Company: ASC
Filing Date: 2025-03-07
Form Type: 20-F
Source: 0001558370-25-002500
Chunk: 152

Company: Ardmore Shipping Corp
Filing Date: 2025-03-07
Form: 20-F
Item: Item 10
Chunk 152
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 a set of countermeasures in order to minimize the risk of piracy attacks during voyages, particularly through regions which the Joint War Committee or our insurers consider high risk, or which they recommend monitoring, to make the navigation safer for sea staff and to protect our assets. The price and supply of fuel is unpredictable and can fluctuate from time to time. We periodically consider and monitor the need for fuel hedging to manage this risk.

Foreign exchange risk

The majority of our transactions, assets and liabilities are denominated in U. S. Dollars, our functional currency. We incur certain general and operating expenses in other currencies (primarily the Euro, Singapore Dollar and Pounds Sterling) and as a result there is a transactional risk to us that currency fluctuations will have a negative effect on the value of our cash flows. Such risk may have an adverse effect on our financial condition and results of operations. We believe these adverse effects to be immaterial and did not enter into any derivative contracts for either transaction or translation risk during the year ended December 31, 2024.

Interest rate risk

We are exposed to the impact of interest rate changes, primarily through borrowings that require us to make interest payments based on the Adjusted SOFR. Significant increases in interest rates could adversely affect our results of operations and our ability to repay debt. We regularly monitor interest rate exposure and may from time to time enter into swap arrangements to hedge exposure where it is considered economically advantageous to do so. We were not party to any swap agreements relating to interest rate risk during the year ended December 31, 2024.

When we enter into interest rate swap agreements, we are exposed to the risk of credit loss in the event of non-performance by the counterparties to the swap agreements. To minimize counterparty risk, we generally have only entered into derivative transactions with investment grade counterparties at the time of the transactions. In addition, to the extent possible and practical, we generally enter into interest rate swaps with different counterparties to reduce concentration risk.

The disclosure in the immediately following paragraph about the potential effects of changes in interest rates are based on a sensitivity analysis, which models the effects of hypothetical interest rate shifts.