2. FINANCIAL

2.1 Review of current budget

Under the previous ownership there has not been any budget or financial planning onboard.

2.2 Review of recent financial reports

No financial reporting is available. The boat’s finances have been the responsibility of the owner’s office in Paris; all financial records are held by them and are not available onboard.

2.3 Review of current financial structure/system

Under previous ownership, the Captain has made funding request directly to the owner’s team as and when he has needed funds. Funds are then provided to the owner’s accounting office in Paris and invoices paid by them. Often funds received have not matched the request made by the Captain, therefore spending has needed to be reduced and regularly there have been bills that have not been able to be paid.

2.4 Review of current financial controls

2.4.1 Budget for the first three months

Below is an overview of a likely budget for the first three months of basic operation, this assumes that the vessel will remain in port with minimal crew. At this early stage this should be used to provide an indication of possible running costs as there are currently many unknown factors.

2.4.2 Annual Budget Example

This budget is an example for a minimal operation for this type of vessel, so called skeleton budget. For minimum maintenance aiming to maintain the value of the asset, when stationary at port, with occasional sea trials. Budget suggests the vessel to be in a good general condition requiring only maintenance to keep it to the level.

This budget is not tailored to M/Y Sarafsa as we are lacking information to reflect expected costs and services as per service agreements in place and potential movement and maintenance requirement of the vessel.

Please refer to Annex 3 to view the pdf version of this annual budget example.

2.5 Review of any current outstanding invoices

Ships Cash: Current ships cash was counted with the Captain, currently there is total cash of EUR 2,460.00 onboard.

Credit Cards: Currently there are no Credit cards onboard.

2.6 Arrow Recommendations

Moving forward we would recommend the implementation of a financial management system onboard Sarafsa in order to effectivly manage the finances of the vessel to ensure funds are available as required by the Captain for the day to day operations and also implement appropriate financial controls necessary to manage and control expenditure within acceptable limits. The Financial management system should include the provision of Credit cards/Pre payment cards in order to reduce the need for cash payments. Currently the Captain is highly dependent on the services of local agents in port to make payments on his behalf, use of this service results in the payment of commissions or service charges to the agent increasing the overall running costs. Implementation of a suitable financial system onboard will enable invoices to be settled directly by the management and also credit card payments when appropriate with the result of significantly reducing agency fees.