Far Eastern Shipping : Consolidated Financial Statements for the year ended 31 December 2022

FAR-EASTERN SHIPPING COMPANY PLC.

AND IT'S SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

for the year ended 31 December 2022

and Independent Auditors' Report

	CONTENTS
Independent Auditors' Report	3
Consolidated Statement of Financial Position	7
Consolidated Statement of Profit or Loss	8
Consolidated Statement of Comprehensive Income	9
Consolidated Statement of Changes in Equity	10
Consolidated Statement of Cash Flows	12
Notes to the consolidated financial statements
1.	Organisation and Trading Activities	14
2.	Basis of Preparation	14
3.	Accounting Policies	18
4.	Goodwill	19
5.	Fleet	20
6.	Rolling Stock and Other Tangible Fixed Assets	22
7.	Investments in Associates	25
8.	Inventories	26
9.	Non-Derivative Financial Assets and Liabilities, Other Assets	26
10.	Debt Obligations	30
11.	Current and Deferred Tax	32
12.	Shareholders' Equity	34
13.	Business Segmental Analysis	34
14.	Revenue	37
15.	Operating Expenses	38
16.	Administrative Expenses	38
17.	Impairment of assets	38
18.	Other Finance Income and Costs, net	38
19.	Earnings per share	39
20.	Contingencies and Commitments	40
21.	Fair Value and Risk Management	41
22.	Related Party Transactions	46
23.	Events Subsequent to The Reporting Date	47

JSC "Kept"

Naberezhnaya Tower Complex, Block C

10 Presnenskaya Naberezhnaya

Moscow, Russia 123112

Telephone	[phone]
Fax	[phone]

Independent Auditors' Report

To the Shareholders of and Board of Directors

FAR-EASTERN SHIPPING COMPANY PLC. (FESCO)

Opinion

We have audited the consolidated financial statements of FAR-EASTERN SHIPPING COMPANY PLC. (FESCO) (the "Company") and its subsidiaries (the "Group"), which comprise the consolidated statement of financial position as at 31 December 2022, the consolidated statements of profit or loss, comprehensive income, changes in equity and cash flows for the year then ended, and notes, comprising significant accounting policies and other explanatory information.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at 31 December 2022, and its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRS).

Basis for Opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the independence requirements that are relevant to our audit of the consolidated financial statements in the Russian Federation and with the International Ethics Standards Board for Accountants International Code of Ethics for Professional Accountants (including International Independence Standards) (IESBA Code), and we have fulfilled our other ethical responsibilities in accordance with the requirements in the Russian Federation and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

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

Audited entity: FAR-EASTERN SHIPPING COMPLANY PLC. (FESCO)

Independent auditor: JSC "Kept"

Registration number in the Unified State Register of Legal Entities:

No. 1022502256127

FAR-EASTERN SHIPPING COMPANY PLC. (FESCO)

Independent Auditors' Report

Page 2

Valuation of goodwill

Please refer to the Notes 4 the consolidated financial statements.

The key audit matter	How the matter was addressed in our audit
The Group has significant goodwill	We evaluated the reasonableness of the expected cash flow
which is material to the consolidated	forecasts by comparing them with externally derived data as well
statement of financial position as at	as our own assessments in relation to key inputs such as
31 December 2022. Due to current	forecasts for volumes of containers throughput and other cargos,
market conditions, including volatility	forecasted container charge out and general cargo rates, costs
of import and export volumes and	projections, discount and terminal growth rates.
exchange rates, there is a risk that the	We challenged:
above may be not recoverable in full.
The risk is associated with goodwill of	- the key assumptions for short and long term growth rates in the
Vladivostok Sea Trade Port ("VMTP")	forecasts by comparing them with economic and industry
cash generating unit ("CGU").	forecasts;
As at the reporting date management	- the discount rates used. Specifically, we recalculated the
determines the recoverable amount of	Group's weighted average cost of capital using market
the Group's assets and cash	comparable information.
generating units as their value in use.	We used our own valuation specialist to assist us in evaluating
Due to the inherent uncertainty	the assumptions and methodologies used by the Group.
involved in forecasting and discounting
future cash flows, which are the basis
of the assessment of recoverability,
this is one of the key judgmental areas
that our audit is concentrated on.

Other Information

Management is responsible for the other information. The other information comprises the information included in the Group's Annual Report for 2022 and in the Company's Issuer's Report for 12 months 2022, but does not include the consolidated financial statements and our auditors' report thereon. The Group's Annual Report for 2022 and the Company's Issuer's Report for 12 months 2022 are expected to be made available to us after the date of this auditors' report.

Our opinion on the consolidated financial statements does not cover the other information and we will not express any form of assurance conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with IFRS, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

FAR-EASTERN SHIPPING COMPANY PLC. (FESCO)

Independent Auditors' Report

Page 3

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

Those charged with governance are responsible for overseeing the Group's financial reporting process.

Auditors' Responsibilities for the Audit of the Consolidated Financial Statements

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

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

• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
• Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors' report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors' report. However, future events or conditions may cause the Group to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

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

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.