1. Basis of Presentation and General Information

Dorian LPG Ltd. (“Dorian”) was incorporated on July 1, 2013, under the laws of the Republic of the Marshall Islands and is headquartered in the United States and is engaged in the transportation of liquefied petroleum gas (“LPG”) worldwide through the ownership and operation of LPG tankers. Dorian LPG Ltd. and its subsidiaries (together “we”, “our”, “DLPG” or the “Company”) is primarily focused on owning and operating very large gas carriers (“VLGCs”), each with a cargo carrying capacity of greater than 80,000 cbm. Our fleet currently consists of six LPG carriers, including two fuel-efficient 84,000 cbm ECO-design VLGCs, three 82,000 cbm VLGCs and one pressurized 5,000 cbm vessel. In addition, we have newbuilding contracts for the construction of seventeen new fuel-efficient 84,000 cbm ECO-design VLGCs at Hyundai Heavy Industries Co., Ltd. (“Hyundai” or “HHI”), and Daewoo  Shipping and Marine Engineering Ltd. (“Daewoo”), both of which are based in South Korea, with scheduled deliveries between January 2015 and January 2016. We refer to these contracts along with the VLGCs that were delivered in July and September 2014 as our VLGC Newbuilding Program.

On May 13, 2014, Dorian completed its initial public offering (the “IPO”) and its shares trade on the New York Stock Exchange under the ticker symbol “LPG”.

The accompanying unaudited condensed consolidated financial statements and related notes (the “Financial Statements”) have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In our opinion, all adjustments, consisting of normal recurring items, necessary for a fair presentation of financial position, operating results and cash flows have been included in the Financial Statements. The Financial Statements should be read in conjunction with the audited consolidated financial statements and related notes for the period ended March 31, 2014 included in the Dorian LPG Ltd. Annual Report on Form 20-F filed with the Securities and Exchange Commission (“SEC”) on July 30, 2014.

Our quarterly results are subject to seasonal and other fluctuations, and the operating results for any quarter are therefore not necessarily indicative of results that may be otherwise expected for the entire year.

As of September 30, 2014, we have current assets of $296.6 million. We have commitments to the shipyards for our newbuilding vessels to be delivered through September 30, 2015 of $696.3 million.

We have funded our obligations to date through cash flows from operations, bank borrowings and equity offerings. Management intends to continue to fund cash flow requirements through these sources. We are currently in negotiations for new credit facilities with banks and Korean export credit agencies and management believes the sources of financing mentioned above will be adequate to fund our operations for the upcoming twelve months and our vessel newbuilding commitments. We do not yet have fully committed bank financing adequate to cover our contractual financial obligations related to our VLGC Newbuilding Program that will come due in the twelve months ending September 30, 2015. Although these factors raise an uncertainty about our ability to fund our obligations related to our VLGC Newbuilding Program, management believes new credit facilities to fund these commitments will be secured. In addition, management believes that if these sources do not provide adequate financing to fund our cash flow needs, it could sell vessels and/or newbuilding contracts.

Our subsidiaries as of September 30, 2014 which are all wholly-owned and are incorporated in Republic of the Marshall Islands (unless otherwise noted) are listed below.

Vessel Owning Subsidiaries

Newbuild Vessel Owning Subsidiaries(3)

Management Subsidiaries

Dormant Subsidiaries

(1)           CBM: Cubic meters, a standard measure for LPG tanker capacity.

(2)           Very Large Gas Carrier (“VLGC”), Pressurized Gas Carrier (“PGC”)

(3)           Represents newbuild vessels not yet delivered as of September 30, 2014

2. Significant Accounting Policies

The same accounting policies have been followed in these unaudited interim condensed consolidated financial statements as were applied in the preparation of our audited financial statements for the period ended March 31, 2014 (see Note 2 of the consolidated financial statements for the period ended March 31, 2014 included in our Annual Report on Form 20-F for the period ended March 31, 2014).

There are no recent accounting pronouncements, other than those disclosed in our audited financial statements for the period ended March 31, 2014, for which the adoption of would have a material effect on our unaudited interim condensed consolidated financial statements in the current period or expected to have an impact on future periods.

3. Transactions with Related Parties

We outsourced the technical and commercial management of our vessels to Dorian (Hellas), S.A. (“Dorian Hellas” or the “Manager”), a related party, through June 30, 2014, pursuant to management agreements entered into by each vessel owning subsidiary on July 26, 2013, as amended. Management fees related to these agreements for the six months ended September 30, 2014 amounted to $1.1 million and are presented in Management fees-related party. There were no management fees related to these agreements for the three months ended September 30, 2014. The amounts due to/from related parties represent amounts due to/from the Manager relating to payments made by the Manager on our behalf relating to vessels operations, fees due to the Manager for services rendered, net of amounts transferred to the Manager.

Additionally, a fixed monthly fee of $15,000 per hull was payable to the Manager for pre-delivery services provided during the period from July 29, 2013 until the date of delivery of each newbuilding. Management fees related to the pre-delivery services for the six months ended September 30, 2014 amounted to $0.9 million. There were no management fees related to pre-delivery services for the three months ended September 30, 2014.

As of July 1, 2014, vessel management services and the associated agreements for our fleet were transferred from the Manager and are now provided through our wholly owned subsidiaries Dorian LPG (USA) LLC, Dorian LPG (UK) Ltd and Dorian LPG Management Corp.

4. Deferred Charges, Net

The analysis and movement of deferred charges is presented in the table below:

The drydocking costs incurred during the six months ended September 30, 2014 relate to the drydocking for Grendon, which was drydocked during the period.

Offering costs related to our IPO were transferred to additional paid-in capital (“APIC”) on completion of our IPO on May 13, 2014.

5. Vessels, Net

The additions represent amounts transferred from Vessels under Construction relating to the cost of our newbuildings, the Comet and the Corsair, which were delivered to us on July 25, 2014 and September 26, 2014, respectively.

Vessels, with a total carrying value of $265.0 million as of September 30, 2014, are first-priority mortgaged as collateral for our loan facility (refer Note 7). No impairment loss was recorded for the periods presented.

6. Vessels Under Construction

The installment payments to the shipyards, totaling $178.5 million, represent scheduled payments we made to the shipyards for the six months ended September 30, 2014. Other capitalized expenditures represents LPG coolant of $1.1 million, fees paid to our Manager of $0.9 million and to third party vendors of $3.5 million for supervision fees and other newbuilding pre-delivery costs including engineering and technical support, liaising with the shipyard, and ensuring key suppliers are integrated into the production planning process.

7. Long-term Debt

The table below presents the loans outstanding as of September 30, 2014:

The interest rate on the loan facility increased in accordance with the loan agreement from LIBOR plus a margin of 1.5% per annum to LIBOR plus a margin of 2.0% per annum on September 26, 2014, commensurate with the delivery of the Corsair. The margin will be increased to 2.5% on September 26, 2015 until maturity.

The loan facility is secured by first priority mortgages on the Captain John NP, Captain Markos NL, Captain Nicholas ML and Corsair and first assignments of all freights, earnings and insurances. In addition, we were obliged to maintain $66,538,170 in a restricted cash account, which was reduced on the date of the second, third and fourth pre-delivery shipyard installments for the Corsair and on delivery of the Corsair was reduced to zero.

8. Common Stock

On April 25, 2014, we completed a private placement of 1,412,698 common shares with a strategic investor at a price of NOK 110.00 or USD 18.40 based upon the exchange rate on April 24, 2014, which represents approximately $26.0 million in gross proceeds not including closing fees.

On May 13, 2014, we completed an initial public offering of 7,105,263 common shares on the New York Stock Exchange at a price of $19.00 per share, or $135.0 million in gross proceeds not including underwriting fees or closing costs. The shares began trading on the New York Stock Exchange on May 8, 2014 under the ticker symbol “LPG”.

On May 22, 2014, we completed the issuance of 245,521 common shares related to the overallotment exercise by the underwriters of our initial public offering at a price of $19.00 per share, or $4.7 million in gross proceeds not including underwriting fees or closing costs.

On June 25, 2014, we completed the exchange offer of unregistered common shares that we previously issued in our prior equity private placements, other than the common shares owned by our affiliates, for 15,528,507 common shares that have been registered under the Securities Act of 1933, as amended, the complete terms and conditions of which were set forth in a prospectus dated May 8, 2014 and the related letter of transmittal.

On June 30, 2014, 655,000 shares of restricted stock were granted and issued to certain of our officers under the equity incentive plan (see Note 9 for further discussion regarding stock-based compensation).

9. Stock-Based Compensation Plans

In April 2014, we adopted an equity incentive plan, which we refer to as the Equity Incentive Plan, under which we expect that directors, officers, and employees (including any prospective officer or employee) of the Company and its subsidiaries and affiliates, and consultants and service providers to (including persons who are employed by or provide services to any entity that is itself a consultant or service provider to) the Company and its subsidiaries and affiliates, as well as entities wholly-owned or generally exclusively controlled by such persons, may be eligible to receive non-qualified stock options, stock appreciation rights, stock awards, restricted stock units and performance compensation awards that the plan administrator determines are consistent with the purposes of the plan and the interests of the Company. We have reserved 2,850,000 of our common shares for issuance under the Equity Incentive Plan, subject to adjustment for changes in capitalization as provided in the Equity Incentive Plan in April 2014. The plan is administered by our compensation committee. For more information relating to the terms of our Equity Incentive Plan, please see the section entitled Equity Incentive Plan in Item 6. Directors, Senior Management and Employees — B. Compensation included in our Annual Report on Form 20-F for the period ended March 31, 2014.

On June 30, 2014, we granted 655,000 shares of restricted stock to certain of our officers. One-third of these restricted shares vest three years after grant date, one-third vest four years after grant date, and one-third vest five years after grant date. The restricted shares were valued at their fair market value on their grant date and are expensed on a straight-line basis over five years. Our stock-based compensation expense was $0.8 million for both the three and six months ended September 30, 2014. Unrecognized compensation cost as of September 30, 2014 is $14.3 million and will be recognized over the remaining weighted average life of 4.8 years.

A summary of the activity of our restricted shares as of September 30, 2014 and changes during the six months then ended, is as follows:

10. Revenues

Revenues comprise the following:

Time charter revenue included a profit-sharing element of the time charter agreements of $2.2 million and $5.3 million for the three and six months ended September 30, 2014, respectively. For the period July 1, 2013 (inception) to September 30, 2013, $0.9 million of the profit-sharing element of the time charter agreements is included in time charter revenue. Other revenue represents income from charterers relating to reimbursement of expenses such as costs for security guards and war risk insurance.

11. Derivatives and Financial Instruments

Our principal financial assets consist of cash and cash equivalents, amounts due from related parties and trade accounts receivable. Our principal financial liabilities consist of long-term bank loan, interest rate swaps, accounts payable, amounts due to related parties and accrued liabilities.

(a)       Concentration of credit risk:  Financial instruments, which potentially subject us to significant concentrations of credit risk, consist principally of trade accounts receivable, amounts due from related parties, cash and cash equivalents. We limit our credit risk with accounts receivable by performing ongoing credit evaluations of our customers’ financial condition and generally do not require collateral for our trade accounts receivable. We place our cash and cash equivalents, with highly-rated financial institutions.

(b)           Fair value:  The carrying values of trade accounts receivable, amounts due from related parties, cash and cash equivalents, accounts payable, amounts due to related parties and accrued liabilities are reasonable estimates of their fair value due to the short-term nature of these financial instruments. The fair value of long-term bank loan approximates recorded value due to its variable interest rate, being LIBOR, which is observable at commonly quoted intervals for the full terms of the loan. Therefore, the long-term bank loan is considered a Level 2 item in accordance with the fair value hierarchy.

(c)           Interest rate risk:  Our long-term bank loan is based on LIBOR and hence we are exposed to movements in LIBOR. We entered into interest rate swap agreements in order to hedge our variable interest rate exposure.

We use interest rate swaps for the management of interest rate risk exposure. The interest rate swaps effectively convert our debt from a floating to a fixed rate. To hedge our exposure to changes in interest rates we are a party to five floating-to-fixed interest rate swaps with RBS. Interest rate swaps are stated at fair value, which is determined using a discounted cash flow approach based on market-based LIBOR swap yield rates. LIBOR swap rates are observable at commonly quoted intervals for the full terms of the swaps and therefore are considered Level 2 items in accordance with the fair value hierarchy. The fair value of the interest rate swap agreements approximates the amount that we would have to pay for the early termination of the agreements.

Tabular disclosure of financial derivatives is as follows:

The effect of derivative instruments on the consolidated statement of operations for the periods presented are as follows:

As of September 30, 2014 and March 31, 2014, no fair value measurements for assets or liabilities under Level 1 or Level 3 were recognized in our consolidated balance sheets. We did not have any other assets or liabilities measured at fair value on a nonrecurring basis during the three or six months ended September 30, 2014.

12. Earnings/(Loss) Per Share (“EPS”)

Basic EPS represents net income/(loss) attributable to common shareholders divided by the weighted average number of common shares outstanding during the measurement period. Our restricted stock shares include rights to receive dividends that are subject to the risk of forfeiture if service requirements are not satisfied, thus these shares are not considered participating securities and are excluded from the basic weighted-average shares outstanding calculation. Diluted EPS represent net income attributable to common shareholders divided by the weighted average number of common shares outstanding during the measurement period while also giving effect to all potentially dilutive common shares that were outstanding during the period.

The calculations of basic and diluted EPS for the periods presented were as follows:

For the three and six months ended September 30, 2014, there are 655,000 shares of unvested restricted stock excluded from the calculation of diluted EPS because the effect of their inclusion would be anti-dilutive.

13. Commitments and Contingencies

Commitments under Newbuilding Contracts

As of September 30, 2014, we had commitments under shipbuilding contracts and supervision agreements for seventeen newbuildings. We expect to settle these commitments as follows:

Other

From time to time we expect to be subject to legal proceedings and claims in the ordinary course of business, principally personal injury and property casualty claims. Such claims, even if lacking in merit, could result in the expenditure of significant financial and managerial resources. We are not aware of any claim, which is reasonably possible and should be disclosed or probable and for which a provision should be established in the accompanying interim condensed consolidated financial statements.

14. Subsequent Events

Robert Bugbee, President and Director of Scorpio Tankers Inc. (“Scorpio”), resigned from the Company’s board of directors on October 29, 2014.  Pursuant to a shareholders’ agreement with Scorpio and other existing shareholders of the Company dated November 26, 2013, Scorpio retains the right to appoint one director to fill the resulting vacancy on the Company’s board of directors so long as Scorpio owns at least 10% of the Company’s outstanding shares.

Vessel Owning Subsidiaries

Newbuild Vessel Owning Subsidiaries(3)

Management Subsidiaries

Dormant Subsidiaries

(1)           CBM: Cubic meters, a standard measure for LPG tanker capacity.

(2)           Very Large Gas Carrier (“VLGC”), Pressurized Gas Carrier (“PGC”)

(3)           Represents newbuild vessels not yet delivered as of September 30, 2014