 November
   2013                     M/V Hellenic Sea         4,625      3.36%      3,925    5.60%       3,550    6.35%
d. Issued 22 May 2006,
   maturing 24 November
   2013                     M/V Hellenic Breeze           –         –           –        –     13,300    6.43%
                                                  ––––––––              ––––––––             ––––––––
Total                                                11,445                19,425               30,350
Less: current portion                               (1,766)               (2,466)              (3,583)
Less: debt discount                                    (30)                  (35)                 (65)
                                                  ––––––––              ––––––––             ––––––––
Long-term portion                                     9,649                16,924               26,702
                                                  ––––––––              ––––––––             ––––––––
The upcoming repayment terms of loans with balances outstanding at 31 December 2006 are:

Loan a: This loan is repayable in seven quarterly instalments of US$450 each, thirteen quarterly instalments
of US$350 each and nine quarterly instalments of US$300, the first one being due on 31 January 2007 and
the final one being due on 31 January 2014 plus a balloon payment of US$3,100, being due on 31 January
2014. This loan was issued on 31 July 2005 partly in order to refinance loan b.

Loan c: This loan is repayable in twenty eight quarterly instalments of US$100 each, the first one being due
on 22 February 2007 and the final one being due on 22 November 2013, plus a balloon payment of US$750
being due on 22 November 2013.

Loan d: This loan is repayable by twenty eight quarterly instalments of US$350 each, the first one being due
on 22 February 2007 and the final one being due on 24 November 2013 along with a balloon payment of
US$3,500 being due on 24 November 2013.

All loans are denominated in US dollars. The bank loans denominated in US dollars bear interest at LIBOR
plus a margin payable quarterly.

During 2006, the Combined Entity entered into an interest rate swap for one of its loans. Under the swap
agreement, the Combined Entity exchanges variable to fixed interest rates at 6.43% (see also note 9).

All loans are secured by a first preferred mortgage on the respective vessel as well as general assignment of
the earnings, insurances and requisition compensation of the respective vessel. Loan d is also secured by the
second preferred mortgage on M/V Hellenic Sea. The Combined Entity’s weighted average borrowing
interest rate for the years ended 31 December 2004, 2005 and 2006 was 2.86%, 4.54% and 6.11%,
respectively. Total interest paid was US$364, US$627 and US$1,571 for the years ended 31 December 2004,
2005 and 2006 respectively.




                                                     99
The loan agreements contain covenants including restrictions as to changes in management and ownership
of the vessels, additional indebtedness and mortgaging of vessels without the bank’s prior consent, dividend
distributions without the bank’s prior consent, as well as minimum requirements regarding hull cover ratio.
The restricted net assets of the vessel-owning companies at 31 December 2006 consisted of restricted cash
US$223.

Hellenic Carriers Corporation S.A. – a related party providing a wide range of shipping managerial and
administrative services to the vessel owning companies (see note 16), has issued a corporate guarantee in
favour of the banks as a further security for the aforementioned loans.

14.   Accrued liabilities and other payables
The amounts in the accompanying balance sheets at 31 December are analysed as follows:

                                                                    2004             2005              2006
                                                                 US$’000          US$’000           US$’000
Accrued interest                                                      53              145              247
Accrual for insurances                                                17                –               13
Other payables                                                         5               34               56
                                                                ––––––––         ––––––––         ––––––––
                                                                      75              179              316
                                                                ––––––––         ––––––––         ––––––––
15.   Commitments and contingencies
Various claims, suits, and complaints, including those involving government regulations and product
liability, arise in the ordinary course of the shipping business. In addition, losses may arise from disputes
with charterers, agents, insurance providers and from other claims with suppliers relating to the operations
of the Combined Entity’s vessels. Currently, management is not aware of any such claims or contingent
liabilities, which should be disclosed, or for which a provision should be established in the combined
financial information.

Operating lease commitments – Combined Entity as lessor:
The Combined Entity has entered into time charter arrangements on some of its vessels. These arrangements
have remaining terms between 1 to 23 months as of 31 December 2006, 1 to 4 months as of 31 December
2005 and 7 to 11 months as of 31 December 2004.

Future minimum charters receivable upon time charter arrangements as at 31 December 2004, 2005 and
2006 are as follows (it is noted that the vessel off-hires and dry-docking days that could occur but are not
currently known are not taken into consideration; in addition early delivery of the vessels by the charterers
are not accounted for):

                                                                              31 December
                                                                    2004             2005              2006
                                                                 US$’000          US$’000           US$’000
Within one year                                                    12,123            2,057           12,919
After one year but not more than five years                             –                –            7,245
More than five years                                                    –                –                –
                                                                ––––––––         ––––––––         ––––––––
                                                                   12,123            2,057           20,164
                                                                ––––––––         ––––––––         ––––––––



                                                    100
16.     Related party transactions
Transactions with related parties consisted of the following for the year ended 31 December:

                                                                            31 December
                                                                   2004            2005             2006
                                                                US$’000         US$’000          US$’000
Voyage expenses – related party
Hellenic Carriers Corporation S.A.                                     –               11              44
Management fees – related party
Mantinia Shipping Company S.A.                                      200             128                –
Hellenic Carriers Corporation S.A.                                  200             272              523
                                                               ––––––––        ––––––––         ––––––––
                                                                    400             411              567
                                                               ––––––––
Balances due from related parties as at 31 December comprise the following:
                                                                               ––––––––         ––––––––
                                                                            31 December
                                                                   2004            2005             2006
                                                                US$’000         US$’000          US$’000
Due from related parties
Hellenic Carriers Corporation S.A.                                  897           4,136            3,870
                                                               ––––––––        ––––––––         ––––––––
Total                                                               897            4,136            3,870
                                                               ––––––––        ––––––––         ––––––––
Hellenic Carriers Corporation S.A.: All vessel-operating companies included in the combined financial
information have a management agreement with Hellenic Carriers Corporation S.A., a Liberian corporation
directly controlled by the same ultimate shareholders with the Company, whereby the latter provides in the
normal course of business, a wide range of shipping managerial and administrative services, such as
commercial operations, chartering, technical support and maintenance, engagement and provision of crew,
financial and accounting services and cash handling, in exchange for a management fee of US$16.67 per
vessel per month (US$200 per year).

The management agreement between Hellenic Carriers Corporation S.A. and one of the vessel owning
companies (Patmos Shipping Company Ltd.) was effected on 24 August 2005. Until that date, Patmos
Shipping Company Ltd. had a management agreement with Mantinia Shipping Company S.A., another
Liberian corporation directly controlled by the same ultimate shareholders with the Company, according to
which the latter provided in the normal course of business, the same wide range of shipping managerial and
administrative services, that were subsequently provided by Hellenic Carriers Corporation S.A., for a
management fee of US$16.67 per month (US$200 per year).

On 24 August 2005, the management agreement between Mantinia Shipping Company S.A. and Patmos
Shipping Company Ltd. was terminated and the latter entered into a new management agreement with
Hellenic Carriers Corporation with the same fee per year. In addition to the monthly management fee
Hellenic Carriers Corporation charges a commission equal to 0.5% of time and voyage revenues relating to
charters it organises.

Furthermore, as at 16 May 2006, Nestos Shipping Corp. signed a management agreement with Hellenic
Carriers Corporation S.A. which also included a term based on which Hellenic Carriers Corporation S.A.
charges a commission equal to 0.5% of time and voyage revenues relating to charters it organises. For the
years ended 31 December 2006, 31 December 2005 and 31 December 2004 commission charged by Hellenic
Carriers Corporation S.A. amounted to US$44, US$11 and nil, respectively and was included in Voyage
expenses-related party.

The Combined Entity did not employ any key management personnel over the years ended 31 December
2004, 2005 and 2006.




                                                   101
17.    Income Taxes
Under the laws of the respective jurisdictions of the combined companies, the Combined Entity is not subject
to tax on international shipping income, however, the combined companies are subject to registration and
tonnage taxes, which have been included in vessel operating expenses in the accompanying combined
income statement.

Pursuant to the United States Internal Revenue Code of 1986, as amended (the “Code”), US source income
derived by a foreign corporation from the international operation of ships generally is exempt from US tax
if the company operating the ships meets both of the following requirements: (a) the company is organised
in a foreign country that grants an equivalent exception to corporations organised in the United States and
(b) either (i) more than 50% of the value of the company’s shares is owned, directly or indirectly, by
individuals who are “residents” of the company’s country of organisation or of another foreign country that
grants an “equivalent exemption” to corporations organised in the United States (50% Ownership Test) or
(ii) the company’s shares are “primarily and regularly traded on an established securities market” in its
country of organisation, in another country that grants an “equivalent exemption” to United States
corporations, or in the United States (Publicly-Traded Test). Under the regulations, company’s shares will be
considered to be “regularly traded” on an established securities market if (i) one or more classes of its shares
representing more than 50% of its outstanding shares, by voting power and value, is listed on the market and
is traded on the market, other than in minimal quantities, on at least 60 days during the taxable year; and (ii)
the aggregate number of shares traded during the taxable year is at least 10% of the average number of shares
outstanding during the taxable year. Notwithstanding the foregoing, the regulations provide, in pertinent part,
that each class of the company’s shares will not be considered to be “regularly traded” on an established
securities market for any taxable year in which 50% or more of the vote and value of the outstanding shares
of such class are owned, actually or constructively under specified stock attribution rules, on more than half
the days during the taxable year by persons who each own 5% or more of the value of such class of the
company’s outstanding shares, (“5 Percent Override Rule”).

18.    Risk Management Objectives and Policies

Risk management objectives and policies
The Combined Entity’s principal financial instruments are bank loans. The main purpose of these financial
instruments is to finance the Combined Entity’s operations. The Combined Entity has various other financial
instruments such as cash and cash equivalents, restricted cash, trade receivables and trade payables, which
arise directly from its operations.

From time to time, the Combined Entity also uses derivative financial instruments, principally interest rate
swaps.

The main risks arising from the Combined Entity’s financial instruments are interest rate risk and credit risk.
The majority of the Combined Entity’s transactions are denominated in US dollars therefore its exposure to
foreign currency risk is minimal.

Cash flow interest rate risk
Cash flow interest rate risk arises from the possibility that changes in interest rates will affect the future cash
outflows of the Combined Entity’s long-term debt. The following table sets out the carrying amount by
maturity of the Combined Entity’s financial instruments that are exposed to interest rate risks. Figures are
stated gross of debt discount.




                                                       102
                                                                               31 December
                                                                      2004            2005              2006
                                                                   US$’000         US$’000           US$’000
Financial liabilities – term loans
Within 1 year                                                         1,775            2,475            3,600
1 to 2 years                                                          1,575            2,200            3,500
2 to 3 years                                                        1,327.5            2,100            3,200
3 to 4 years                                                         992.50            4,050            3,200
4 to 5 years                                                          3,150            1,400            3,200
more than 5 years                                                     2,625            7,200          13,650
                                                                  ––––––––         ––––––––         ––––––––
                                                                     11,445           19,425           30,350
                                                                  ––––––––         ––––––––
                                                                               31 December
                                                                                                    ––––––––
                                                                      2004            2005              2006
                                                                   US$’000         US$’000           US$’000
Interest rate swap – other non-current liabilities                       –               –                32
                                                                  ––––––––         ––––––––         ––––––––
Credit risk
The Combined Entity’s maximum exposure to credit risk in the event the counterparties fail to perform their
obligations as of 31 December 2006 in relation to each class of recognised financial assets, other than
derivatives, is the carrying amount of those assets as indicated in the combined balance sheet.

Concentration of Credit Risk
Financial instruments, which potentially subject the Combined Entity to significant concentrations of credit
risk, consist principally of cash and cash equivalents, and trade accounts receivables. The Combined Entity
places its cash and cash equivalents, consisting mostly of deposits, with financial institutions. The Combined
Entity performs annual evaluations of the relative credit standing of those financial institutions. Credit risk
with respect to trade accounts receivable is generally managed by the chartering of vessels to major trading
houses rather than to more speculative or undercapitalised entities. The vessels are normally chartered under
time-charter agreements where as per the industry practice the charterer pays for the transportation service
in advance, supporting the management of trade receivables.

Fair values of financial assets and financial liabilities
The historical cost carrying values of financial assets and financial liabilities in the combined balance sheet
approximate fair values as at 31 December 2004, 2005 and 2006.

Foreign currency risk
The majority of the Combined Entity’s transactions are denominated in US dollars therefore its exposure to
foreign currency risk from operations is minimal.

Liquidity risk
The Combined Entity aims to mitigate liquidity risk by managing cash generation by its operations, applying
cash collection targets throughout the Combined Entity. The vessels are normally chartered under time-
charter agreements where as per the industry practice the charterer pays for the transportation service in
advance, supporting the management of cash generation. Investment is carefully controlled, with
authorisation limits operating up to Combined Entity’s board level and cash payback periods applied as part
of the investment appraisal process. In this way the Combined Entity aims to maintain a good credit rating
to facilitate fund raising.

In its funding strategy, the Combined Entity’s objective is to maintain a balance between continuity of
funding and flexibility through the use of bank loans.




                                                     103
Excess cash used in managing liquidity is only invested in financial instruments exposed to insignificant risk
of changes in market value, being placed on interest-bearing deposit with maturities fixed at no more than
three months.

19.   Events after the balance sheet date
(a)   Placing and Admission: In September 2007, the Company commenced preparations for Placing and
      Admission in the United Kingdom. Following the completion of the initial public offering, it is
      expected that existing shareholders will own directly or indirectly approximately 72.3% of the
      Company’s outstanding share capital. The reorganisation described in note 1 will be effected
      immediately prior to Admission.

(b)   New vessel acquisitions: On 19 July 2007, Arkadia Maritime Corporation S.A. entered into a
      Memorandum of Agreement for the purchase of one handymax bulk carrier vessel. According to the
      purchase agreement the consideration for this vessel was agreed at US$39,500. An advance of
      US$3,950 was paid to the seller in July 2007 and the remaining amount was paid upon delivery of the
      vessel. The vessel was delivered to Arkadia Maritime Corporation S.A. in November 2007. The
      Memorandum of Agreement contains an attached charter party agreement with an unrelated third
      party at a daily rate of US$25.75.

      On 10 October 2007, Vergina entered into an agreement for the purchase of a dry bulk vessel M/V
      Aegean Hawk (to be renamed M/V Konstantinos D). The vessel is expected to be delivered according
      to the purchase agreement in March or April 2008. The consideration was agreed to be US$62,000.

(c)   New loan facility: On 6 November 2007, the Combined Entity entered into a new loan facility
      agreement for US$57,850. The new loan facility was made available for the purposes of (i)
      refinancing in full the existing indebtedness of Thasos in connection with the acquisition of the M/V
      Hellenic Sky, (ii) financing part of the acquisition of the M/V Hellenic Horizon and (iii) providing
      corporate liquidity. This facility will be repaid through 12 quarterly instalments of US$1,500 each, 17
      quarterly instalments of US$1,000 each, one instalment of US$1,155 and one balloon payment of
      US$15,495. Based on the loan agreement, US$6,200 will be repaid either immediately after the
      Company’s Admission or upon delivery of the M/V Aegean Hawk (to be renamed M/V Konstantinos
      D), whichever comes earlier.

(d)   New management agreements: Pursuant to new management agreements dated 26 October 2007
      between HSC and Mantinia Shipping Company S.A. a related party under common control with the
      Company, HSC sub-contracts certain of the ship management services it will provide to the vessel
      owning companies following the reorganisation to Mantinia Shipping Company S.A., for a monthly
      fee of US$19.2 per vessel.




                                                     104
                                                PART VII

             UNAUDITED INTERIM FINANCIAL INFORMATION                                                               AnnI(19)
                                                                                                                   AnnI(20.1)
                                                                                                                   AnnI(20.3)

               UNAUDITED INTERIM CONDENSED CONSOLIDATED                                                            AnnI(2.1)

 FINANCIAL INFORMATION FOR THE PERIODS ENDED 30 JUNE 2006 AND 30 JUNE 2007                                         AnnI(20.4.1)
                                                                                                                   AnnIII(10.2)
Set out below are the unaudited interim financial information for the periods ended 30 June 2006 and 2007,         AnnI(5.2.1)
and the review report from Ernst & Young (Hellas) Certified Auditors – Accountants S.A. thereon.                   AnnI(5.2.2)
                                                                                                                   AnnIII(10.2)




Report on Review of Interim Financial Information
The Directors
Hellenic Carriers Limited
Walker House
38-34 Hill Street
St. Helier
Jersey JE4 8PN

Introduction
We have reviewed the accompanying interim condensed combined balance sheet of the companies which are
to become subsidiaries of Hellenic Carriers Limited as a result of the reorganisation (namely HSC, Patmos,
Nestos, Thasos, Arkadia, Vergina – together the “Hellenic Business”) as at 30 June 2007 and the related
interim condensed combined statements of income, changes in equity and cash flows for the six-month
period then ended, and a summary of significant accounting policies and other explanatory notes (together
“the interim financial information”). Management is responsible for the preparation and fair presentation of
this interim financial information on the basis of preparation set out in notes 1 and 2 to the interim financial
information. Our responsibility is to express a conclusion on this interim condensed combined financial
information based on our review.

Save for any responsibility arising under Schedule Two of the AIM Rules for Companies to any person as
and to the extent there provided, to the fullest extent permitted by law we do not assume any responsibility
and will not accept any liability to any other person for any loss suffered by any such other person as a result
of, arising out of, or in connection with this report or our statement, required by and given solely for the
purposes of complying with Schedule Two of the AIM Rules for Companies, consenting to its inclusion in
the AIM admission document.

Scope of Review
We conducted our review in accordance with International Standard on Review Engagements 2410, “Review
of Interim Financial Information Performed by the Independent Auditor of the Entity.” A review of interim
financial information consists of making inquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review procedures. A review is substantially less in
scope than an audit conducted in accordance with International Standards on Auditing and consequently does
not enable us to obtain assurance that we would become aware of all significant matters that might be
identified in an audit. Accordingly, we do not express an audit opinion.




                                                      105
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the accompanying
interim condensed combined financial information does not present fairly, in all material respects, the
combined financial position of the Hellenic Business as at 30 June 2007, and of its combined financial
performance and its combined cash flows for the six-month period then ended in accordance with the basis
of preparation set out in notes 1 and 2 to the interim financial information.

Declaration
For the purposes of Paragraph (a) of Schedule Two of the AIM Rules for Companies we are responsible for
this report as part of the AIM admission document and declare that we have taken all reasonable care to
ensure that the information contained in this report is, to the best of our knowledge, in accordance with the
facts and contains no omission likely to affect its import. This declaration is included in the AIM admission
document in compliance with Schedule Two of the AIM Rules for Companies.

Ernst & Young (Hellas) Certified Auditors - Accountants S.A
27 November 2007




                                                    106
INTERIM CONDENSED COMBINED INCOME STATEMENT
FOR THE SIX MONTHS ENDED 30 JUNE 2007

                                                                           Period ended 30 June
                                                                             2006            2007
                                                                        (unaudited)    (unaudited)
                                                             Notes        US$’000        US$’000
Revenue                                                                     5,982          12,792
                                                                        ––––––––        ––––––––
Expenses and other income
Voyage expenses                                                  3           (276)           (599)
Voyage expenses – related party                                3,9            (15)            (44)
Vessel operating expenses                                        3         (1,711)         (2,539)
Management fees – related party                                  9           (220)           (300)
Depreciation                                                     4           (726)         (1,361)
Depreciation of dry-docking costs                                4           (286)           (228)
Other income                                                                   41              54
                                                                        ––––––––        ––––––––
Operating profit                                                            2,789           7,775
Finance expense                                                             (616)           (945)
Finance income                                                                83             122
Foreign currency gain, net                                                    18               –
                                                                        ––––––––        ––––––––
                                                                            (515)           (823)
Profit for the period                                                       2,274           6,952
                                                                        ––––––––        ––––––––
The accompanying condensed notes are an integral part of the interim condensed combined financial
information.




                                              107
INTERIM CONDENSED COMBINED BALANCE SHEET
AS AT 30 JUNE 2007

                                                                     31 December          30 June
                                                                            2006            2007
                                                                                       (unaudited)
                                                             Notes       US$’000         US$’000
ASSETS
Non-current assets
Vessels                                                          4         37,870          36,281
                                                                        ––––––––        ––––––––
                                                                           37,870          36,281
                                                                        ––––––––        ––––––––
Current assets
Inventories                                                                   206             306
Trade receivables                                                             147               –
Due from related parties                                         9          3,870           6,447
Prepaid expenses and other assets                                              60              80
Restricted cash                                                  6            223             186
Cash and cash equivalents                                        5          4,867           4,261
                                                                        ––––––––        ––––––––
                                                                            9,373          11,280
                                                                        ––––––––        ––––––––
TOTAL ASSETS                                                               47,243          47,561
                                                                        ––––––––
                                                                     31 December
                                                                                        ––––––––
                                                                                          30 June
                                                                            2006            2007
                                                                                       (unaudited)
                                                             Notes       US$’000         US$’000
EQUITY AND LIABILITIES
Equity attributable to shareholders
  of the Combined Entity
Capital contributions                                            7         15,326         15,326
Retained earnings                                                             360           2,112
                                                                        ––––––––        ––––––––
Total equity                                                               15,686          17,438
                                                                        ––––––––        ––––––––
Non-current liabilities
Long-term debt                                                   8         26,702         24,910
Other non current liabilities                                                  32              12
                                                                        ––––––––        ––––––––
                                                                           26,734          24,922
                                                                        ––––––––        ––––––––
Current liabilities
Trade payables                                                                564             745
Current portion of long-term debt                                8          3,583           3,584
Accrued liabilities and other payables                                        316             319
Deferred revenue                                                              360             553
                                                                        ––––––––        ––––––––
                                                                            4,823           5,201
                                                                        ––––––––        ––––––––
Total Liabilities                                                          31,557          30,123
                                                                        ––––––––        ––––––––
TOTAL EQUITY AND LIABILITIES                                               47,243          47,561
                                                                        ––––––––        ––––––––
The accompanying condensed notes are an integral part of the interim condensed combined financial
information.




                                              108
INTERIM CONDENSED COMBINED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2007

                                                            Capital      Retained           Total
                                                      contributions      earnings          equity
                                                          US$’000        US$’000         US$’000
At 31 December 2005                                          8,326            199           8,525
Profit for the period                                            –          2,274           2,274
Shareholders’ contributions                                  7,000              –           7,000
                                                         ––––––––       ––––––––        ––––––––
At 30 June 2006 (unaudited)                                 15,326          2,473          17,779

At 31 December 2006
                                                         ––––––––
                                                            15,326
                                                                        ––––––––
                                                                              360
                                                                                        ––––––––
                                                                                           15,686
Profit for the period                                            –          6,952           6,952
Dividends to equity shareholders                                 –         (5,200)         (5,200)
                                                         ––––––––       ––––––––        ––––––––
At 30 June 2007 (unaudited)                                 15,326          2,112          17,438
                                                         ––––––––       ––––––––        ––––––––
The accompanying condensed notes are an integral part of the interim condensed combined financial
information.




                                              109
INTERIM CONDENSED COMBINED CASH FLOW STATEMENT
FOR THE SIX MONTHS ENDED 30 JUNE 2007

                                                                           Period ended 30 June
                                                                             2006            2007
                                                                        (unaudited)    (unaudited)
                                                             Notes        US$’000        US$’000
Operating activities
Profit for the period                                                       2,274          6,952
                                                                        ––––––––        ––––––––
Adjustments to reconcile profit to net
  cash flows from operations:
Depreciation                                                                  726           1,361
Depreciation of dry-docking costs                                             286             228
Finance expense                                                               616             945
Finance income                                                                (83)           (122)
Foreign currency gain, net                                                    (18)              –
                                                                        ––––––––        ––––––––
                                                                            3,801           9,364
Increase in inventories                                                      (104)           (100)
Decrease in trade receivables and prepaid expenses                            310             127
Increase in due from related parties                                       (2,770)         (2,577)
Increase in trade payables and accrued liabilities
  and other payables                                                       1,101              182
Increase in deferred revenue                                                  100             194
                                                                        ––––––––        ––––––––
Net cash flows from operating activities                                    2,438           7,190
Investing activities
Acquisition/ improvement of vessels                                       (20,760)             –
Dry-docking costs                                                            (856)             –
Interest received                                                              83            122
                                                                        ––––––––        ––––––––
Net cash flows (used in)/from investing activities                        (21,533)           122
Financing activities
Proceeds from issue of long -term debt                                     13,955               –
Repayment of long-term debt                                                (1,175)         (1,800)
Restricted cash                                                              (244)             37
Interest paid                                                                (538)           (955)
Shareholders’ contributions                                                 7,000               –
Dividends paid                                                                  –          (5,200)
                                                                        ––––––––        ––––––––
Net cash flows provided by/(used in) financing activities                  18,998          (7,918)
Net decrease in cash and cash equivalents                                     (97)           (606)
                                                                        ––––––––        ––––––––
Cash and cash equivalents at 1 January                                      4,902           4,867

Cash and cash equivalents at 30 June                             5
                                                                        ––––––––
                                                                            4,805
                                                                                        ––––––––
                                                                                            4,261
                                                                        ––––––––        ––––––––
The accompanying condensed notes are an integral part of the interim condensed combined financial
information.




                                                     110
NOTES TO THE INTERIM CONDENSED COMBINED FINANCIAL INFORMATION
FOR THE SIX MONTHS ENDED 30 JUNE 2007
(Expressed in thousands of US dollars)

1.    Formation, Basis of Presentation and General Information
Hellenic Carriers Limited (the “Company”) was incorporated under the laws of Jersey on 26 September
2007. Pursuant to a reorganisation agreement it will become, immediately prior to Admission to AIM, the
holding company for six companies (altogether the “Contributed Companies”). These companies are HSC,
five vessel owning companies, Patmos, Thasos, Nestos, Arkadia and Vergina, a company established to serve
as a vessel owning company of M/V Aegean Hawk (to be renamed M/V Konstantinos D), expected to be
delivered between 1 March and 30 April 2008. Prior to the reorganisation, the Company and the Contributed
Companies were wholly owned by Faith, Corpus and Bedat who in turn are wholly owned by Ms. Fotini
Karamanlis and Mr. Konstantinos Karamanlis, respectively. Ms. Fotini Karamanlis and Mr. Konstantinos
Karamanlis are siblings acting together in such a manner so as to collectively control all entities. The
reorganisation involves the contribution of Faith, Corpus and Bedat shares in the Contributed Companies to
the Company, in exchange for Ordinary Shares.

HSC was incorporated under the laws of the Marshall Islands on 17 September 2007 to serve as the
management company of the vessel owning companies.

Following the reorganisation, the Contributed Companies will be wholly owned subsidiaries of the
Company. Faith, Corpus and Bedat will be jointly the Company’s controlling parties and Ms. Fotini
Karamanlis and Mr. Konstantinos Karamanlis will be jointly the ultimate controlling parties of the Company.

Prior to the Admission Date, the Company did not control any of the Contributed Companies and
consequently the Company is not permitted by IAS27, “Consolidated and Separate Financial Statements”,
to present consolidated financial information. Accordingly the interim financial information, which has been
prepared specifically for the purpose of the admission document, is prepared on a basis that combines the
interim results and assets and liabilities of the Contributed Companies (together “the Combined Entity”) by
applying the principles underlying the consolidation procedures of IAS27 for the six monthly period ended
30 June 2007 and as at that date. Internal transactions within the Combined Entity have been eliminated on
combination.

The combined financial information has been prepared in accordance with the requirements of Schedule Two
of the AIM Rules for Companies and in accordance with this basis of preparation. The basis of preparation
describes how the financial information has been prepared in accordance with IAS 34, “Interim Financial
Reporting” except as described below.

IAS 34, “Interim Financial Reporting”, does not provide for the preparation of combined financial
information, and accordingly in preparing the interim combined financial information certain accounting
conventions commonly used for the preparation of interim financial information for inclusion in admission
documents as described in the Annexure to SIR 2000 (Investment Reporting Standard applicable to public
reporting engagements on historical financial information) issued by the UK Auditing Practice Board, have
been applied. The application of these conventions results in the following material departures from
International Financial Reporting Standards as adopted by the European Union. In other respects IAS 34
“Interim Financial Reporting” has been applied.

•     As explained above, the interim financial information is prepared on a combined basis and therefore
      does not comply with the requirements of IAS 27.

•     Earnings per share is not disclosed as required by IAS 34 as the interim financial information has been
      prepared on a combined basis, rather than a legal consolidation.

•     For the reasons described above, there is no statement of compliance with IAS 34 as contemplated by
      paragraph 19 of IAS 34.

The address of the registered office of the Company is Walker House, 28-34 Hill Street,St. Helier, JE4 8PN,
Jersey. The Group’s business is conducted principally through HSC from 51 Akti Miaouli, Piraeus, Greece.


                                                    111
The interim condensed combined financial information was authorised for issue in accordance with a
resolution of the Board of Directors on 9 November 2007.

The interim condensed combined financial information include the interim accounts of the following
companies:

                                            Country of                  Date of
Company                                     Incorporation               Incorporation               Activity
Hellenic Shipmanagement Co.                 Marshall Islands            17 September 2007           Management Company

                                            Country of                  Vessel Delivery
Vessel Owning Company                       Incorporation               Date                        Vessel Owned
Patmos Shipping Company Ltd.               Malta                       27 March 2002                M/V Hellenic Sea
Thasos Shipping Company Ltd.               Malta                       14 July 2003                 M/V Hellenic Sky
Nestos Shipping Corp.                      Marshall Islands            25 May 2006                  M/V Hellenic Breeze
Arkadia Maritime Corp.                     Marshall Islands            8 November 2007              M/V Hellenic Horizon
Vergina Shipping Limited                   Marshall Islands            (1)                          (1)
(1) On 10 October 2007, Hellenic Carriers Corporation S.A. entered into an agreement for the purchase of the dry bulk vessel M/V
    Aegean Hawk (to be renamed M/V Konstantinos D) which was novated to Vergina. The vessel is expected to be delivered
    between 1 March and 30 April 2008.

The principal business of the Combined Entity is the ownership and operation of a fleet of dry bulk vessels,
providing maritime services for the transportation of dry cargo products on a worldwide basis. The
Combined Entity conducts its operations through its vessel owning companies.

2.     Summary of Significant Accounting Policies
(a)     Basis of Preparation: This interim financial information has been prepared on a historical cost basis,
        except for derivative financial instruments which are presented at fair values. The interim condensed
        financial information do not include all the information and disclosures required in the annual
        financial information, and should be read in conjunction with the Combined Entity’s annual financial
        information as at 31 December 2004, 2005 and 2006. The accounting policies adopted in the
        preparation of the interim condensed combined financial information are consistent with those
        followed in the preparation of the Combined Entity’s annual financial information for the year ended
        31 December 2006. The interim condensed combined financial information is presented in US dollars
        and all financial values are rounded to the nearest thousand (US $000) except when otherwise
        indicated.

(b)     Basis of Combination: The interim condensed combined financial information comprises the
        financial information of the Contributed Companies. The financial information of the Contributed
        Companies is prepared for the same reporting date, using consistent accounting policies. All material
        internal balances and transactions have been eliminated.

(c)     Business combinations between companies under common control: Business combinations between
        companies under common control are excluded from the scope of IFRS 3 and are accounted for in a
        manner akin to a pooling of interest.

(d)     Use of Estimates: The preparation of combined financial information requires management to make
        estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of
        contingent assets and liabilities at the date of the combined financial information and the reported
        amounts of revenues and expenses during the period. Actual results could differ from those estimates.

        The estimates and assumptions that have the most significant effect on the amounts recognised in the
        combined financial information, are estimations in relation to useful lives of vessels (vessels have a
        carrying amount of US$37,870 and US$36,281, as at 31 December 2006 and 30 June 2007,
        respectively) and provision for doubtful trade receivables (trade receivables have a carrying amount
        of US$147 and US$nil, as at 31 December 2006 and 30 June 2007, respectively).



                                                             112
(e)   Revenues and Related Expenses: The Combined Entity generates its revenues from charterers for the
      charter hire of its vessels. Vessels are chartered using time charters, where a contract is entered into
      for the use of a vessel for a specific period of time and a specified daily charter hire rate. If a time
      charter agreement exists and collection of the related revenue is reasonably assured, revenue is
      recognised on a straight line basis over the period of the time charter. Such revenues are treated in
      accordance with IAS 17 as lease income as explained in note 2 (v) below. Associated voyage
      expenses, which primarily consist of commissions, are recognised on a pro-rata basis over the
      duration of the period of the time charter.

      Deferred revenue relates to cash received prior to the balance sheet date and is related to revenue
      earned after such date. Deferred revenue also includes the value ascribed to time charter agreements
      assumed upon the purchase of a vessel, if any. This ascribed amount is amortised over the remaining
      term of the time charter and the amortised portion for the period is included in revenue for the period.

      Vessel voyage expenses primarily consisting of port, canal and bunker expenses that are unique to a
      particular charter and are paid for by the charterer under time charter arrangements or by the
      Combined Entity under voyage charter arrangements. Furthermore, voyage expenses include
      commission on income. This commission is paid by the Combined Entity. The Combined Entity
      defers bunker expenses under voyage charter agreements and amortises them over the related voyage
      charter to the extent revenue has been recognised. Port and canal costs are accounted for on an actual
      basis. Other operating expenses are accounted on an accrual basis.

(f)   Foreign Currency Translation: The functional currency of the Combined Entity is the US dollar,
      which is also the presentation currency of the Combined Entity, because the Combined Entity’s
      vessels operate in international shipping markets, whereby the US dollar is the currency used for
      transactions. Transactions involving other currencies during the period are converted into US dollars
      using the exchange rates in effect at the time of the transactions. At the balance sheet dates, monetary
      assets and liabilities, which are denominated in currencies other than the US dollar, are translated into
      the functional currency using the period-end exchange rate. Gains or losses resulting from foreign
      currency transactions are included in foreign currency gain or loss in the combined income
      statements.

(g)   Cash and Cash Equivalents: The Combined Entity considers highly liquid investments such as time
      deposits and certificates of deposit with an original maturity of three months or less to be cash
      equivalents.

(h)   Restricted Cash: Certain of the Combined Entity’s loan agreements require the Combined Entity to
      deposit funds into a loan retention account in the name of the borrower. The amount deposited is
      equivalent to the monthly portion of the next principal and interest payment. The amount is not freely
      available to the Combined Entity, and it is used for repaying interest and principal on the loan.

(i)   Inventories: Inventories consist of lubricants and victualling and are stated at the lower of cost or net
      realisable value. Cost is determined by the first-in first-out method. Since all vessels were under time-
      charter agreements no inventory of bunkers is shown as of 31 December 2006 and 30 June 2007.

(j)   Trade Receivables: The amount shown as trade receivables at each balance sheet date includes
      estimated recoveries from charterers for hire, freight and demurrage billings, net of an allowance for
      doubtful accounts. Trade receivables are recognised and carried at the lower of their original invoiced
      value and recoverable amount. At each balance sheet date, all potentially uncollectible accounts are
      assessed individually for the purpose of determining the appropriate allowance for doubtful accounts.

(k)   Insurance Claims: The Combined Entity recognises insurance claim recoveries for insured losses
      incurred on damage to vessels. Insurance claim recoveries are recorded, net of any deductible
      amounts, at the time the Combined Entity’s vessels suffer insured damages, if the Combined Entity
      can make a reliable estimate of the amount to be reimbursed following the insurance claim and the
      amounts are virtually certain to be received. Claims are submitted to the insurance company, which
      may increase or decrease the claim amount. Such adjustments are recorded in the period they become



                                                     113
      known and have not been material to the combined financial position or results of operation in the
      periods ended 30 June 2006 and 2007.

(l)   Vessels: The vessels are stated at cost, net of accumulated depreciation and any accumulated
      impairment loss. Vessel cost consists of the contract price for the vessel and any material costs
      incurred upon acquisition of the vessel (initial repairs, improvements, delivery costs and other direct
      costs to prepare the vessel for its initial voyage). Subsequent costs for major improvements are also
      capitalised when the recognition criteria are met. The cost of each of the Combined Entity’s vessels
      is depreciated beginning when the vessel is ready for its intended use, on a straight-line basis over the
      vessels’ remaining economic useful life, after considering the estimated residual value. Management
      estimates the useful life of new vessels at 25 years, which is consistent with industry practice.
      Acquired second-hand vessels are depreciated from the date of their acquisition over their remaining
      estimated useful life. The remaining useful life of the Combined Entity’s vessels is between 9 and
      12 years. A vessel is derecognised upon disposal or when no future economic benefits are expected
      from its use. Any gain or loss arising on derecognition of the vessel (calculated as the difference
      between the net disposal proceeds and the carrying amount of the vessel) is included in the combined
      income statement in the year the vessel is derecognised.

      From time to time the Combined Entity’s vessels are required to be dry-docked for inspection and re-
      licensing at which time major repairs and maintenance that cannot be performed while the vessels are
      in operation are generally performed. When each dry-dock is performed the Combined Entity
      recognises the costs associated with dry-docking in the carrying amount of the vessel as a replacement
      and depreciates these costs on a straight-line basis over the year until the next scheduled dry-docking,
      generally 2.5 years. In the cases whereby the dry-docking takes place earlier than 2.5 years since the
      previous one, the carrying amount of the previous dry-docking is derecognised. In the event of a
      vessel sale, the respective carrying values of dry-docking costs are written-off at the time of sale.

      At the date of acquisition of a second-hand vessel, management estimates the cost of a future similar
      inspection and uses this as an indication of the existing inspection component cost to be depreciated
      on a straight-line basis over the remaining period to the estimated dry-docking date.

(m)   Impairment of vessels: The Combined Entity’s vessels are reviewed for impairment in accordance
      with IAS 36, “Impairment of Assets.” Under IAS 36, the Combined Entity assesses at each reporting
      date whether there is an indication that a vessel may be impaired. If such an indication exists, the
      Combined Entity makes an estimate of the vessel’s recoverable amount. Any impairment loss of the
      vessel is assessed by comparison of the carrying amount of the asset to its recoverable amount.
      Recoverable amount is the higher of the vessel’s fair value less costs to sell and its value in use.

      If the recoverable amount is less than the carrying amount of the vessel, the asset is considered
      impaired and an impairment loss is recognised equal to the amount required to reduce the carrying
      amount of the vessel to its then recoverable amount. Fair value of the vessels is determined by
      independent marine appraisers. If on receipt of valuation from the independent marine appraiser, an
      impairment is indicated, the Combined Entity then proceeds to calculate the vessels’ value in use.

      The value in use calculation is made at the individual vessel level since separately identifiable cash
      flow information is available for each vessel. In developing estimates of future cash flows, the
      Combined Entity makes assumptions about future charter rates, vessel operating expenses, and the
      estimated remaining useful lives of the vessels. These assumptions are based on historical trends as
      well as future expectations. The Combined Entity regularly reviews its vessels for impairment on a
      vessel by vessel basis. No impairment loss was recognised by the Combined Entity for the periods
      ended 30 June 2006 and 2007.

(n)   Long-term debt: Long-term debt is initially recognised at the fair value of the consideration received
      net of issue costs directly attributable to the borrowing. After initial recognition, long-term debt is
      subsequently measured at amortised cost using the effective interest rate method. Amortised cost is
      calculated by taking into account any issue costs, and any discount or premium on settlement.




                                                     114
      Gains and losses are recognised in net profit or loss when the liabilities are derecognised or impaired,
      as well as through the amortization process.

(o)   Borrowing costs: The borrowing costs are expensed to the income statement, except for borrowing
      costs on loans specifically used to finance the construction, or reconstruction of vessels which are
      capitalised during the construction period.

(p)   Derivative financial instruments and hedging. The Combined Entity uses derivative financial
      instruments such as interest rate swaps to hedge its risks associated with interest rate fluctuations.
      Such derivative financial instruments are initially recognised at fair value on the date on which a
      derivative contract is entered into and are subsequently remeasured at fair value. Derivatives are
      carried as assets when the fair value is positive and as liabilities when the fair value is negative.

      The fair value of interest rate swap contracts is determined by reference to market values for similar
      instruments.

      Any gains or losses arising from changes in the fair value of derivatives that do not qualify for hedge
      accounting are taken to the income statement.

(q)   Segment Reporting: The Combined Entity reports financial information and evaluates its operations
      by charter revenues and not, for example, by (i) the length of ship employment for its customers, i.e.
      spot or time charters; or (ii) type of vessel. Management, including the chief operating decision maker,
      reviews operating results solely by revenue per day and operating results of the fleet and thus the
      Combined Entity has determined that it operates under one reportable segment. Furthermore, when
      the Combined Entity charters a vessel to a charterer, the charterer is free to trade the vessel worldwide
      and, as a result, the disclosure of geographic information is impracticable.

(r)   Provisions and Contingencies: Provisions are recognised when the Combined Entity has a present
      legal or constructive obligation as a result of past events, it is probable that an outflow of resources
      embodying economic resources will be required to settle the obligation, and a reliable estimate of the
      amount of the obligation can be made. Provisions are reviewed at each balance sheet date and adjusted
      to reflect the present value of the expenditure expected to be required to settle the obligation.
      Contingent liabilities are not recognised in the financial information but are disclosed unless the
      possibility of an outflow of resources embodying economic benefits is remote. Contingent assets are
      not recognised in the financial information but are disclosed when an inflow of economic benefits is
      probable.

(s)   Offsetting of Financial Assets and Liabilities: Financial assets and liabilities are offset and the net
      amount is presented in the balance sheet only when the Combined Entity has a legally enforceable
      right to set off the recognised amounts and intends either to settle such asset and liability on a net basis
      or to realise the asset and settle the liability simultaneously.

(t)   Derecognition of Financial Assets and Liabilities:

      (i)    Financial assets

             A financial asset (or, where applicable a part of a financial asset or part of a group of similar
             financial assets) is derecognised where:

             •      the rights to receive cash flows from the asset have expired;

             •      the Combined Entity retains the right to receive cash flows from the asset, but have
                    assumed an obligation to pay them in full without material delay to a third party under
                    a “pass-through” arrangement; or

             •      the Combined Entity has transferred their rights to receive cash flows from the asset and
                    either (a) have transferred substantially all the risks and rewards of the assets, or (b) have
                    neither transferred nor retained substantially all the risks and rewards of the asset, but
                    has transferred control of the asset.


                                                      115
             Where the Combined Entity has transferred its rights to receive cash flows from an asset and
             have neither transferred nor retained substantially all the risks and rewards of the asset nor
             transferred control of the asset, the asset is recognised to the extent of the Combined Entity’s
             continuing involvement in the asset. Continuing involvement that takes the form of a guarantee
             over the transferred asset is measured at the lower of the original carrying amount of the asset
             and the maximum amount of consideration that the Combined Entity could be required to
             repay.

      (ii)   Financial liabilities

             A financial liability is derecognised when the obligation under the liability is discharged or
             cancelled or expires. Where an existing financial liability is replaced by another from the same
             lender on substantially different terms, or the terms of an existing liability are substantially
             modified, such an exchange or modification is treated as a derecognition of the original liability
             and the recognition of a new liability, and the difference in the respective carrying amounts is
             recognised in profit or loss.

(u)   Leases – where the Combined Entity is the lessee: Leases where a significant portion of the risks and
      rewards of ownership are retained by the lessor are classified as operating leases. Payments made
      under operating leases are charged to the combined income statement on a straight-line basis over the
      period of the lease.

(v)   Leases – where the Combined Entity is the lessor: Leases of vessels where the Combined Entity does
      not transfer substantially all the risks and benefits of ownership of the vessel are classified as
      operating leases. Lease income on operating leases is recognised on a straight line basis over the lease
      term. Contingent rents are recognised as revenue in the period in which they are earned.

(w)   IFRS and IFRIC Interpretations that became effective in the year ended 31 December 2007: The
      following Standards and Interpretations became effective within the year ended 31 December 2007.
      None of the Standards and Interpretations had an impact in the interim condensed combined financial
      information for the six months ended 30 June 2007.

      •      IFRS 7, Financial Instruments: Disclosures, and a complementary amendment to IAS 1,
             Presentation of Financial Statements – Capital Disclosures (effective for financial years
             beginning on or after 1 January 2007). The Combined Entity assessed the impact of IFRS 7
             and the amendment to IAS 1 and concluded that additional disclosures will be required in the
             combined financial information for the year ending 31 December 2007, which will be the
             sensitivity analysis to market risk and the capital.




                                                     116
3.    Voyage & vessel operating expenses
The amounts in the accompanying combined income statement are analysed as follows:

Voyage expenses
                                                                             Period ended 30 June
                                                                               2006           2007
                                                                            US$’000        US$’000
Voyage expenses                                                                 276           599
Voyage expenses– related party                                                   15            44
                                                                           ––––––––      ––––––––
                                                                                291           643

Voyage expenses consist of:
                                                                           ––––––––      ––––––––
Port charges                                                                     68            18
Bunkers (fuel costs)                                                            (99)          (62)
Commissions                                                                     322           687
                                                                           ––––––––      ––––––––
Total voyage expenses:                                                          291           643
                                                                           ––––––––      ––––––––
Vessel operating expenses
                                                                             Period ended 30 June
                                                                               2006           2007
                                                                            US$’000        US$’000
Vessel Operating Expenses
Crew wages and related costs                                                     645           980
Other crew expenses                                                               79           139
Deck stores                                                                      109           194
Crew victualling                                                                  41            71
Repairs & maintenance                                                             61            33
Spares                                                                            69           249
Engine stores                                                                     19            34
Lubricants                                                                       146           282
Insurance                                                                        237           324
Other operating expenses                                                         301           219
Taxes (other than income tax)                                                      4            14
                                                                           ––––––––      ––––––––
Total vessel operating expenses:                                               1,711         2,539
                                                                           ––––––––      ––––––––




                                                117
4.    Vessels
Vessels consisted of the following at 30 June:
                                                                               30 June 2006     30 June 2007
                                                                                   US$’000          US$’000
Vessel Cost, excluding dry-docking component
At 1 January                                                                        21,987           42,747
Additions                                                                           20,760                 –
                                                                                  ––––––––         ––––––––
At 30 June                                                                           42,747           42,747
                                                                                  ––––––––         ––––––––
Accumulated Depreciation
At 1 January                                                                         (3,430)          (5,539)
Depreciation charge for the period                                                     (726)          (1,361)
                                                                                  ––––––––         ––––––––
Accumulated depreciation                                                             (4,156)          (6,900)
                                                                                  ––––––––         ––––––––
Net carrying amount of vessels, excluding
  dry docking component                                                              38,591           35,847
Dry-docking component cost
At 1 January                                                                         2,075            2,931
Additions                                                                               856                –
                                                                                  ––––––––         ––––––––
At 30 June                                                                            2,931            2,931
                                                                                  ––––––––         ––––––––
Accumulated Depreciation
At 1 January                                                                         (1,666)          (2,269)
Depreciation charge for the period                                                     (286)            (228)
                                                                                  ––––––––         ––––––––
Accumulated depreciation                                                             (1,952)          (2,497)
                                                                                  ––––––––         ––––––––
Net carrying amount of dry-docking component                                            979              434
Net carrying amount of vessels as at 1 January                                       18,966           37,870

Net carrying amount of vessels as at 30 June
                                                                                  ––––––––
                                                                                     39,570
                                                                                                   ––––––––
                                                                                                      36,281
                                                                                  ––––––––         ––––––––
5.    Cash and cash equivalents
                                                                         31 December 2006       30 June 2007
                                                                                 US$’000            US$’000
                                                                                                  (unaudited)
Cash at bank                                                                         4,205            3,541
Short-term deposits                                                                     662              720
                                                                                  ––––––––         ––––––––
                                                                                      4,867            4,261
                                                                                  ––––––––         ––––––––
Cash at banks earns interest at floating rates based on daily bank deposit rates. Short-term deposits are made
for varying periods of between one day and three months, depending on the immediate cash requirements of
the Combined Entity, and earn interest at the respective short-term deposit rates. Interest earned during the
six month period ended 30 June 2006 and 2007, amounted to US$83 and US$122 and is included in the
accompanying combined income statements.

6.    Restricted Cash
                                                                         31 December 2006       30 June 2007
                                                                                 US$’000            US$’000
                                                                                                  (unaudited)
Restricted cash                                                                         223               186
                                                                                  ––––––––         ––––––––
The restricted cash concerns the amounts held in bank accounts of the vessel owning companies that were
retained for the future instalment of Combined Entity’s loans.

                                                     118
7.    Capital contributions
Capital contributions represent the contribution of the Combined Entity’s shareholders to the acquisition of
the Combined Entity’s vessels.

8.    Long-term Debt
The amounts in the accompanying combined balance sheets are analysed as follows:

                                                               31 December 2006          30 June 2007
                                                                   US$’000                 US$’000
                                                                                          (unaudited)
                                                           US$’000                               US$’000
Bank Loan                            Vessel(s)              Amount        Rate %       Amount      Rate %
a. Issued 31 July 2005,
     maturing 31 January 2014        M/V Hellenic Sky        13,500        6.40%        12,600        6.37%
b. Issued 29 March 2002,
     maturing 22 November 2013       M/V Hellenic Sea         3,550        6.35%         3,350        6.39%
c. Issued 22 May 2006,
     maturing 24 November 2013       M/V Hellenic Breeze 13,300            6.43%       12,600         6.43%
                                                       ––––––––                      ––––––––
Total                                                     30,350                        28,550
Less: current portion                                     (3,583)                       (3,584)
Less: debt discount                                          (65)                          (56)
                                                       ––––––––                      ––––––––
Long-term portion                                         26,702                        24,910
                                                          ––––––––
The upcoming repayment terms of loans with balances outstanding at 30 June 2007 are:
                                                                                     ––––––––
Loan a: This loan is repayable in five quarterly instalments of US$450 each, thirteen quarterly instalments
of US$350 each and nine quarterly instalments of US$300, the first one being due on 31 January 2007 and
the final one being due on 31 January 2014 plus a balloon payment of US$3,100, being due on 31 January
2014.

Loan b: This loan is repayable in twenty six quarterly instalments of US$100 each, the first one being due
on 22 February 2007 and the final one being due on 22 November 2013, plus a balloon payment of US$750
being due on 22 November 2013.

Loan c: This loan is repayable by twenty six quarterly instalments of US$350 each, the first one being due
on 22 February 2007 and the final one being due on 24 November 2013 along with a balloon payment of
US$3,500 being due on 24 November 2013.

All loans are denominated in US dollars. The bank loans denominated in US dollars bear interest at LIBOR
plus a margin payable quarterly.

During 2006, the Combined Entity entered into an interest rate swap for one of its loans. Under the swap
agreement, the Combined Entity exchanges variable to fixed interest rates at 6.43%.

All loans are secured by a first preferred mortgage on the respective vessel as well as general assignment of
the earnings, insurances and requisition compensation of the respective vessel. Loan c is also secured by the
second preferred mortgage on M/V Hellenic Sea. Total interest paid was US$538 and US$955 for the six
month periods ended 30 June 2006 and 30 June 2007 respectively.

The loan agreements contain covenants including restrictions as to changes in management and ownership
of the vessels, additional indebtedness and mortgaging of vessels without the bank’s prior consent as well as
minimum requirements regarding hull cover ratio. The restricted net assets of the Combined Entity at 30 June
2007 consisted of restricted cash US$186.




                                                    119
Hellenic Carriers Corporation S.A. – a related party providing a wide range of shipping managerial and
administrative services to the vessel owning companies (see note 9), has issued a corporate guarantee in
favour of the banks as a further security for the aforementioned loans.

9.      Related party transactions
Transactions with related parties consisted of the following:

                                                                              30 June 2006     30 June 2007
                                                                                  US$’000          US$’000
                                                                                (unaudited)      (unaudited)
Voyage expenses – related party
Hellenic Carriers Corporation S.A.                                                       15               44
Management fees – related party
Hellenic Carriers Corporation S.A.                                                    220              300
                                                                                 ––––––––         ––––––––
                                                                                      235              344

Balances due from related parties comprise the following:
                                                                                 ––––––––         ––––––––
                                                                        31 December 2006       30 June 2007
                                                                                US$’000            US$’000
                                                                                                 (unaudited)
Due from related parties
Hellenic Carriers Corporation S.A.                                                   3,870           6,447
                                                                                 ––––––––         ––––––––
Total                                                                                3,870            6,447
                                                                                 ––––––––         ––––––––
Hellenic Carriers Corporation S.A.: All vessel-operating companies included in the combined financial
information have a management agreement with Hellenic Carriers Corporation S.A., a Liberian corporation
directly controlled by the same ultimate shareholders with the Combined Entity, where by the latter provides
in the normal course of business, a wide range of shipping managerial and administrative services, such as
commercial operations, chartering, technical support and maintenance, engagement and provision of crew,
financial and accounting services and cash handling in exchange for a management fee of US$16.67 per
vessel per month.

On 24 August 2005, the management agreement between Hellenic Carriers Corporation S.A. and Patmos
Shipping Company Ltd. was amended, and in addition to the monthly management fee Hellenic Carriers
Corporation S.A. charges a commission equal to 0.5% of time and voyage revenues relating to charters it
organises. Furthermore, as at 16 May 2006, Nestos Shipping Corp. signed a management agreement with
Hellenic Carriers Corporation S.A. which also included a term based on which Hellenic Carriers Corporation
S.A. charges a commission equal to 0.5% of time and voyage revenues relating to charters it organises. For
the six month periods ended 30 June 2006 and 30 June 2007 commission charged by Hellenic Carriers
Corporation S.A. amounted to US$15 and US$44, respectively and was included in Voyage expenses-related
party.

10.     Commitments and contingencies
Various claims, suits, and complaints, including those involving government regulations and product
liability, arise in the ordinary course of the shipping business. In addition, losses may arise from disputes
with charterers, agents, insurance providers and from other claims with suppliers relating to the operations
of the Combined Entity’s vessels. Currently, management is not aware of any such claims or contingent
liabilities, which should be disclosed, or for which a provision should be established in the combined
financial information.




                                                    120
Operating lease commitments – Combined Entity as lessor:

The Combined Entity has entered into time charter arrangements on some of its vessels. These arrangements
have remaining terms between one to 16 months as of 30 June 2007.

Future minimum charters receivable upon time charter arrangements as at 30 June 2007 are as follows (it is
noted that the vessel off-hires and dry-docking days that could occur but are not currently known are not
taken into consideration; in addition early delivery of the vessels by the charterers are not accounted for):

                                                                                               30 June 2007
                                                                                                   US$’000
                                                                                                 (unaudited)
Within one year                                                                                     22,720
After one year but not more than five years                                                           2,852
More than five years                                                                                      –
                                                                                                  ––––––––
                                                                                                     25,572
                                                                                                  ––––––––
11.   Events after the balance sheet date

(a)   Initial public offering: In September 2007, the Company commenced preparations for an initial
      public offering in the United Kingdom. Following the completion of the initial public offering, it is
      expected that existing shareholders will own directly or indirectly approximately 72.3% of the
      Company’s outstanding share capital. The reorganisation described in note 1 will be effected
      immediately prior to Admission.

(b)   New vessel acquisitions: On 19 July 2007, Arkadia Maritime Corporation S.A. entered into a
      Memorandum of Agreement for the purchase of one handymax bulk carrier vessel. According to the
      purchase agreement the consideration for this vessel was agreed at US$39,500. An advance of US
      $3,950 was paid to the seller in July 2007 and the remaining amount was paid upon delivery of the
      vessel. The vessel was delivered to Arkadia Maritime Corporation S.A. in November 2007. The
      Memorandum of Agreement contains an attached charter party agreement with an unrelated third
      party at a daily rate of US$25.75.
      On 10 October 2007, Vergina entered into an agreement for the purchase of a dry bulk vessel M/V
      Aegean Hawk (to be renamed M/V Konstantinos D). The vessel is expected to be delivered according
      to the purchase agreement between 1 March and 30 April 2008. The consideration was agreed to be
      US$62,000.

(c)   New loan facility: On 6 November 2007, the Combined Entity entered into a new loan facility
      agreement for US$57,850. The new loan facility was made available for the purposes of (i)
      refinancing in full the existing indebtedness of Thasos in connection with the acquisition of the M/V
      Hellenic Sky, (ii) financing part of the acquisition of the M/V Hellenic Horizon and (iii) providing
      corporate liquidity. This facility will be repaid through 12 quarterly instalments of US$1,500 each,
      17 quarterly instalments of US$1,000 each, one instalment of US$1,155 and one balloon payment of
      US$15,495. Based on the loan agreement, US$6,200 will be repaid either immediately after the
      Company’s Admission or upon delivery of the M/V Aegean Hawk (to be renamed M/V Konstantinos
      D), whichever comes earlier.

(d)   New Management agreements: Pursuant to new management agreements dated 26 October 2007
      between HSC and Mantinia Shipping Company S.A. (a related party under common control with the
      Company), HSC sub-contracts certain of the ship management services it will provide to the vessel
      owning companies following the reorganisation to Mantinia Shipping Company S.A., for a monthly
      fee of US$19.2 per vessel.




                                                    121
                                                 PART VIII

                      PRO FORMA FINANCIAL INFORMATION

UNAUDITED PRO FORMA STATEMENT OF NET ASSETS
                                                                                                                            AnnI(19)
The unaudited pro forma statement of net assets set out below has been prepared to illustrate the effect of the
                                                                                                                            AnnI(20.1)
Placing, the acquisitions of the two vessels M/V Hellenic Horizon and M/V Aegean Hawk (to be renamed M/V
                                                                                                                            AnnI(20.3)
Konstantinos D), the declaration and payment of dividends to existing shareholders prior to Admission and the
                                                                                                                            AnnI(2.1)
incurrence of additional debt to fund the acquisition of these vessels on the net assets of the Group as if the
                                                                                                                            AnnI(20.4.1)
above transactions had happened on 30 June, 2007. The unaudited pro forma statement of net assets has been
                                                                                                                            AnnIII(10.2)
prepared on the basis of the combined net assets of the Group as at 30 June 2007 as set out in the Unaudited
                                                                                                                            AnnI(5.2.1)
Interim Financial Information contained in Part VII and adjusted in accordance with the notes below. The
                                                                                                                            AnnI(5.2.2)
statement has been prepared for illustrative purposes only and, because of its nature, addresses a hypothetical
                                                                                                                            AnnIII(10.2)
situation. It therefore does not represent the Group’s actual financial position or results and may not give a true
picture of the net assets which would have been reported if the Placing and acquisition of M/V Hellenic Horizon
and M/V Aegean Hawk (to be renamed M/V Konstantinos D) and the incurrence of additional debt to fund the
acquisition of these vessels had occurred at 30 June 2007.
                                                                                                             Pro Forma
                            30 June 2007 1                            Adjustments                            Net Assets 3
                                 US$000         US$000         US$000     US$000             US$000            US$000
ASSETS
Non current assets                 36,281               –       45,700 2(a)           –        24,800 2(e)       106,781
CURRENT ASSETS
Cash                                4,261         57,850 2(a) (57,850)2(a)   49,300 2(b),(c), (26,912)
                                                                                    (d)
                                                                                                         2(e),
                                                                                                         (f)       26,649
Other Current assets                7,019              –             –            –            (4,500)   (g)
                                                                                                                    2,519
                                 –––––––        –––––––       –––––––      –––––––           –––––––             –––––––
                                   11,280         57,850       (57,850)      49,300           (31,412)             29,168
                                 –––––––        –––––––       –––––––      –––––––           –––––––             –––––––
TOTAL ASSETS                       47,561         57,850       (12,150)      49,300            (6,612)            135,949

EQUITY AND LIABILITIES
                                 ––––––– ––––––– ––––––– ––––––– ––––––– –––––––
Shareholders's Equity
Share Capital                –                        –             –               46 2(b)            –            46
Capital contributions   15,326                        –             –          55,454  2(b),(c)
                                                                                                  (4,500) (g)
                                                                                                                66,280
Retained earnings        2,112                        –             –                –            (2,112)2(f)        –
                      –––––––                   –––––––       –––––––         –––––––           –––––––       –––––––
Total equity            17,438                        –             –           55,500            (6,612)       66,326

Non-current liabilities
                                 ––––––– ––––––– ––––––– ––––––– ––––––– –––––––
Long term debt, net of
 current portion                   24,910        45,650 2(a) (10,350)2(a)       –                  –               60,210
Other non-current liabilities          12              –            –           –                  –                   12
                                 –––––––        –––––––      –––––––      –––––––            –––––––             –––––––
                                   24,922         45,650      (10,350)          –                  –               60,222
Current liabilities
Current portion of long-term
 debt                               3,584         12,200 2(a)   (1,800)2(a)   (6,200)2(d)       –                   7,784
Other current liabilities           1,617              –             –             –            –                   1,617
                                 –––––––        –––––––       –––––––       –––––––       –––––––                –––––––
                                    5,201         12,200        (1,800)       (6,200)           –                   9,401
                                 –––––––        –––––––       –––––––       –––––––       –––––––                –––––––
TOTAL LIABILITIES                  30,123         57,850       (12,150)       (6,200)           –                  69,623

TOTAL EQUITY AND
                                 ––––––– ––––––– ––––––– ––––––– ––––––– –––––––
 LIABILITIES                       47,561         57,850       (12,150)         49,300         (6,612)           135,949
                                 ––––––– ––––––– ––––––– ––––––– ––––––– –––––––
                                                       122
1.   The financial information on the Group has been extracted without material adjustment from the Financial Information for the
     six months ended 30 June 2007 contained in Part VII: headed “Unaudited Interim Financial Information”.
2.   The following adjustments have been made in arriving at the pro-forma statement of net assets of the Group:
     (a) The debt proceeds of US$57.85 million (US$45.7 million included in long-term portion and US$12.2 million in current
         portion) relating to: (i) the refinancing of the existing loan of US$12.15 million (US$10.35 million in long-term portion and
         US$1.80 million in current portion) for the M/V Hellenic Sky, (ii) the financing of the acquisition cost of US$39.5 million
         of the M/V Hellenic Horizon, and (iii) US$6.2 million relating to the 10% instalment of the purchase price of the M/V
         Aegean Hawk (to be renamed M/V Konstantinos D).
     (b) The gross proceeds of the Placing of approximately US$60 million, reflecting the issue of 13,684,970 Ordinary Shares with
         par value of US$0.001 (in addition to the 31,931,881 Ordinary Shares with par value of US$0.001 issued before Admission)
         at a premium of US$4.38 per Ordinary Share, thereby increasing the share capital by US$0.046 million and increasing share
         premium by US$59.95 million.
     (c) Estimated expenses directly attributable to the Placing of US$4.5 million.
     (d) Of the net proceeds of the Placing of US$55.5 million, US$6.2 million will be used to repay bank debt relating to the 10%
         instalment of the purchase price of the vessel M/V Aegean Hawk (to be renamed M/V Konstantinos D).
     (e) Of the net proceeds of the Placing of US$55.5 million, US$31 million will be used to pay part of the purchase price of the
         M/V Aegean Hawk (to be renamed M/V Konstantinos D) to be delivered between 1 March and 30 April 2008. US$6.2
         million representing 10% deposit, was paid upon conclusion of the agreement for the purchase of M/V Aegean Hawk (to be
         renamed M/V Konstantinos D) on 14 November 2007. See also notes 2(a) and 2(d). US$24.8 million represents the
         difference between US$31 million and the advance payment of US$6.2 million. It is intended that the remaining part of the
         purchase price will be paid with a new debt facility. No committed debt facility has been secured at this stage for the
         remainder of the purchase price therefore no such debt facility is presented in the Pro forma Balance Sheet.
     (f)   Within the context of the Placing, the vessel owning companies, having obtained the necessary consent from the lending
           banks, has decided that prior to Admission, a dividend will be declared and paid equaling the retained earnings of the vessel
           owning companies immediately prior to Admission. This is estimated to be US$12.5 million and will be paid utilising the
           vessel owning companies’ cash in hand. The above adjustment reflects only the effect of a dividend payment equalling
           retained earnings as at 30 June 2007 of US$2.1 million and does not take into account earnings up to the date of Admission.
     (g) Within the context of the Placing, the Group’s existing Shareholders have decided to offset US$4.5 million of the amount
         due to the Group from one related party, under common ownership and control, (the amount due from the related party is
         included in Other Current Assets in the Pro Forma Balance Sheet), with Capital Contributions included in Total Equity.
3.   Save as set out above, the unaudited pro forma statement of net assets of the Group does not reflect any changes in the trading
     and net asset position of the Group since 30 June 2007.




                                                                  123
                                               PART IX

                              ADDITIONAL INFORMATION

1.    Responsibility
The Directors, whose names are set out on page 11 of this document, and the Company accept responsibility      Sch2(k)

for all the information contained in this document. To the best of the knowledge and belief of the Directors   AnnI(1.2)

and the Company (who have taken all reasonable care to ensure that such is the case) the information           AnnIII(1.2)

contained in this document is in accordance with the facts and does not omit anything likely to affect the
import of such information.

2.    Incorporation and principal activities
(a)   The Company was incorporated and registered in Jersey as a public limited liability par value            AnnI(5.1.2)

      company on 26 September 2007 pursuant to the Companies Law with registration number 98805. The           AnnI(5.1.3)

      Company is governed by its Memorandum and Articles of Association and the principal statute              AnnI(5.1.4)

      governing the Company is the Companies Law and the subordinate legislation thereunder.                   AnnIII(4.2)


(b)   The Group’s business is conducted principally by our ship management subsidiary HSC, from 51,            AnnI(5.1.4)

      Akti Miaouli Street, 185 36 Piraeus, Greece and our telephone number is +30 210 455 8850. Our
      registered office is at Walker House, PO Box 72, 28-34 Hill Street, St. Helier, Jersey JE4 8PN.

(c)   The Group’s website is www.hellenic-carriers.com where all the information required by Rule 26 of
      the AIM Rules can be found.

(d)   The liability of the Shareholders is limited and we have the objects and powers of a natural person.

(e)   Following the Reorganisation detailed in section 11.8 of this Part IX we will have six wholly-owned      AnnI(7.1)

      subsidiaries, details of which are set out below:                                                        AnnI(7.2)


      Name                Date and place of Authorised share          Issued share          Nature of
                          incorporation     capital                   capital               business
      Hellenic            17 September        300 shares without      300 shares without    Commercial
      Shipmanagement      2007,               par value               par value             and financial
      Corp.               Marshall Islands(1)
                                                                                            management of
                                                                                            our Ships
      Nestos Shipping     19 April 2006,      500 shares without      500 shares without    Owns M/V
      Corp.               Liberia             par value               par value             Hellenic
                          (redomiciled on                                                   Breeze
                          29 October 2007
                          to the Marshall
                          Islands)
      Thasos Shipping     4 March 2003,       LM500 divided into      LM500 divided into Owns M/V
      Co Ltd.             Malta               500 ordinary shares     500 ordinary shares Hellenic Sky
                                              of LM1 each             of LM1 each
      Patmos Shipping     21 February,        LM500 divided into      LM500 divided into Owns M/V
      Co Ltd.             2002, Malta         500 ordinary shares     500 ordinary shares Hellenic Sea
                                              of LM1 each             of LM1 each




                                                    124
      Name                   Date and place of Authorised share       Issued share           Nature of
                             incorporation     capital                capital                business
      Arkadia                4 July 2007,      500 shares without     500 shares without     Owns M/V
      Maritime Corp.         Liberia           par value              par value              Hellenic
                             (redomiciled on                                                 Horizon
                             8 November,
                             2007 to the
                             Marshall Islands)
      Vergina Shipping       31 October 2007, 500 shares without      500 shares without     To acquire
      Limited                the Marshall     par value               par value              M/V Aegean
                             Islands                                                         Hawk (to be
                                                                                             renamed M/V
                                                                                             Konstantinos
                                                                                             D)
      Note:
      (1)   HSC has a registered branch in Greece.


3.    Share capital
3.1   The Company was incorporated with an authorised share capital of £10,000 divided into 10,000
      ordinary shares of £1.00 each.

3.2   By a special resolution dated 20 November 2007, the Company converted its authorised share capital
      from pounds sterling to US dollars at an exchange rate of £1=US$2.070 so that the existing share
      capital was converted to US$20,700 divided into 10,000 ordinary shares of US$2.070 each. By a
      special resolution also dated 20 November 2007, the authorised share capital of US$20,700 was
      subdivided into 20,700,000 ordinary shares of US$0.001 each.

3.3   By a special resolution also dated 20 November 2007, the Company increased its authorised share
      capital by the creation of an additional 79,300,000 ordinary shares in the share capital of the Company
      following which the Company’s authorised share capital was US$100,000 divided into 100,000,000
      ordinary shares of US$0.001 each.

3.4   The authorised and issued share capital of the Company (all of which is fully paid up unless stated       AnnI(21.1.1)(a)

      otherwise) at the date of this document is as follows:                                                    AnnI(21.1.1)(b)
                                                                                                                AnnI(21.1.1)(c)
                                                              Authorised                 Issued (fully paid)
                                                           number        US$            number           US$
      Ordinary Shares of US$0.001 each               100,000,000     100,000             4,140           4.14

3.5   Immediately following the Placing and Admission, the authorised and issued share capital of the
      Company is expected to be as follows (assuming the number of Ordinary Shares being offered is
      13,684,970):

                                                              Authorised                 Issued (fully paid)
                                                           number        US$            number           US$
      Ordinary Shares of US$0.001 each               100,000,000     100,000         45,616,851   45,616.85

      On Admission the Ordinary Shares will rank pari passu in all respects.

3.6   The Articles permit the Directors to exercise all powers of the Company to allot Ordinary Shares. The
      Directors do not currently intend to allot further Ordinary Shares pursuant to such authorities save in
      connection with the Reorganisation Agreement and the Placing and such allotments are restricted by
      the Placing Agreement. In order to grow its business as opportunities arise, the Company may require
      additional capital. In this connection therefore, the Directors may exercise these powers in order that
      the Company may raise additional capital subject to the rights of pre-emption in the Company’s
      Articles described in paragraph 4.2.1 headed “Articles – Rights attaching to shares” of this Part IX.



                                                     125
3.7   A written resolution of the Shareholders was duly passed on 22 November 2007 resolving that,
      subject to the adoption of the Articles, the Directors are empowered to allot and issue up to 15% of
      the Ordinary Shares in the share capital of the Company in issue immediately after Admission as if
      pre-emption rights did not apply to such allotments. Such authority shall expire at the conclusion of
      the next annual general meeting, unless such authority is renewed prior to such time.

3.8   The Ordinary Shares are in registered form and will be eligible for settlement in CREST.                 AnnI(21.1.1(c)
                                                                                                               AnnIII(4.1)

4.    Memorandum and Articles of Association
Set out below is a summary of certain provisions of the Memorandum and Articles which are to be adopted
immediately prior to Admission. Persons seeking a detailed explanation of any provisions of Jersey law or
the difference between it and the laws of England and Wales, or any other jurisdiction with which they may
be more familiar, should seek specific legal advice.

4.1   Memorandum of Association
      The Company is a public company and a par value company under the relevant provisions of the
      Companies Law. The liability of each member arising from his holding of a share in the Company is
      limited to the amount (if any) unpaid on it. The Company has unrestricted corporate capacity as set
      out on page 1 of its Memorandum of Association.

4.2   Articles
      The Articles, which are to be adopted immediately prior to Admission, contain provisions (amongst
      others) to the following effect:

      4.2.1 Rights attaching to shares

             (a)   Issue of shares
                   Subject to rights of pre-emption set out below, the Directors may approve the allotment,
                   grant of options over or otherwise dispose of shares to such persons, at such times and
                   on such terms as they think fit. The Company may by ordinary resolution determine that
                   a share be issued with certain rights and restrictions.

                   The rights of pre-emption are as follows: when proposing to allot equity securities to a
                   person, the Company must first offer them to every holder on at least the same terms.
                   The number of equity securities offered will be in proportion to the nominal share value
                   held by the relevant holder to the nominal value of the issued share capital. This
                   procedure does not apply to an allotment of shares where such equity securities are or
                   will be wholly or partly paid otherwise than in cash nor does it apply to shares allotted
                   or issued under an employee share scheme.

                   The Company may, by special resolution, (i.e. a majority of two-thirds of voting
                   Shareholders) disapply these rights thereby empowering the Directors to issue shares on
                   a non-preemptive basis.

             (b)   Voting rights
                   (i)    At any general meeting, a resolution put to the vote of the meeting shall, in the
                          first instance, be voted upon by a show of hands. At a general meeting on a show
                          of hands every shareholder who is present in person or by proxy has one vote.

                   (ii)   On a poll, every shareholder who is present in person or by proxy or (being a
                          corporation) is present by a representative has one vote for every share in the
                          capital of the Company of which he is the holder.




                                                   126
(c)   Restrictions on voting
      In the case of joint holders, the person whose name appears first in the register of
      members will hold the vote attached to the relevant share. Unless otherwise decided by
      the Board, no vote is allowed in respect of a share where a call or other amount due and
      payable in respect of the share is unpaid.

(d)   Dividends
      The Company may by ordinary resolution declare dividends in accordance with the
      respective rights of the Shareholders but no dividend can exceed the amount
      recommended by the Directors. Holders of shares are entitled to dividends pro rata
      according to the number of shares held. This is subject to any priority of payment of
      dividends as determined by the Articles, the class rights of other classes of shares or by
      special resolution. Subject to the provisions of the Companies Law, interim dividends
      may be paid if it appears to the Directors that they are justified by the level of the
      Company’s distributable reserves. Unless otherwise provided by rights attaching to the
      shares, all dividends will be declared and paid according to the amounts paid up on the
      shares on which the dividend is paid.

(e)   Variation of rights
      Where the capital of the Company is divided into different classes of shares, rights
      attached to any class of shares may (unless otherwise provided by the terms of issue of
      the shares of that class) be varied or abrogated. This can be done with the consent in
      writing of the holders of a majority in nominal value of the issued shares of the relevant
      class or by an ordinary resolution passed at a separate meeting of the holders of the
      issued shares of that class.

(f)   Alteration of capital
      The Company may by special resolution:

      (i)     increase its share capital by creating new shares of such amount and in such
              currency or currencies as it thinks expedient;

      (ii)    consolidate and divide all or any of its shares (whether issued or not) into shares
              of a larger amount than its existing shares;

      (iii)   convert all or any of its fully paid shares into stock, and re-convert that stock into
              fully paid shares of any denomination;

      (iv)    sub-divide its shares, or any of them, into shares of smaller amount than is fixed
              by the memorandum save that in a sub-division the proportion between the
              amount paid and the amount, if any, unpaid on each reduced share will be the
              same as it was in the case of the share from which the reduced share is divided;

      (v)     subject to the Articles and the Companies Law, convert any of its fully paid shares
              which have a nominal value expressed in one currency into fully paid shares of a
              nominal value of another currency and denominate the nominal value of its issued
              or unissued shares in units of the currency into which they have been converted;
              and

      (vi)    cancel shares which, at the date of the passing of the resolution to cancel them,
              have not been taken or agreed to be taken by a person, and diminish the amount
              of the Company’s share capital by the amount of the shares so cancelled.




                                        127
      (g)   Purchase of own shares and reduction of capital
            Subject to the confirmation by the court as required by the Companies Law and to the
            rights attaching to existing shares, the Company may by special resolution reduce its
            share capital or any capital redemption reserve or any share premium account in any
            way.

            The Company may also purchase, or agree to purchase in the future, any shares of any
            class (including redeemable shares) in its own capital in any way provided it is
            authorised to do so by special resolution.

      (h)   Winding-up
            If the Company is wound up, the Company may, by a special resolution and subject to
            any other sanction required by the Companies Law or a court, divide the whole or any
            part of the assets of the Company among the holders in specie provided that no holder
            will be compelled to accept any assets upon which there is a liability.

4.2.2 Transfer of shares
      (a)   Subject to the Articles, the instrument of transfer of a share must be in writing and may
            be in any usual form or in any other form which the Directors may approve and must be
            executed by or on behalf of the transferor and, unless the shares are fully paid, by or on
            behalf of the transferee.

      (b)   Uncertificated shares may be transferred in accordance with the Companies
            (Uncertificated Securities) (Jersey) Order 1999.

4.2.3 Directors

      (a)   Number of Directors
            Unless the Company decides otherwise by ordinary resolution, there is no maximum but
            the minimum number of Directors is two.

      (b)   Appointment of Directors
            The Company may appoint Directors by ordinary resolution. The Board may appoint a
            Director but such a Director may hold office only until the dissolution of the next annual
            general meeting after his appointment unless he is reappointed during that meeting.

            The FK Group and KK Group have additional rights to appoint Directors as described
            in section 4.2.13 of this Part IX.

      (c)   Retirement of Directors by rotation
            Save as detailed below, at each annual general meeting one third of the Directors who
            are subject to retirement by rotation will retire. If the number of Directors is not divisible
            by three, the number nearest to but not less than one-third will retire from office. If there
            are fewer than three Directors who are subject to retirement by rotation, one will retire
            from office. If any one or more Directors: (i) were last appointed or reappointed three
            years or more prior to the meeting; (ii) were last appointed or reappointed at the third
            immediately preceding annual general meeting; or (iii) at the time of the meeting will
            have served more than nine years as a non-executive Director of the Company, he or they
            shall retire from office and shall be counted in obtaining the number required to retire at
            the meeting.

            Directors appointed by the FK Group or the KK Group are not subject to retirement by
            rotation.




                                              128
(d)   Permitted interests of Directors
      Subject to the Companies Law and provided he has disclosed to the Board the nature and
      extent of any direct or indirect interest, a Director notwithstanding his office:
      (i)     may enter into or otherwise be interested in a contract, arrangement, transaction
              or proposal with the Company or any of its subsidiary undertakings or in which
              the Company or any of its subsidiary undertakings is otherwise interested either
              in connection with his tenure of an office or place of profit or as seller, buyer or
              otherwise;
      (ii)    may hold another office or place of profit with the Company or any of its
              subsidiary undertakings (except that of auditor or auditor of a subsidiary of the
              Company or any of its subsidiary undertakings) in conjunction with the office of
              Director and may act by himself or through his firm in a professional capacity to
              the Company or any of its subsidiary undertakings, and in that case on such terms
              as to remuneration and otherwise as the Board may decide either in addition to or
              instead of other remuneration provided for by the Articles;
      (iii)   may be a director or other officer of, or employed by, or a party to a contract,
              transaction, arrangement or proposal with or otherwise interested in, a company
              promoted by the Company or any of its subsidiary undertakings or in which the
              Company or any of its subsidiary undertakings is otherwise interested or as
              regards which the Company or any of its subsidiary undertakings has a power of
              appointment; and
      (iv)    is not liable to account to the Company or any of its subsidiary undertakings for
              a profit, remuneration or other benefit realised by such contract, arrangement,
              transaction, proposal, office or employment and no such contract, arrangement,
              transaction or proposal is avoided on the grounds of any such interest or benefit.
              An interest of a Director is not deemed to include any interest that might arise
              simply by virtue of the holding of shares or other securities in the Company.

(e)   Remuneration of Directors
      Unless otherwise decided by ordinary resolution, the Directors (but not any alternate
      directors) will be paid such amount of aggregate fees as the Board decides. These fees
      will be divided in proportions decided by the Board and may not exceed £500,000 per
      annum without the consent of the members of the Company by ordinary resolution.

(f)   Directors’ interests in shares
      Directors are required to notify the Company on the same day if they acquire or agree
      to acquire shares in the Company or, if they already hold shares, of any change in or
      agreement to change their shareholding. When a Director is appointed, he must notify
      the Company of any shares he holds. All notifications are to be made on either the day
      the acquisition or disposal takes place or the date of the agreement to acquire or dispose
      or the date of appointment as applicable. The Company is to keep a register of the
      Director’s shareholdings at its registered office which is open to inspection by the
      members. Directors are, pursuant to these provisions, also required to disclose shares
      held by:
      (i)     companies in which they hold 33% or more of the voting rights or otherwise
              control or direct;
      (ii)    husbands, wives, civil law partners, infant sons and daughters (including step
              children); and
      (iii)   trusts in which they, or any of these persons, are interested.
      These provisions also apply to shadow directors.



                                        129
4.2.4 Directors’ powers
      The Board may delegate to a Director holding executive office any of its powers, authorities
      and discretions for such time and on such terms and conditions as it thinks fit. The Board may
      also delegate any of its powers, authorities and discretions (with power to sub-delegate) to a
      person or a committee consisting of more than one person (whether a member of the Board or
      not) as it thinks fit.

4.2.5 Borrowing powers
      The Board may exercise all the powers of the Company to borrow money and to mortgage or
      charge all or any part of the undertaking, property and assets (present and future) and uncalled
      capital of the Company and to create and issue debenture and other loan stock and debentures
      and other securities, whether outright or as collateral security for any debt, liability or
      obligation of the Company or of any third party.

4.2.6 Meetings of Shareholders
      (a)    Annual general meetings are to be held once every year. They can be convened by the
             Board at such time and place as it thinks fit provided that there must not be a gap of more
             than 15 months between one annual general meeting and the next. Extraordinary general
             meetings, being meetings other than annual general meetings, may be convened
             whenever the Board thinks fit or whenever requested by the Shareholders in accordance
             with the Companies Law or the Articles. Annual general meetings and any extraordinary
             general meeting at which a special resolution is to be proposed or at which some other
             resolution of which special notice under the Companies Law has been given to the
             Company require not less than 21 clear days’ notice. All other extraordinary general
             meetings require not less than 14 clear days’ notice.

      (b)    The notice must be given to all holders and to all persons recognised by the Directors as
             having become entitled to a share following the death, bankruptcy or incapacity of a
             Shareholder. Shorter notice is possible, in the case of an annual general meeting, by the
             agreement of all the members entitled to attend and vote at the meeting and, in the case
             of an extraordinary general meeting, by a majority of members holding not less than
             95% of the total voting rights.

      (c)    The notice must specify that a member entitled to attend and vote may appoint one or
             more proxies to attend and, on a poll, vote instead of him and that a proxy need not also
             be a member. Where more than one proxy is validly appointed for the same share for use
             at the same meeting, the last valid one is treated as revoking or replacing any previous
             ones. An instrument appointing a proxy is to be in writing in any usual form, or as
             approved by the Directors, and must be executed by or on behalf of the appointer. The
             Board may accept the appointment of a proxy received in an electronic communication
             on such terms and subject to such conditions as it considers fit, subject to the Companies
             Law and the Electronic Communications (Jersey) Law 2000.

      (d)    The quorum of a general meeting is two persons entitled upon the business to be
             transacted, each being a Shareholder present or by proxy.

      (e)    In the case of joint holders of a share, a notice will be given to whichever of them is
             named first in the register of Shareholders in respect of the joint holding and notice
             given in this way is sufficient notice to all joint holders.

4.2.7 Written resolutions of Shareholders
      Under the Companies Law and the Articles, provision may be made in the form of a resolution
      in writing for each Shareholder to indicate how many of the votes in respect of a resolution in
      writing which he would have been entitled to cast at a meeting to consider the resolution he
      wishes to cast in favour of or against such resolution or to be treated as abstentions and the


                                              130
      result of any such resolution in writing need not be unanimous and shall be determined upon
      the same basis as on a poll.

4.2.8 Untraced Shareholders
      Subject to the Companies (Uncertificated Securities) (Jersey) Order 1999 in respect of untraced
      Shareholders, in the event a Shareholder is deemed to be untraceable, the Company may sell
      the shares of that Shareholder at the best price reasonably obtainable. This power of sale is
      subject to certain conditions before it is triggered. Principally, three cash dividends must have
      become payable in respect of the untraced shares during a period of not less than 12 years and
      the holder must not have presented any cheque, warrant or money order payable by the
      Company throughout the 12 year period. The Company must then advertise its intention to
      exercise the power of sale in the relevant press. After publication of the advertisement, the
      holder has a further three months to communicate with the Company and therefore effectively
      terminate the power of sale. The Company and any one Director are given an irrevocable power
      of attorney by the holder to do all such acts and to agree and execute all such agreements,
      documents and instruments of transfer in order to effect the transfer of the shares in these
      circumstances. Any amounts raised by the power of sale are owed to the relevant member
      although the Company does not act as trustee of these monies and they do not carry interest.

4.2.9 Distribution of assets on a liquidation
      The assets of the Company remaining after payment of its liabilities will, subject to the rights
      of the holders of other classes of shares, be applied to the holders of shares equally pro rata to
      their holdings of shares.

4.2.10 Indemnity of officers
      Subject to the Companies Law, the Company indemnifies every Director, alternate director or
      secretary of the Company out of the Company’s assets against expenses and any liability
      incurred by such person in the proper execution of his duties, or the proper exercise of his
      powers. No such right of indemnification shall exist with respect to a claim brought by such
      person against the Company except as provided for in the Articles.

      The Companies Law disallows any agreement by the Company to exempt any person from, or
      indemnify any person against, any liability which by law would otherwise attach to the person
      by reason of the fact that the person is or has been an officer of the Company. However, the
      Companies Law allows certain exceptions to this, particularly in respect of any liability
      incurred otherwise than to the Company if the person acted in good faith with a view to the best
      interests of the Company.

4.2.11 Disclosure of interests in Ordinary Shares and failure to disclose interests in Ordinary Shares
      The provisions of Chapter 5 of the Disclosure and Transparency Rules (the “Disclosure and
      Transparency Provisions”) and Part 22 of the 2006 Act (the “2006 Act Provisions”) are
      incorporated by reference into the Articles.

      The Disclosure and Transparency Provisions detail the circumstances in which a person may
      be obliged to notify the Company within two business days that he has an interest in voting
      rights in respect of the Ordinary Shares (a “notifiable interest”). An obligation to notify the
      Company arises when the percentage of voting rights which a person holds reaches, exceeds or
      falls below 3% of the voting rights attaching to the Shares or moves through any whole
      percentage point above 3%.

      The 2006 Act Provisions permit the Company to serve a notice (a “Part 22 Notice”) on any
      person where the Company has reasonable cause to believe such person is interested in the
      Company’s shares or has been interested in the Company’s shares at any time during the three
      years immediately preceding the date on which the Part 22 Notice is issued. The Part 22 Notice



                                                131
      may require the person to confirm or deny that he is or was interested in the Company’s shares
      and, if he holds, or has during that time held, any such interest to give such further information
      as may be required in accordance with the 2006 Act Provisions. Where a Shareholder fails to
      comply with the Disclosure and Transparency Provisions or the terms of a Part 22 Notice
      within the period specified that Shareholder will be in default (such Shareholder being a
      “Default Shareholder”). Pursuant to the Articles, a Default Shareholder may not be entitled to
      attend or vote at meetings of the Company in respect of any shares held by him in relation to
      which he or any other person appears to be interested.

      The full text of the Disclosure and Transparency Provisions and the 2006 Act Provisions will
      be made available to any Shareholder free of charge on application to the Company Secretary.

4.2.12 Takeover provisions
      Pursuant to the Articles, a person must not:
      (a)    acting by himself or with persons determined by the Directors to be acting in concert
             with him, seek to acquire shares in the Company which, taken together with shares held
             or acquired by persons determined by the Directors to be acting in concert with him,
             carry 30% or more of the voting rights attributable to the shares in the Company; or

      (b)    acting by himself or with persons determined by the Directors to be acting in concert
             with him, and holding not less than 30% but not more than 50%, of the voting rights
             attributable to shares, and seek to acquire, by himself or with persons determined by the
             Directors to be acting in concert with him, additional shares which, taken together with
             the shares held by the persons determined by the Directors to be acting in concert with
             him, increase his voting rights, except (in the case of (a) or (b) above) as a result of a
             “permitted acquisition” (meaning an acquisition either consented to by the Directors, or
             made in compliance with Rule 9 of the City Code, or arising from the repayment of a
             stock borrowing arrangement); or

      (c)    effect or purport to effect an acquisition which would breach or not comply with Rules
             4, 5, 6 or 8 of the City Code, if the Company were subject to the City Code. Where the
             Directors have reason to believe that a breach of the above has taken place, then the
             Company may take all or any of the following actions:
             (i)     require the person(s) appearing to be interested in the shares of the Company to
                     provide such information as the Directors consider appropriate;
             (ii)    make any determination under the relevant Articles as they think fit, either after
                     calling for submissions by the relevant person(s) or without calling for any;
             (iii)   determine that the voting rights attached to such shares in breach of the Articles,
                     (the “Excess Shares”), are from a particular time incapable of being exercised for
                     a definite or indefinite period;
             (iv)    determine that some or all of the Excess Shares are to be sold;
             (v)     determine that all or some of the Excess Shares will not carry any right to any
                     dividends or other distributions from a particular time for a definite or indefinite
                     period; and
             (vi)    take such actions as they think fit for the purposes of the relevant Articles
                     including prescribing rules not inconsistent with such Articles, setting deadlines
                     for the provision of information, drawing adverse inferences where information
                     requested is not provided, making determinations or interim determinations,
                     executing documents on behalf of a shareholder, converting any Excess Shares
                     held in uncertificated form to certificated form and vice-versa, or converting any
                     Excess Shares represented by depository interests issued in uncertificated form
                     under the Articles into shares in certificated form, paying costs and expenses out



                                               132
                            of proceeds of sale, and changing any decision or determination or rule
                            previously made.

      4.2.13 Power of the FK Group and KK Group to appoint Directors
            (a)     Whilst the FK Group controls directly or indirectly a shareholding of, in aggregate:

                    (i)     at least 30% of the issued share capital of the Company, and the KK Group
                            controls directly or indirectly a shareholding of, in aggregate:

                            (A)     less than 30% of the issued share capital of the Company, either Fotini
                                    Karamanlis (“FK”) or Faith has the right to appoint and maintain in office
                                    one Director (who shall have the right to hold the post of the Chief
                                    Executive Officer or Chief Financial Officer);
                            (B)     at least 30% of the issued share capital of the Company, the FK Group and
                                    the KK Group jointly have the right to appoint and maintain in office two
                                    Directors (one of whom shall have the right to hold the post of the Chief
                                    Executive Officer or Chief Financial Officer and one of whom shall be a
                                    non-executive Director who shall be appointed to hold the post of
                                    Chairman unless the Board decides otherwise).
                    (ii)    12% but less than 30% of the issued share capital of the Company, FK has the
                            right to appoint and maintain in office one non-executive Director who shall, if
                            elected by the Board, be entitled to hold the post of Chairman.

            (b)     The KK Group has similar rights to the FK Group.

5.    Directors                                                                                                                  AnnI(21.1.6)


5.1   Interests in Ordinary Shares
      5.1.1 The interests of the Directors in the Ordinary Shares as at the date of this document and on
            Admission, all of which are beneficial, are as follows:

                                          As at the date of this document            On Admission
                                                             Percentage of                    Percentage of
                                         No. of Ordinary       issued share No. of Ordinary Enlarged Issued
            Directors                             Shares            capital          Shares   Share Capital
            Graham Roberts                                –                 –%                70,755                 0.16%
            Fotini Karamanlis(1)                      2,070                50%            21,287,921                46.66%
            Dimitris Sfakianakis                          –                 –%                     –                    –%
            Charlotte Stratos                             –                 –%                     –                    –%
            Dimos Kapouniaridis                           –                 –%                     –                    –%
            Note:
            (1) Fotini Karamanlis is deemed to be interested in all the Ordinary Shares held by: (a) Faith, a company owned as
                to 100% by her; and (b) Bedat, a company owned as to 50% by her.

      5.1.2 Save as described above, no Director will have any interest in the Ordinary Shares on
            Admission; save as provided for in the Reorganisation Agreement there is no person to whom
            any capital of any member of the Group is under option or agreed unconditionally to be put
            under option; and no Director or member of any Director’s family has a financial product
            referenced to the Ordinary Shares.

5.2   Directorships
      The tables below state the name of all companies and partnerships of which the Directors are or have                       Sch2(g)(ii)

      been a director or partner at any time within the five years prior to the publication of this document
      (all companies registered in England and Wales unless otherwise indicated):



                                                          133
                                                         Former directorships held in
                Current directorships                    last five years
Graham Roberts PD Ports Limited                          THPA Properties Limited
               Tees Valley Regeneration Limited          THPA Distribution and Services
               BBI Port Acquisitions (UK) Limited        Limited
               BBI Finance (UK) Limited                  Teesside Holdings Limited
                                                         THPA Consortium Limited
                                                         PD Teesport Limited
                                                         T.H.P.A. Group Services Limited
                                                         PD Port Services Limited
                                                         PD Group Management Limited
                                                         Ports Holdings Limited
                                                         Tees and Hartlepool Pilotage Company
                                                         Limited
                                                         Powell Duffryn Shipping Limited
                                                         PD Portco Limited
                                                         PD Ports Group Limited
                                                         PD Shipping Agency Limited
                                                         PD Logistics Limited
                                                         R. Durham & Sons Limited
Charlotte Stratos Emporiki Bank S.A. (Greece)
                  Gyroscopic Fund Limited (Cayman
                  Islands)
Fotini          Hellenic Carriers Limited (Jersey)       Argolis S.A. (Greece)
Karamanlis      Jacopo International Limited (Marshall   Limenodomiki S.A. (Greece)
                Islands)                                 Poseidon S.A. (Greece)
                Faith Holdings Limited (Marshall         Mantinia Shipping Co. S.A. (Panama)
                Islands)                                 Hellenic Carriers Corporation S.A.
                Makedoniki S.A. (Greece)                 (Liberia)
                Piraeus Bank S.A. (Greece)               Thasos Shipping Co. Ltd (Malta)
                Super Sea S.A. (Greece)                  Patmos Shipping Co. Ltd (Malta)
                Dulany Services Limited (Liberia)        Symi Shipping Co. Ltd (Malta)
                                                         Skopelos Shipping Co. Ltd (Malta)
                                                         Adriatiki Shipping Co. Ltd (Malta)
                                                         Arkadiki Shipping Co. Ltd (Malta)
                                                         Possidonia Shipping Co. Ltd (Malta)
                                                         Vari Shipping Co. Ltd (Malta)
                                                         Holloway Marine Co. (Liberia)
                                                         Neptunea Universal Naviera S.A
                                                         (Panama)
                                                         Fairline Marine Co. (Liberia)
                                                         Topic Transport Corp. (Liberia)
                                                         Morgan Transport Company (Liberia)
                                                         Harbor Shipping Company (Liberia)
                                                         Cedar S.A. (Liberia)
                                                         Basswood Limited (Liberia)
                                                         Gamba International Limited (Liberia)
                                                         Rolig Holdings Co. (Liberia)
Dimitris        Hellenic Carriers Limited (Jersey)
Sfakianakis     Quinta Holding Corporation (Marshall
                Islands)




                                         134
5.3   Receiverships and liquidations
      5.3.1 None of the Directors have had any unspent convictions in relation to indictable offences.            Sch2(g)(iii)
                                                                                                                  Sch2(g)(iv)
      5.3.2 None of the Directors have been declared bankrupt or entered into an individual voluntary             Sch2(g)(v)
            arrangement.                                                                                          Sch2(g)(vi)
                                                                                                                  Sch2(g)(vii)
      5.3.3 None of the Directors have been a director with an executive function of any company at the
                                                                                                                  Sch2(g)(viii)
            time or within 12 months preceding any receivership, compulsory liquidation, creditors
            voluntary liquidation, administration, company voluntary arrangement or any composition or
            arrangement with that company’s creditors generally or with any class of its creditors.

      5.3.4 None of the Directors have been a partner in a partnership at the time of, or within twelve
            months preceding, any compulsory liquidation, administration or partnership voluntary
            arrangement of any such partnership.

      5.3.5 None of the Directors have had his assets the subject of any receivership or has been a partner
            of a partnership at the time of or within the twelve months preceding, any assets thereof being
            the subject of a receivership.

      5.3.6 None of the Directors have been subject to any public criticism by any statutory or regulatory        Sch2(g)(iii)

            authority (including any recognised professional body) or has ever been disqualified by a court
            from acting as a director of a company or from acting in the management or conduct of the
            affairs of any company.

5.4   Service contracts and letters of appointment

      Fotini Karamanlis
      Fotini Karamanlis has entered into a service agreement with the Company dated 27 November 2007
      pursuant to which she is appointed Chief Executive Officer of the Company. The service agreement
      is conditional upon and shall take effect on Admission. The service agreement is for an initial fixed
      term of two years. The Company may not give notice to terminate Ms. Karamanlis’s employment
      during the initial term (save in the case of gross misconduct). Thereafter, her employment may be
      terminated by the Company on six months’ notice. Ms. Karamanlis may terminate her employment at
      any time on three months’ notice.

      The service agreement provides for an annual salary of €200,000 and a discretionary bonus of up to
      150% of the annual salary which must be on terms comparable to those given to executives of other
      shipping companies listed on public markets of the same standing as Ms. Karamanlis and who have
      made similar achievements in the course of their duties with their employers. Ms. Karamanlis will not
      be entitled to receive a bonus if on the date the bonus is declared she is suspended pursuant to the
      terms of the agreement, or if the Company has terminated Ms. Karamanlis’s employment or given
      notice to terminate her employment due to her material breach of the agreement or by reason of gross
      misconduct. In any other circumstances Ms. Karamanlis’s entitlement to any bonus on termination
      will be at the sole discretion of the board. On the first anniversary of Admission, Ms. Karamanlis’s
      remuneration package will be reviewed in accordance with the remuneration packages of the
      executives of other shipping companies listed on public markets who have made similar achievements
      in the course of their duties with their employers. Ms. Karamanlis will be eligible to participate in any
      share incentive arrangements adopted by the Company subject to the rules of such plans and at the
      board’s absolute discretion. Ms. Karamanlis has the right to direct that any shares that may vest to her
      under such plans are delivered to a third party nominated by her. Other benefits provided under the
      service agreement are reimbursement of the cost of private medical insurance, permanent health
      insurance, life insurance, contractual sick pay at a rate equivalent to her basic salary for 24 weeks of
      sickness absence in any 12 month period and the provision of directors’ and officers’ liability
      insurance. Ms. Karamanlis is also entitled to the higher of 30 days’ paid holiday per annum or the
      number of days permitted under the relevant Greek laws in respect of paid holidays.




                                                     135
In the event of a change of control of the Company at any time during the employment, if the
Company serves notice to terminate Ms. Karamanlis’s employment within a period of 12 months
following the change of control for any reason (save in the case of gross misconduct), then the
Company is required to give 24 months’ prior written notice to terminate Ms. Karamanlis’s
employment. Within a period of 12 months following the change of control, Ms. Karamanlis may
terminate her employment upon giving five days’ written notice to the Company and the Company
shall pay her 24 months’ basic salary. For the purposes of the service agreement, change of control
has a wide definition encompassing certain changes of shareholding, certain changes to the Board and
certain mergers and consolidations.

The Company agrees to reimburse Ms. Karamanlis for all reasonable legal fees reasonably incurred
by Ms. Karamanlis in recovering the amounts that are lawfully payable to her in respect of any bonus
to which she may be entitled, or in the event that her employment terminates as a result of her office
as a Director of the Company being terminated without her consent, or if she is suspended during an
investigation by an external competent authority.

Save as detailed above, there are no provisions in the service agreement providing for compensation
on termination of employment.

The service agreement contains restrictive covenants which apply during Ms. Karamanlis’s
employment with the Company and which remain in force for a period of three months following the
termination of her employment. During this period Ms. Karamanlis is prohibited from being engaged
in any competing business and from dealing with or soliciting the Company’s customers and from
soliciting, employing or encouraging any of the Company’s employees to cease working for the
Company.

Ms. Karamanlis is permitted to work for Mantinia and any related company both during and following
the termination of her employment.

The Company agrees to indemnify Ms. Karamanlis against any liability to third parties that arises in
connection with the performance of her duties as a Director to the extent permitted by law and to
provide funds to meet any expenditure incurred in the defence of any such proceedings.

The service agreement is governed by Greek law.

Dimitris Sfakianakis
HSC has entered into a service agreement with Dimitris Sfakianakis, dated 9 November 2007.
Pursuant to the service agreement Mr Sfakianakis agrees to provide his services as the Company’s
Chief Financial Officer.

The agreement is for an initial fixed period of one year until 31 October 2008. The Company agrees
to pay Mr Sfakianakis a net fee of €2,000 per month in return for his services.

Upon Admission the agreement will become a fixed term agreement until 31 October 2009,
terminable by HSC without the obligation to pay Mr Sfakianakis damages if terminated for the
reasons provided for in the agreement and for any reason which would be interpreted as material by
the Greek courts. In the event that HSC fails to honour the fixed term of Mr Sfakianakis employment,
he has the right to claim damages as prescribed under Greek law.

After the expiry of the fixed term, and unless otherwise agreed, the agreement automatically extends
for an indefinite period of time and is terminable by HSC for any reason whatsoever pursuant to the
provisions of Greek law.

The service agreement contains post termination restrictions preventing Mr Sfakianakis from
providing his services, without the Company’s prior written consent, to any listed company which
competes with the Group for a period of three months following the termination of the agreement.

The service agreement is governed by Greek law.


                                             136
      Graham Roberts
      Graham Roberts has been appointed as a non-executive Chairman of the Company pursuant to a letter
      of appointment dated 9 November 2007. The Appointment will take effect on, and is conditional upon,
      Admission and is for an initial period of one year subject to earlier termination by either party on not
      less than three months’ notice. Mr. Roberts is entitled to an annual fee of £50,000, payable quarterly
      in arrears. The letter of appointment is governed by English law.

      Charlotte Stratos
      Charlotte Stratos has been appointed as a non-executive Director pursuant to a letter of appointment
      dated 9 November 2007. The Appointment will take effect on, and is conditional upon, Admission and
      is for an initial period of one year subject to earlier termination by either party on not less than three
      months’ notice. Ms. Stratos is entitled to an annual fee of €30,000, payable quarterly in arrears. The
      letter of appointment is governed by English law.

      Dimos Kapouniaridis
      Dimos Kapouniaridis has been appointed as a non-executive Director pursuant to a letter of
      appointment dated 9 November 2007. The Appointment will take effect on, and is conditional upon,
      Admission and is for an initial period of one year subject to earlier termination by either party on not
      less than three months’ notice. Mr. Kapouniaridis is entitled to an annual fee of €30,000, payable
      quarterly in arrears. The letter of appointment is governed by English law.

5.5   Consultancy agreement

      Dimitris Sfakianakis
      The Company has entered into a consultancy agreement with Quinta Holding Corp (“Quinta”), a
      company owned by Dimitris Sfakianakis, dated 9 November 2007. Pursuant to the consultancy
      agreement Quinta agrees to provide the services of Mr. Sfakianakis for such duties as the Company
      may require from time to time.

      The agreement is for an initial fixed period of one year until 31 October 2008. The Company agrees
      to pay Quinta a net fee of €8,674 on the execution of the agreement and thereafter Quinta will receive
      a net fee of €8,500 per month in return for its services.

      Upon Admission the agreement will become a fixed term agreement until 31 October 2009 (and
      cannot be terminated without cause during that period) and thereafter is terminable by either party on
      immediate notice.

      The Company is obliged to take out insurance cover for the benefit of the consultant in respect of the
      provision of the services under the agreement.

      The consultancy agreement contains post termination restrictions preventing Quinta from employing
      or soliciting employees of the Company to cease working for Company for a period of two years
      following the termination of the agreement.

      The consultancy agreement is governed by English law.

5.6   Aggregate remuneration
      No remuneration (including benefits in kind) was paid to the Directors by members of the Group in
      respect of the year ended 31 December 2006. It is estimated that the gross aggregate remuneration and
      benefits in kind payable to the Directors by members of the Group in respect of the current financial
      year (under the arrangements in force at the date of this document) will be approximately €65,500.

5.7   Other matters
      Save as set out in sections 5.4 and 5.5 of this Part IX, there are no service agreements in existence
      between any of the Directors and the Company or any of its subsidiaries which cannot be determined


                                                     137
       by the employing company without payment of compensation (other than statutory compensation)
       within one year.

       There is no arrangement under which any Director has waived or agreed to waive future emoluments.

       Save as set out in the Relationship Agreements and the Articles, there are no arrangements or
       understandings with major Shareholders, customers, suppliers or others, pursuant to which any
       Director was selected as a member of the Board or as a member of senior management.

6.     Substantial Shareholders
Other than the holdings of the Directors, which are set out in section 5.1 of this Part IX, the Directors are           Sch2(i)

aware of the following persons who, as at the date of this document, were and on Admission will be,                     AnnI(18.1)

interested, directly or indirectly, in 3% or more of the Company’s capital:

                                         As at the date of this document             On Admission
                                                              Percentage of                   Percentage of
                                         No. of Ordinary       issued share No. of Ordinary Enlarged Issued
                                                   Shares           capital          Shares   Share Capital
Faith(1)                                            2,070              50%          10,643,960                23.33
Corpus(2)                                           2,070              50%          10,643,960                23.33
Bedat(3)                                                –               –%          10,643,961                23.33
Pandinia Trading Limited(4)                             –               –%           1,044,619                 2.29
(1) Owned as to 100% by Fotini Karamanlis.
(2) Owned as to 100% by Konstantinos Karamanlis.
(3) Owned as to 50% by Fotini Karamanlis and as to 50% by Konstantinos Karamanlis. Fotini Karamanlis and Konstantinos
    Karamanlis are both deemed to be interested in all of the Ordinary Shares held by Bedat.
(4) Owned as to 100% by Konstantinos Karamanlis.

The Shareholders listed above do not have any different voting rights from any other Shareholder in the
Company.

7.     CREST
All of the Ordinary Shares will be in registered form and will be eligible for settlement in CREST.                     AnnIII(4.3)



8.     Working capital
The Directors are of the opinion that, having made due and careful enquiry, taking into account the net                 Sch2(c)

proceeds of the Placing receivable by the Company, the working capital available to the Group is sufficient             Ann I(10.1)

for its present requirements that is for at least the 12 months from the date of Admission.                             AnnIII(3.1)



9.     Legal and arbitration proceedings
The Group is not, or has not been, engaged in any governmental legal or arbitration proceedings and, so far             AnnI(20.8)

as the Directors are aware, there are no such proceedings pending or threatened against or being brought by
the Company, which are having or may have or have had during the twelve months preceding the date of this
document a significant effect on the Group’s financial position.

10.    Taxation
The following is intended as a general guide to the tax position in Jersey and the United Kingdom                       AnnIII(4.11)

(“UK”) under current legislation and published practice of the tax authorities of Jersey and the UK.

Any person who is in any doubt as to his tax position or who is resident, or otherwise subject to
taxation, in a jurisdiction other than the UK or Jersey, should consult his professional adviser.




                                                        138
10.1 Jersey Taxation
     The following summary of the anticipated tax treatment in Jersey of the Company and holders of
     Ordinary Shares is based on Jersey taxation law and practice in force at the date of this document.
     It does not constitute legal or tax advice. Shareholders should consult their professional advisers
     on the implications of acquiring, buying, holding, selling or otherwise disposing of Ordinary
     Shares under the laws of the jurisdiction in which they may be liable to taxation. Shareholders
     should be aware that tax rules and practice and their interpretation may change.

     10.1.1 The Company has “exempt company” status within the meaning of Article 123A of the Income
            Tax (Jersey) Law 1961, as amended, for the calendar year ended 31 December 2007. The
            Company will be required to pay an annual exempt company charge, which is currently £600,
            in respect of each subsequent calendar year during which it wishes to continue to have “exempt
            company” status. The retention of “exempt company” status is conditional on the Jersey
            Comptroller of Income Tax being satisfied that no Jersey resident has a beneficial interest in
            the Company, except as permitted by concessions granted by the Jersey Comptroller of Income
            Tax, and disclosure of beneficial ownership being made to the Jersey Financial Services
            Commission. As such:

           (a)     the Company will not be liable to Jersey income tax other than on Jersey source income
                   (except by concession bank deposit interest on Jersey bank accounts);

           (b)     holders of Ordinary Shares (other than residents of Jersey) are not subject to any tax in
                   Jersey in respect of the holding, sale or other disposition of such Ordinary Shares; and

           (c)     so long as the Company maintains its “exempt company” status, dividends on the
                   Ordinary Shares may be paid by the Company without withholding or deduction for or
                   on account of Jersey income tax.

     10.1.2 Under current Jersey law there are no death or estate duties, capital gains, gift, wealth,
            inheritance or capital transfer taxes. No stamp duty is levied in Jersey on the issue or transfer
            of Ordinary Shares.

     10.1.3 On the death of an individual, Jersey stamp duty will be payable on the registration in Jersey
            of a grant of probate or letters of administration, which will be required in order to transfer or
            otherwise deal with the deceased person’s personal estate, if the net value of (i) the deceased
            person’s personal estate wherever situated (where the deceased person was domiciled in Jersey
            at the time of death), or (ii) the deceased person’s personal estate situated in Jersey (if the
            deceased person was domiciled outside of Jersey at the time of death), exceeds £10,000. The
            rate of duty payable is (where the net value of such personal estate does not exceed £100,000)
            0.50% of the net value of such personal estate or (where the net value of such personal estate
            exceeds £100,000) £500 for the first £100,000 plus 0.75% of the net value of such personal
            estate which exceeds £100,000.

     10.1.4 Legislation has been adopted by the States of Jersey which will, on and from 1 January 2009,
            introduce a standard rate of corporate tax of 0% applicable to all companies (other than any
            “financial services company” (as defined therein) and certain specified Jersey utility
            companies). As at the date of this opinion, the Company is neither a “financial services
            company” nor such a specified utility company.

10.2 UK Taxation
     The following is intended as a general guide to the UK tax position under current legislation and
     published HM Revenue & Customs’ practice at the date of this document, both of which are
     subject to change at any time. It only deals with the position of certain types of Shareholder, and
     does not deal with others (such as dealers in securities, insurance companies and collective
     investment schemes) whose tax position might in some cases be different. The information given
     is by way of general summary only and does not constitute legal or tax advice to any person.



                                                    139
Shareholders who are in any doubt about their tax position, or who are taxable in a jurisdiction
other than the UK, should obtain detailed tax advice.

10.2.1 UK Taxation of Dividends
      Shareholders who are resident in the UK for tax purposes may, depending on their
      circumstances, be liable to UK income tax or corporation tax in respect of dividends paid by
      the Company.

      Dividends received by an individual who is resident or ordinarily resident in the UK for
      taxation purposes will be chargeable to UK income tax at the dividend rate. Such a Shareholder
      is not entitled to a tax credit in the UK in respect of a dividend received from the Company. For
      such Shareholders who are liable to UK income tax at the starting or basic rates, dividends
      received from the Company will be liable to UK income tax at the dividend ordinary rate,
      currently 10% of the dividend paid. For individual Shareholders who are liable to UK income
      tax at the higher rate, dividends received from the Company will be subject to UK income tax
      at the dividend higher rate, currently 32.5% of the dividend paid.

      The UK Government has announced its intention to introduce legislation to grant a non-
      payable tax credit (subject to certain financial limits) to UK resident or ordinarily resident
      individuals who are in receipt of dividends from non-UK resident companies. If such
      legislation is enacted, it would bring the taxation of dividends received from the Company by
      individual Shareholders who are resident or ordinarily resident in the UK more closely into line
      with the taxation of dividends received from UK resident companies by such Shareholders, in
      that, for individual Shareholders who are liable to UK income tax at the higher rate the effect
      of the tax credit would be to reduce the effective rate of income tax payable in respect of such
      dividends from 32.5% of the dividend received to 25% of the dividend received. However, there
      can be no guarantee that these proposals will be enacted, and even if they are enacted the
      current proposals are only for the tax credit to be available for dividends paid after 5 April
      2008.

      A UK resident corporate Shareholder will be liable to UK corporation tax in respect of
      dividends paid by the Company.

10.2.2 UK Taxation of Capital Gains
      In the case of those UK resident or ordinarily resident Shareholders who are individuals or
      otherwise not within the charge to corporation tax, UK capital gains tax may be payable on a
      disposal of Ordinary Shares. Taper relief may be available to reduce the amount of any
      chargeable gain on such a disposal where the disposal occurs before 6 April 2008. The UK
      Chancellor of the Exchequer has announced the intention to remove taper relief with effect
      from 6 April 2008. No indexation allowance will be available to such Shareholders. Individual
      Shareholders are entitled to an annual exemption from capital gains. For the 2007/2008 tax year
      this is £9,200 of gains.

      Shareholders within the charge to UK corporation tax may be subject to corporation tax on
      chargeable gains in respect of any gain arising on a disposal of Ordinary Shares. Indexation
      allowance may apply to reduce any chargeable gain arising on a disposal of Ordinary Shares
      but will not create or increase an allowable loss.

      Shareholders who, together with persons connected with them, hold more than 10% of the
      share capital of the Company should be aware that the Company may be regarded as a close
      company if it were resident in the UK. Accordingly, capital gains realised by the Company may
      be attributed to such Shareholders under section 13 Taxation of Chargeable Gains Act 1992.




                                             140
      10.2.3 Other UK Taxation Matters
             The Directors intend to manage the Company’s affairs such that it should not be regarded as a
             collective investment scheme for the purposes of section 235 Financial Services and Markets
             Act 2000 (as deemed to be amended for tax by section 57 of the Finance Act 2007). On this
             basis, a shareholding in the Company should not be regarded as a material interest in an
             offshore fund for the purposes of sections 756A to 764 (as amended by the Finance Act 2005)
             of the Income and Corporation Taxes Act 1988 (the “Taxes Act”). Accordingly, gains realised
             on such holdings should not be subject to tax as income under that legislation.

             A UK resident corporate Shareholder who, together with connected or associated persons
             would, broadly, be entitled to at least 25% of the profits of the Company were such profits to
             be distributed, should note the provisions of the controlled foreign companies legislation
             contained in sections 747 to 756 of the Taxes Act.

             The attention of individuals ordinarily resident in the UK is drawn to the provisions of Chapter
             2, Part 13 of the Income Tax Act 2007 which may render such individuals liable to tax on the
             income of the Company (taken before any deduction for interest) in certain circumstances.

             The attention of individuals ordinarily resident in the UK is drawn to Chapter 1, Part 13
             of the Income Tax Act 2007 under which HM Revenue & Customs may seek to cancel tax
             advantages from certain transactions in securities.

      10.2.4 Non-UK Shareholders
             Shareholders who are not resident or ordinarily resident (and who are not temporarily non
             resident) in the UK and do not carry on a trade, profession or vocation through a branch, agency
             or other form of permanent establishment in the UK with which the Ordinary Shares are
             connected will not normally be liable to UK taxation on capital gains arising on the sale or
             other disposal of their Ordinary Shares. However, non-UK Shareholders will need to take
             specific professional advice about their individual tax position.

      10.2.5 Individual Savings Accounts (ISAs) and Personal Equity Plans (PEPs)
             Ordinary Shares in the Company will not be eligible to be held in the stocks and shares
             component of an ISA or an existing PEP.

      10.2.6 Stamp Duty and Stamp Duty Reserve Tax
             The following comments are intended as a guide to the general UK Stamp Duty and Stamp
             Duty Reserve Tax (“SDRT”) position and do not relate to persons such as market makers,
             brokers, dealers, intermediaries and persons connected with depositary arrangements or
             clearance services to whom special rules apply. No UK Stamp Duty or SDRT will be payable
             on the issue of the Placing Shares. UK Stamp Duty (at the rate of 0.5%, rounded up where
             necessary to the next £5, of the amount of the value of the consideration for the transfer) is
             payable on any instrument of transfer of Ordinary Shares executed within, or in certain cases
             brought into, the UK. Provided that Ordinary Shares are not registered in any register of the
             Company kept in the UK any agreement to transfer the Ordinary Shares should not be subject
             to SDRT.

             Any person who is in any doubt as to his/her tax position or requires more detailed
             information than the general outline above should consult his/her professional advisers.

11.   Material Contracts
Set out below is a summary of each material contract entered into by the Company, other than those entered      AnnI(22)

into in the ordinary course of business, to which the Company or any other member of the Group is a party:
(a) within the two years immediately preceding the date of this document; or (b) which contains any




                                                    141
provision under which any member of the Group has any obligation or entitlement which is material to the
Group as at the date of this document.

11.1 Placing Agreement
      The Placing Agreement contains, amongst others, the following further provisions:
      •      the obligations of Jefferies, are subject to certain conditions including, amongst others,
             Admission occurring by not later than 8.00 a.m. (London time) on 30 November 2007 (or such
             later time and/or date (being no later than 31 December 2007) as Jefferies may agree with the
             Company). Jefferies may terminate the Placing Agreement in certain circumstances prior to
             Admission, including on the occurrence of certain material changes in the condition (financial
             or otherwise) of the Company and certain changes in market and economic conditions (as more
             fully set out in the Placing Agreement);
      •      the Company has agreed to pay to Jefferies a commission of 5% of the amount equal to the
             gross proceeds from the Placing (such commission being reduced in respect of certain
             subscriptions made by investors introduced by management) and, at the Company’s sole
             discretion, an incentive fee of 0.5% of the aggregate gross proceeds of the Placing. The
             Company shall also pay Jefferies a capital markets advisory fee upon Admission;
      •      the Company has undertaken not to issue or sell any securities within nine months of
             Admission without the prior written consent from Jefferies;
      •      the Company, the Controlling Shareholders, Bedat, Corpus, Faith and the Directors have given
             certain representations, warranties and undertakings to Jefferies and, in addition, the Company
             has given certain indemnities to Jefferies; and

      •      the Company has agreed not to issue or sell Ordinary Shares or related securities for a period
             of nine months after Admission without the prior written consent of Jefferies.

11.2 Nomad Agreement
      On 27 November 2007, the Company, the Directors and Jefferies entered into a nominated adviser and
      broker agreement pursuant to which the Company appointed Jefferies to act as its nominated adviser
      and broker under the AIM Rules for Nominated Advisers and rule 35 of the AIM Rules for
      Companies. Pursuant to the nominated adviser and broker agreement, the Company has agreed to pay
      Jefferies an annual fee of £60,000 plus VAT (if applicable) together with Jefferies’ fees and expenses
      incurred in connection with its role as nominated adviser and broker. The agreement contains certain
      undertakings and indemnities given by the Company in respect of, inter alia, compliance with
      applicable laws and regulations. The agreement is for a period of 12 months and may thereafter be
      terminated by the Company or Jefferies giving three months’ notice at any time after the expiry of the
      first nine month period.

11.3 Lock-in agreement
      Each of Corpus, Bedat, Faith and Graham Roberts have agreed, subject to certain customary                    Sch 2(f)

      exceptions, not to offer or otherwise dispose of, or agree to offer or otherwise dispose of, directly or     AnnIII(7.3)

      indirectly, whether for consideration or not: (a) any Ordinary Shares (or any legal or beneficial interest
      in any Ordinary Shares); or (b) any securities of the Company that are substantially similar to
      Ordinary Shares including any securities that are convertible into or exchangeable for, or that
      represent the right (whether conditional or not) to receive Ordinary Shares or any such similar
      securities; or (c) do anything with the same or substantially the same economic effect as any of the
      transactions in (a) or (b) (including a derivatives transaction), in each case without the prior written
      consent of Jefferies and the Company for a period of nine months following Admission.

      In addition, each of Bedat, Corpus, Faith and Graham Roberts have agreed not to dispose of any
      Ordinary Shares other than through the Company’s broker for a period of nine months.




                                                     142
11.4 Loan agreements
     The Group has entered into the loan and associated agreements described in section 12 of this Part IX.

11.5 Relationship Agreements
     The Company has entered into the Relationship Ageements described in section 13.2 of this Part IX.

11.6 Mantinia Management Agreements
     The day-to-day technical and operational management of our fleet is currently sub-contracted by HSC
     to Mantinia, a company which is ultimately majority controlled by the Controlling Shareholders.
     Mantinia has an outsourcing agreement in relation to each of the Ship Owning Companies (other than
     Vergina in relation to which HSC will enter into an agreement with Mantinia in the same form in
     relation to M/V Aegean Hawk (to be renamed M/V Konstantinos D) on delivery of that vessel) (the
     “Mantinia Management Agreements”) in place with HSC which have been negotiated on arm’s length
     terms. The Mantinia Management Agreements are based on the Baltic and International Maritime
     Council (BIMCO) Standard Ship Management Agreement. The initial term of these agreements is for
     12 months from the date of commencement and thereafter continues automatically unless terminated
     by either party on two months’ notice. Termination by Mantinia cannot occur before the 24 months
     from the date of commencement. Under the Mantinia Management Agreements, Mantinia provides
     HSC with the following specific services in relation to each of the Ships:

     •     attending to the maintenance, repairs, modifications, supply and classification requirements of
           our vessels;

     •     attending to the due and regular operation and performance of our vessels and following
           operations issuing voyage instructions appointing port agents and stevedores and arranging
           surveys;

     •     concerning loading and discharging, settlements of claims and surveys;

     •     attending to all matters concerning contracts relating to the supply of the bunkers, lubricants
           and other kind of materials, stores and provisions;

     •     negotiating and executing contracts for the modification or repairs in shipyards worldwide
           subject to the previous consent of the vessel-owning company and its final approval and
           generally performing every and all actions necessary for the accomplishment of the above or
           in connection therewith;

     •     arranging insurance for all our vessels;

     •     recruiting and employing seamen and arranging for the execution of the contracts of
           employment; and

     •     attending to all matters concerning social security provisions concerning our vessels’ crews.

     The monthly fees which are payable in arrears from HSC to Mantinia in respect of each of the
     Mantinia Management Agreements amount to US$19,167 per vessel. If any of the Mantinia
     Management Agreements are terminated, other than by reason of Mantinia’s default (other than if the
     vessel is lost, sold or otherwise disposed of) Mantinia is entitled to receive three months of fees. In
     such circumstances, Mantinia shall also be entitled to severance costs up to a maximum of
     US$45,000.

11.7 Ship purchase agreements
     The Group has entered into the following Memoranda of Agreement (each a “MoA”):

     (a)   Nestos entered into a MoA dated 25 April 2006 with Erica Navigation S.A., of Panama,
           (“Erica”) to purchase the vessel M/V Rubin Energy (renamed M/V Hellenic Breeze) for US$21
           million. A deposit of 10% of the purchase price was paid into a joint account of Erica and


                                                   143
           Nestos within three banking days of signing the MoA. The balance of 90% of the purchase
           price plus other monies due on delivery was paid into an account in the name of Nestos at
           Erica’s nominated bank at least three banking days prior to the expected date of delivery of the
           vessel. The full purchase price was released to Erica on presentation by Erica to their bank of
           a Protocol of Delivery and Acceptance. Delivery took place in May 2006.

     (b)   Arkadia entered into a MoA dated 19 July 2007 with Euroforum Marine Company Limited,
           Liberia (“Euroforum”) to purchase the vessel Union Leader (renamed M/V Hellenic Horizon)
           for US$39.5 million. A deposit of 10% of the purchase price was paid into a joint account of
           Euroforum and Arkadia within three banking days of signing the MoA. The remaining 90% of
           the purchase price plus other monies due on delivery was paid into an account in the name of
           Euroforum at Euroforum’s nominated bank on closing. Delivery took place in November 2007.

     (c)   Hellenic Carriers Corporation S.A., entered into a MoA dated 10 October 2007 with Southern
           Route Maritime S.A., of Panama (“SRM”), on behalf of both Nissen Kaiun Co., Ltd and SRM
           to purchase the vessel M/V Aegean Hawk (to be renamed M/V Konstantinos D) for US$62
           million. A deposit of 10% of the purchase price was paid into a joint account of Hellenic
           Carriers Corporation S.A. and SRM at SRM’s bank within three banking days of signing the
           MoA. The balance of 90% of the purchase price plus other monies due on delivery is to be paid
           into an account in the name of Hellenic Carriers Corporation S.A. at SRM’s bank at least three
           banking days before the expected date of delivery of the vessel. The full purchase price is to be
           released to SRM on presentation by SRM to their bank of a Protocol of Delivery and
           Acceptance signed by both parties. On 16 November 2007 Hellenic Carriers Corporation S.A.
           nominated Vergina as the buyer under this agreement although the corporate guarantee from
           Hellenic Carriers Corporation S.A. remains in place until delivery. It is intended that the
           acquisition of the M/V Aegean Hawk (to be renamed M/V Konstantinos D) will be financed by
           approximately US$31 million of the net proceeds of the Placing and the remainder through a
           new debt facility which will be obtained following Admission.

11.7 Charterparties
     The Group has the following current agreements for time charter:

     (a)   M/V Hellenic Breeze was under a time charter dated 19 May 2006, between Nestos and
           Daeyang Shipping Co. Limited, of Seoul, (“Daeyang”) for a period of 11 months (-10 days) to
           13 months (+15 days) at the option of Daeyang at a rate of US$15,000 per day, payable 15 days
           in advance. A commission of 1.25% was payable by Nestos to ACE Chartering Corp., Seoul
           and 1.25% to Arrow Panamax (UK) Limited., both on earned and paid hire. Further, an address
           commission of 2.5% was payable by Nestos to Daeyang both on earned and paid hire. This
           agreement was renewed by Daeyang on the same terms on 25 May 2007 (except at a rate of
           US$45,000 per day).

     (b)   M/V Hellenic Sky is under a time charter dated 10 August 2006, between Thasos and Armada
           Bulk Carriers Limited., of Jersey, (“Armada”) for a period of 12 months (+-15 days) to about
           14 months (+-15 days), or about 22 months (+-15 days) to about 24 months (+- 15 days) at the
           option of Armada at a rate of US$24,000 per day or US$23,000 depending on the period
           Armada opted for. A commission of 1.25% is payable to Simpson, Spence and Young, London,
           both on earned and paid hire. Further, an address commission of 3.75% is payable by Thasos
           to Armada, both on earned and paid hire.

     (c)   M/V Hellenic Sea is under a time charter dated 12 July 2007, between Patmos and China
           National Chartering Corporation, (“China National”) for a minimum period of 18 months to a
           maximum of 20 months (+15 days) at the option of China National at a rate of US$37,500 per
           day, payable 15 days in advance. A commission of 1% is payable by Patmos to Simpson,
           Spence and Young, London, both on earned and paid hire. Further, an address commission of
           3.75% was payable by Patmos to China National, both on earned and paid hire.




                                                  144
      (d)   M/V Hellenic Horizon is under a time charter dated 25 January 2007 and novated on 17 August
            2007, between Arkadia and San Juan Navigation Corp., of the Marshall Islands (“San Juan”),
            for a minimum period of 11 months to 13 months (+/- 15 days) at the option of San Juan at a
            rate of US$25,750 per day, payable 15 days in advance. A commission of 1.25% is payable by
            Arkadia to Frank-Symons Ltd. and of 1.25% to Droman Maritine on both earned and paid hire.
            Address commission of 3.75% is also payable by Arkadia to San Juan on earned and paid hire.

      (e)   A time charter in respect of M/V Aegean Hawk (to be renamed M/V Konstantinos D) was
            entered into between Vergina and Korea Line Corporation (“Korea Line”) on 9 November 2007
            and is expected to commence between 1 March 2008 and 15 May 2008, for a minimum period
            of 24 months to 26 months, at the option of Korea Line, at a rate of US$64,250 per day, payable
            15 days in advance, for the period from the date of delivery to the 365th day of the charter and
            thereafter at the rate of US$48,250 per day, payable 15 days in advance, until the 730th day of
            the charter. For the balance of the charter (if such an option is exercised) hire is agreed to be at
            the rate of US$56,250 per day, again, payable 15 days in advance. A commission of 1.25% is
            to be paid to Prime Maritime Inc. and 1.25% to Korea Chartering Co. Ltd. Address commission
            of 2.5% is also payable by Vergina to Korea Line on earned and paid hire.

11.8 Reorganisation Agreement
      On 27 November 2007, the Company, Faith, Corpus and Bedat entered into the Reorganisation
      Agreement whereby the parties agreed to complete the Reorganisation summarised below prior to
      Admission:

      (a)   Faith, Corpus and Bedat will transfer their shares in HSC and the Ship Owing Companies to
            the Company in consideration for the issue of new Ordinary Shares.

      (b)   In the Reorganisation Agreement Faith, Corpus and Bedat gave a tax indemnity in respect of
            any obligations arising out of the Reorganisation and certain warranties in respect of the assets
            contributed to the Company (i.e. the shares of the Ship Owning Companies and HSC) as to:

            •      authority to execute and deliver, and to perform obligations under, the Reorganisation
                   Agreement;

            •      title to shares in HSC and the Ship Owning Companies;

            •      the binding nature of the Reorganisation Agreement;

            •      the solvency of HSC and the Ship Owning Companies;

            •      that no consent, authorisation, licence or approval is required in connection with the
                   Reorganisation Agreement; and

            •      compliance by HSC and the Ship Owning Companies with applicable laws and
                   regulations.

12.   Financing arrangements

12.1 Loan from Calyon to Nestos
      On 18 May 2006, Nestos as borrower entered into a US$14 million term loan agreement with Calyon
      as lender (the “Nestos Loan”). The loan is governed by English law.

      The Nestos Loan was made available to finance part of the cost of the purchase of the M/V Hellenic
      Breeze (now registered in the ownership of Nestos under the Liberian flag with Official Number
      12938). The loan was drawn down in one amount and is repayable by 30 consecutive quarterly
      instalments starting three months after the drawdown of the loan with the final repayment due 90
      months after the drawdown date.




                                                    145
     Interest consists of the aggregate of (i) the margin (being 0.30% per annum for a portion of the loan
     equal to the amount standing to the credit of a deposit account of Nestos held with Calyon and 1%
     per annum for the remaining portion of the loan) and (ii) LIBOR for each interest period.

     Nestos has also entered into an ISDA master swap agreement (the “Nestos ISDA”) with Calyon and
     has entered into one transaction under the Nestos ISDA. All rights, title, interest and benefits of Nestos
     in connection with the Nestos ISDA are charged to Calyon by way of a first fixed charge.

     By way of security for Nestos’ obligations under the Nestos Loan and the Nestos ISDA, Hellenic
     Carriers Corporation S.A. has provided a guarantee to Calyon. In addition, the three bank accounts of
     Nestos held with Calyon and the balances of those accounts and all rights relating thereto are pledged
     in favour of Calyon.

     Nestos has also provided security over the M/V Hellenic Breeze in the form of a first preferred
     Liberian ship mortgage and an assignment of the earnings, insurances and any requisition
     compensation of Hellenic Breeze. There is also an assignment of HSC’s interest (as manager of
     Hellenic Breeze) in the insurances of the M/V Hellenic Breeze.

     Finally, Patmos has also provided security for Nestos’ obligations under the Nestos Loan and the
     Nestos ISDA by way of a second priority assignment of the earnings, insurances and any requisition
     compensation of the M/V Hellenic Sea (owned by Patmos).

12.2 Loan from Calyon to Nestos – supplemental agreement
     Nestos entered into a supplemental agreement (the “Nestos Supplemental Agreement”) with (inter
     alios) Calyon on 22 November 2007 amending and supplementing the Nestos Loan.

     In particular, the Nestos Supplemental Agreement amends the following provisions of the Nestos Loan:

     (a)    the Company replaces Hellenic Carriers Corporation S.A. as the corporate guarantor;

     (b)    HSC replaces Hellenic Carriers Corporation S.A. as the manager of M/V Hellenic Breeze and
            M/V Hellenic Sea;

     (c)    there is no restriction on Nestos declaring or paying dividends to its shareholders (i.e. the
            Company) if Nestos has provided Calyon with financial statements evidencing that Nestos
            maintains sufficient cash balances to meet its debt service obligations under the Nestos Loan,
            and the running expenses for M/V Hellenic Breeze, each for the next three months;

     (d)    the Company may declare or pay dividends to its shareholders if no Event of Default (as
            defined in the Nestos Loan) has occurred and is continuing at the time of declaration of such
            dividends or would occur as a result thereof; and

     (e)    if, without the prior written consent of Calyon, Fotini Karamanlis and Konstantinos Karamanlis
            cease to have the power to direct the Company’s policies (through a material reduction in their
            shareholdings) and they are no longer being represented in an executive position on the Board,
            then Nestos is obliged to prepay the Nestos Loan in full within 60 days of notice from Calyon.

12.3 Loan from Calyon to Nestos – Guarantee
     By way of security for Nestos’ obligations under the Nestos Loan and the Nestos ISDA, the Company
     will provide an English law guarantee to Calyon. Under the terms of the guarantee, the Company will
     guarantee to pay Calyon on demand all moneys and discharge all obligations and liabilities due, owing
     or incurred by Nestos under the Nestos Loan and the related security documents.

     The guarantee will contain various indemnities from the Company to Calyon. The Company will be
     obliged to indemnify Calyon for any losses in connection with the invalidity or unenforceability of
     any obligation, taxes or increased payments, currency exchange and any legal and other costs, charges
     and expenses incurred by Calyon.



                                                    146
     The Company may not assign or transfer any of its rights or obligations under the guarantee.

12.4 Loan from Calyon to Patmos
     On 22 March 2002, Patmos as borrower entered into a US$6.25 million term loan agreement with
     Calyon (then known as Crédit Agricole Indosuez) as lender (the “Patmos Loan”). The loan is
     governed by English law. The Patmos Loan, which is governed by English Law, has been amended
     and supplemented by a first supplemental agreement dated 12 September 2005 and by a second
     supplemental agreement dated 18 May 2006.

     The Patmos Loan was made available to finance part of the cost of the purchase of the M/V Hellenic
     Sea (now registered in the ownership of Patmos under the Maltese flag with Official Number 7656).
     The loan was drawn down in one amount and is repayable by 46 instalments starting three months
     after the drawdown of the loan with the final repayment due 141 months after the drawdown date.

     Interest consists of the aggregate of the margin (being 1% per annum) and LIBOR for each interest
     period.

     By way of security for Patmos’ obligations under the Patmos Loan, Hellenic Carriers Corporation
     S.A. has provided a guarantee to Calyon. In addition, the two bank accounts of Patmos held with
     Calyon and the balances of those accounts and all rights relating thereto are pledged in favour of
     Calyon.

     Patmos has also provided security over the M/V Hellenic Sea in the form of a first priority Maltese
     ship mortgage and an assignment of the earnings, insurances and any requisition compensation of the
     M/V Hellenic Sea. There is also an assignment of HSC’s interest (as manager of the M/V Hellenic
     Breeze) in the insurances of Hellenic Sea.

12.5 Loan from Calyon to Patmos – third supplemental agreement
     Patmos entered into a third supplemental agreement (the “Patmos Supplemental Agreement”) with
     (inter alios) Calyon on 22 November 2007 amending and supplementing the Patmos Loan.

     In particular, the Patmos Supplemental Agreement amends the following provisions of the Patmos
     Loan:

     (a)   the Company replaces Hellenic Carriers Corporation S.A. as the corporate guarantor;

     (b)   HSC replaces Hellenic Carriers Corporation S.A. as the manager of M/V Hellenic Sea;

     (c)   there is no restriction on Patmos declaring or paying dividends to its shareholders (i.e. the
           Company) if Patmos has provided Calyon with financial statements evidencing that Patmos
           maintains sufficient cash balances to meet its debt service obligations under the Patmos Loan,
           and the running expenses for M/V Hellenic Sea, each for the next three months;

     (d)   the Company may declare or pay dividends to its shareholders if no Event of Default (as
           defined in the Patmos Loan) has occurred and is continuing at the time of declaration of such
           dividends or would occur as a result thereof; and

     (e)   if, without the prior written consent of Calyon, Fotini Karamanlis and Konstantinos Karamanlis
           cease to have the power to direct the Company’s policies (through a material reduction in their
           shareholdings) and they are no longer being represented in an executive position on the Board,
           then Patmos is obliged to prepay the Patmos Loan in full within 60 days of notice from Calyon.

12.6 Loan from Calyon to Patmos - Guarantee
     By way of security for Patmos’ obligations under the Patmos Loan, the Company will provide an
     English law guarantee to Calyon. Under the terms of the guarantee, the Company will guarantee to
     pay Calyon on demand all moneys and discharge all obligations and liabilities due, owing or incurred
     by Patmos under the Patmos Loan and the related security documents.


                                                 147
      The guarantee will contain various indemnities from the Company to Calyon. The Company is
      obliged to indemnify Calyon for any losses in connection with the invalidity or unenforceability of
      any obligation, taxes or increased payments, currency exchange and any legal and other costs, charges
      and expenses incurred by Calyon.

      The Company may not assign or transfer any of its rights or obligations under the guarantee.

12.7 Loan from National Bank of Greece S.A. to Arkadia and Thasos
      On 6 November 2007, Thasos and Arkadia as joint and several borrowers (the “Borrowers”) entered
      into an English law US$57.85 million term loan agreement with National Bank of Greece S.A.
      (“NBG”) as lender (the “Arkadia Loan”).
      The Arkadia Loan was made available for the purposes of (i) refinancing in full the indebtedness of
      Thasos owed to NBG in connection with the acquisition of the M/V Hellenic Sky (registered in the
      ownership of Thasos under the Maltese flag with Official Number 8249) (“Hellenic Sky”), (ii)
      financing part of the acquisition of the M/V Hellenic Horizon (registered in the name of Arkadia under
      the flag of the Hellenic Republic with Official Number 10820 ) (“Union Leader”) and (iii) providing
      corporate liquidity.
      The loan will be made available in three advances of US$12.5 million, US$25 million and US$20.7
      million respectively and is repayable by (i) 30 repayment instalments starting three months after the
      drawdown of the first advance with the final repayment due 90 months after the date of the first
      advance and (ii) an interim balloon instalment.
      Interest consists of the aggregate of the margin (being 1% per annum for the period commencing on
      the drawdown date of the first advance and ending on the date falling twelve months thereafter, 0.95%
      per annum for the portion of the loan equal to the final balloon instalment and 0.85% per annum for
      the remaining portion of the loan) and LIBOR for each interest period.
      By way of security for the Borrowers’ obligations under the Thasos Loan, HSC has provided a
      guarantee to NBG.
      Thasos has provided security over the M/V Hellenic Sky in the form of a first priority Maltese ship
      mortgage and collateral deed of covenants.
      Arkadia has provided security over the M/V Hellenic Horizon in the form of a first preferred Greek
      mortgage of the M/V Hellenic Horizon and a collateral first priority general assignment of the
      earnings, insurances and any requisition compensation of the M/V Hellenic Horizon.
      The Borrowers have also executed a first priority pledge in favour of NBG in respect of a retention
      account opened jointly by the borrowers.
      Under the terms of the Arkadia Loan, if (i) Fotini Karamanlis and Konstantinos Karamanlis cease to
      be the ultimate beneficial owners of at least 40% of the issued share capital of the Company and/or
      (ii) any of the Ship Owning Companies and/or HSC ceases to be a wholly-owned subsidiary of the
      Company, then there is an event of default.

13.   Related party transactions
The transactions described in this section 13 are transactions which, as a single transaction or in their      AnnI(14.3)

entirety, are or may be material to the Company and have been entered into by the Company or any other         AnnI(19)

member of the Group during the period commencing on 1 January 2006 and are up to the date of this              AnnI(19(a))

document with a related party. Each of the transactions was concluded at arm’s length.                         AnnI(19(b))



13.1 Reorganisation Agreement
      The Company has entered into the Reorganisation Agreement, further details of which are set out in
      section 11.8 of this Part IX.




                                                   148
13.2 Relationship Agreements
     On 27 November 2007, the Company entered into two Relationship Agreements, the first with Fotini
     Karamanlis (“FK”), Faith and Bedat (together the “FK Group”) and the second with Konstantinos
     Karamanlis (“KK”), Corpus and Bedat (together the “KK Group”). Under the agreements each of the
     FK Group and the KK Group have agreed that all arrangements between it and the Group will be on
     arms’ length terms and that the Board will operate independently of the FK Group and the KK Group
     and all decisions taken by the Board will be made for the benefit of Shareholders as a whole.

     For as long as the FK Group controls directly or indirectly a shareholding of, in aggregate:

     (a)   at least 30% of the issued share capital of the Company, and the KK Group controls directly or
           indirectly a shareholding of, in aggregate:

           (i)    less than 30% of the issued share capital of the Company, either FK or Faith has the right
                  to appoint and maintain in office one Director (who has the right to hold the post of the
                  Chief Executive Officer or Chief Financial Officer);

           (ii)   at least 30% of the issued share capital of the Company, the FK Group and the KK
                  Group jointly have the right to appoint and maintain in office two Directors (one of
                  whom has the right to hold the post of the Chief Executive Officer or Chief Financial
                  Officer and one of whom shall be a non-executive Director, such non-executive Director
                  shall be entitled to hold the post of Chairman unless the Board determines otherwise);

     (b)   12% but less than 30% of the issued share capital of the Company, FK has the right to appoint
           and maintain in office one non-executive Director such non-executive Director shall, if elected
           by the Board, be entitled to hold the post of Chairman.

     For as long as the KK Group controls directly or indirectly a shareholding of, in aggregate;

     (a)   at least 30% of the issued share capital of the Company, and the FK Group controls directly or
           indirectly a shareholding of, in aggregate:

           (i)    less than 30% of the issued share capital of the Company, either KK or Corpus has the
                  right to appoint and maintain in office one Director (who has the right to hold the post
                  of the Chief Executive Officer or Chief Financial Officer);

           (ii)   at least 30% of the issued share capital of the Company, the KK Group and the FK
                  Group jointly have the right to appoint and maintain in office two Directors (one of
                  whom has the right to hold the post of the Chief Executive Officer or Chief Financial
                  Officer and one of whom shall be a non-executive Director, such non-executive Director
                  shall be entitled to hold the post of Chairman unless the Board determines otherwise;

     (b)   12% but less than 30% of the issued share capital of the Company, KK has the right to appoint
           and maintain in office one non-executive Director. Such non-executive Director shall, if elected
           by the Board, be entitled to hold the post of Chairman.

     These rights survive termination of the Relationship Agreements.

     The Relationship Agreements contain non-compete provisions (in relation to the dry bulk shipping
     industry) and non-solicitation provisions. These restrictions do not however apply in the event that the
     Board declines an opportunity to acquire any ships and/or acquire any interest and/or make any
     investment and/or engage in any business (provided at least one Director who is independent of the
     FK Group or the KK Group (as the case may be) and is an independent non-executive Director has
     approved such decision) in which case the FK Group or the KK Group (as the case may be) and/or
     any of its associates may make such a acquisition during the four month period following such
     decision on terms no more favourable that those offered to the Company. Ms. Karamanlis’s husband
     is not an associate for the purpose of this agreement. The Relationship Agreements also contain
     provisions ensuring that at least one independent non-executive Director votes in favour of any related
     party matters.


                                                   149
      Both Relationship Agreements automatically terminate in circumstances where the Board considers
      the FK Group and the KK Group to be acting in concert if: (a) the aggregate direct and indirect
      holding of the FK Group and the KK Group falls below 30%; or (b) any Shareholder (or group of
      Shareholders acting in concert) holds more shares, in aggregate, than the FK Group and the KK Group
      in aggregate. The relevant Relationship Agreement also terminates in circumstances where the Board
      has failed within 15 days of the relevant event to pass a resolution confirming that the FK Group and
      the KK Group are acting in concert if: (a) the aggregate direct and indirect holding of the FK Group
      (in the case of the FK Relationship Agreement) or the KK Group (in the case of the KK Relationship
      Agreement) alone falls below 30%; or (b) any Shareholder (or group of Shareholders acting in
      concert) holds more shares in aggregate than the aggregate direct and indirect holding of the FK
      Group (in the case of the FK Relationship Agreement) or the KK Group (in the case of the KK
      Relationship Agreement) alone.

13.3 The assignment of the MOA in respect of M/V Aegean Hawk (to be renamed M/V Konstantinos D)
      On 16 November 2007, Hellenic Carriers Corporation S.A. nominated Vergina as the Buyer under the
      MOA in respect of the M/V Aegean Hawk (to be renamed M/V Konstantinos D) although the
      corporate guarantee from Hellenic Carriers Corporation S.A. to the seller remains in place. For further
      details see section 11.7 of this Part IX.

14    Share incentive schemes

14.1 Introduction
      The Company has established the Long Term Incentive Plan (the “LTIP”) which will be used to
      provide equity incentives to selected employees and executive Directors. The remuneration committee
      of the Board (the “Committee”) will oversee the LTIP and awards granted under it, having regard to
      market practice within the Company’s business sector and the need to recruit, incentivise and retain
      the best people and align their interests with those of Shareholders.

      The LTIP provides for the following types of share award:

      (i)    options (“Options”); and

      (ii)   performance share awards (being conditional awards of free Shares which vest subject to
             continuing service and performance conditions) (“Performance Share Awards”),

      (together the “Awards”).

      The LTIP will be administered and operated by the Board, who shall determine the level of an Award
      and appropriate vesting, service and performance conditions. However, the grant of an Award to a
      Director, its material terms and the exercise of any discretion pursuant to such director’s Award shall
      be subject to the recommendation and approval of the Committee.

      The following is a summary of the principal terms of the LTIP. Unless stated otherwise, the same
      terms apply to Options and Performance Share Awards.

14.2 Eligibility
      Any employee or executive Director of the Group may be selected, at the Committee’s discretion, to
      be granted an Award under the LTIP.

14.3 Grant of Awards
      No payment is required for the grant of an Award.

      Awards may be granted on a day that the London Stock Exchange is open for business and trading at
      the following times:

      (a)    within 42 days following the announcement by the Company of its results for any period; or



                                                    150
      (b)     where the Committee resolves that exceptional circumstances have arisen which justify the
              grant of an Award; or

      (c)     in other circumstances which could include, without being limited to, subsequent offers of
              Shares (primary or secondary).

      It is the Company’s current intention that no awards will be granted until at least six months following
      Admission and that, thereafter, awards will normally be granted on an annual basis.

      No Awards may be granted after the tenth anniversary of Admission.

14.4 Distributions
      If the Company makes a distribution (including by way of dividend) to its shareholders between the
      grant of an Award and the date when that Award is exercised or vests (as the case may be), the Board
      may, in its absolute discretion, determine that the number of Shares subject to the Award shall be
      increased to reflect the value of the distribution which would have been paid on the Shares subject to
      the Award had such Shares been held by the awardholder.

14.5 Exercise price of Options
      Options will be granted with an exercise price per Share not less than the market value of a Share on
      the date of grant.

14.6 Plan limit
      At any time during the 10 years following the date of the first grant under the LTIP, the total number
      of Shares which have been issued or remain issuable pursuant to grants made under the LTIP, and
      under any other employees’ share scheme established by the Company, may not exceed five % of the
      Shares in issue at that time.

      For the purposes of the above limit, awards which have lapsed are to be disregarded.

14.7 Individual limit
      During any financial year of the Company, Awards may not normally be granted to any individual over
      Shares with an aggregate value (measured at the date of grant) in the case of Options of more than
      100% and in the case of Performance Share Awards of more than 75% of his/her basic salary.
      However, if the Board determines that exceptional circumstances exist in relation to an individual
      (such as his/her recruitment), these limits may be exceeded.

14.8 Exercise or vesting of Awards
      Options may be exercised, subject to continuing service and, at the discretion of the Board, subject to
      performance conditions, over such period as the Board may determine. However, it is the Board’s
      intention in the foreseeable future:

      (i)     to vest Options based only on continuing service;

      (ii)    that vesting will begin no earlier than the first anniversary of grant; and

      (iii)   that vesting will be over proportions of Shares over a specified period of time.

      Once vested, Options will remain exercisable for a period of up to five years measured from the date
      of grant.

      Performance Share Awards shall vest subject to continuing service and appropriate and challenging
      performance conditions relating to the overall performance of the Company. The conditions shall be
      determined by the Board, taking into account market practice and investor’s expectations.




                                                      151
14.9 Leavers
      If an awardholder ceases to be employed by the Group by reason of his death, injury, ill-health,
      disability, redundancy, retirement, as a result of the sale out of the Group of the business or subsidiary
      by which the awardholder is employed or any other reason which the Board in its absolute discretion
      permits, his Award will vest. The number of Shares which vest or over which Options are exercisable
      will, in these circumstances, be determined by reference to the extent to which any performance
      conditions have been fulfilled over the reduced period and will then be reduced to reflect the
      foreshortened service period. The Board may, in its discretion, determine that any performance
      conditions shall not apply.
      If an awardholder ceases employment for any other reason, his Award will lapse immediately on
      cessation.

14.10 Reconstruction, takeover or liquidation
      The rules of the LTIP provide for early exercise of Options and early vesting of Performance Share
      Awards in full in the event of takeover, reconstruction or winding-up of the Company.

14.11 Variation of share capital
      In the event of any variation in the ordinary share capital of the Company, by way of capitalisation of
      profits or reserves or by way of rights or any consolidation or sub-division, or reduction of capital or
      otherwise, or in the event of any payment of a special dividend, the plan limit, the exercise price of
      an Option and the number and the nominal value of Shares subject to an Award may be adjusted in
      such manner as the Board determines is appropriate.

14.12 Voting, dividend and other rights
      Awardholders will have no voting or dividend rights in respect of the Shares subject to Awards until
      the Awards are exercised or vest.
      Shares allotted under the LTIP will rank pari passu with the existing Shares with the exception of
      rights attaching by reference to a record date prior to the date of exercise or vesting of the relevant
      Award. Application will be made to AIM for all such Shares to be admitted to trading.
      Awards are non-transferable and non-pensionable.

14.13 Amendments
      The LTIP may be amended by the Board in any respect provided that no amendment may be made if
      it would adversely affect in any material way rights already acquired by awardholders without the
      approval of the majority of the awardholders affected, and no amendment to the material advantage
      of awardholders may be made to key provisions of the LTIP without the approval of the Shareholders.
      The Board may however make minor amendments to benefit the administration of the LTIP, to take
      account of a change in the applicable legislation in any country or territory or to obtain or maintain
      favourable tax, exchange control or regulatory treatment for awardholders or any Group company.

15.   Other information
15.1 Other than the current application for Admission, the Ordinary Shares have not been admitted to
     dealings on any investment exchange nor has any application for such admission been made nor are
     there intended to be any other arrangements for there to be dealings in the Ordinary Shares.
15.2 Save as disclosed in this document, no person (excluding professional advisers and trade suppliers)           Sch2(h)(i)

     has (i) received directly or indirectly from the Company within the 12 months preceding the date of           Sch2(h)(ii)

     this document or (ii) entered into contractual arrangements to receive, directly or indirectly, from the
     Company on or after Admission any of the following:
      15.2.1 fees totalling £10,000 or more; or
      15.2.2 securities in the Company where these have a value of £10,000 or more calculated by reference
             to the Placing Price; or


                                                     152
      15.2.3 any other benefit to a value of £10,000 or more on the date of Admission.

15.3 The accounting reference date of the Company is 31 December.

15.4 Save as disclosed in this document, there are no patents, licences, industrial, commercial or financial     AnnI(6.4)

     contracts or new manufacturing processes which are or may be of fundamental importance to the
     Company’s business.

15.5 Save as stated below, there has been no significant change in the financial or trading position of the
     Company since 30 June 2007. During the period since 1 July 2007, the business of the Group has
     performed in line with management expectations and fleet utilisation rates have remained consistent
     with those rates achieved in the six month period that ended on 30 June 2007. With the delivery of a
     supramax vessel scheduled between 1 March and 30 April 2008 and all of our current vessels fixed
     on time-charters, our management is confident about the Group’s prospects for the current financial
     year.

15.6 The Group took delivery, on 8 November 2007, of its fourth vessel, the M/V Hellenic Horizon. The
     M/V Hellenic Horizon is subject to a charterparty agreement dated 27 January 2007 with San Juan
     Navigation Corp. as a result of which the Group’s revenue will increase.

15.7 The total costs and expenses in relation to Admission and the Placing (including registration and
     London Stock Exchange fees, printing, advertising and distribution costs, legal, accounting,
     consultants and public relations fees and expenses) are payable by the Company and (assuming
     subscription in full) are estimated to amount to approximately US$4.5 million, excluding value added
     tax.

15.8 There have been no interruptions and there have been no significant changes to the business of the          AnnI(6.1.2)

     Company which have or have had a significant effect on the financial position of the Company since          AnnI(9.2.3)

     incorporation and there are no significant investments in progress by the Company.

15.9 The Directors are unaware of any exceptional factors which have influenced the Company’s activities.        AnnI(6.3)
                                                                                                                 AnnI(9.2.3)
15.10 To the extent that information in this document sourced from a third party, it has been accurately         AnnI(23.2)

      reproduced and that so far as the Company is aware and able to ascertain from the information
      published by that third party, no facts have been omitted which would render the reproduced
      information inaccurate or misleading.

15.11 The Directors are not aware of any arrangements (other than the loan agreements detailed in section        Sch2(d)

      12 of this Part IX) under which future dividends are waived or agreed to be waived.

15.12 NBG International of Old Change House, 128 Queen Victoria Street, London EC4V 4BJ has acted as
      Lead Manager.

16.   Consents
16.1 Ernst & Young (Hellas) Certified Auditors – Accountants S.A. has given and has not withdrawn its            AnnI(23.1)

     written consent to the inclusion in this document of its name, its accountant’s report in Part VI of this   AnnIII(10.3)

     document, its report on review of interim financial statements in Part VII of this document, and
     references to its name and those documents in the form and context in which they appear. Ernst &
     Young (Hellas) Certified Auditors – Accountants S.A. is registered to carry out audit work by the
     Institute of Certified Public Accountants of Greece. Ernst & Young (Hellas) Certified Auditors –
     Accountants S.A. has no material interest in the Company.

16.2 Drewry Shipping Consultants Limited (“Drewry”), shipping consultants of Drewry House, Meridian
     Gate, South Quay, 213 Marsh Wall, London, E14 9FJ has given and not withdrawn its written consent
     to the inclusion of the Industry description in Part I of this document, its name and the references to
     it in this document in the form and context in which they are included. Drewry has no material interest
     in the Company.



                                                     153
17.   Third party information
The information sourced from Drewry in Part I of this document has been accurately reproduced and as far   AnnI(23.2)

as the Directors are aware and have been able to ascertain from information published by Drewry no facts   AnnIII(10.4)

have been omitted which would render the reproduced information inaccurate or misleading. Where third
party information has been used in this document the source of such information has been identified.

27 November 2007




                                                    154
                                           sterling greenaways 95351

				
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