Braemar Shipping Services plc
Annual Report 2012

Shipbroking + Technical + Logistics + Environmental

Our business

The Group is divided into four operating divisions: Shipbroking, Technical, Logistics and Environmental. These work together to offer a unique combination of skills for clients, at any time, anywhere in the world.

We recognise that the needs of our clients are ever-changing and our aim is to provide a skilled and professional workforce to address those needs.

We will continue to develop our worldwide presence to meet the challenges of our international marketplace.

Well positioned

The Group is well positioned to provide its wide range of services from its international network of offices. The focus is on providing high quality services to ensure that clients' needs are met to the highest standards.

Financial highlights

	Revenue		Pre-tax profit
2011: £126.1m	£133.5m	2011: £13.2m	£9.8m
	Earnings per share		Cash at 29 February 2012
2011: 48.41p	33.84p	2011: £25.6m	£17.5m
	Full year dividend per share		Revenues from the Technical, Logistics and Environmental divisions
2011: 26.0p	26.0p	2011: £64.5m	£83.7m

2012 Review of Operations 01-16
Governance 16-27
Financial statements 28-61
Shareholder information 62-64

2012 Review of Operations

IFC 2012 key highlights
02 Chairman's statement
04 Chief Executive's strategic review
06 Review of operations
12 Corporate social responsibility report
14 Financial review

Governance

16 Board of Directors
17 Report of the Directors
19 Corporate Governance
22 Remuneration Report
27 Independent auditors' report to the members of Braemar Shipping Services plc

Financial statements

28 Consolidated income statement
28 Consolidated statement of comprehensive income
29 Balance sheets
30 Cash flow statements
31 Statements of changes in equity
32 Notes to the consolidated financial statements
60 Five year financial summary

Shareholder information

62 Shareholder information
63 Offices and contacts

Operational highlights

Breadth

Increase in shipbroking chartering transactions and robust sale and purchase performance in a challenging market

Expansion

Expansion of Braemar Technical Services with the purchase of Casbarian Engineering in addition to The Salvage Association

Response

Significant role played by the Environmental division in handling the containers from the stricken RENA in New Zealand

Diversification

Growing contribution from Technical, Logistics and Environmental divisions, supporting the strategy of diversification

Braemar Shipping Services plc
Annual Report 2012

Chairman's statement

Overview

This has been a challenging year for shipping with a significant surplus of tonnage in many sectors. While Shipbroking activity remained strong, charter rates and vessel values suffered and income fell as a result. However, the Technical, Logistics and Environmental divisions all performed well and offset some of the reduction. Their success was largely the result of the more positive oil and gas services market, increased levels of activity and the Group's on-going response work in support of the stricken container ship the RENA in New Zealand. The growing contribution from these divisions is an important factor in the development and growth of the Group.

Results

Group revenues grew 6% to £133.5 million; pre-tax profits before amortisation of acquisition related intangibles and non-recurring items were £11.2 million compared with £14.8 million in 2010/11 and pre-tax profits were £9.8 million compared with £13.2 million in 2010/11. Basic earnings per share (EPS) were 33.84p (2011: 48.41p) and EPS excluding amortisation of acquisition related intangibles and non-recurring items were 39.05p (2011: 53.84p).

Acquisitions

We continue to make progress with our strategy of diversifying our marine interests into areas which are less geared to the shipping market cycle. In May 2011 we acquired the business and certain assets of BMT Marine and Offshore Surveys Limited from the administrator for £2.4 million in cash. The business trades under the name Braemar incorporating The Salvage Association, providing hull and machinery, protection & indemnity (P&I) and marine warranty survey services around the globe.

In July we acquired the business and certain assets of Casbarian Engineering which provides specialist engineering services primarily to the offshore industry in the Gulf of Mexico. Both of these businesses have been integrated within the Technical division.

Dividend

The Directors are recommending for approval, at the Annual General Meeting on 20 June 2012, an unchanged final dividend of 17 pence per ordinary share, to be paid on 25 July 2012 to shareholders on the register at the close of business on 22 June 2012. Together with the 9 pence interim dividend, the Company's dividend for the year will be 26 pence (2011: 26 pence). The dividend is covered 1.5 times by earnings before amortisation of acquisition related intangibles and non-recurring items.

Outlook

The shipping markets are likely to feel the effects of the tonnage surplus for a few years to come. The principal forces working to re-balance the fleet are the continuing growth in demand from Asia for energy and raw materials and the scrapping of older ships. However, the pace of correction is difficult to assess because of the uncertain macroeconomic picture. In this environment shipbroking activity is likely to remain high but with continuing pressure on margins.

The Technical division should benefit from the more active oil and gas industry and a full year's contribution from acquired businesses.

After a strong performance last year, the Logistics division has begun the new year in the same vein and the prospects for the coming year are good.

The Environmental division expects to commit a similar level of resource to the RENA for most of the coming year although the commitment in the second half may reduce as the project nears completion. Braemar Howells' pre-eminence in this type of work has established them as a leader in the field.

Braemar is well-equipped to trade in the competitive and challenging markets in which the Group operates. The skills, experience and commitment of the Group's staff around the world deserves much praise and I offer them my thanks on behalf of the Board.

Sir Graham Hearne CBE
Chairman
4 May 2012

Braemar Shipping Services plc
Annual Report 2012

2012 Review of Operations 01-19
Governance 16-27
Financial statements 28-61
Shareholder information 62-64

Our services

Shipbroking

Tanker chartering – crude oil, clean products, LPG, LNG, chemicals
Dry bulk chartering
Ship valuations
LPG trading
LNG consultancy
Offshore – chartering and sale and purchase
Containers – chartering and sale and purchase
Sale and purchase – second-hand, newbuilding, demolition

Logistics

Port and liner agency
Ship-to-ship transfers
Hub agency
Customs clearance
Supply chain management
Freight forwarding
Worldwide consolidation
Project cargoes
Cruise ship support
Recycling

Environmental

Pollution control
Incident response
Salvage services
Marine and port services
Accredited training and environmental consultancy
Crisis management and emergency response advice
Industrial services and tank cleaning technology
MARPOL waste reception facilities
Airport services
Forensic science services
Response facility management

Our global coverage

Braemar offices

Shipbroking
Technical
Logistics
Environmental

Braemar Shipping Services plc
Annual Report 2012
03

Chief Executive's strategic review

Overview

Our strategy is to grow our international shipbroking and marine and energy services businesses. We advise and execute transactions for the principals who operate in these markets. We have built a group that derives its income from a mixture of transaction-related commission and time-based or project-based fee income. Our staff of nearly 1,000, possess a unique blend of complementary skills in shipbroking, marine engineering and surveying, energy loss adjusting, ship agency and logistics and environmental response. We have representation in all of the main geographies and shipping cities.

Shipping facilitates world trade and is greatly influenced by the demand for bulk commodities (particularly iron ore, coal and grain), energy (oil, gas, refined products and exploration) and exported consumer products via container. Each is subject to its own market forces but there are a number of common features which affect shipping which include:

Fleet growth and current imbalance.
The dominating influence of Asia in most aspects of shipping.
A significant reduction in most vessel values in the past few years.
A shortage of available bank finance.

In anticipation of the growth in the fleet much of our recent investment has been in marine surveying and engineering and similar support services which stand to benefit from a greater requirement for their skills. We have also been building our presence in Asia to ensure we participate fully in the region. The rapid emergence of the "southern silk route" of trade between Africa, South America and Asia will be an important factor in the future development of the Group.

Our estimate of the shipbroking forward order book (which includes newbuildings yet to be delivered and period charters) deliverable over the course of the financial year 2012/13 stands at £19 million (US$30 million), compared with £25 million (US$39 million) at 1 March 2011. Newbuilding business has been scarce and we have seen a noticeable shift away from long-term period business in favour of spot business, where numbers of transactions are continuing to increase. This is unsurprising when there is little incentive for owners to commit their ships at an unattractive return.

Colleagues

Everyone across the Group has worked very hard throughout the year, with skill and commitment second to none, and I would like to thank them all sincerely for their contribution.

Alan Marsh FICS

Chief Executive

4 May 2012

Financial performance by division

Shipbroking	2012 £'000	2011 £'000
Revenue	49,813	61,646
Divisional operating profit	7,121	14,309
Divisional operating profit margin	14.3%	23.2%
Employee numbers	302	288

Technical

Revenue	31,954	22,621
Divisional operating profit	1,833	1,319
Divisional operating profit margin	5.7%	5.8%
Employee numbers	339	222

Logistics

Revenue	37,630	35,119
Divisional operating profit	1,888	1,230
Divisional operating profit margin	5.0%	3.5%
Employee numbers	227	232

Environmental

Revenue	14,529	6,749
Divisional operating profit	1,857	271
Divisional operating profit margin	12.8%	4.0%
Employee numbers	51	60

Divisional operating profit is defined as operating profit before amortisation of acquisition related intangibles, non-recurring items and central costs and is referred to consistently throughout the divisional reviews.

Braemar Shipping Services plc

Annual Report 2012

2012 Review of Operations 01-16
Governance 16-27
Financial statements 28-61
Shareholder information 62-64

Our vision

To continue to develop our worldwide presence to meet the challenges of our international marketplace.

Our strategy

Our strategy is to grow our international shipbroking, marine and energy services businesses.

Markets

Global, competitive and fragmented. Relationship based. Commission income.

International. Defined by skill-sets, expertise and track record. Contractual – Project or time based.

One off fee or project income. Relationship based. Cory presence in UK and Singapore.

Incident driven. Defined by response capability and skill-sets. Presence in the UK, New Zealand and Africa.

Client base

Shipowners, charterers, yards, banks, oil, gas and commodities companies, trading houses, demolition contractors and financial institutions.

Major oil and gas companies, insurance companies, ship and rig owners and operators.

Major shipowners and charterers (wet, dry, container and cruise ships) and small to medium organisations from sole traders to blue chip companies.

Ports, major shipowners, charterers, industrial clients and insurance companies.

Drivers

Supply and demand for vessels, number of skilled brokers and the competition.

Economic factors: World trade, price and supply of raw materials (particularly oil, coal and iron ore), the availability of finance, exchange rates (particularly relative to the US dollar).

New investment projects including exploration activity, natural catastrophes, newbuilding activity and ordering, fleet size, staff skill-sets.

Number of clients and their activity level (port calls). UK and Far East trade and relative competitiveness.

Environmental and safety regulation, legislation and government training. Major oil or chemical spill incidents. Customer relationships.

Braemar Shipping Services plc
Annual Report 2012
05

Review of Operations

Shipbroking

Braemar Seascope's brokers use their close understanding of the workings of the markets to ensure their clients meet market challenges head-on and with confidence.

Revenue	£49.8m	Divisional operating profit	£7.1m
2012	49.8	2012	7.1
2011	61.6	2011	14.3
2010	57.4	2010	13.3

Offices

London
Melbourne
Singapore
Monte Carlo
Aberdeen
Mumbai
Beijing
Perth
Delhi
Shanghai
Genoa

Services

Tanker chartering – crude oil, clean products, LPG, LNG, chemicals
Offshore – chartering and sale and purchase
Dry bulk chartering
Containers – chartering and sale and purchase
Ship valuations
Sale and purchase – second-hand, newbuilding, demolition
LPG trading
LNG consultancy

Growth market

Chinese Oil Imports (Million BPD)

6.00
5.00
4.00
3.00
2.00
1.00

Shipbroking revenues were £49.8 million compared to £61.6 million in the previous year and divisional operating profits were £7.1 million compared to £14.3 million last year. The fall in the divisional operating profit margin reflects market weakness and a lower order book.

Dry bulk

On 1 March 2011 the Baltic Dry Index stood at 1,251 and by the end of our financial year (29 February 2012) it had fallen to 750 although it reached a high of 2,173 on 14 October 2011 and a low of 647 on 3 February 2012. The average for that period was 1,476 and on 4 May 2012 it stood at 1,157.

The growth in the dry bulk fleet is dominating the market and the sustained oversupply is likely to continue. While 2011 was a record year for bulker scrapping, with around 25 million dwt removed from the fleet, new deliveries were in the region of 95 million dwt representing a net addition to the fleet of 13%. The Cape market was very weak at the beginning and end of the year but saw a noticeable recovery during the second half as Chinese buyers took advantage of lower iron ore prices to enhance their inventories. While most volatility has been in the Cape market, smaller ships showed more resilience throughout the year often achieving higher daily rates than Capes. Our offices in India and the Far East performed well in this challenging market, with most growing their level of business involvement.

Deep Sea tankers

For the majority of the year tanker rates remained low, giving returns to owners at below break-even and at times even below daily operating costs. Oil prices remain high and as a consequence the price of fuel oil for a vessel's bunkers has also been at an historically high price, pushing up owners' operating costs. In a low chartering market owners need to manage their assets carefully which they have done by strategic slow steaming in ballast to improve returns. Although both crude and products are being moved in increasing volumes, the influx of new tonnage continues to stifle any improvement in rates which affects our commission. In the past financial year we have been able to maintain our crude fixture volumes with all of our key clients as well as adding lucrative business with some substantial newcomers to both the Western and Eastern markets. In the product chartering markets we have also performed better than the previous year especially with new Asian clients and we are confident that we will remain as active for the coming year.

As anticipated we have concluded further time charters in the latter stages of the year with more owners looking at managing their returns, as well as charterers looking to take advantage of low rates for their refinery transportation programs. Oil traders are also beginning to look for advantageous freight and we hope to be able to report on more activity in this segment during the year.

We closed our unprofitable tanker freight futures desk during the year. While the sector remains of long-term interest to us, it is hard to see there being significant returns in today's freight market.

Specialised tankers

In the specialised tanker sectors we have extended existing contracts, added further contracts of affreightment and gained significant new chartering accounts. LNG shipping became more significant last year as previously delayed projects finally absorbed the spot tonnage leaving a sudden

Braemar Shipping Services plc

Annual Report 2012

tonnage shortage and a subsequent freight spike. This led to a run of ordering of new tonnage hoping to benefit from the anticipated lucrative charters in order to meet the expected increase in requirements. We now have LNG tonnage on period charter and are working with exclusive charterers both in the West and in the East to secure tonnage for their transportation requirements as well as being appointed to act for new owners in this field.

Our LPG physical product broking division has been active in increasing its client base into new areas and together with our existing clients has shown an improvement over the year.

Offshore

The North Sea 2011/12 winter market for offshore vessels was much stronger than the previous three years with higher vessel demand and utilisation. This continued into the 2012 Spring and our team concluded a number of term chartering contracts as well as some excellent project business. The high oil price has led to increased exploration activity especially in the North Sea with owners seeing better utilisation and vessel returns. Success has also been forthcoming in the Offshore Renewables sector which is expected to be a growing source of income. The Offshore Singapore team is increasing both its market presence and share in a very active area for Exploration & Production. Overall, the outlook for the offshore market is positive and we expect our team to continue making a significant contribution.

Containers

The container market suffered from excess supply in 2011/12 and a market share battle ensued during which freight rates and charter rates have fallen. This was brought about by the recovery in 2010/11 which encouraged some Lines to invest further and extend their commitments. There has been some recent respite for the Lines as they have increased freight rates. Sale and purchase activity has remained tight, with only older and less competitive vessels being sold as owners prepare to receive their newbuildings. Despite the market conditions the Container desk worked hard to book a healthy level of business last year.

Sale and Purchase

The second-hand sale and purchase market for bulk carriers and tankers was less active this year. Serious buyers and sellers were often apart on price, partly because there were fewer market transactions to benchmark against. The limited availability of bank finance has also been a constraint for some owners. Over the year vessel values have dropped quite considerably in many sectors and at these lower levels the market will interest some owners who hope to benefit from a cyclical upturn in the market. Despite this our transactions numbers remained robust.

Not surprisingly the demolition market has been extremely active and we have played a significant role in bringing older tonnage to the recycling yards, especially large tankers and bulk carriers. Based on age profiles in most sectors, the high price of steel and an increasing propensity to scrap younger vessels, we expect this market to remain active in the coming year and to be a significant part of sale and purchase business.

Newbuilding orders have been limited in the past few years and yard order books have shortened. Our newbuilding deliveries have mostly taken place as expected but there has been a market-related decline in replacement business in our forward order book.

Braemar Seascope's offshore brokers are involved in a wide variety of transactions.

Shipbrokers in the Group's offices worldwide provide information flows for clients.

Braemar Shipping Services plc

Annual Report 2012

Review of Operations

continued

Technical

The Group's Technical division provides energy loss adjusting, surveying, engineering and consultancy services. Its offices are located throughout the world and provide marine and energy technical expertise ensuring they exceed our customers' expectations.

Revenue	Divisional operating profit
£32.0m	£1.8m
2012	2012
2011	2011
2010	2010
32.0	1.8
2011	1.8
2010	2.3

Offices

+ Accra	+ New Orleans
+ Calgary	+ Perth
+ Cape Town	+ Rio de Janeiro
+ Essex	+ Shanghai
+ Houston	+ Singapore
+ Jakarta	+ Shenzhen
+ Kuala Lumpur	+ Tianjin
+ London	+ Vung Tau
+ Miami	+ Varna
+ Mumbai	+ Tokyo
+ Miami	+ Trinidad
+ New York

Services

+ Warranty services	+ Ship construction supervision
+ Energy loss adjusting	+ Failure mode and effect analysis
+ Marine engineering, structural engineering and naval architecture	+ Marine cargo surveys
+ Marine consultancy	+ DP Audits
+ Vessel and condition surveys	+ Shipyard risk assessments
+ Marine casualty investigations	+ Towage approvals
	+ Claims, dispute and litigation support

Growth market

Number of rigs and platforms deployed in the Far East and India

During the year the process of bringing the Technical businesses closer together operationally continued. To complement our existing businesses and to expand our service offering, the Group acquired the businesses and certain assets of BMT (incorporating The Salvage Association) on 9 May 2011 (now trading as Braemar incorporating The Salvage Association – "Braemar SA") and Casbarian Engineering Associates Inc on 1 July 2011, which now trades as Braemar Casbarian. Braemar Casbarian was acquired for US$75,000 plus a two-year profit related earn-out which we expect will be approximately £0.4 million.

We also completed a rebranding to emphasise the core service lines within the division, which now trade as Braemar Offshore, Braemar Adjusting, Braemar Engineering, Braemar SA and Braemar Casbarian. From this platform we are now able to provide technical solutions worldwide, which is a good basis from which to deepen and strengthen relationships with existing multinational clients.

Revenue in the Technical division was £32.0 million in 2011/12 compared to £22.6 million last year. This included £10.5 million in respect of acquisitions from the dates of purchase. Divisional operating profits were £1.8 million, inclusive of a net contribution of £0.3 million from acquired businesses, compared to £1.3 million last year.

Braemar Offshore enjoyed a higher level of activity and grew its revenue by 8% compared with last year. Its offices in the Far East have performed well and the increased demand for energy together with the sustained high oil prices have led to more marine warranty survey contracts from the oil majors. We are optimistic for the coming year based on the on-going offshore oil and gas projects and those we are aware of in the pipeline.

Braemar Adjusting specialises in the low-frequency high value energy and marine claims market. In February 2012 the Group sold the non-traditional adjusting assets in Mexico, Venezuela and Ecuador to a management lead team. The core energy and marine business in these locations has been retained and is now run from our Houston office. Despite the continued low industry activity, the Houston and Calgary offices have performed well, partly as a result of business gained in the oil sands and power generation sectors. Singapore maintains its position as a dominant market leader in the Asia Pacific region despite increased competition. We are also continuing our development plans in Brazil and the Middle East which are areas we expect to see growth in demand for adjusting.

Braemar Shipping Services plc

Annual Report 2012

Braemar SA's principal activities include the provision of hull & machinery damage surveys, marine warranty surveys, loss prevention services and expert marine consultancy on behalf of underwriters, owners, P&I Clubs and marine lawyers. Originally established in 1856 The Salvage Association remains an internationally recognised name within the marine insurance and shipping industries. Braemar SA operates from a global network of offices strategically located in the main shipping centres around the world. It has performed in line with our expectations and new instructions in the period have exceeded those experienced over the same period in prior years. It also benefitted from working jointly with the Environmental division.

Braemar Engineering's main area of expertise – design, plan approval and site supervision for LNG newbuildings – has been in limited demand over the past couple of years partly because existing LNG carrier owners are not always open to input from independent consultancies. However, towards the end of the financial year Braemar Engineering was appointed for plan approval and site supervision work on several new LNG projects which should see improved results in 2012/13.

Braemar Casbarian has a team of highly-skilled engineers who provide original design, modification, and engineering compliance, certification and verification services to the offshore industry. It operates primarily in the Gulf of Mexico from offices in New Orleans, Houston and Trinidad. At the time of purchase project work was low but the offshore oil and gas industry was beginning to see the resumption in activity following the United States government actions to restrict offshore activity in the aftermath of Macondo. Since then new compliance verification regulations have brought about a pick-up in assignments. In addition, the company has recently become involved with work involving the decommissioning and removal of inactive platforms for which the regulations have been revised and accelerated. We expect to see a flow of similar work for several years to come.

The Group's Technical division is proud to employ staff of the highest calibre throughout the division.

Braemar Offshore undertake complex surveys to ensure that client's interests are protected.

Braemar Shipping Services plc

Annual Report 2012

Review of Operations
continued

Logistics

Cory Brothers Shipping Agency provides port agency, freight forwarding and logistics services within the UK and Singapore. They have solid industry experience and maintain a worldwide reputation for customer care and insistence on the highest standards. An in-depth knowledge of client requirements across the division ensures the delivery of a first-class service.

Revenue	Divisional operating profit
£37.6m	£1.9m
2012 37.6	2012 1.9
2011 35.1	2011 1.2
2010 31.9	2010 1.4

Offices

Tilbury Docks
Felixstowe
Bebington
Billingham
Bristol
Cardiff
Edinburgh
Falmouth
Grangemouth
Hull
Immingham
Invergordon
Ipswich
Isle of Grain
Milford Haven
Newport
Sheemess Docks
Singapore
Southampton
Teesport

Services

Port and liner agency
Ship-to-ship transfers
Hub agency
Customs clearance
Supply chain management
Freight forwarding
Worldwide consolidation
Project cargoes
Cruise ship support
Recycling

Growth market

UK Container Throughput, TEU

Source: Harwich International Container Port.

Cory Brother's hub agency operations centre manages vessel requirements throughout Europe.

The Logistics division reported an increase in revenue of 7% to £37.6 million and divisional operating profit increased to £1.9 million from £1.2 million, a rise of 53%.

The forwarding and logistics arm was responsible for the majority of this revenue growth, particularly from an increase in forwarding and turnkey project logistics. One large project we handled was the transfer of a redundant Sheffield Steel Mill to India which involved 180 container loads and some 10,000 tonnes of break bulk cargo. To tackle the task, Cory Logistics put together a dedicated team of transport and freight staff to oversee movement of components which were 12 metres in length, 5 metres wide and weighing more than 30 tonnes. Prospects for the new financial year continue to be promising in Logistics especially with certain key customers consolidating their forwarding requirements with Cory.

Port Agency maintained its steady progress in a competitive and somewhat depressed UK market. The operation handled approximately 8,500 port calls during the year, compared with a similar number the year before. Although ship-to-ship transfer operations were lower than the previous year, this was compensated for by strong performances in the majority of port offices. The Singapore office also performed well, with the recent high levels of shipping activity in the region expected to continue next year. This year our cruise ship agency business on the river Thames stands to benefit from the London Olympics.

We are proud that this year is the 170th anniversary of Cory Brothers original founding in South Wales where it handled the export of coal by sea.

Braemar Shipping Services plc
Annual Report 2012

2012 Review of Operations 01-15
Governance 16-27
Financial statements 28-61
Shareholder information 62-64

Environmental

Braemar Howells offers support to both industry and government bodies around the clock and around the globe. Their experienced teams are trained to respond quickly and effectively to hazardous incidents whether at sea, offshore or on land.

Revenue	Divisional operating profit
£14.5m	£1.9m
2012	2012
14.5	1.9
2011	2011
6.8	0.3
2010	2010
7.1	0.6

Offices

Falmouth
Barnsley
Belfast
Bristol
Didcot
Dundee
Harlow
Lagos
Liverpool
Luanda
Perth
Portlaoise

Services

Pollution control
Incident response
Salvage services
Marine and port services
Accredited training and environmental consultancy
Crisis management and emergency response advisers
Industrial services and tank cleaning technologies
MARPOL waste reception facilities
Airport services
Forensic science services
Response facility management

Braemar Howells operations headquarters in New Zealand.

Braemar Howells have been successfully processing recovered containers from the stricken container ship the RENA.

The Environmental division more than doubled its revenue to £14.5 million resulting in a divisional operating profit of £1.9 million (2010/11: £0.3 million). Their incident response skills and environmental resources were utilised to their full extent in the call out to attend the RENA grounded off the North Island of New Zealand in October 2011. The company is involved in the location and recovery of all of the 1,368 containers on board and, once ashore, the safe handling of the good cargo and disposal of the distressed cargo and damaged containers. To date approximately 769 containers have been recovered with a further 599 still to be brought ashore, and of these 201 remain in the forward end of the wreck, such that the work there is unlikely to finish before October 2012. Our work on the project demonstrates the Group's capability to offer a 24/7 global problem solving service drawing on the wider skills within the Group, particularly from Braemar Technical Services.

The Company's routine incident response, industrial services, rail trackside work, accredited training and environmental consulting work remain the underlying foundations of the Company. However, the development of overseas activities in the past two years is proving to be successful. The West and Central African operations are steadily increasing and we have also undertaken work in Indonesia which has opened up a new market. In addition we have begun work for a UK based multinational in the treatment and recycling of their oily waste water which has brought in a new revenue stream.

Braemar Shipping Services plc
Annual Report 2012
11

Corporate social responsibility report

The Group is involved in supporting and sponsoring a wide variety of youth sports teams and events.

The Group sponsor's a merchant navy cadet during their three year training.

The Group recognises that there are a number of stakeholders in its business and seeks to ensure that the wider community interest is taken into account in every aspect of its business.

Human Resources

The Group is dedicated to providing a fair and professional workplace for all of its employees.
The Group is committed to providing a workplace where all employees can achieve their potential.

As a service company, the Group's employees are vital to the success of the organisation and staff motivation and retention is a high priority across the entire Group. The Group has a long history of training its personnel and is committed to ensuring that all employees are empowered to realise their potential within the Group.

The Group is dedicated to providing a fair and professional workplace for all of its employees and has a range of policies covering issues such as equal opportunities, bullying, harassment and whistleblowing to support this commitment.

The involvement of employees in the Group's performance is encouraged where appropriate through participation in the annual discretionary bonus and share option schemes including both UK and International Save As You Earn schemes. The Group keeps its employees informed of all matters affecting their interests through managerial consultation and internal memoranda.

The Group is committed to ensuring high standards in its employment policies throughout the Group. The Group aims to provide equal opportunities for all employees so that they can work without discrimination on the grounds of race, religious or political beliefs, marital status, age, gender, sexual orientation or disability. The Group does not tolerate harassment of any kind in the workplace. The Group gives full and fair consideration to applications for employment from persons with a disability. If any employee were to become disabled while in employment of a Group company, it is the Group's policy to make every effort to find continuing employment and arrange appropriate training for that employee, where possible.

Health and Safety

The Board considers reports on Health and Safety from all companies within the Group regularly.
Regular audits are undertaken in order to comply with legal requirements and the Group's procedures.

The Group is committed to operating high standards of Health and Safety, designed to minimise the risk of injuries and ill health of employees, contractors, visitors and any other persons who come into contact with the Group. The Board considers reports on Health and Safety from all companies within the Group regularly. In many parts of the Group, employees are office-based and the Health and Safety risks are managed in the offices locally. In the Technical and Environmental divisions, our employees may be field-based and the risks associated with these activities are actively monitored and managed by appropriate health and safety professionals. Regular audits are undertaken in order to comply with legal requirements and the Group's procedures.

Braemar Shipping Services plc

Annual Report 2012

Regular Health and Safety training is undertaken in all areas of the Group which is specific to the risks and activities in each division. Various Group companies are required to comply with the strictest policies of major offshore clients and do so to the highest standards.

Community

The Group gives support to young people in education in a number of ways.

The Group is conscious that it is important to consider the good of the wider community in the conduct of its business. The Group has a continuing commitment to education whereby it provides sponsorship to a merchant navy cadet for his or her three years of training. In addition the Group is committed to three years financial support of a Maritime Studies teacher at a major Central London secondary school to promote the marine world and its potential employment opportunities. A number of Group companies have arrangements with Universities to provide both industrial placements and internships for students.

Environment

Management monitors the way in which Group companies manage their approach to the environment.
Recycling and energy efficiency are actively encouraged.

The Group recognises the importance of ensuring that the Group's businesses are conducted with respect and care for the environment. The differing nature and location of its operations makes an all-embracing Group policy difficult to apply uniformly, but Group companies are responsible for devising environmental policies that are appropriate to their business. Management monitors the way in which Group companies manage their approach to the environment to ensure their activities have minimal adverse impact on the environment. Recycling and energy efficiency are actively encouraged where it is practical and efficient to do so.

Cory Brothers have secured ISO 14001 accreditation which is the internationally accepted standard that sets out how they have gone about putting in place an effective Environmental Management System (EMS).

The Group's specialist ship recycling brokers continue to assist clients in ensuring ships are recycled in an environmentally sensitive way and comply with international regulations.

Braemar Howells are very active in protecting the environment in their work and are assisting the New Zealand Government in minimising the environmental impact of lost containers from the RENA.

Environmentally sound ship re-cycling is a key aspect of Braemar Seascope's business.

Braemar Howells have been minimising the environmental impact of a stricken container ship. © LOC.

Braemar Shipping Services plc

Annual Report 2012

Financial review

Overview

The Technical, Logistical and Environmental divisions each grew significantly, partly offsetting Shipbroking which represented 56% (2010/11: 84%) of the divisional operating profit. Market weakness and a lower order book caused average commissions and Shipbroking returns to fall in 2011/12. Operating returns in both Logistics and Environmental benefited from the extra revenue generated by their expanded customer bases and from longer term project work. Technical revenues grew with the aid of the acquisitions of Braemar SA and Braemar Casbarian although margins were constrained mostly by low activity in the Gulf of Mexico. Corporate costs have been reduced by £0.7 million due to lower board remuneration.

Foreign exchange

Over the year the US dollar exchange rate relative to sterling was comparatively benign and the average rate of exchange for US dollar-denominated shipbroking earnings was $1.60/£ (2011: $1.57/£). At 29 February 2012 the balance sheet rate for conversion was $1.60/£ (28 February 2011: $1.63/£) and the Group held forward currency contracts to sell $6.0 million at an average rate of $1.55/£ and variable forward window agreements to sell US$1.0 million per month with upper and lower limits of $1.531-$1.70 between March 2012 and February 2013 and to sell US$1.0 million at limits of $1.511-$1.60 between March 2012 and August 2012.

Non-recurring items

The Group recognised the following non-recurring items during the year:

a gain of £0.9 million representing the amount by which the fair value of the assets acquired with the Braemar SA business were over the purchase price net of the costs of purchase.
acquisition costs associated with the purchase of Braemar Casbarian of £0.1 million.
a net loss on sale of £0.3 million (including the write off of £0.1 million of goodwill) in respect of the disposal of the Mexican office of Braemar Adjusting.
the cost of closure of Braemar Futures totalling £0.4 million.

Taxation

The effective rate of tax for the Group was 29.5% (2011: 25.6%). The increase in the rate is mainly due to a higher proportion of non-deductible expenditure in shipbroking. The provision for deferred tax is calculated using the reduced UK corporation tax rate of 25%. The further reductions from 25% to 24% together with the two further annual 1% cuts to 22% by April 2014 that were announced on 23 March 2012 are expected to reduce the rate in future years.

Braemar Shipping Services plc

Annual Report 2012

Braemar Shipping Services plc
Annual Report 2012

Cash flow

At 29 February 2012 the Group had cash of £17.5 million and no debt (28 February 2011: £25.6 million). Working capital levels have been quite varied across the Group and through the year. Receivables in shipbroking have generally reduced in line with revenue. The Technical division debtors have increased mainly due to the effect of the acquired businesses with underlying receivables marginally down. Both the Logistics and Environmental divisions have managed working capital well with a large rise in the year end debtor position commensurate with the increase in work on the RENA.

Cash expenditure on acquisitions of £3.1 million during the year comprised £2.6 million for Braemar SA (including costs) and £0.5 million of deferred consideration from prior purchases. Capital expenditure of £1.0 million was mainly the cyclic replacement of IT and office equipment and £1.2 million was spent on purchasing the company's own shares for use with employee share schemes.

Principal risks and uncertainties

Market risk

The markets in which the Group operates are influenced by many factors some of which are on-going by nature (e.g. economic factors such as world trade and the demand for commodities) and others of which are one-off (e.g. geo-political events and extreme weather). The Group seeks to mitigate its exposure to any one driver or event by maintaining a presence in most bulk shipping markets and by investing in a variety of shipping and energy services businesses.

Reputational risks

We view the Group's reputation with existing and potential clients, staff and other business partners as critical to the on-going success of the Group. Management seeks to ensure that staff are properly managed, trained and informed so that they can provide a high quality service to clients. The Group also seeks to adhere to all applicable laws, regulations and ethical standards.

Operational risks

The key operational risks are:

Departure of key teams or staff which is managed through staff contracts and long and short-term incentive arrangements and the monitoring of market practice.
Staff errors and/or omissions, for which the Group carries separate professional indemnity insurance.
The failure of financial controls which is monitored by management reporting and oversight and other checks including internal audit; and
The failure of support services such as communications systems and public utilities for which the Group maintains business continuity plans and back-up procedures.

Foreign exchange risk

Much of the Group's income is earned in US dollars and therefore changes in the US dollar rate of exchange relative to the currencies in the countries where the Group operates (principally the pound sterling) can have an effect on the reported results and net assets. The Group has a policy of hedging some of this exposure to limit the effect of currency fluctuations and does so by entering into treasury instruments with banks.

Liquidity risk

The Group maintains an overdraft facility of £8.0 million with the Group's principal relationship bank, the Royal Bank of Scotland plc. The Group reviews the institutions with whom cash resources are held and has funded its operations from internal resources.

Credit risk

The Group is exposed to risk of non-payment by a trade debtor including the concentration of credit risk within market sectors. We consider the risk to be reduced due to the breadth and diversity of the Group's customer base. Management monitors the level of outstanding trade receivables regularly following up to ensure appropriate steps are being taken to collect debts on a timely basis.

A review of risks affecting all areas of the Group is prepared for consideration annually by the Audit Committee and appropriate actions are taken to address the risks identified.

James Kidwell FCA

Group Finance Director

4 May 2012

Board of Directors

Non-executive Directors

Sir Graham Hearne CBE (74)
Chairman.

Committee memberships: None.

Background and relevant experience:
Qualified solicitor, formerly Chairman of Enterprise Oil plc and Catlin PLC.

Current external appointments:
Non-executive Director of Rowan Companies Inc, Bumi PLC and Genel Energy PLC.

John Denholm CA (55)

Non-executive Director.

Committee memberships: Chairman of the Remuneration Committee, member of the Audit and Nominations Committees.

Background and relevant experience:
A Chartered Accountant, currently Chairman and Chief Executive of J&J Denholm Limited.

Current external appointments: J&J Denholm Limited, Anglo Eastern Management Limited, Chamber of Shipping Limited and a member of the Executive Committee and President designate of the Baltic International Maritime Council.

Alastair Farley (66)

Non-executive Director.

Committee memberships: Chairman of the Audit Committee, member of Nominations and Remuneration Committees.

Background and relevant experience:
Qualified solicitor and a founding partner of Watson, Farley & Williams LLP, a firm of international lawyers, and senior partner from 1982-1999. He remains a senior adviser there. Formerly a non-executive Director of Close Brothers Group plc.

Current external appointments: Chairman of Seaguard Offshore Group, Director of Nautilus Holdings Limited, Opus Portfolio Group, Gyroscopic Fund Limited and J&P (Overseas) Limited and senior adviser to Chandris Group.

David Moorhouse CBE, FNI (65)

Non-executive Director.

Committee memberships: Chairman of the Nominations Committee, member of the Audit and Remuneration Committees.

Background and relevant experience:
Formerly Chairman of Lloyd's Register, adviser to UK DTI on technology exports.

Current external appointments: Trafalgar House Trustees Limited, Chairman of Maritime London, trustee of the National Maritime Museum and Director of OAO Sovcomflot.

Executive Directors

Alan Marsh FICS (62)
Chief Executive Officer.

Background and relevant experience:
Established Braemar Shipbrokers in 1983. Fellow of the Institute of Chartered Shipbrokers.

Current external appointments: Director of ITIC (professional indemnity club for ship agents, brokers and managers) and President of the Institute of Chartered Shipbrokers. Trustee of Marine Society & Sea Cadets.

Quentin Soanes MICS (57)

Executive Director with responsibility for Business Development and the Logistics, Technical and Environmental divisions.

Background and relevant experience:
Established Braemar Shipbrokers in 1983.

Current external appointments: Chairman elect of the Baltic Exchange.

Denis Petropoulos (55)

Executive Director with responsibility for tanker chartering and development in Singapore where he is now based.

Background and relevant experience:
Established Braemar Tankers in 1986.

Current external appointments: Member of Intertanko's Associate Members Committee.

James Kidwell FCA (50)

Group Finance Director.

Background and relevant experience:
Chartered Accountant. Formerly Finance Director of Boosey & Hawkes Music Publishers Limited and Group Financial Controller of Carlton Communications PLC.

Current external appointments: None.

Braemar Shipping Services plc

Annual Report 2012

2012 Review of Operations 01-15
Governance 16-27
Financial statements 28-61
Shareholder information 62-64

The Directors submit their report and the audited accounts for Braemar Shipping Services plc, registered number 2286034, for the year ended 29 February 2012, which were approved by the Board on 4 May 2012.

Principal activities and review of business

The Company operates through a number of subsidiaries and joint ventures. A review of the Group's activities including principal risks and uncertainties, business drivers, key performance indicators and future prospects is contained in the Chief Executive's review of the business on pages 4 to 11, the Corporate social responsibility report on pages 12 and 13, the Financial review on pages 14 and 15 and the Corporate Governance statement on pages 19 to 21.

Results and dividends

The Group profit before taxation for the year amounted to £9.8 million (2011: £13.2 million). Details of the results are set out in the consolidated income statement on page 28 and in the related notes. Details of dividends paid during the period are set out in note 9 to the Accounts. The Directors are recommending the payment of a final dividend of 17 pence per share on 25 July 2012 to shareholders on the register at the close of business on 22 June 2012.

Share capital

During the year ended 29 February 2012 the Company issued 503,754 new shares pursuant to the exercise of employee share options.

At 29 February 2012 the total issued ordinary share capital was 21,599,862 shares of 10 pence each. All of the Company's shares are fully paid up and quoted on the London Stock Exchange Plc's Official List. The rights and obligations attaching to the Company's ordinary shares as well as the powers of the Company's Directors, are set out in the Company's Articles of Association, copies of which can be obtained from Companies House, or by writing to the Company Secretary. There are no restrictions on the voting rights attaching to or the transfer of the Company's issued ordinary shares.

No person holds securities in the Company carrying special rights with regard to control of the Company. The Company is not aware of any agreements between holders of securities that may result in restrictions in the transfer of securities or voting rights. The Company's Articles of Association may be amended by special resolution of the Company's shareholders. There are a number of agreements that take effect, alter or terminate upon a change of control of the Company, such as commercial contracts and joint venture agreements. None is considered to be significant in terms of their potential impact on the business of the Group as a whole.

At the forthcoming Annual General Meeting, shareholders will be asked to consider a renewal of the Directors' authority to allot shares. Details are contained in the Notice of the Annual General Meeting.

Purchase of own ordinary shares

The Directors are authorised to make market purchases of the Company's ordinary shares under an authority granted by the Annual General Meeting held on 22 June 2011. No purchases were made under this authority during the year. In accordance with ABI Investor Protection Guidelines, the maximum number of ordinary shares which may be acquired is 10% or less of the Company's issued ordinary shares as at 4 May 2012.

The Directors will seek the renewal of this authority at the 2012 Annual General Meeting in Resolution 10 in accordance with

the Company's Articles of Association. The Directors have no immediate intention of exercising the authority but they will keep the matter under review. Purchases will only be made if they result in an expected increase in earnings per share and will take into account other available investment opportunities, appropriate gearing levels and the overall position of the Company. Any shares purchased in accordance with this authority will subsequently be cancelled. The total number of options to subscribe for shares that were outstanding as at 4 May 2012 was 428,282, being 2% of the issued share capital. If the authority to purchase shares is used in full, the proportion of issued share capital represented by this number of options would amount to 2.2%.

Directors and their interests

The Directors of the Company during the year and at the date of this report are shown on page 16. The Directors' beneficial interests, including family interests in the shares of the Company at 29 February 2012, were as follows:

	29 February 2012	28 February 2011
John Denholm	7,000	7,000
Sir Graham Hearne	2,500	2,500
Alastair Farley	13,366	2,895
James Kidwell	107,971	96,417
Alan Marsh	1,265,960	1,244,406
David Moorhouse CBE	-	-
Denis Petropoulos	591,525	579,858
Quentin Soanes	1,198,481	1,180,677

Directors' interests in share options are set out on page 26.

The Directors, in common with other employees of the Group also have an interest in 877,709 (2010: 817,242) ordinary 10 pence shares held by Kleinwort Benson (Channel Islands) Limited on behalf of the Employee Share Ownership Plan. During the year, the Board resolved to acquire additional shares in the market to be used for employee share awards. 281,160 shares were acquired at an average price of 428 pence (see note 23).

The Directors held no material interest in any contract of significance entered into by the Company or its subsidiaries during the period. There have been no changes in Directors' interests between 29 February 2012 and 4 May 2012.

During the year, the Group maintained cover for its Directors and officers and those of its subsidiary companies under a Directors' and officers' liability insurance policy, as permitted by the Companies Act 2006.

Substantial shareholdings

At 4 May 2012, the Directors have been notified or are aware of the following persons who directly or indirectly are interested in 3% or more of the issued ordinary share capital of the Company.

Directors	%
Alan Marsh	5.86%
Quentin Soanes	5.55%
Others
BlackRock Investment Management	6.62%
Majedie Asset Management	6.37%
Standard Life Investments Ltd	3.73%
Legal & General Investment Management	3.61%

Braemar Shipping Services plc
Annual Report 2012
17

Report of the Directors

for the year ended 29 February 2012
continued

As far as the Company is aware there are no other persons with significant direct or indirect holdings in the Company. Information provided to the Company pursuant to the Financial Services Authority's (FSA) Disclosure and Transparency Rules (DTRs) is published on a Regulatory Information Service and the Company's website.

Post balance sheet event

On 30 April 2012, the Group acquired 100% of the share capital of Orca Shipping Limited. The consideration was £0.7 million satisfied by cash from existing resources. The consideration represents the fair value of the net assets of the business which includes the forward book of shipping time charters.

Payments to suppliers

Group companies are responsible for agreeing the terms and conditions under which business transactions with their suppliers are conducted. It is Group policy that payments to suppliers are made in accordance with these terms, provided that the supplier is also complying with all relevant terms and conditions. The Company has no trade creditors (see note 21).

Employee relations

Information on employee relations is set out in the Corporate social responsibility report on pages 12 and 13.

Donations

During the year the Group made charitable donations amounting to £43,882 (2011: £26,035) to a range of different charities. No political donations were made during the period.

Financial instruments

The Group's financial risk management objectives and policies are set out in the Corporate Governance statement on page 21 and in the Financial review on page 15.

The Group's statement on Corporate Governance can be found on pages 19 to 21 and forms part of this Directors' report and is incorporated into it by cross-reference.

Statement of Directors' responsibilities

The Directors are responsible for preparing the Annual Report and the Group and Parent Company financial statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare Group and Parent Company financial statements for each financial year. Under that law they are required to prepare the Group financial statements in accordance with IFRSs as adopted by the EU and applicable law and have elected to prepare the Parent Company financial statements on the same basis.

Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and Parent Company and of their profit or loss for that period. In preparing each of the Group and Parent Company financial statements, the Directors are required to:

select suitable accounting policies and then apply them consistently;
make judgements and estimates that are reasonable and prudent;
state whether they have been prepared in accordance with IFRSs as adopted by the EU; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and the Parent Company will continue in business.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Parent Company's transactions and disclose with reasonable accuracy at any time the financial position of the Parent Company and enable them to ensure that its financial statements comply with the Companies Act 2006. They have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.

Under applicable law and regulations, the Directors are also responsible for preparing a Directors' Report, Directors' Remuneration Report and Corporate Governance Statement that complies with that law and those regulations.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Each of the Directors, whose names and functions are listed on page 16 confirm that, to the best of their knowledge:

the Group financial statements, which have been prepared in accordance with IFRSs as adopted by the EU, give a true and fair view of the assets, liabilities, financial position and profit of the Group and the Company; and
the Chief Executive's review and the Financial review include a fair review of the development and performance of the business and the position of the Group and the Company, together with a description of the principal risks and uncertainties that it faces.

In the case of each of the persons who are Directors at the time when the report is approved, the following applies:

(a) so far as the Director is aware, there is no relevant audit information of which the Company's auditors are unaware; and
(b) he has taken all the steps that he ought to have taken as a Director in order to make himself aware of any relevant audit information and to establish that the Company's auditors are aware of that information.

A resolution to re-appoint KPMG Audit Plc as auditors to the Company, at remuneration to be agreed by the Directors will be proposed at the forthcoming Annual General Meeting. A resolution will also be proposed authorising the Directors to determine the auditors' remuneration.

Annual General Meeting

The 2012 Annual General Meeting of the Company will be held at 12 noon on 20 June 2012 at The Empire Room, The Landmark Hotel, 222 Marylebone Road, London NW1 6JQ. A separate document accompanying the Annual Report and Accounts contains the Notice convening the Annual General Meeting and a description of the business to be conducted thereat.

By Order of the Board
Laura Bugden ACIS
Company Secretary
4 May 2012

Braemar Shipping Services plc
Annual Report 2012

Corporate Governance
for the year ended 29 February 2012

Braemar Shipping Services plc is committed to ensuring high standards of Corporate Governance. This statement together with the Remuneration Report on pages 22 to 26 describes how the Company has applied the principles of good Corporate Governance during the year ended 29 February 2012.

The Board endorses the main principles and provisions set out in the UK Corporate Governance Code issued by the Financial Reporting Council in May 2011 ("the Code"). The Board believes that the Company has been compliant with the Code throughout the year.

The Board

The Board is responsible to shareholders for the effective direction and control of the Group and it aims to provide entrepreneurial leadership within a framework of prudent and effective controls, enabling risks to be assessed and managed.

The Board currently comprises the Chairman, three independent non-executive Directors and four executive Directors. John Denholm has served on the Board for ten years. The Board considers that he remains wholly independent in character and judgement, with no relationships or circumstances that are otherwise likely to affect or appear to affect his judgement. He has brought to the Board wide knowledge and experience of the shipping and related industries which provide the Board with valuable insights which cannot easily be replicated. For these reasons, the Board is satisfied that his long service is not an impediment to his continuing in his present role. During the year, Richard Agutter retired as planned from the Board as an independent non-executive Director. The Board believes that its current composition is appropriate having regard to the Company's size and activities.

The non-executive Directors, none of whom has fulfilled an executive role within the Company, are appointed for an initial three-year term serving under letters of engagement, which contain a formal one-month notice period. Sir Graham Hearne chairs the Board and is not a member of any of the Board's sub-committees. Alastair Farley is the senior independent non-executive Director and he chairs the Audit Committee; John Denholm chairs the Remuneration Committee and David Moorhouse CBE chairs the Nominations Committee.

The executive Directors are engaged under service agreements, and those for James Kidwell, Denis Petropoulos and Quentin Soanes can be terminated on 12 months' notice. The service agreement for Alan Marsh can be terminated on 6 months' notice.

The Board met seven times during the year and the attendance by the Directors is set out below. Board meetings include reviews of financial and business performance and consideration and monitoring of business risks and opportunities. The following matters are specifically reserved for the Board's consideration and approval:

Group strategy;
the Group budget;
major capital expenditure, disposals or leasing arrangements;
choice of key corporate advisers;
acquisitions and disposals;
Group financial and treasury policy including dividends and borrowing;
establishing Board committees and setting their terms of reference; and
internal control arrangements.

On a periodic basis, the Board receives reports on its activities from the senior management of a subsidiary company or a head of department. The Group has also undertaken a strategy process involving the Board and some senior divisional managers. All Directors are provided with appropriate and timely information and are properly briefed on Board matters. In the furtherance of his duties any Director may take independent professional advice or receive training, if necessary, at the Company's expense.

During the year, the Board and its committees conducted a review of the effectiveness of their operations. The review process was led by a non-executive Director and entailed each Director completing an assessment questionnaire, the results of which were summarised for consideration by the Board. The Chairman and non-executive Directors meet without the presence of executive Directors from time to time and the senior independent non-executive Director held a meeting with the Chairman to consider his effectiveness as Chairman.

Under the Company's Articles of Association, Directors should submit themselves for re-election every three years. The Directors retiring by rotation at the Annual General Meeting and offering themselves for re-election are James Kidwell and Sir Graham Hearne. The Nominations Committee and the Board all unanimously support these elections. Biographical information on the Directors can be found on page 16 of this Annual Report.

Relations with shareholders

The Board recognises the importance of maintaining good communications with both institutional and private shareholders. For several years the Group has pursued an active investor relations programme conducted primarily through regular meetings of the Chief Executive and Finance Director with existing and potential institutional investors following both the interim and preliminary announcements of the results of the Group. Feedback on shareholder meetings is provided via the Group's corporate stockbroker or public relations adviser. Corporate announcements are also made available on the Group's website.

The Board exercises care to ensure that all information, including that which is potentially price-sensitive, is released to all shareholders at the same time in accordance with applicable legal and regulatory requirements.

The Company encourages attendance at its Annual General Meeting where each resolution is separately put to the meeting and where the Chairman and/or Chief Executive makes a statement on the current year's performance to date and the near-term financial outlook.

Braemar Shipping Services plc
Annual Report 2012
19

Corporate Governance

for the year ended 29 February 2012

continued

Board Committees

The number of meetings of the Board and its committees and the attendance of those meetings by each member is set out below:

Number of meetings	Board	Audit Committee	Remuneration Committee	Nominations Committee
Non-executive Directors
Sir Graham Hearne	7/7
Richard Agutter(1)	6/7	2/3	3/3	1/2
John Denholm	7/7	3/3	3/3	2/2
David Moorhouse CBE	5/7	2/3	2/3	2/2
Alastair Farley	7/7	3/3	3/3	2/2
Executive Directors
Alan Marsh	7/7
James Kidwell	7/7
Denis Petropoulos	7/7
Quentin Soanes	7/7

(1) Richard Agutter retired from the Board on 13 December 2011 as planned. He attended all meetings prior to retirement.

Each of the Board committees comprises solely non-executive Directors. The composition and responsibilities for the Audit, Remuneration and Nominations Committee are as follows:

Audit Committee

Number of scheduled meetings in 2011/2012: 3	Attended
Richard Agutter	2/3
John Denholm	3/3
David Moorhouse CBE	2/3
Alastair Farley	3/3

Non-executive Directors: Alastair Farley (Chairman), John Denholm and David Moorhouse CBE.

Although the Board as a whole has a statutory responsibility for the preparation and publication of the Company's accounts, the Audit Committee reports to the Board and takes responsibility for the following matters:

review of the internal control procedures and risk assessment process;
planning with the external auditors the half-year review and full-year audit programme including agreement with the external auditors of the nature and scope of the audit, together with the level of the audit fee set in the context of the overall audit plan;
reviewing with the external auditors their audit findings and responses to the matters raised, including any issues or reservations the auditors may have;
reviewing the half-year and annual financial statements before they are submitted to the Board;
setting the policy on the appointment of the external auditors for the supply of non-audit services having regard to the level of fees for both audit and non-audit work;
reviewing the operations of internal audit; and
reviewing the insurance arrangements for the Group.

The Audit Committee places great emphasis on the cost-effectiveness, independence and objectivity of the audit function. Company policy is that fees paid to auditors for non-audit services do not exceed audit fees unless such non-audit services are reviewed and approved by the Audit Committee.

During the year, the Audit Committee has reviewed the key risks that affect the Group, as explained under the section on Risk management and internal control. In connection with this, the Chairman of the Audit Committee is overseeing the development of the internal audit agenda which provides assurance to the Committee that the financial controls which exist in the Group are effective at mitigating the risks it is exposed to. The Audit Committee has reviewed and approved the fees paid to the auditors at the meeting held prior to the end of the financial year and in addition to the formal Committee meetings held, the Chairman of the Audit Committee meets with the Group audit partner.

Nominations Committee

Number of scheduled meetings in 2011/2012: 2	Attended
Richard Agutter	1/2
John Denholm	2/2
David Moorhouse CBE	2/2
Alastair Farley	2/2

Non-executive Directors: David Moorhouse CBE (Chairman), John Denholm and Alastair Farley.

The Nominations Committee considers the balance of skills and experience of the Board membership and makes recommendations to the Board on the appointment of new Directors. For each new appointment the Nominations Committee considers, amongst other things, the appropriateness of the qualifications and experience of the candidate for the role to be fulfilled and their availability to devote time to the job. Details of the Directors' other professional commitments are set out in the biographical details on page 16.

The Nominations Committee also reviews the appointment of non-executive Directors at the expiration of their three-year service letter of engagement.

Braemar Shipping Services plc

Annual Report 2012

Braemar Shipping Services plc
Annual Report 2012

Remuneration Committee

Number of scheduled meetings in 2011/2012: 3	Attended
Richard Agutter	3/3
John Denholm	3/3
David Moorhouse CBE	2/3
Alastair Farley	3/3

Non-executive Directors: John Denholm (Chairman), David Moorhouse CBE and Alastair Farley. A report of the Remuneration Committee is set out on pages 22 to 26.

Ethical conduct and anti-bribery measures

The Group is committed to undertaking business to the highest standards and has very clear ethical guidelines which are issued to all Group companies in both English and local languages where appropriate. The compliance with these ethical guidelines is monitored through the Group's internal procedures. The Group has a total prohibition on the payments of any kind of bribes and monitors this closely through both internal and external auditing.

Risk management and internal control

The Directors acknowledge the requirements of the Code and seek to review all aspects of risk management in relation to each part of the Group. These risks include, but are not limited to, staff errors and/or omissions, non-compliance with industry standard procedures, loss of broker teams, effectiveness of internal control systems, industry sector consolidation, currency exposure, credit risk and the effectiveness of financial control. The Directors acknowledge their responsibility for the implementation and effectiveness of the Group's system of internal controls in accordance with the Turnbull guidance. These are designed to identify and manage the particular risks to which the Group is exposed. By their very nature these controls can only provide reasonable but not absolute assurance against material misstatement or loss. The effectiveness of the system of internal controls has been reviewed by the Audit Committee during the year and action taken to strengthen the controls if necessary.

Internal audit

The Group's internal audit function is a peer Group review process, whereby senior financial managers from within the business conduct audits of non-related areas of the Group's activities. The programme is co-ordinated by the Group Financial Controller who presents the Group internal audit plan and reports to the Audit Committee. This person is responsible for ensuring that the internal audit program is met and recommendations are actioned. The Directors have reviewed the effectiveness of the Group's system of internal control throughout the year.

Risk management

A summary of key risks and internal controls is prepared for consideration at the Audit Committee on an annual basis. These processes to monitor risk have been in place throughout the year and up to the date of approval of the Annual Report. The Company also holds professional indemnity insurance to an amount considered adequate for its size and potential exposure.

A Group budget is prepared annually and approved by the Board. The performances of the Group and the individual operating units are monitored against budget throughout the year and significant variances are investigated. Regular re-forecasts for the remainder of the financial year are prepared during the year.

An internal system of checks and authorisations is operated and independent audits are conducted in relation to the ISO 9001:2000 certification which Braemar Seascope Limited, Cory Brothers Shipping Agency Limited, Braemar Howells Limited and Braemar Falconer Pte all undertake.

There is also an internal whistleblowing procedure through which any member of staff may raise, in confidence, any concerns they may have about the way the Group is run or business is conducted.

The Group has foreign currency exposure which arises as a result of the majority of its shipbroking earnings being denominated in US dollars while the majority of its costs are denominated in £ sterling. The treasury policy and objective in relation to foreign currencies is to limit the exposure to currency risk by covering a proportion of expected foreign currency denominated future income up to two years forward. This exposure is managed through the use of treasury instruments; principally forward foreign exchange contracts and currency options. The Group manages its exposure to fluctuations in interest rates by pooling its UK bank accounts under an offset agreement. The Board monitors treasury activity through regular reporting by the Finance Director. The Group does not enter into speculative transactions.

Accountability and audit

A statement of the Directors' responsibilities for preparing the financial statements is included in the Report of the Directors on page 18. This Corporate Governance report forms part of the Directors' report on pages 17 and 18.

Going concern

After making enquiries, the Directors have a reasonable expectation that the Company and Group have adequate resources to continue to trade for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the accounts.

Remuneration Report

for the year ended 29 February 2012

This report to shareholders provides the information required by Schedule 8 to the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008. A resolution will be put to shareholders at the Annual General Meeting on 20 June 2012 inviting them to approve this report.

The Remuneration Committee was responsible for determining the executive Directors' remuneration for the year ended 29 February 2012 and comprises the following non-executive Directors:

John Denholm (Chairman), Alastair Farley and David Moorhouse CBE. Richard Agutter was a member of the Remuneration Committee until 13 December 2011 when he retired. The Chairman, Chief Executive and Finance Director attended meetings of the Remuneration Committee by invitation. None of the executive Directors were present during any discussion of their own emoluments.

The responsibilities of the Remuneration Committee are:

to determine on behalf of the Board and shareholders the Group's overall policy for executive remuneration;
to determine individual remuneration packages for each of the executive Directors of the Company, including their base salary and all performance-related elements including bonus arrangements, profit share schemes, equity participation schemes, other long-term incentive schemes, pension and other benefits;
to review the introduction and to determine the terms of all bonus, profit share or equity participation schemes or any other schemes intended to reward and incentivise employees of the Group and to review the participation of the executive Directors and senior executives in such schemes, including the award of any bonuses and the grant of rights or options thereunder; and
to maintain an overview of policy in relation to the remuneration and conditions of service of other senior executives within the Group.

In discharging these responsibilities the Remuneration Committee may call for information and advice from advisers inside and outside the Group. During 2011/12, the Remuneration Committee took advice from the Chief Executive, Alan Marsh.

Remuneration policy

The remuneration of the executive Directors is determined after a review of the individual's performance and after taking account of comparable arrangements for executive Directors of other companies of similar size and activity to the Group. The Remuneration Committee has adopted a remuneration policy based on the following principles:

that the executive Directors should be rewarded fairly, competitively and at a level that will attract, motivate and retain Directors of an appropriate calibre; and
that the executive Directors' remuneration should be aligned, as far as possible, with the performance of the Group.

The Remuneration Committee will continue to apply this policy in the coming year and currently intends to apply this policy in the financial years subsequent to that. No Director is involved in deciding his own remuneration.

The executive Directors' remuneration packages are reviewed on a regular basis and presently comprise:

a competitive base salary;
annual bonus based on performance;
defined contribution scheme pension contributions linked to base salary;
life and medical insurance and similar benefits; and
share options and long-term incentive plan awards.

The Remuneration Committee considers that a significant proportion of the executive Directors' remuneration should be performance-related and that the individual elements of the executive Directors' remuneration packages constitute an appropriate balance between fixed and variable remuneration. The individual elements are described below:

Base salary

Each executive Director's base salary is reviewed annually on performance, achievement of objectives and comparative salaries.

Annual bonus

The Remuneration Committee believes that a significant proportion of the executive Directors' overall remuneration package should be an annual bonus based on the performance of the Group, in order to provide an incentive to management and to align their interests with those of the shareholders. The bonus policy rewards executive Directors based on achieving earnings per share in excess of a hurdle figure. This excess is then applied to a weighting selected for each participant. The hurdle figure for the year ended 29 February 2012 was 21.27 pence giving an excess of 12.57 pence. The hurdle was unchanged from the previous year. As in prior years, in determining the hurdle figure, the Remuneration Committee took into account factors such as the relative strength and cyclical nature of the shipping markets and their influence on the base hurdle figure, the relative importance of less cyclical non-broking businesses and the general rate of inflation. This policy was established some years ago and has been reviewed regularly to ensure it remains appropriate.

Where an executive Director has specific responsibilities for a subsidiary company or section of the Group, the Remuneration Committee believes it appropriate that an element of the executive Director's annual bonus may be determined by reference to that responsibility.

In the year to 29 February 2012 Alan Marsh waived any bonus based on the performance of the Group such that the bonus he received was related solely to his shipbroking business. Denis Petropoulos and Quentin Soanes each received a bonus calculated (as described above) by reference to the performance of the Group, together with a component which was related to their respective shipbroking business. James Kidwell's bonus was calculated solely with reference to the performance of the Group. The Group-related components of James Kidwell, Quentin Soanes and Denis Petropoulos's bonuses were paid in deferred shares which they will receive in three years' time providing they remain employed by the Group.

Braemar Shipping Services plc

Annual Report 2012

The performance-related element of the executive Directors' remuneration for the past two years is as follows:

	2012	2011
Alan Marsh(1)	8%	40%
James Kidwell	28%	44%
Denis Petropoulos	33%	50%
Quentin Soanes	36%	49%

(1) Alan Marsh waived any corporate-related bonus.

The annual bonus is not pensionable.

Deferred Bonus Plan

The Group operates the Braemar Seascope Group PLC Deferred Bonus Plan ("the DBP") whereby part of the annual performance-related bonus can be delivered in the form of awards over ordinary shares in the Company, on a discretionary basis, to staff including executive Directors ("Awards"). The value of shares over which an Award may be granted to an individual cannot exceed the value of the individual's annual performance-related bonus.

Under the DBP, the shares subject to the Awards are held in an employee trust for three years and are released to the participants (so that the participants become absolutely entitled to the shares) at the end of that period provided that the participants remain in employment with the Group at that time (or have ceased to be employed in certain specified circumstances).

In the financial year commencing 1 March 2010 and in subsequent financial years, the Remuneration Committee operated the DBP in conjunction with the Braemar Shipping Services PLC 2010 Company Share Option Plan (the "2010 CSOP") (see below under the heading "Discretionary options") to enable UK tax resident individuals to benefit, to the maximum extent possible, from the growth in value of the shares subject to the Awards in a tax-efficient manner.

When Awards are granted under the terms of the DBP, a corresponding option will be granted to each UK tax resident participant under the terms of the 2010 CSOP ("Option"). The maximum value of the shares (at grant) subject to each participant's Option will be £30,000. The Options will vest on the same terms as and on the same date as the corresponding Awards granted under the DBP and, accordingly, vesting of the Options will not be subject to the satisfaction of performance conditions and the Options must be exercised within two days following the vesting date. On exercise of an Option the participant will be required to pay an exercise price per share equal to the market value of such a share on the date of grant of the Option. The maximum amount payable by any individual on exercise of an Option in full will be £30,000. Options which are granted under the 2010 CSOP in conjunction with the DBP will be satisfied by the transfer of existing shares held in an employee trust.

Unlike awards granted under the DBP, provided that the Options are exercised more than three years after the date of grant (or within three years on the cessation of employment in special circumstances), no income tax or employees' or employer's National Insurance contributions will be payable, on exercise, on the growth in value of the shares subject to the Options. The growth in value of the shares from the date of grant may be subject to capital gains tax on a subsequent disposal of the shares.

The number of shares in respect of which the Awards granted under the DBP will vest will be reduced to take account of the value, as at vesting, of the Options linked to the relevant Awards (being the amount by which the total market value of the shares on vesting of the Options exceeds the total exercise price of the Options). In addition, the number of shares in respect of which each Option will vest will be reduced in the event that the value, as at vesting, of the Option exceeds the value, as at vesting, of the corresponding Award. (In those latter circumstances, the number of shares in respect of which the Award will vest will be reduced to zero.)

At 29 February 2012 unvested Awards over a total of 342,356 shares were outstanding under the DBP (2011: 457,631). In respect of the year to 29 February 2012 Awards over 31,000 shares were made (inclusive of Awards over 28,250 shares which were also the subject of corresponding Non-Performance Options under the 2010 CSOP – see below under the heading “Discretionary options”).

Pensions

The Group's trading subsidiaries operate a number of defined contribution pension schemes or make other similar arrangements for individual members as appropriate. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and the various individual employees' retirement plans.

The principal scheme in the UK is the Braemar Seascope Pension Scheme which is a Company-sponsored money purchase scheme. The scheme is administered by trustees and an indemnity in relation to their services as a trustee is given by the sponsoring company.

Alan Marsh and Quentin Soanes do not receive an employer's pension contribution.

Benefits

Benefits provided in the UK relate mainly to the provision of medical, life and permanent health insurance. The company also pays for Denis Petropoulos's accommodation in Singapore and some private air flights while he is seconded to the office.

Share options

The Company operates a discretionary share option scheme, the Braemar Seascope Group 1997 Executive Option Scheme ("the 1997 Scheme") which has now been superseded by the 2010 CSOP (see above under the heading "Deferred Bonus Plan") and two all-employee save-as-you-earn option schemes called the Braemar Seascope Group PLC 2003 Savings-Related Share Option Scheme ("the SAYE Scheme") and the Braemar Shipping Services plc 2008 International Savings-Related Share Option Scheme ("the International SAYE Scheme"). No option may be granted under either scheme which would result in the total number of shares issued or remaining issuable under all of the schemes (or any other Group share schemes), in the ten-year period ending on the date of grant of the option, exceeding 10% of the Company's issued share capital (calculated at the date of grant of the relevant option).

Braemar Shipping Services plc

Annual Report 2012

Remuneration Report

for the year ended 29 February 2012 continued

The SAYE Scheme

Under the SAYE Scheme, options may be granted to UK employees (including executive Directors) to acquire a number of shares at a future date at a price that is up to 20% below the share price at the time the option is granted. The grant of the option is linked to a contract to make monthly savings to enable the employee to build up the amount required to fund the option exercise price. Exercise of options granted under the SAYE scheme is not subject to the achievement of a performance target. This scheme operates within UK tax legislation. The SAYE Scheme was first launched in July 2003 and options have been granted once each year since then. Options over 351,076 shares under the SAYE Scheme were granted on 1 February 2012. These options were granted at a 20% discount to the prevailing market price. All UK employees who participate in the SAYE Scheme are entitled to do so on the same terms. The rules of the SAYE Scheme (which are approved by HM Revenue and Customs) do not permit performance conditions to be applied to the options.

The Remuneration Committee believes the SAYE Scheme, which offers staff a tax effective way of saving money and acquiring an equity interest in the Company, both helps attract and retain staff and aligns the interests of staff and shareholders. As at 29 February 2012, there were options outstanding over 420,716 shares under the SAYE Scheme (2011: 580,240 shares) of which options over 14,850 shares were held by executive Directors (2011: 19,548 shares).

The International SAYE Scheme

In 2009 the Company established the International SAYE Scheme to enable share options to be granted to its employees resident in Australia and Singapore. The International SAYE Scheme closely resembles the SAYE Scheme (as described above) in its operation. No options were granted under this scheme during the year to 29 February 2012. As at 29 February 2012, there were options outstanding over 19,490 shares under the International SAYE Scheme (2011: 108,071 shares).

Discretionary options

The 1997 Scheme provided for the grant of options to employees (including executive Directors) to acquire shares in the Company at a price equal to the market value of a share at the time of grant of the options. The 1997 Scheme has terminated with the result that no further options may be granted by the Remuneration Committee under that scheme. Options granted under the 1997 Scheme have, since July 2002, been subject to a performance condition that the growth in the Company's average adjusted earnings per share over a period of no less than three financial years must exceed the growth in the retail prices index ("RPI") over the corresponding period by no less than 3% per annum compounded. None of the options granted prior to 2002 remain outstanding. The performance condition was chosen to test whether or not there had been a sustained and significant improvement in the Group's financial performance over a continuous period. There is no retesting of performance conditions. The Remuneration Committee determines whether the performance condition has been met using earnings per share information contained in the Group's Annual Report and Accounts. As at 29 February 2012, there were options over 2,000 shares outstanding under the 1997 Scheme.

The 2010 CSOP was adopted by the Remuneration Committee on 5 March 2010 and approved by shareholders on 13 June 2010. The 2010 CSOP provides for the grant of options to employees (including executive Directors) to acquire shares in the Company at a price equal to the market value of a share at the time of grant of the options. The 2010 CSOP provides for the grant of two types of option – "Performance Options" (which vest subject to the satisfaction of performance conditions) and "Non-Performance Options". The maximum value (at grant) of the shares over which a Non-Performance Option may be granted under the 2010 CSOP is £30,000 and the maximum value of the shares (at grant) over which a Performance Option may be granted is 100% of the participant's annual base salary.

"Non-Performance Options" will be granted to employees only in conjunction with the grant to such employees of an award under the terms of the DBP. Accordingly, to reflect the terms of Awards granted under the DBP, vesting and exercise of Non-Performance Options will not be subject to the satisfaction of performance conditions (although exercise will be dependent on continued employment with the Group other than in certain special circumstances). The number of shares which vest under a participant's DBP Award will be reduced to take account of the value at vesting of the participant's Non-Performance Option. During the year to 29 February 2012 28,250 Non-Performance Options were granted under the 2010 CSOP.

No Performance Options have been granted under the 2010 CSOP since its adoption by the Remuneration Committee. While the Remuneration Committee considers that discretionary share options can be an appropriate method of incentivising senior executives, the Remuneration Committee has no current intention to grant Performance Options under the 2010 CSOP. The Remuneration Committee is intending to continue to grant awards under the Braemar Seascope Group PLC 2006 Long-Term Incentive Plan ("the LTIP") to incentivise executive Directors (see below). In normal circumstances, a Performance Option will not be granted to an individual in the same financial year as that individual receives an award under the LTIP.

Long-term Incentive Plan

The Company established the LTIP in 2006. Participation in the LTIP is intended to be limited to executive Directors and senior managers of the Group. On 17 May 2011 awards were made under the LTIP in the following amounts to the executive Directors:

James Kidwell	45,000
Alan Marsh	97,436
Denis Petropoulos	42,735
Quentin Soanes	55,556
Total	240,727

In addition there were a further 40,000 LTIP awards made to other senior staff.

Braemar Shipping Services plc

Annual Report 2012

The LTIP is designed to deliver benefits to participants in the form of either an option to subscribe for shares at nominal value or a conditional right to receive shares at nil cost. The awards will normally vest over a period of three years, provided there has been sustained and significant improvement in the Group's financial performance over the corresponding period. No award may be granted under the LTIP which would result in the total number of shares issued or remaining issuable under the LTIP (or any other Group share schemes) in the ten-year period ending on the date of grant of the award exceeding 10% of the Company's issued share capital (calculated at the date of grant of the relevant award). To date, vested LTIP awards have been satisfied with shares purchased on market by the Company's ESOP. The Remuneration Committee intends to satisfy future vested awards in the same manner and the ESOP has acquired shares to meet the expected exposure.

No individual may receive an award of shares with a market value (at grant) which exceeds 100% of salary in any financial year.

The performance condition applied to the awards is based on the Group's earnings per share over a period of three years – a condition chosen to align the interests of the Directors and shareholders by measuring sustained performance over the longer term. The awards will vest as to 50% of the shares if the Group's average adjusted earnings per share has increased by RPI plus 4% and will vest as to 100% of the shares if the Group's average adjusted earnings per share has increased by RPI plus 10% and will vest as to between 50% and 100% of the shares on a sliding scale if the Group's average adjusted earnings per share has increased by RPI plus more than 4% but less than 10%. Providing the performance condition has been met, the awards will vest in three tranches: one third on each of the third, fourth and fifth anniversaries of the date of grant of the awards.

The table showing the Directors' share incentives is set out on page 26.

Contracts of service

The Company's policy on executive Directors' service contracts is that they should be rolling contracts terminable on no more than twelve months' notice by either party. The non-executive Directors do not have service contracts but serve under letters of engagement. The policy on the terms that the non-executive Directors serve under is that they are appointed for a fixed three-year term renewable by mutual consent, but terminable by either party on one month's notice. In the event of early termination of service contracts (or letters of engagement as applicable), each Director is entitled to payment in lieu of notice equal to their basic salary (or fee as applicable) and contractual benefits for the notice period as set out below. The policy on termination payments to Directors is that the Company does not normally make payments beyond its contractual obligations. In exceptional circumstances, an ex-gratia payment may be considered based on the circumstances of the Director's departure and their past contribution.

Details of Directors' service contracts/letters of engagement (as applicable) are as follows:

	Date of Contract/Letter	Unexpired term	Notice period
Executive
Alan Marsh	15 August 2011	6 months	6 months
James Kidwell	20 February 2003	12 months	12 months
Denis Petropoulos	10 October 2001	12 months	12 months
Quentin Soanes	18 March 2008	12 months	12 months
Non-executive
Sir Graham Hearne	24 June 2009	4 months	1 month
John Denholm	30 April 2012	2 months	1 month
Alastair Farley	11 January 2011	23 months	1 month
David Moorhouse CBE	30 April 2012	23 months	1 month
Richard Agutter	Retired
	13 December 2011	-	-

The executive Directors' service contracts do not provide for compensation (other than payments in lieu of notice) to be payable on early termination of the contracts.

Non-executive Directors

The remuneration of the non-executive Directors is determined by the Board with reference to comparable organisations and roles.

The performance graph

Set out below is the Company's total shareholder return performance over the last five years rebased to be compared with the FT All Share Index. The index has been chosen as it represents the overall return achieved in the UK equity market.

Braemar Shipping Services plc

Annual Report 2012

Remuneration Report
for the year ended 29 February 2012
continued

Directors' emoluments (audited)
For the year ended 29 February 2012 the individual emoluments by Director are as follows:

	Salary/Fee £	Performance-related bonus(2) £	Benefits £	Pension £	Aggregate emoluments year ended 29 February 2012 £	Aggregate emoluments year ended 29 February 2011 £
Executive Directors
Alan Marsh	500,000	45,000	5,457	–	550,457	846,085
James Kidwell	230,000	110,616	3,018	50,000	393,634	479,615
Denis Petropoulos	200,000	147,814	79,239	27,000	454,053	423,051
Quentin Soanes	260,000	147,814	3,059	–	410,873	512,729
Non-executive Directors
Sir Graham Hearne	75,000	–	–	–	75,000	100,000
Richard Agutter(1)	27,462	–	–	–	27,462	35,000
John Denholm	35,000	–	–	–	35,000	35,000
Alastair Farley	31,667	–	–	–	31,667	4,936
David Moorhouse CBE	35,000	–	–	–	35,000	35,000
	1,394,129	451,244	90,773	77,000	2,013,146	2,471,416

(1) Retired 13 December 2011.
(2) £110,616 of each of James Kidwell, Denis Petropoulos and Quentin Soanes' bonus was paid in deferred share awards which vest in three years' time.

Directors' share incentives (audited)
The numbers of ordinary shares subject to options held by Directors and granted under the SAYE Scheme and the LTIP are set out below:

		Date of Grant	Number at 1 Mar 2011	Exercised	Granted	Number at 29 Feb 2012	Exercise price (pence)	Date options exercisable	Date options expire
James Kidwell	SAYE	1 Feb 09	4,887	4,887	–	–	196.4	1 Feb 12	1 July 12
	SAYE	1 Feb 12	–	–	3,321	3,321	271	1 Feb 15	1 July 15
	LTIP	11 May 07	13,333	6,667	–	6,666	–	11 May 10	11 May 17
	LTIP	7 May 10	40,000	–	–	40,000	–	7 May 13	7 May 20
	LTIP	17 May 11	–	–	45,000	45,000	–	17 May 14	17 May 21
Alan Marsh	SAYE	1 Feb 09	4,887	4,887	–	–	196.4	1 Feb 12	1 July 12
	SAYE	1 Feb 12	–	–	3,321	3,321	271	1 Feb 15	1 July 15
	LTIP	11 May 07	13,333	6,667	–	6,666	–	11 May 10	11 May 17
	LTIP	7 May 10	75,000	–	–	75,000	–	7 May 13	7 May 20
	LTIP	17 May 11	–	–	97,436	97,436	–	17 May 14	17 May 21
Denis Petropoulos	SAYE	1 Feb 09	4,887	–	–	4,887	196.4	1 Feb 12	1 July 12
	LTIP	11 May 07	13,333	6,667	–	6,666	–	11 May 10	11 May 17
	LTIP	7 May 10	33,644	–	–	33,644	–	7 May 13	7 May 20
	LTIP	17 May 11	–	–	42,735	42,735	–	17 May 14	17 May 21
Quentin Soanes	SAYE	1 Feb 09	4,887	4,887	–	–	196.4	1 Feb 12	1 July 12
	SAYE	1 Feb 12	–	–	3,321	3,321	271	1 Feb 15	1 July 15
	LTIP	11 May 07	13,333	6,667	–	6,666	–	11 May 10	11 May 17
	LTIP	7 May 10	47,500	–	–	47,500	–	7 May 13	7 May 20
	LTIP	17 May 11	–	–	55,556	55,556	–	17 May 14	17 May 21

No consideration was payable on the grant of any of the outstanding options held by Directors during the year ending 29 February 2012. The performance conditions applying to the outstanding awards held by Directors under the LTIP are set out in the description of the LTIP above. No performance targets apply to the outstanding options held by Directors under the SAYE Scheme. The market price on the date of maturity on 12 May 2011 of the Directors' LTIP awards was 472 pence giving a value of £31,468 for each Director on vesting. The market price on 30 January 2012 was 381 pence giving a gain of £9,021 on exercise of the 2009 SAYE options for James Kidwell, Alan Marsh and Quentin Soanes.

The closing mid-market share price on 29 February 2012 was 385 pence and the range of closing prices during the year ended 29 February 2012 was 282 pence to 505 pence.

No other Director who served during the year held any share options. Directors' interests are set out on page 17.

Non-executive Directors are not permitted to participate in the 1997 Scheme, the SAYE scheme, the 2010 CSOP or the LTIP.

The Directors' remuneration report above was approved by the Board on 4 May 2012 and signed on its behalf by:

John Denholm
Chairman, Remuneration Committee
4 May 2012

Braemar Shipping Services plc
Annual Report 2012

Independent auditors' report to the members of Braemar Shipping Services plc

We have audited the financial statements of Braemar Shipping Services plc for the year ended 29 February 2012 set out on pages 28 to 59. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the EU and, as regards the parent company financial statements, as applied in accordance with the provisions of the Companies Act 2006.

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members, as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of directors and auditor

As explained more fully in the Directors' Responsibilities Statement set out on page 18, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit, and express an opinion on, the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's (APB's) Ethical Standards for Auditors.

Scope of the audit of the financial statements

A description of the scope of an audit of financial statements is provided on the APB's website at www.frc.org.uk/apb/scope/private.cfm.

Opinion on financial statements

In our opinion:

the financial statements give a true and fair view of the state of the group's and of the parent company's affairs as at 29 February 2012 and of the group's profit for the year then ended;
the group financial statements have been properly prepared in accordance with IFRSs as adopted by the EU; and
the financial statements have been prepared in accordance with the requirements of the Companies Act 2006 and, as regards the group financial statements, Article 4 of the IAS Regulation.

Opinion on other matters prescribed by the Companies Act 2006

In our opinion:

the part of the Directors' Remuneration Report to be audited has been properly prepared in accordance with the Companies Act 2006;
the information given in the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
information given in the Corporate Governance Statement set out on pages 19 to 21 with respect to internal control and risk management systems in relation to financial reporting processes and about share capital structures is consistent with the financial statements

Matters on which we are required to report by exception

We have nothing to report in respect of the following:

Under the Companies Act 2006 we are required to report to you if, in our opinion:

adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent company financial statements and the part of the Directors' Remuneration Report to be audited are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit; or
a Corporate Governance Statement has not been prepared by the company.

Under the Listing Rules we are required to review:

the directors' statement, set out on page 21, in relation to going concern;
the part of the Corporate Governance Statement on pages 19 to 21 relating to the company's compliance with the nine provisions of the UK Corporate Governance Code specified for our review and
certain elements of the report to shareholders by the Board on directors' remuneration.

John Luke (Senior Statutory Auditor)

for and on behalf of KPMG Audit Plc, Statutory Auditor Chartered Accountants

15 Canada Square, London, E14 5GL

4 May 2012

Braemar Shipping Services plc

Annual Report 2012

Consolidated income statement

for the year ended 29 February 2012

| Continuing operations | Notes | 29 Feb 2012
£'000 | 28 Feb 2011
£'000 |
| --- | --- | --- | --- |
| Revenue | 2 | 133,474 | 126,135 |
| Cost of sales | 4 | (36,922) | (29,897) |
| | | 96,552 | 96,238 |
| Operating costs | | | |
| Operating costs excluding amortisation of other intangibles | | (85,806) | (81,744) |
| Non-recurring income and expense | 3 | 69 | - |
| Amortisation of other intangible assets | 13 | (1,458) | (1,565) |
| | | (87,195) | (83,309) |
| Operating profit | 2,4 | 9,357 | 12,929 |
| Finance income | 7 | 213 | 177 |
| Finance costs | 7 | (32) | (14) |
| Share of profit from joint ventures | 15 | 252 | 103 |
| Profit before taxation | | 9,790 | 13,195 |
| Taxation | 8 | (2,888) | (3,378) |
| Profit for the year | | 6,902 | 9,817 |
| Attributable to: | | | |
| Ordinary shareholders | | 6,841 | 9,802 |
| Non-controlling interest | | 61 | 15 |
| Profit for the year | | 6,902 | 9,817 |
| Earnings per ordinary share | 10 | | |
| Basic – profit for the year | | 33.84p | 48.41p |
| Diluted – profit for the year | | 32.53p | 47.43p |

Consolidated statement of comprehensive income

for the year ended 29 February 2012

| | Notes | 29 Feb 2012
£'000 | 28 Feb 2011
£'000 |
| --- | --- | --- | --- |
| Profit for the year | | 6,902 | 9,817 |
| Other comprehensive income/(expense) | | | |
| Foreign exchange differences on retranslation of foreign operations | | 341 | 977 |
| Cash flow hedges – net of tax | 25 | (70) | (179) |
| Total comprehensive income for the year | | 7,173 | 10,615 |
| Attributable to: | | | |
| Equity holders of the parent | | 7,112 | 10,600 |
| Non-controlling interest | | 61 | 15 |
| Total comprehensive income for the year | | 7,173 | 10,615 |

The notes on pages 32 to 59 form an integral part of these consolidated financial statements.

Braemar Shipping Services plc
Annual Report 2012

Balance sheets

as at 29 February 2012

Company number 2286034

Assets	Notes	Group		Company
		As at 29 Feb 2012 £'000	As at 28 Feb 2011 £'000	As at 29 Feb 2012 £'000	As at 28 Feb 2011 £'000
Non-current assets
Goodwill	12	30,416	30,006	-	-
Intangible assets	13	2,630	2,777	-	-
Property, plant and equipment	14	6,257	6,813	-	-
Investments	15	1,895	1,694	52,053	51,522
Deferred tax assets	8	1,665	1,797	-	-
Other long-term receivables	16	233	238	39	54
		43,096	43,325	52,092	51,576
Current assets
Trade and other receivables	17	46,973	40,741	2,387	2,232
Derivative financial instruments	18	136	314	-	-
Restricted cash	19	335	-	-	-
Cash and cash equivalents	20	17,467	25,634	307	23
		64,911	66,689	2,694	2,255
Total assets		108,007	110,014	54,786	53,831
Liabilities
Current liabilities
Derivative financial instruments	18	7	-	-	-
Trade and other payables	21	36,953	41,062	1,010	1,295
Current tax payable		1,674	2,379	-	-
Provisions	22	345	267	-	-
Client monies held as escrow agent	19	335	-	-	-
		39,314	43,708	1,010	1,295
Non-current liabilities
Deferred tax liabilities	8	1,130	1,271	-	-
Trade and other payables	21	400	-	-	-
Provisions	22	325	217	-	-
		1,855	1,488	-	-
Total liabilities		41,169	45,196	1,010	1,295
Total assets less total liabilities		66,838	64,818	53,776	52,536
Equity
Share capital	23	2,160	2,110	2,160	2,110
Share premium		12,018	11,077	12,018	11,077
Shares to be issued	24	(3,695)	(3,275)	(3,695)	(3,275)
Other reserves	25	26,664	26,323	21,742	21,742
Retained earnings		29,471	28,424	21,551	20,882
Group shareholders' equity		66,618	64,659	53,776	52,536
Non-controlling interest	26	220	159	-	-
Total equity		66,838	64,818	53,776	52,536

The accounts on pages 28 to 59 were approved by the Board of Directors on 4 May 2012 and were signed on its behalf by:

Sir Graham Hearne
J.R.V. Kidwell FCA
Chairman
Finance Director

The notes on pages 32 to 59 form part of these accounts

Braemar Shipping Services plc
Annual Report 2012

Cash flow statements

for the year ended 29 February 2012

	Notes	Group		Company
		29 Feb 2012 £'000	28 Feb 2011 £'000	29 Feb 2012 £'000	28 Feb 2011 £'000
Cash flows from operating activities
Cash generated from operations	27	5,034	12,280	5,711	5,285
Interest received		213	177	-	1
Interest paid		(32)	(14)	(52)	(1)
Tax paid		(3,858)	(5,164)	-	-
Net cash generated from operating activities		1,357	7,279	5,659	5,285
Cash flows from investing activities
Dividends from joint ventures		74	-	74	-
Acquisition of businesses, net of cash acquired	28	(3,106)	(1,293)	-	(960)
Purchase of property, plant and equipment and computer software		(1,050)	(1,549)	-	-
Proceeds from sale of property, plant and equipment		-	43	-	-
Purchase of investments		-	(94)	-	-
Other long-term assets		5	(69)	15	3
Net cash used in investing activities		(4,077)	(2,962)	89	(957)
Cash flows from financing activities
Proceeds from issue of ordinary shares		991	65	991	65
Dividends paid		(5,233)	(5,110)	(5,233)	(5,110)
Purchase of own shares		(1,222)	(916)	(1,222)	(916)
Net cash used in financing activities		(5,464)	(5,961)	(5,464)	(5,961)
(Decrease)/increase in cash and cash equivalents		(8,184)	(1,644)	284	(1,633)
Cash and cash equivalents at beginning of the period		25,634	27,930	23	1,656
Foreign exchange differences		17	(652)	-	-
Cash and cash equivalents at end of the period		17,467	25,634	307	23

Braemar Shipping Services plc

Annual Report 2012

Statements of changes in equity for the year ended 29 February 2012

Group	Share capital £'000	Share premium £'000	Shares to be issued £'000	Other reserves £'000	Retained earnings £'000	Total £'000	Non-controlling interest £'000	Total equity £'000
At 1 March 2010	2,108	11,014	(3,198)	25,525	23,534	58,983	144	59,127
Profit for the year	-	-	-	-	9,802	9,802	15	9,817
Foreign exchange differences	-	-	-	977	-	977	-	977
Cash flow hedges net of tax	-	-	-	(179)	-	(179)	-	(179)
Total recognised income in the year	-	-	-	798	9,802	10,600	15	10,615
Dividends paid	-	-	-	-	(5,110)	(5,110)	-	(5,110)
Issue of shares	2	63	-	-	-	65	-	65
Purchase of own shares	-	-	(916)	-	-	(916)	-	(916)
ESOP shares allocated	-	-	839	-	(839)	-	-	-
Credit in respect of share option schemes	-	-	-	-	829	829	-	829
Deferred tax on items taken to equity	-	-	-	-	208	208	-	208
At 28 February 2011	2,110	11,077	(3,275)	26,323	28,424	64,659	159	64,818
Profit for the year	-	-	-	-	6,841	6,841	61	6,902
Foreign exchange differences	-	-	-	411	(70)	341	-	341
Cash flow hedges net of tax	-	-	-	(70)	-	(70)	-	(70)
Total recognised income in the year	-	-	-	341	6,771	7,112	61	7,173
Dividends paid	-	-	-	-	(5,233)	(5,233)	-	(5,233)
Issue of shares	50	941	-	-	-	991	-	991
Purchase of own shares	-	-	(1,222)	-	-	(1,222)	-	(1,222)
ESOP shares allocated	-	-	802	-	(802)	-	-	-
Credit in respect of share option schemes	-	-	-	-	513	513	-	513
Deferred tax on items taken to equity	-	-	-	-	(202)	(202)	-	(202)
At 29 February 2012	2,160	12,018	(3,695)	26,664	29,471	66,618	220	66,838
Company	Share capital £'000	Share premium £'000	Shares to be issued £'000	Other reserves £'000	Retained earnings £'000	Total £'000
---	---	---	---	---	---	---
At 1 March 2009	2,108	11,014	(3,198)	21,742	20,796	52,462
Profit for the year	-	-	-	-	5,206	5,206
Dividends paid	-	-	-	-	(5,110)	(5,110)
Issue of shares	2	63	-	-	-	65
Purchase of own shares	-	-	(916)	-	-	(916)
ESOP shares allocated	-	-	839	-	(839)	-
Credit in respect of share option schemes	-	-	-	-	829	829
At 28 February 2010	2,110	11,077	(3,275)	21,742	20,882	52,536
Profit for the year	-	-	-	-	6,191	6,191
Dividends paid	-	-	-	-	(5,233)	(5,233)
Issue of shares	50	941	-	-	-	991
Purchase of own shares	-	-	(1,222)	-	-	(1,222)
ESOP shares allocated	-	-	802	-	(802)	-
Credit in respect of share option schemes	-	-	-	-	513	513
At 29 February 2012	2,160	12,018	(3,695)	21,742	21,551	53,776

Braemar Shipping Services plc

Annual Report 2012

Notes to the consolidated financial statements

General information

Group and Company financial statements of Braemar Shipping Services plc for the year ended 29 February 2012 were authorised for issue in accordance with a resolution of the Directors on 4 May 2012. Braemar Shipping Services plc is a Public Limited Company incorporated in England and Wales.

The term “Company” refers to Braemar Shipping Services plc and “Group” refers to the Company and all its subsidiary undertakings, joint ventures and of the employee share ownership plan trust.

1 Accounting policies

a) Basis of preparation and forward-looking statements

The financial statements of the Group and the Company have been prepared in accordance with International Financial Reporting Standards (IFRS) and IFRIC interpretations as adopted by the European Union and in accordance with the provisions of the Companies Act 2006. No income statement is presented for Braemar Shipping Services plc as provided by section 408 of the Companies Act 2006.

The Directors have a reasonable expectation that the Company and Group have adequate resources to continue to trade for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the financial statements.

The financial statements have been prepared under the historic cost convention except for the derivative financial instruments, which are measured at fair value.

Certain statements in this Annual Report are forward-looking. Although the Group believes that the expectations reflected in these forward-looking statements are reasonable, we can give no assurance that these expectations will prove to have been correct. Because these statements involve risks and uncertainties, actual results may differ materially from those expressed or implied by these forward-looking statements. We undertake no obligation to update any forward-looking statements whether as a result of new information, future events or otherwise.

The Group and Company financial statements are presented in pounds sterling and all values are rounded to the nearest thousand pounds (£'000) except where otherwise indicated.

New and amended standards adopted by the Group

There are no IFRSs or IFRIC interpretations that are effective for the first time for the financial year beginning on or after 1 March 2011 that had a material impact on the Group.

New standards, amendments and interpretations issued but not effective for the financial year beginning 1 March 2011 and not early adopted

IAS 1, ‘Financial statement presentation’ regarding other comprehensive income. The effective date is for annual periods beginning on or after 1 July 2012. The main change resulting from these amendments is a requirement for entities to group items presented in Other Comprehensive Income on the basis of whether they are potentially reclassifiable to profit or loss subsequently (reclassification adjustments). The amendments do not address which items are presented in Other Comprehensive Income.

IFRS 9, ‘Financial instruments’, addresses the classification, measurement and recognition of financial assets and financial liabilities. IFRS 9 was issued in November 2009 and October 2010. It replaces the parts of IAS 39 that relate to the classification and measurement of financial instruments. IFRS 9 requires financial assets to be classified into two measurement categories: those measured as at fair value and those measured at amortised cost. The determination is made at initial recognition. The classification depends on the entity’s business model for managing its financial instruments and the contractual cash flow characteristics of the instrument. For financial liabilities, the standard retains most of the IAS 39 requirements. The main change is that, in cases where the fair value option is taken for financial liabilities, the part of a fair value change due to an entity’s own credit risk is recorded in other comprehensive income rather than the income statement, unless this creates an accounting mismatch. The Group is yet to assess IFRS 9’s full impact and intends to adopt IFRS 9 no later than the accounting period beginning on or after 1 March 2013, subject to endorsement by the EU.

IFRS 10, ‘Consolidated financial statements’ builds on existing principles by identifying the concept of control as the determining factor in whether an entity should be included within the consolidated financial statements of the parent company. The standard provides additional guidance to assist in the determination of control where this is difficult to assess. The Group is yet to assess IFRS 10’s full impact and intends to adopt IFRS 10 no later than the accounting period beginning on or after 1 March 2013, subject to endorsement by the EU.

IFRS 11 ‘Joint Arrangements’ is applicable for 2013. The IFRS establishes principles for financial reporting by parties to a joint arrangement. It is concerned principally with both the structure of the arrangement and that an entity had a choice of accounting treatment for interests in jointly controlled entities. IFRS11 requires that joint arrangements be accounted for using the equity method.

IFRS 12, ‘Disclosures of interests in other entities’ includes the disclosure requirements for all forms of interests in other entities, including joint arrangements, associates, special purpose vehicles and other off balance sheet vehicles. The Group is yet to assess IFRS 12’s full impact and intends to adopt IFRS 12 no later than the accounting period beginning on or after 1 March 2013, subject to endorsement by the EU.

IFRS 13, ‘Fair value measurement’, aims to improve consistency and reduce complexity by providing a precise definition of fair value and a single source of fair value measurement and disclosure requirements for use across IFRSs. The requirements, which are largely aligned between IFRSs and US GAAP, do not extend the use of fair value accounting but provide guidance on how it should be applied where its use is already required or permitted by other standards within IFRSs or US GAAP. The Group is yet to assess IFRS13’s full impact and intends to adopt IFRS 13 no later than the accounting period beginning on or after 1 March 2013, subject to endorsement by the EU.

There are no other IFRSs or IFRIC interpretations that are not yet effective that would be expected to have a material impact on the Group.

Braemar Shipping Services plc

Annual Report 2012

1 Accounting policies continued

The principal accounting policies adopted in the preparation of these financial statements are set out below.

b) Basis of consolidation

The consolidated financial statements incorporate the accounts of the Group and the Company made up to 28 February each year or 29 February in a leap year.

The results of subsidiaries are consolidated using the purchase method of accounting, from the date on which control of the net assets and operation of the acquired company are effectively transferred to the Group. Similarly, the results of subsidiaries divested cease to be consolidated from the date on which control of the net assets and operations are transferred out of the Group.

The interest of non-controlling interests is stated at the non-controlling interests' proportion of the value of the assets and liabilities recognised and is presented separately within total equity in the consolidated balance sheet.

Investments in joint ventures and associates and where the Group has significant influence are equity accounted and carried in the balance sheet at cost plus post-acquisition changes in the Group's share of net assets of the associate or joint venture, less any impairment in value. The income statement reflects the Group's share of the post-tax result of the joint venture or associate.

All intra-group transactions, balances, income and expenses are eliminated on consolidation.

c) Use of estimates and critical judgements

The preparation of financial statements in conformity with IFRSs as endorsed by the EU requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on management's best knowledge of the amount, events or actions, actual results ultimately may differ from those estimates. Principal areas where the assumptions and estimates have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the next financial year are in respect of the impairment review of goodwill (see note 12), other intangible assets (see note 13) and impairment of trade receivables (see note 17).

d) Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the Company and the revenue can be reliably measured.

Revenue of the Group consists of:

i) Shipbroking – income comprises commission arising from tanker and dry cargo charter broking, sale and purchase broking, offshore broking and financial consultancy arrangement fees. Income is recognised when the Group has a contractual entitlement to commission, normally the point at which there is a stage of completion of contractual terms between the principals of a transaction.

ii) Technical – fee income comprises fees for the supply of technical and energy loss adjusting services. Income from technical services is recognised on a time incurred and recoverable expenses basis net of provisions.

iii) Logistics – agency income is recognised at the point when the ship sails from the port. Forwarding and logistics income is recognised when the ship departs. Where the Group acts as a principal rather than as agent, the revenue and costs are shown gross.

iv) Environmental – revenue from environmental services is recognised at the contractual rates, as labour hours are delivered and direct expenses incurred.

Other income of the Company consists of dividends from investments. Dividend income from investments is recognised when the shareholders' legal rights to receive payment have been established.

e) Foreign currencies

The functional currency of the Group is pounds sterling. Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing on the date of the transaction. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year end exchange rates of monetary assets and liabilities denominated in foreign currency are recognised in the income statement.

In order to hedge its exposure to certain foreign exchange risks, the Group enters into derivative financial instruments contracts, mainly forward contracts and other derivative currency contracts (see the following page for details of the Group's accounting policies in respect of such derivative financial instruments).

Assets and liabilities of overseas subsidiaries, branches and associates are translated from their functional currency into pounds sterling at the exchange rates ruling at the balance sheet date. Trading results are translated at the average rates for the period. Exchange differences arising on the consolidation of the net assets of overseas subsidiaries are dealt with through the foreign currency translation reserve (see note 24), whilst those arising from trading transactions are dealt with in the income statement. On disposal of a business, the cumulative exchange differences previously recognised in the foreign currency translation reserve relating to that business are transferred to the income statement as part of the gain or loss on disposal.

f) Taxation

The taxation expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the period. Taxable profit differs from net profit as reported in the income statement because it excludes items of income and expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group and Company's liability for current tax is calculated using rates that have been enacted or substantively enacted by the balance sheet date.

Braemar Shipping Services plc
Annual Report 2012

Notes to the consolidated financial statements continued

1 Accounting policies continued

Full provision is made for deferred taxation on all taxable temporary differences. Deferred tax assets and liabilities are recognised separately on the balance sheet. Deferred tax assets are recognised only to the extent that they are expected to be recoverable. Deferred taxation is recognised in the income statement unless it relates to taxable transactions taken directly to equity, in which case the deferred tax is also recognised in equity. The deferred tax is released to the income statement at the same time as the taxable transaction is recognised in the income statement. Deferred taxation on un-remitted overseas earnings is provided for to the extent a tax charge is foreseeable.

g) Goodwill

Business combinations are accounted for using the purchase method.

On the acquisition of a business, fair values are attributed to the net assets (including any identifiable intangible assets) acquired. Goodwill arises where the fair value of the consideration given exceeds the fair value of the net assets acquired. Goodwill is recognised as an asset and is reviewed for impairment at least annually. Impairments are recognised immediately in the income statement. Goodwill is allocated to cash-generating units for the purposes of impairment testing. On the disposal of a business, goodwill relating to that business remaining on the balance sheet is included in the determination of the profit or loss on disposal. As permitted by IFRS 1, goodwill on acquisitions arising prior to 1 March 2004 has been retained at prior amounts and will be tested annually for impairment.

In relation to acquisitions where the fair value of assets acquired exceeds the fair value of the consideration, the excess fair value is recognised immediately in the income statement.

h) Intangible assets

i) Computer software

The Group capitalises computer software at cost. It is amortised on a straight-line basis over its estimated useful life of up to 4 years. The carrying value of intangible assets with a finite life is reviewed for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable.

ii) Intangible assets

Intangible assets acquired as part of a business combination are stated in the balance sheet at their fair value at the date of acquisition less accumulated amortisation and any provisions for impairment. The amortisation of the carrying value of the capitalised forward order book and customer relationships is charged to the income statement over an estimated useful life of two to ten years. The carrying values of intangible assets are reviewed for impairment at least annually or when there is an indication that they may be impaired.

i) Property, plant and equipment

Property, plant and equipment are shown at historical cost less accumulated depreciation and any impairment value.

Depreciation is provided at rates calculated to write off the cost, less estimated residual value of each asset, on a straight line basis over its expected useful life as follows (except for long and short leasehold interests which are written off against the remaining period of the lease):

Motor vehicles – three years
Computers – four years
Fixtures and equipment – four years

j) Investments

Investments in associates and joint ventures where the Group has significant influence are accounted for under the equity method of accounting in the financial statements.

Investments where the Group has no significant influence are held at fair value.

Investments in the Company are shown at cost less impairment.

k) Impairment

The carrying amount of the Group's assets other than financial assets within the scope of IAS 39 and deferred tax assets, are reviewed each balance sheet date to determine whether there is an indication of impairment. If any such indication exists, the asset's recoverable amount is estimated. The recoverable amount is determined based on value in use calculations, which requires the use of estimates. An impairment loss is recognised in the income statement whenever the carrying amount of the assets exceeds its recoverable amount.

Where an impairment loss subsequently reverses, the carrying amount of the assets with the exception of goodwill and other intangibles is increased to the revised estimate of its recoverable amount. This cannot exceed the carrying amount prior to the impairment charge. An impairment recognised in the income statement in respect of goodwill and other intangibles is not subsequently reversed.

l) Derivative financial instruments and hedging

Derivatives are initially recognised at fair value and are subsequently re-measured at their fair value at each balance sheet date. Recognition of the resulting gain or loss depends on whether the derivative is designated as a hedging instrument, and if it is, the nature of the item being hedged. Changes in the fair value of derivatives that do not qualify for hedge accounting are recognised immediately in the income statement. The Group designates derivatives that qualify for hedge accounting as a cash flow hedge where there is a high probability of the forecast transactions arising. The effective portion of changes in the fair value of these derivatives are recognised in equity. The gain or loss relating to the ineffective portion is recognised immediately in the income statement. Amounts accumulated in equity are recycled to the income statement at the same time as the gains or losses on the hedged items. When a forecast transaction is no longer expected to occur, the cumulative gains or losses that were reported in equity are immediately transferred to the income statement.

Braemar Shipping Services plc
Annual Report 2012

2012 Review of Operations 01-15
Governance 16-27
Financial statements 28-61
Shareholder information 62-64

1 Accounting policies continued

When a hedging instrument expires or is sold, terminated or exercised, or the entity revokes designation of the hedge relationship but the hedged forecast transaction is still expected to occur, the cumulative gain or loss at that point remains in equity and is recognised in accordance with the above policy when the transaction occurs.

The fair value of forward foreign exchange contracts is based either directly (i.e. as prices) or indirectly (i.e. derived from prices) at the balance sheet date.

m) Trade and other receivables

Trade and other receivables are recognised and carried at the lower of their original value and recoverable amount. Provision is made where there is evidence that the balances will not be recovered in full.

n) Cash and cash equivalents

Cash and short-term deposits included in the balance sheet comprise cash in hand and short-term deposits with an original maturity of three months or less.

Cash and cash equivalents included in the cash flow statement include cash and short-term deposits, net of bank overdrafts.

Restricted cash comprises cash balances where the Group is holding cash as escrow agent for certain clients, pending completion of transactions in which the Group acted as broker. The amounts are held in designated accounts and any interest earned is due to the clients.

o) Provisions

Provisions are recognised when the Group has a present obligation (legal or otherwise) as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. If material, the provisions are discounted using an appropriate current pre-tax interest rate.

p) Share-based payments

The fair value at the date of grant of share-based remuneration, principally share options, is calculated using a binomial pricing model and charged to the income statement on a straight line basis over the vesting period of the award. The charge to the income statement takes account of the estimated number of shares that will vest. All share-based remuneration is equity settled. The balance sheet entry is included in reserves. Shares issued in respect of the deferred bonus plan are valued at the market value on the date the shares are purchased.

The Company reflects the fair value of the share-based payments as an investment in its subsidiaries.

q) Commissions payable

Commissions payable to clients are recognised in trade payables due within one year on the earlier of the date of invoicing or the date of receipt of cash.

r) Pension scheme arrangements

The Group operates several defined contribution pension schemes. The assets of the schemes are held separately from those of the Company within independently administered funds. The pension cost charge represents contributions payable by the Company to the fund.

s) Leasing

Operating leases are charged to the income statement as an expense on a straight-line basis over the lease term. Operating lease income is recognised in the income statement as it is earned.

t) Segmental analysis

The Group's segmental analysis is based on its four business segments: Shipbroking, Technical, Logistics and Environmental. This is consistent with the way the Group manages itself and with the format of the Group's internal financial reporting.

The second analysis is presented according to the geographic markets comprising the UK, Singapore, Other Asia, Australia and the Rest of the World. The Group's geographical segments are determined by the location of the Group's assets and operations.

Costs are allocated between segments on an actual basis.

2 Segmental information

a) Business segments

Management has determined the operating segments for the Group based on the reports reviewed by the Chief Operating Decision Maker to make strategic decisions. The Chief Operating Decision Maker is the Board of Directors.

The Board consider the business from both a service line and geographical perspective. A description of each of the lines of service is provided on page 3.

For management purposes, the Group is currently organised into four operating divisions – Shipbroking, Technical, Logistics and Environmental. These divisions are the basis on which the Group reports its segment information. The reportable segments are derived from an aggregation of operating segments. Unallocated costs relate to Board costs and other costs associated with the Group's listing on the London Stock Exchange.

Braemar Shipping Services plc
Annual Report 2012
35

Notes to the consolidated financial statements continued

2 Segmental information continued

The segment information provided to the Board for reportable segments for the year ended 29 February 2012 is as follows:

2012	Shipbroking £'000	Technical £'000	Logistics £'000	Environmental £'000	Inter-division £'000	Total £'000
Revenue	49,813	31,954	37,630	14,529	(452)	133,474
Divisional operating profit	7,121	1,833	1,888	1,857	–	12,699
Amortisation of other intangible assets	(531)	(838)	(87)	(2)	–	(1,458)
Non-recurring income and expense	(354)	423	–	–	–	69
Segment result	6,236	1,418	1,801	1,855	–	11,310
Unallocated other costs						(1,953)
Operating profit						9,357
Finance income – net						181
Share of profit from joint ventures						252
Profit before taxation						9,790
Taxation						(2,888)
Profit for the period attributable to shareholders from continuing operations						6,902
Capital additions	650	1,574	164	30	–	2,418
Depreciation of property, plant and equipment	559	322	206	162	–	1,249
Segment operating assets	42,334	25,051	13,575	5,685	–	86,645
Segment operating liabilities	(15,038)	(4,486)	(14,031)	(4,475)	–	(38,030)

2011

Revenue	61,646	22,621	35,119	6,749	–	126,135
Divisional operating profit	14,309	1,319	1,230	271	–	17,129
Amortisation of other intangible assets	(586)	(644)	(299)	(36)	–	(1,565)
Segment result	13,723	675	931	235	–	15,564
Unallocated other costs						(2,635)
Operating profit						12,929
Finance income – net						163
Share of profit from joint ventures						103
Profit before taxation						13,195
Taxation						(3,378)
Profit for the period attributable to shareholders from continuing operations						9,817
Capital additions	587	436	192	183	–	1,398
Depreciation of property, plant and equipment	592	221	174	215	–	1,202
Segment operating assets	43,448	20,738	14,141	2,562	–	80,889
Segment operating liabilities	(23,018)	(2,831)	(14,535)	(1,162)	–	(41,546)

Divisional operating profit is defined as operating profit before amortisation of acquisition related intangibles, non-recurring items and central costs.

Sales between business segments are carried out at an arm's-length basis.

Capital expenditure comprises additions to property, plant and equipment, goodwill and other intangibles including additions resulting from business acquisitions.

Segment assets consist primarily of intangible assets (including goodwill), tangible fixed assets, receivables and other assets. Receivables for taxes, cash and cash equivalents and investments have been excluded. Segment liabilities relate to the operating activities and exclude liabilities for taxes.

Braemar Shipping Services plc

Annual Report 2012

2012 Review of Operations 01-15
Governance 16-27
Financial statements 28-61
Shareholder information 62-64

2 Segmental information continued

b) Geographical segment – by origin

The Group manages its business segments on a global basis. The operation's main geographical area is the United Kingdom. The United Kingdom is the home country of the parent. The Group has updated the geographical split of its business to reflect its growing presence and Singapore. The geographical regions in which it now reports are shown below.

	Revenue		Capital additions		Non-current assets
	2012 £'000	2011 £'000	2012 £'000	2011 £'000	2012 £'000	2011 £'000
United Kingdom	90,849	92,168	1,521	525	30,579	37,767
Singapore	14,193	11,577	266	638	4,025	987
Other Asia	11,098	8,839	60	24	514	744
Australia	5,971	6,207	83	82	3,792	80
Rest of the World	11,363	7,344	488	129	626	256
	133,474	126,135	2,418	1,398	39,536	39,834

c) Revenue analysis

All revenue arises from the rendering of services.

There is no one customer that contributes greater than 10% of Group revenue.

3 Non-recurring income and expense

During the year ended 29 February 2012, the Group incurred the following non-recurring income and expenses resulting in a total of £69,000 credited to the income statement.

a) Acquisition of trade and assets of BMT Marine and Offshore Services Limited ("BMTMOS")

In May 2011, the Group acquired certain trade and assets of BMTMOS. The acquisition of this business resulted in a non-recurring gain after accounting for acquisition costs of £856,000 (see note 28).

b) Braemar Futures Limited

After the end of the first half of the year, the unprofitable freight futures broking desk was closed. The cost of closing down the business this year was £354,000 before tax.

c) Braemar Steege de Mexico

On 16 February 2012, the Group disposed of the subsidiary undertaking, Braemar Steege de Mexico. The loss falling in this year in connection with the disposal was £325,000 before tax.

d) Braemar Casbarian Inc

Transaction costs of £108,000 associated with the acquisition of the business and certain assets of Braemar Casbarian were incurred.

Braemar Shipping Services plc
Annual Report 2012
37

Notes to the consolidated financial statements continued

4 Operating profit

Operating profits from continuing operations represent the results from operations before share of profits of joint ventures, finance income, finance costs and taxation.

This is stated after charging/(crediting):

| | Notes | 2012
£'000 | 2011
£'000 |
| --- | --- | --- | --- |
| Cost of sales | | | |
| Freight and haulage | | 24,587 | 21,314 |
| Payments to sub-contractors | | 3,880 | 5,702 |
| Materials and other costs | | 8,455 | 2,881 |
| | | 36,922 | 29,897 |
| Staff costs | 5 | 64,389 | 57,553 |
| Depreciation of property, plant and equipment | 14 | 990 | 1,202 |
| Amortisation of computer software | 13 | 259 | - |
| Amortisation of other intangible assets | 13 | 1,458 | 1,565 |
| Operating lease rentals: | | | |
| - Land and buildings | | 2,344 | 1,762 |
| - Other | | 215 | 215 |
| (Profit)/loss on sale of tangible assets | | 118 | (20) |
| Net movements in bad debt provisions | | 821 | 660 |
| Auditors' remuneration | 6 | 422 | 289 |
| Net foreign exchange gains and financial instruments | | (120) | (714) |

5 Staff costs

a) Staff costs for the Group during the year (including Directors)

| | Notes | 2012
£'000 | 2011
£'000 |
| --- | --- | --- | --- |
| Salaries, wages and short-term employee benefits | | 55,949 | 49,689 |
| Other pension costs | 29 | 2,857 | 2,478 |
| Social security costs | | 5,070 | 4,557 |
| Share based payments | | 513 | 829 |
| | | 64,389 | 57,553 |

No staff costs were incurred by the Company.

The numbers above include remuneration and pension entitlements for each Director. Details are included in the Remuneration Report on page 26.

b) Average number of full time employees

| | 2012
Number | 2011
Number |
| --- | --- | --- |
| Shipbroking | 302 | 288 |
| Technical | 339 | 222 |
| Logistics | 227 | 232 |
| Environmental | 51 | 60 |
| | 919 | 802 |

The Company had no employees. The Directors' remuneration is borne by Braemar Seascope Limited and Braemar Seascope Pte Limited.

38 Braemar Shipping Services plc
Annual Report 2012

5 Staff costs continued

c) Key management compensation (including Directors)

The remuneration of key management including the nine Directors of the Company is set out below. Further information about the remuneration of individual Directors is provided in the Directors' Remuneration Report on page 26. Key management represents the Directors of the Company and individuals who have responsibility for controlling activities of the Group and who regularly attend the Board meetings of the Company.

| | 2012
£'000 | 2011
£'000 |
| --- | --- | --- |
| Salaries, short-term employee benefits and fees | 3,125 | 5,447 |
| Post-employment benefits | 115 | 96 |
| Share-based payments | 120 | 223 |
| | 3,360 | 5,766 |
| Number of key employees | 11 | 11 |

Retirement benefits are accruing to three key management personnel (2011: 4) in respect of defined contribution pension scheme.

6 Auditors' remuneration

A more detailed analysis of auditors' services is given below:

| | 2012
£'000 | 2011
£'000 |
| --- | --- | --- |
| Audit services | | |
| - Fees payable to the Company auditor for audit of the Company and Group financial statements | 70 | 70 |
| Fees payable to the Group's auditor and its associates for other services: | | |
| - The audit of the Group's subsidiaries pursuant to legislation | 223 | 164 |
| - Other services pursuant to legislation | 20 | 20 |
| - Other services relating to taxation | 85 | 35 |
| - Other services relating to corporate finance transactions | 24 | - |
| | 422 | 289 |

In the year ended 29 February 2012, all fees paid to the auditors were charged to operating profit.

7 Finance income - net

| | 2012
£'000 | 2011
£'000 |
| --- | --- | --- |
| Finance income: | | |
| - Interest on bank deposits | 213 | 177 |
| Total finance income | 213 | 177 |
| Finance costs: | | |
| - Interest payable on overdrafts | (32) | (14) |
| Total finance costs | (32) | (14) |
| Finance income/(costs) - net | 181 | 163 |

Braemar Shipping Services plc

Annual Report 2012

Notes to the consolidated financial statements continued

8 Taxation

a) Analysis of charge in year

| | 2012
£'000 | 2011
£'000 |
| --- | --- | --- |
| Current tax | | |
| UK corporation tax charged to the income statement | 2,022 | 3,524 |
| UK adjustment in respect of previous years | 56 | (395) |
| Overseas tax on profits in the year | 1,407 | 1,345 |
| Overseas adjustment in respect of previous years | 8 | (123) |
| Total current tax | 3,493 | 4,351 |
| Deferred tax | | |
| UK current year origination and reversal of timing differences | (235) | (414) |
| UK adjustment in respect of previous years | 57 | 55 |
| Overseas current year origination and reversal of timing differences | (453) | (477) |
| Overseas adjustment in respect of previous years | 52 | (119) |
| Effect of change of tax rate | (26) | (18) |
| Total deferred tax | (605) | (973) |
| Taxation | 2,888 | 3,378 |

Reconciliation between expected and actual tax charge

| | 2012
£'000 | 2011
£'000 |
| --- | --- | --- |
| Profit before tax | 9,790 | 13,195 |
| Profit before tax at standard rate of UK corporation tax of 26% | 2,545 | 3,695 |
| Expenses not deductible for tax purposes | 542 | 570 |
| Non taxable income | (81) | (95) |
| Tax calculated at domestic rates applicable to profits in overseas subsidiaries | (196) | (163) |
| Joint venture income not subject to UK tax | (69) | (29) |
| Prior year adjustments | 173 | (582) |
| Effect of change of tax rate | (26) | (18) |
| Total tax charge for the year | 2,888 | 3,378 |

Tax on items charged to equity

| | 2012
£'000 | 2011
£'000 |
| --- | --- | --- |
| Current tax (credit)/debit on exercised share options | (63) | (69) |
| Deferred tax credit on share options | 256 | (166) |
| Deferred tax credit on cash flow hedges | (26) | (70) |
| Effect of change of tax rate | 5 | 24 |
| Tax credit in the statement of changes in equity | 172 | (281) |

40
Braemar Shipping Services plc
Annual Report 2012

8 Taxation continued

Analysis of the deferred tax asset	As at 29 Feb 2012 £'000	As at 28 Feb 2011 £'000
Accelerated capital allowances (includes £162,000 (2011: £174,000) of overseas accelerated capital allowances)	410	439
Short-term timing differences (includes £129,000 (2011: £196,000) of overseas short-term timing differences)	1,255	1,358
	1,665	1,797
The movement in the deferred tax asset	2012 £'000	2011 £'000
Balance at beginning of year	1,797	1,208
Reclassification	(232)	79
Disposal	(94)	–
Movement to income statement	463	426
Movement to reserves	(259)	138
Exchange differences	(10)	(54)
Balance at end of year	1,665	1,797

A deferred tax asset of £1,665,000 (2011: £1,797,000) has been recognised as the Directors believe that it is probable that there will be sufficient taxable profits in the future to recover the asset in full.

The closing deferred tax asset includes £51,000 (2011: £55,000) expected to reverse within the next 12 months of the balance sheet date.

b) Deferred tax liability

Analysis of the deferred tax liabilities	As at 29 Feb 2012 £'000	As at 28 Feb 2011 £'000
Short-term timing differences	(1,130)	(1,271)
	(1,130)	(1,271)
The movement in the deferred tax liabilities	2012 £'000	2011 £'000
Balance at beginning of year	(1,271)	(2,001)
Reclassification	–	126
Movement to income statement	142	547
Movement to reserves	24	74
Exchange differences	(25)	(17)
Balance at end of year	(1,130)	(1,271)

The closing deferred tax liability includes £331,000 (2011: £384,000) expected to reverse within the next 12 months of the balance sheet date.

The 2012 Budget on 21 March 2012 announced that the UK corporation tax rate will reduce to 22% by 2014. A reduction in the rate from 26% to 25% (effective from 1 April 2012) was substantively enacted on 5 July 2011, and a further reduction to 24% (effective from 1 April 2012) was substantively enacted on 26 March 2012. This will reduce the company's future current tax charge accordingly and further reduce the deferred tax asset and liability at 29 February 2012 (which has been calculated based on the rate of 25% substantively enacted at the balance sheet date). It has not yet been possible to quantify the full anticipated effect of the announced further 2% rate reduction, although this will further reduce the Company's future current tax charge and reduce the Company's deferred tax asset and liability accordingly.

No deferred tax has been provided in respect of temporary differences associated with investments in subsidiaries and interests in joint ventures where the Group is in a position to control the timing of the reversal of the temporary differences and it is probable that such differences will not reverse in the foreseeable future. The aggregate amount of temporary differences associated with investments in subsidiaries and interests in joint ventures, for which a deferred tax liability has not been recognised is approximately £2.9 million (2011: £3.2 million).

Braemar Shipping Services plc
Annual Report 2012

Notes to the consolidated financial statements continued

9 Dividends

Amounts recognised as distributions to equity holders in the year:

| | 2012
£'000 | 2011
£'000 |
| --- | --- | --- |
| Ordinary shares of 10 pence each | | |
| Final of 17.0 pence per share for the year ended 28 February 2011 (2010: 16.25 pence per share) | 3,421 | 3,293 |
| Interim of 9.0 pence per share paid (2010: 9.0 pence per share) | 1,812 | 1,817 |
| | 5,233 | 5,110 |

In addition, the Directors are proposing a final dividend in respect of the financial year ended 29 February 2012 of 17.0 pence per share. It will be paid on 25 July 2012 to shareholders who are on the register of members on 22 June 2012. The proposed final dividend is subject to approval by the shareholders at the Annual General Meeting and has not been included as a liability in these financial statements.

The right to receive dividends on the shares held in the ESOP has been waived (see note 24). The dividend saving through the waiver is £253,000 (2011: £212,000).

10 Earnings per share

Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the year, excluding 877,709 ordinary shares held by the employee share trust (2011: 817,242 shares) which are treated as cancelled.

For diluted earnings per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all dilutive ordinary shares. The Group has one class of potential dilutive ordinary shares being those options granted to employees where the exercise price is less than the average market price of the Company's ordinary shares during the year.

| | 2012
£'000 | 2011
£'000 |
| --- | --- | --- |
| Profit for the period attributable to shareholders | 6,841 | 9,802 |
| | pence | pence |
| Basic earnings per share | 33.84 | 48.41 |
| Effect of dilutive share options | (1.31) | (0.98) |
| Diluted earnings per share | 32.53 | 47.43 |
| | £'000 | £'000 |
| Profit for the period attributable to shareholders before amortisation of other intangible assets and non-recurring income and expense | 7,895 | 10,901 |
| | pence | pence |
| Basic earnings per share | 39.05 | 53.84 |
| Effect of dilutive share options | (1.51) | (1.10) |
| Diluted earnings per share | 37.54 | 52.74 |
| | Shares | Shares |
| Weighted average number of ordinary shares | 20,214,713 | 20,248,456 |
| Effect of dilutive share options | 817,611 | 419,543 |
| Diluted weighted average number of ordinary shares | 21,032,324 | 20,667,999 |

11 Profit for the financial year

In accordance with the exemptions allowed by section 408 of the Companies Act 2006, the Company has not presented its own profit and loss account. A profit of £6,191,000 (2011: profit of £5,206,000) has been dealt with in the accounts of the Company.

Braemar Shipping Services plc

Annual Report 2012

2012 Review of Operations 01-15
Governance 16-27
Financial statements 28-61
Shareholder information 62-64

12 Goodwill

Group	£'000
Cost
At 1 March 2010	36,433
Adjustment to previously reported goodwill	(151)
Exchange adjustments	1,417
At 28 February 2011	37,699
Adjustment to previously reported goodwill	42
Additions	241
Disposals	(53)
Exchange adjustments	180
At 29 February 2012	38,109
Accumulated impairment
At 1 March 2010, 28 February 2011 and 29 February 2012	7,693
Net book value at 29 February 2012	30,416
Net book value at 28 February 2011	30,006

Details of the acquisitions which took place during the year ended 29 February 2012 can be found in note 28 as well as details of adjustments to previously reported goodwill.

All goodwill is allocated to cash-generating units. The allocation of goodwill to cash-generating units is as follows:

	2012 £'000	2011 £'000
Braemar Seascope Limited	18,113	18,113
Braemar Seascope Pty Limited	3,678	3,613
Braemar Technical Services (Engineering) Limited	204	204
Cory Brothers group	3,225	3,225
Braemar Offshore Pte Limited	2,901	2,796
Braemar Technical Services Holdings Limited	1,624	1,677
Cory Brothers Singapore	125	82
Braemar Seascope India Private Limited	299	296
Braemar Casbarian Inc	247	-
	30,416	30,006

These cash-generating units represent the lowest level within the Group at which goodwill is monitored for internal management purposes. Goodwill denominated in foreign currencies is re-valued at the balance sheet date.

All recoverable amounts were measured based on value in use. The forecast cash flows were based on the approved annual budget for the next financial year and management projections for the following four years which are based on estimated conservative growth rates for revenue and costs. Management believe any improvements in the cash flow are achievable. Cash flows have been used over a period of five years as management believes this reflects a reasonable time horizon for management to monitor the trends in the business. After five years a terminal value is calculated using a long-term growth rate of 2.0% (2011: 2%). The cash flows were discounted using a pre-tax discount rate of 10.81% (2011: 10.48%) for UK based operations and 10.81% to 12.81% (2011: 10.48% to 12.48%) for overseas based operations.

Sensitivity to impairment

To test the sensitivity of the results of the impairment review, the calculations have been re-performed assuming a long-term growth rate of nil%. The results showed that there was still no indication of impairment.

Braemar Shipping Services plc
Annual Report 2012
43

Notes to the consolidated financial statements continued

13 Intangible assets

Group	Computer software £'000	Other intangible assets £'000	Total £'000
Cost
At 1 March 2010	–	7,824	7,824
Exchange adjustments	–	95	95
At 28 February 2011	–	7,919	7,919
Additions	706	880	1,586
Disposals	–	(74)	(74)
Exchange adjustments	–	168	168
At 29 February 2012	706	8,893	9,599
Amortisation
At 1 March 2010	–	3,577	3,577
Charge for the year	–	1,565	1,565
At 28 February 2011	–	5,142	5,142
Charge for the year	259	1,458	1,717
Disposals	–	(59)	(59)
Exchange adjustments	–	169	169
At 29 February 2012	259	6,710	6,969
Net book value at 29 February 2012	447	2,183	2,630
---	---	---	---
Net book value at 28 February 2011	–	2,777	2,777

Other intangible assets are acquisition related.

During the year ended 29 February 2012, the Group capitalised the value of the customer relationships (£354,000) following the purchase of the business and certain assets of BMT Marine and Offshore Surveys Limited. In addition, the Group also capitalised £326,000 associated with the name "The Salvage Association", which was acquired at the same time. Furthermore, following the acquisition of the business and certain trade and assets of Casbarian Engineering Associates Inc, the Group has capitalised £200,000 in respect of customer relationships associated with this business. In arriving at a valuation of customer relationships, the Group has estimated attrition rates for non-contractual customer relationships and a discount rate has been applied to these amounts.

The Company has no intangible assets.

Braemar Shipping Services plc

Annual Report 2012

2012 Review of Operations 01-15
Governance 16-27
Financial statements 28-61
Shareholder information 62-64

14 Property, plant and equipment

| Group | Long leasehold
£'000 | Short leasehold
£'000 | Computers
£'000 | Fixtures & equipment
£'000 | Motor vehicles
£'000 | Total
£'000 |
| --- | --- | --- | --- | --- | --- | --- |
| Cost or fair value | | | | | | |
| At 1 March 2010 | 5,097 | 344 | 2,618 | 2,759 | 501 | 11,319 |
| Additions at cost | 294 | 11 | 549 | 578 | 117 | 1,549 |
| Disposals | (71) | – | (45) | (147) | (53) | (316) |
| Exchange differences | (2) | – | (28) | (28) | (2) | (60) |
| At 28 February 2011 | 5,318 | 355 | 3,094 | 3,162 | 563 | 12,492 |
| Additions at cost | 79 | – | 208 | 20 | 37 | 344 |
| Acquisitions | – | – | 83 | 88 | 34 | 205 |
| Disposals | (9) | – | (213) | (140) | (75) | (437) |
| Exchange differences | 14 | – | 15 | 5 | (3) | 31 |
| At 29 February 2012 | 5,402 | 355 | 3,187 | 3,135 | 556 | 12,635 |
| Accumulated depreciation | | | | | | |
| At 1 March 2010 | 902 | 137 | 1,813 | 1,654 | 303 | 4,809 |
| Charge for the year | 189 | 30 | 493 | 370 | 120 | 1,202 |
| Disposals | (70) | – | (49) | (128) | (46) | (293) |
| Exchange differences | – | – | (22) | (17) | – | (39) |
| At 28 February 2011 | 1,021 | 167 | 2,235 | 1,879 | 377 | 5,679 |
| Charge for the year | 246 | 31 | 413 | 219 | 81 | 990 |
| Disposals | (4) | – | (170) | (96) | (49) | (319) |
| Exchange differences | 1 | – | 9 | 7 | 11 | 28 |
| At 29 February 2012 | 1,264 | 198 | 2,487 | 2,009 | 420 | 6,378 |
| Net book value at 29 February 2012 | 4,138 | 157 | 700 | 1,126 | 136 | 6,257 |
| Net book value at 28 February 2011 | 4,297 | 188 | 859 | 1,283 | 186 | 6,813 |

At 29 February 2012, the Group had no contractual commitments for the acquisition of property, plant and equipment (2011: nil).

The Company has no property, plant and equipment.

15 Investments

| Group | Joint ventures
£'000 | Unlisted investments
£'000 | Total
£'000 |
| --- | --- | --- | --- |
| Goodwill | 340 | – | 340 |
| Share of net assets/cost | 426 | 719 | 1,145 |
| At 1 March 2010 | 766 | 719 | 1,485 |
| Exchange differences | 13 | (1) | 12 |
| Additions | – | 94 | 94 |
| Share of joint ventures profits retained | 103 | – | 103 |
| Goodwill | 340 | – | 340 |
| Share of net assets/cost | 542 | 812 | 1,354 |
| At 28 February 2011 | 882 | 812 | 1,694 |
| Exchange differences | 23 | – | 23 |
| Dividends received | (74) | – | (74) |
| Share of joint ventures profits retained | 252 | – | 252 |
| – Goodwill | 340 | – | 340 |
| Share of net assets/cost | 743 | 812 | 1,555 |
| At 29 February 2012 | 1,083 | 812 | 1,895 |

Braemar Shipping Services plc
Annual Report 2012
45

Notes to the consolidated financial statements continued

15 Investments continued

| Company | Subsidiaries
£'000 | Joint venture
undertakings
£'000 | Unlisted
investments
£'000 | Total
£'000 |
| --- | --- | --- | --- | --- |
| Cost | | | | |
| At 1 March 2010 | 51,723 | 412 | 560 | 52,695 |
| Share-based payments | 818 | – | – | 818 |
| Adjustment to cost of investments | (154) | – | – | (154) |
| At 28 February 2011 | 52,387 | 412 | 560 | 53,359 |
| Share-based payments | 531 | – | – | 531 |
| At 29 February 2012 | 52,918 | 412 | 560 | 53,890 |
| Impairment | | | | |
| At 1 March 2010, 28 February 2011 and 29 February 2012 | 1,837 | – | – | 1,837 |
| Net book value at 29 February 2012 | 51,081 | 412 | 560 | 52,053 |
| Net book value at 28 February 2011 | 50,550 | 412 | 560 | 51,522 |

The Company invested £531,000 (2011: £818,000) in the subsidiaries of the Group in respect of share-based payment charges incurred in the year (see note 23).

In the year ended 28 February 2011, the Group made the final payment in respect of the acquisition of Braemar Technical Services Holdings Limited (formerly Braemar Steege Holdings Limited), as a result the Company adjusted the value of the cost of investment in the Company to the final value of the consideration paid.

A list of principal operating subsidiary and joint venture undertakings is as follows:

a) Subsidiaries

Particulars of subsidiary undertakings are as follows:

Name of company	Country	Principal activity	Percentage of ordinary shares directly owned	Percentage of ordinary shares indirectly owned
Braemar Seascope Limited	England & Wales	Shipbroking		100
Braemar Seascope Valuations Limited	England & Wales	Valuations		100
Braemar Seascope Pty Limited	Australia	Shipbroking	100
Braemar Seascope Pte Limited	Singapore	Shipbroking	100
Braemar Seascope India Private Limited	India	Shipbroking		100
Cagnoil Limited	England & Wales	Shipbroking		100
Cory Brothers Shipping Agency Limited	England & Wales	Ship agents	100
Gorman Cory Limited	England & Wales	Ship agents		100
Fred. Olsen Freight Limited	England & Wales	Ship agents		80
Braemar Technical Services (Engineering) Limited	England & Wales	Marine consultants	100
Braemar Technical Services Limited	England & Wales	Marine consultants		100
Braemar Technical Services Holdings Pte Limited	Nevis	Marine consultants	100
Braemar Technical Services Offshore Pte Limited	Singapore	Marine consultants		100
Braemar Technical Services Engineering Pte Limited	Singapore	Energy consultants		100
Braemar Technical Services Offshore Sdn Bhd	Malaysia	Marine consultants		49
PT Braemar Technical Services Offshore	Indonesia	Marine consultants		100
Braemar Technical Services Offshore Vietnam Co Limited	Vietnam	Marine consultants		100
Braemar Technical Services Holdings Limited	England & Wales	Energy loss adjuster	100
Braemar Technical Services (Adjusting) Limited	England & Wales	Energy loss adjuster		100
Braemar Technical Services (USA) Limited	United States	Energy loss adjuster		100
Braemar Technical Services (Adjusting) Pte Limited	Singapore	Energy loss adjuster		100
Braemar Technical Services (Canada) Limited	Canada	Energy loss adjuster		100
Braemar Howells Limited	England & Wales	Environmental services	100
Braemar Casbarian Inc	United States	Marine consultants		100

All subsidiaries were owned at 29 February 2012 and 28 February 2011 except for Braemar Casbarian Inc which was incorporated during the year.

The financial statements of the principal subsidiary undertakings are prepared to 29 February 2012 except for PT Braemar Technical Services Offshore and Braemar Technical Services Offshore Vietnam Co Limited for which, as permitted under IAS 27, the results to 31 December 2011 have been consolidated on the basis that the results to 29 February 2012 would not be materially different.

46 Braemar Shipping Services plc
Annual Report 2012

15 Investments continued

b) Joint ventures

Particulars of the joint venture companies which have been equity accounted are as follows:

Name of company	Country	Principal activity	Percentage of ordinary shares owned	Accounting reference date
Braemar Quincannon Ltd	England & Wales	Shipbroking	50%	28 February
Braemar Quincannon Pte Limited	Singapore	Shipbroking	50%	31 December

The share capital of Braemar Quincannon Pte Limited is owned by the Company. All other joint ventures are indirectly owned by the Group.

In relation to the Group's interest in joint ventures, the assets, liabilities, income and expenses are shown below:

	2012 £'000	2011 £'000
Current assets	1,378	998
Non-current assets	47	59
Current liabilities	(683)	(515)
	742	542
Income	1,750	1,555
Expenses	(1,419)	(1,392)
	331	163
Taxation	(79)	(60)
Share of post tax results	252	103

The joint ventures have no significant contingent liabilities to which the Group is exposed.

c) Unlisted investments

The Group's unlisted shares principally include 1,000 (16.7%) ordinary £1 shares in London Tankers Brokers Panel and 7,500 ordinary £1 shares London Ship Valuation Panel. These have been treated as available for sale investments and not equity accounted, as the Company does not have significant influence as all investors in these companies have equivalent proportional influence. Since the fair value of the investment cannot be reliably measured as the shares are not quoted on a market, it has been held at cost.

16 Other long-term receivables

Other receivables of £233,000 (2011: £238,000) comprised £39,000 (2011: £54,000) in respect of non-interest bearing loans to 7 (2011: 11) employees in the Shipbroking division repayable over three years and £194,000 (2011: £184,000) in respect of security deposits with landlords and other service providers in the Technical division.

Braemar Shipping Services plc
Annual Report 2012

Notes to the consolidated financial statements continued

17 Trade and other receivables

	Group		Company
	2012
£'000	2011
£'000	2012
£'000	2011
£'000
Trade receivables	37,530	34,413	–	–
Provision for impairment of trade receivables	(3,789)	(2,640)	–	–
	33,741	31,773	–	–
Amounts due from subsidiary undertakings	–	–	1,709	1,615
Other receivables	3,521	2,360	645	607
Accrued income	8,354	5,575	–	–
Prepayments	1,357	1,033	33	10
	46,973	40,741	2,387	2,232

The total receivables balance is denominated in the following currencies:

	Group		Company
	2012
£'000	2011
£'000	2012
£'000	2011
£'000
US Dollars	18,805	15,224	–	–
Pounds sterling	16,059	16,904	2,387	2,232
Other	12,109	8,613	–	–
	46,973	40,741	2,387	2,232

The Directors consider that the carrying amounts of trade receivables approximate to their fair value.

Terms associated with the settlement of the Group's trade receivables vary across the Group but in general are settled in less than 90 days. As at 29 February 2012 trade receivables of £3,549,000 (2011: £2,467,000) which were over 12 months old were treated as impaired and have been provided for. Amounts over twelve months old at 29 February 2012 have not been provided for if they have been recovered since that date.

In addition, a provision of £240,000 (2011: £173,000) has been made for specific trade receivables less than 12 months overdue.

The ageing profile of trade receivables as at 29 February 2012 is as follows:

	Group
	2012
£'000	2011
£'000
Up to 3 months	26,210	23,579
3 to 6 months	4,023	4,116
6 to 12 months	2,831	3,542
Over 12 months	4,466	3,176
Total	37,530	34,413

The Company has no trade receivables (2011: £nil).

Movements on the Group provision for impairment of trade receivables were as follows:

| | 2012
£'000 | 2011
£'000 |
| --- | --- | --- |
| At 1 March | 2,640 | 3,257 |
| Provision for receivables impairment | 1,641 | 1,747 |
| Receivables written off during the year as uncollectable | (359) | (1,277) |
| Acquisitions | 687 | – |
| Amounts previously impaired collected in period | (859) | (1,053) |
| Exchange differences | 39 | (34) |
| At 29 / 28 February | 3,789 | 2,640 |

The other classes within trade and other receivables do not contain impaired assets with the exception of accrued income. At 29 February 2012, the provision for amounts greater than 12 months old was £210,000 (2011: £nil).

48
Braemar Shipping Services plc
Annual Report 2012

18 Derivative and other financial instruments

a) Currency risk

The Group's currency risk exposure arises as a result of the majority of its shipbroking earnings being denominated in US dollars while the majority of its costs are denominated in pounds sterling and from the carrying values of its overseas subsidiaries being denominated in foreign currencies. The Group manages the exposure to currency variations by spot and forward currency sales and other derivative currency contracts.

At 29 February 2012 the Group held forward currency contracts to sell US$6.0 million at an average rate of $1.55/£ and variable forward rate windows to sell US$1.0 million per month for 12 months with upper and lower limits of $1.5310 – $1.7000 and for $1.0 million per month at limits of $1.5110 – $1.6000 for the first six months of the year ended 28 February 2013.

At 28 February 2011 the Group held forward currency contracts to sell US$13.0 million at an average rate of $1.57/£ and a variable forward window agreement to sell US$1.0 million per month with upper and lower limits of $1.4885 – $1.6510 for the months March 2011 to February 2012.

The fair value/carrying value of the derivative financial instruments of the Group are as follows:

	2012		2011
	Book value £'000	Fair value £'000	Book value £'000	Fair value £'000
Forward currency contracts
Assets	136	136	236	236
Liabilities	-	-	-	-
Forward currency options
Assets	-	-	78	78
Liabilities	7	7	-	-

The net fair value of forward currency contracts that are designated and effective as cash flow hedges amount to a £136,000 asset (2011: £236,000) which has been deferred in equity.

Amounts of £236,000 have been credited (2011: £198,000 charged) to the income statement in respect of forward contracts which have matured in the period.

During the year ended 28 February 2010, the Group settled early the portion of its variable forward window agreement relating to the period from March 2010 to February 2011, realising a profit of £868,000. £686,000 of this profit was deferred in equity and was recognised in the income statement during the year ended 28 February 2011 as the forecast transactions occurred.

The fair value of financial instruments is based on prices quoted by the counterparty (level 2) at the balance sheet date.

Excluding the effect of hedging, the effect on equity and profit before tax of a 10% increase in the average dollar exchange rate in the year, with all other variables being equal, is approximately £2.2 million adverse (2011: £2.6 million). A 10% decrease in the average US dollar exchange rate is approximately £2.6 million favourable (2011: £3.2 million).

b) Interest rate risk

The Group minimises its exposure to interest rate risk by pooling sterling cash balances across the UK Group.

The following table sets out the carrying amount, by maturity, of the Group's financial instruments which are exposed to interest rate risk:

| Group | 2012
Within one year
£'000 | 2011
Within one year
£'000 |
| --- | --- | --- |
| Floating rate: | | |
| Cash and cash equivalents (see note 20) | 17,467 | 25,634 |
| Company | 2012
Within one year
£'000 | 2011
Within one year
£'000 |
| Floating rate: | | |
| Cash and cash equivalents (see note 20) | 307 | 23 |

Cash balances are generally held on overnight deposits at floating rates depending on cash requirements and the prevailing market rates for the amount of funds deposited.

The other financial instruments of the Group are non-interest bearing.

The effect on equity and profit before tax of a 1% increase in the interest rate, all other variables being equal, is approximately £0.2 million (2011: £0.2 million).

Braemar Shipping Services plc
Annual Report 2012
49

Notes to the consolidated financial statements continued

18 Derivative and other financial instruments continued

c) Banking facilities

At 29 February 2012, the Group had an overdraft facility for £8.0 million (2011: £5.0 million). At 29 February 2012 none of the facility had been drawn (2011: £nil). The Company and its subsidiaries have provided cross guarantees and fixed and floating rate charges over their assets to secure the above overdraft facility.

d) Credit risk

There are no significant concentrations within the Group or Company.

Concentrations of credit risk with respect to trade receivables are limited due to the diversity of the Group's customer base. The Directors believe there is no further credit risk provision required in excess of normal provisions for doubtful receivables, estimated by the Group's management based on prior experience and their assessment of the current economic environment. The Group seeks to trade only with creditworthy parties and carries out credit checks where appropriate. The maximum exposure is the carrying amount as disclosed in note 17.

e) Capital management

The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares.

No changes were made in the objectives, policies or processes during the years ended 29 February 2012 and 28 February 2011.

19 Restricted cash

At 29 February 2012, the Group held £0.3 million restricted cash balances (2011: £nil). Restricted cash comprises cash balances where the Group is holding cash as escrow agent for certain clients, pending completion of transactions in which the Group acted as broker and where the Group is holding payments due to clients on behalf of an insurer. The amounts are held in designated accounts and any interest earned is due to the clients. Restricted cash is denominated in US dollars. A corresponding liability is recorded on the balance sheet as client monies held as escrow agent.

20 Cash and cash equivalents

Cash and cash equivalents comprise £17.5 million held by the Group (2011: £25.6 million) and £307,000 held by the Company (2011: £23,000).

The carrying amount of these assets approximates to their fair value.

Braemar Shipping Services plc

Annual Report 2012

21 Trade and other payables

Current liabilities	Group		Company
	2012 £'000	2011 £'000	2012 £'000	2011 £'000
Trade payables	18,731	17,267	–	–
Amounts owed to subsidiary undertakings	–	–	1,005	1,212
Other taxation and social security	1,151	1,279	–	–
Deferred consideration	268	431	–	–
Other payables	1,512	1,269	5	13
Other accruals and deferred income	15,291	20,816	–	70
	36,953	41,062	1,010	1,295

The average credit period taken for trade payables is 32 days (2011: 42 days). The Directors consider that the carrying amounts of trade payables approximate to their fair value.

The amounts included in current liabilities are expected to be settled in less than 12 months.

Non-current liabilities	Group		Company
	2012 £'000	2011 £'000	2012 £'000	2011 £'000
Deferred consideration	400	–	–	–

Deferred consideration due after more than one year represents the estimated remaining consideration in respect of the acquisition of the business and certain assets of Casbarian Engineering Associates Inc (see note 28). This amount is expected to be settled in the year ended 28 February 2014.

22 Provisions

	Employee entitlements £'000
At 1 March 2011	484
Provided in the year	189
Utilised in the year	(3)
At 29 February 2012	670

Employee entitlements relate to statutory long service leave in Braemar Seascope Pty Limited and the Braemar Offshore companies.

The maturity profile of the provisions is as follows:

	2012 £'000	2011 £'000
Within one year	345	267
Current liabilities	345	267
Between one and two years	62	62
Between two and three years	263	155
Non-current liabilities	325	217
Total provisions	670	484

The Company has no provisions.

Braemar Shipping Services plc
Annual Report 2012

Notes to the consolidated financial statements continued

23 Share Capital

| Group and Company | 2012
Number | 2011
Number | 2012
£'000 | 2011
£'000 |
| --- | --- | --- | --- | --- |
| a) Authorised
Ordinary shares of 10 pence each | 34,903,000 | 34,903,000 | 3,490 | 3,490 |
| | 2012
Number | 2011
Number | 2012
£'000 | 2011
£'000 |
| b) Issued
Fully paid ordinary shares of 10 pence each
As at start of year | 21,096,108 | 21,072,924 | 2,110 | 2,108 |
| Shares issued and fully paid | 503,754 | 23,184 | 50 | 2 |
| As at end of year | 21,599,862 | 21,096,108 | 2,160 | 2,110 |

During the year ended 29 February 2012, 5,000 shares were issued at 245.0 pence as part of the 1997 Executive Scheme. A further 446,335 shares were issued at 196.4 pence and 28 shares were issued at 353.20 pence as part of the Save As You Earn ("SAYE") Scheme. No shares remained unpaid at 29 February 2012.

During the year ended 28 February 2011, 6,000 shares were issued at 181.5 pence and 5,000 shares were issued at 245.0 pence as part of the 1997 Executive Scheme. A further 1,865 shares were issued at 314.0 pence, 9,980 shares were issued at 355.2 pence and 339 shares were issued at 353.20 pence as part of the Save As You Earn ("SAYE") Scheme. No shares remained unpaid at 28 February 2011.

The Company has one class of ordinary shares which carry no right to fixed income.

c) Capital redemption reserve

| Group and Company | 2012
£'000 | 2011
£'000 |
| --- | --- | --- |
| Beginning and end of year | 396 | 396 |

The capital redemption reserve arose on previous share buy-backs by the Company.

d) Share-based payments

The Company operates a variety of share-based payment schemes which are listed below.

The total charge for the year relating to all employee share-based payment plans was £513,000 (2011: £829,000) with a further £39,000 (2011: £69,000) incurred in respect of national insurance contributions, all of which related to equity-settled share-based payment transactions. At 29 February 2012, £47,000 (2011: £69,000) relating to national insurance contributions has been accrued in current liabilities but remains unsettled.

i. Share options

The Company operates a discretionary share option scheme, the Braemar Shipping Services Group 1997 Executive Option Scheme ("The 1997 Scheme") which has now been superseded by the Braemar Shipping Services 2010 Executive Options Scheme ("the 2010 CSOP") under which options are granted by the Remuneration Committee. The schemes are open to all UK employees and executive Directors and the exercise price of the options granted were at the market price at date of grant. The 2010 CSOP provides for the grant of two types of option – "Non-performance options" and "Performance options". "Non-performance options" are granted to employees only in conjunction with the grant to such employees of an award under the Deferred Bonus Plan (see ii.). Unlike the "Performance Options", the vesting and exercise of "Non-performance options" will not be subject to the satisfaction of performance conditions (although exercise will be dependent on continuous employment within the Group). During the year to 29 February 2012, 31,000 "Non-performance options" and no "Performance" options were granted under the CSOP (2011: 104,750 "Non-performance options" and no "Performance" options).

The Company also operates a Save As You Earn ("SAYE") Scheme. The scheme is open to all UK employees and executive Directors as well as certain International employees. Options were granted at 20% discount to the prevailing market price.

52 Braemar Shipping Services plc
Annual Report 2012

23 Share Capital continued

Details of the share options in issue and the movements in the year are given below:

Share scheme	Year option granted	Number at 1 March 2011	Granted	Exercised	Lapsed	Number at 29 February 2012	Exercise price (pence)	Exercisable between
1997 Executive Scheme
	2003	2,000	–	–	–	2,000	181.5	2006-2013
	2004	5,000	–	(5,000)	–	–	245.0	2007-2014
		7,000	–	(5,000)	–	2,000
SAYE
	2007	2,863	–	–	(2,863)	–	355.2	2010-2011
	2009	568,909	–	(498,726)	(43,794)	26,389	196.4	2011-2012
	2010	60,055	–	–	(23,194)	36,861	353.2	2012-2013
	2011	56,484	–	(28)	(22,739)	33,717	426.4	2013-2014
	2012	–	351,076	–	(7,837)	343,239	271.0	2014-2015
		688,311	351,076	(498,754)	(100,427)	440,206
		695,311	351,076	(503,754)	(100,427)	442,206

Share options granted in 2003 and 2004 under the 1997 Executive Scheme are subject to a performance condition that the growth in the Company's average adjusted earnings per share (EPS) over a period of no less than three financial years must exceed the growth in the retail price index (RPI) over the corresponding period by no less than 3% per annum compounded. If the performance condition is not satisfied at this point, no retesting of the performance condition is permitted in subsequent financial years until the option lapses. The base measurement period for the remaining options is the average of the EPS (as published in the Group's Annual Report and Accounts) for the three financial years immediately preceding the grant of the relevant option. Exercise of an option is subject to continued employment.

Options are valued using a binomial pricing model. The fair value per option granted and the assumptions used in the calculation are as follows:

	SAYE	SAYE
Grant date	30 Nov 11	22 Dec 10
Share price at grant date	325.50p	520.00p
Exercise price	271.00p	426.40p
Number of employees	178	65
Shares under option	351,076	56,484
Vesting period (years)	3.0	3.0
Expected volatility	47.98%	20.13%
Option life (years)	3.5	3.5
Risk free rate	2.84%	4.20%
Expected dividends expressed as a dividend yield	5.00%	5.00%
Possibility of ceasing employment before vesting	5.00%	5.00%
Expectation of meeting performance criteria	100.00%	100.00%
Fair value per option	75.50p	70.28p

The expected volatility is based on historical volatility over the last four years. The risk-free rate of return is based on LIBOR.

Braemar Shipping Services plc

Annual Report 2012

Notes to the consolidated financial statements continued

23 Share Capital continued

A reconciliation of option movements during the year is shown below:

	2012		2011
	Number	Weighted average exercise price	Number	Weighted average exercise price
Outstanding at 1 March	695,311	229.59p	724,495	214.72p
Granted	351,076	271.00p	56,484	426.40p
Exercised	(503,754)	196.90p	(23,184)	283.14p
Lapsed	(100,427)	295.04p	(62,484)	215.22p
Outstanding at 29 / 28 February	442,206	284.84p	695,311	229.59p
Exercisable at 29 / 28 February	28,389	195.35p	9,863	372.13p
			2012	2011
			Contractual	Contractual
Weighted average remaining life (years)			2.6	1.2

The weighted average share price for share options exercised in the year is 379.87 pence (2011: 525.57 pence).

ii. Deferred bonus plan

In 2005 the Company put in place a Deferred Bonus Plan ("the Plan") whereby part of the annual performance-related bonus is delivered in shares, on a discretionary basis, to staff including executive Directors. Under the Plan the shares are bought and held in an employee trust for three years after which the employee beneficiary will become absolutely entitled to the shares provided they remain in employment. Shares are valued at fair value at the date of grant.

During the year ended 29 February 2012, 27,775 shares at a value of £124,000 that were awarded to employees in May 2008 as part of the Plan were delivered to them in May 2011 following the three-year vesting period. In addition, 165,000 shares at a value of £545,000 that were awarded to employees in December 2008 were delivered to them in December 2011 following the three-year vesting period. Awards over 31,000 shares were made to employees during the year.

During the year ended 28 February 2011, 46,750 shares at a value of £149,000 that were awarded to employees in May 2007 as part of the Plan were delivered to them in May 2010 following the three-year vesting period. In addition, 156,000 shares at a value of £597,000 that were awarded to employees in November 2007 were delivered to them in November 2010 following the three-year vesting period. Awards over 189,856 shares were made to employees during the year and a total of 53,750 share awards lapsed.

As at 29 February 2012, 339,856 deferred shares had been awarded to employees (2011: 504,131) but not yet vested.

iii. Long-term incentive plan ("LTIP")

The Company established an LTIP in 2006. LTIP awards take the form of a conditional right to receive shares at nil cost. The awards normally vest over three years and are subject to a performance condition based on earnings per share (EPS). If EPS has increased by RPI plus 4%, the awards vest up to 50% and if EPS has increased by 10% they vest up to 100% with a sliding scale in between.

In May 2011, a further 26,668 shares out of the 80,000 shares awarded in May 2007 were delivered to the executive Directors of Braemar Shipping Services plc, at a value of £93,000 on the date of delivery. At 29 February 2012, 26,664 shares remained outstanding (2011: 53,332 shares). LTIP awards over 280,727 shares were made to the executive Directors and senior management in May 2011 in addition to the 196,144 LTIP awards made in June 2010.

Braemar Shipping Services plc

Annual Report 2012

2012 Review of Operations 01-15
Governance 16-27
Financial statements 28-61
Shareholder information 62-64

24 Shares to be issued

Group and Company	£'000
At 1 March 2010	3,198
Share capital acquired in the year	916
ESOP shares allocated	(839)
At 28 February 2011	3,275
Share capital acquired in the year	1,222
ESOP shares allocated	(802)
At 29 February 2012	3,695

Shares to be issued are a deduction from shareholders' funds and represent a reduction in distributable reserves.

An employee share ownership plan (ESOP) was established on 23 January 1995. The ESOP has been set up to purchase shares in the Company. These shares, once purchased, are held on trust by the Trustee of the ESOP, Kleinwort Benson (Channel Islands) Limited, for the benefit of the employees. As at 29 February 2012, the ESOP held 877,709 (2011: 817,242) ordinary shares of 10 pence each at a total cost of £3,695,000 (2011: £3,275,000) including stamp duty associated with the purchase. The funding of the purchase has been provided by the Company in the form of an interest-free loan and the Trustees have contracted with the Company to waive the ESOP's right to receive dividends. The fees charged by the Trustees for the operation of the ESOP are paid by the Company and charged to the income statement as they fall due. The shares owned by the ESOP had a market value at 29 February 2012 of £3,379,180 (2011: £3,726,624). The distribution of these shares is determined by the Remuneration Committee and of the 877,709 held, 843,391 shares had been allocated at 29 February 2012 (2011: 753,607). 248,193 shares (2011: 229,418) have been released to employees during the year (see note 23).

25 Other reserves

	Capital redemption reserve £'000	Merger reserve £'000	Deferred consideration reserve £'000	Translation reserve £'000	Hedging reserve £'000	Total £'000
Group
At 1 March 2010	396	21,346	(389)	3,821	351	25,525
Cash flow hedges
- Transfer to net profit	-	-	-	-	(488)	(488)
- Fair value losses in the period	-	-	-	-	236	236
Exchange differences	-	-	-	977	-	977
Deferred tax on items taken to equity	-	-	-	-	73	73
At 28 February 2011	396	21,346	(389)	4,798	172	26,323
Cash flow hedges
- Transfer to net profit	-	-	-	-	(236)	(236)
- Fair value losses in the period	-	-	-	-	136	136
Exchange differences	-	-	-	411	-	411
Deferred tax on items taken to equity	-	-	-	-	30	30
At 29 February 2012	396	21,346	(389)	5,209	102	26,664

Braemar Shipping Services plc
Annual Report 2012
55

Notes to the consolidated financial statements continued

25 Other reserves continued

	Capital redemption reserve £'000	Merger reserve £'000	Total £'000
At 1 March 2010, 28 February 2011 and 29 February 2012	396	21,346	21,742

The hedging reserve comprises the effective portion of the cumulative net change in fair value of cash flow hedging instruments relating to hedged transactions that have not yet occurred of £136,000 asset (2011: £236,000). A deferred tax liability of £34,000 (2011: £64,000) is attributable to these transactions.

At 28 February 2010, the hedging reserve also included a realised profit of £686,000 from the sale of the portion of the variable forward window agreement in the year ended 28 February 2010 that related to the period from March 2010 to February 2011.

The translation reserve contains all foreign exchange differences arising from the translation of the Group's net investment in overseas subsidiaries and joint ventures.

The deferred consideration reserve contains the estimated cost of acquiring the remaining 20% of Fred. Olsen Freight Limited (see note 30) which is held under option.

The merger reserve arose principally in 2001 in relation to acquisitions of Braemar Shipbrokers and Braemar Tankers.

26 Non-controlling interest

	Group £'000
At 1 March 2010	144
Profit for the period attributable to shareholders for the year	15
At 28 February 2011	159
Profit for the period attributable to shareholders for the year	61
At 29 February 2012	220

The minority interest represents 20% of Fred. Olsen Freight Limited acquired on 24 December 2007 which is not owned by the Group.

27 Cash generated from operations

	Group		Company
	2012 £'000	2011 £'000	2012 £'000	2011 £'000
Profit before tax for the year from continuing operations	9,790	13,195	6,069	5,123
Adjustments for:
- Depreciation of property, plant and equipment	990	1,202	-	-
- Amortisation of computer software	259	-	-	-
- Amortisation of other intangible assets	1,458	1,565	-	-
- Loss/(profit) on sale of property plant and equipment	118	(20)	-	-
- Non recurring income and expense from acquisition and disposal of businesses	(423)	-	-	-
- Finance income	(213)	(177)	-	(1)
- Finance expense	32	14	52	1
- Share of profit of joint ventures	(252)	(103)	-	-
- Share based payments	513	829	-	-
- Net foreign exchange gains and financial instruments	(120)	(714)	-	-
Changes in working capital:
- Trade and other receivables	(3,305)	(4,395)	(153)	14
- Trade and other payables	(3,985)	854	(257)	148
- Provisions	172	30	-	-
Cash generated from operations	5,034	12,280	5,711	5,285

56 Braemar Shipping Services plc
Annual Report 2012

28 Business combinations

During the year ended 29 February 2012, the following acquisitions took place.

a) BMT Marine and Offshore Services Limited ("BMTMOS")

On 9 May 2011 the Group acquired the business and certain assets of BMT Marine and Offshore Surveys Limited ('BMTMOS') from the Administrator, Deloitte LLP for a cash consideration of £2.4 million.

The fair value of the assets acquired was:

	Acquiree's carrying amount £'000	Fair value adjustments £'000	Fair value £'000
Intangible assets	–	680	680
Property, plant & equipment	199	–	199
Trade and other receivables	3,665	(151)	3,514
Payables	–	(827)	(827)
Net assets acquired by the Group	3,864	(298)	3,566
Cash consideration			2,400
Excess of fair value of net assets acquired over consideration paid			1,166
Transaction costs			(310)
Non-recurring gain			856

The acquired business contributed revenues of £8.5 million and an operating profit before amortisation of £0.5 million to the Group for the period from acquisition to 29 February 2012. These results are included within the Group's Technical division in note 2. The results for the pre-acquisition period from 1 March 2011 to 8 May 2011 included revenue of £2.1 million and an operating profit before amortisation of £0.1 million.

b) Casbarian Engineering Associates Inc

On 15 July 2011, the Group acquired the business and certain assets of Casbarian Engineering Associates Inc for US$75,000 (£47,000) which was paid on completion, plus an earn-out. The expected earn-out consideration has been assessed on a multiple of the earnings before interest and tax in each of the two years post completion and total consideration is capped at US$3.5 million.

The fair value of the assets acquired

	Acquiree's carrying amount £'000	Fair value adjustments £'000	Fair value £'000
Intangible assets	–	200	200
Property, plant & equipment	6	–	6
Net assets acquired by the Group	6	200	206
Goodwill			241
			447
Consideration:
Cash consideration			47
Deferred consideration			400
Transaction costs (charged to the income statement)			108
Total consideration			555

The acquired business contributed revenues of £2.0 million and an operating loss before amortisation of £0.2 million to the Group for the period from acquisition to 29 February 2012. These results are included within the Group's Technical division in note 2. The results for the pre-acquisition period from 1 March 2011 to 15 July 2011 included revenue of £1.3 million and an operating loss before amortisation of £0.1 million.

c) Other business combinations

The final stage payments were made during the year in respect of the acquisitions of LPG Connect (£42,000) and Sealion Shipping (S) Pte Limited (£115,000) together with a further stage payment made in respect Cagnoil Limited (£47,000).

Braemar Shipping Services plc
Annual Report 2012

Notes to the consolidated financial statements continued

29 Pensions

The Group participates in a number of defined contribution schemes. Contributions of £2,857,000 (2011: £2,478,000) were paid in the year and contributions of £105,000 were due to these schemes at 29 February 2012 (2011: £103,000).

30 Financial commitments

a) Operating lease commitments

Future minimum rentals payable under non-cancellable operating leases as at 29 / 28 February are as follows:

2012	Land and buildings			Other £'000
	Lease minimum payments £'000	Sub-lease income £'000	Net minimum lease repayments £'000
Within one year	2,049	(343)	1,706	201
Between one and five years	4,838	(928)	3,910	385
Over five years	1,556	-	1,556	-
	8,443	(1,271)	7,172	586
2011	Land and buildings			Other £'000
	Lease minimum payments £'000	Sub-lease income £'000	Net minimum lease repayments £'000
Within one year	1,680	(65)	1,615	186
Between one and five years	4,391	(93)	4,298	153
Over five years	1,875	-	1,875	-
	7,946	(158)	7,788	339

The Group leases various offices and a warehouse under non-cancellable operating lease agreements. The leases have various terms, escalation clauses and renewal rights.

The Group also leases plant and machinery under non-cancellable operating lease agreements.

There were no commitments under operating leases in the Company.

b) Other commitments

On completion of the acquisition of 80% of Fred. Olsen Freight Limited on 27 December 2007, the Group entered into a put and call option agreement to acquire the remaining 20% of the share capital of Fred. Olsen Freight Limited. The terms of the put option provide that the Group could be required to purchase the remaining portion of the business at any time up until 24 December 2015 and the call option allows the Group to exercise its right in any event on 24 December 2015 if the option has not been exercised by the vendors prior to this date. The value of the deferred consideration at 29 February 2012 was £389,000 (2011: £389,000) and is based on current forecasts. It is included in deferred consideration in current liabilities (note 21), although the exact payment may take place at any time over the period to 2015. The call option has not been reflected in the financial statements as it is assessed to have nil value.

31 Contingent liabilities

The Company has given a guarantee to HM Revenue and Customs in respect of duty deferment in the amount of £2.0 million (2011: £2.0 million). Further guarantees to HM Revenue and Customs and third parties total £0.8 million (2011: £0.7 million). In addition, the Company and its subsidiaries have provided cross guarantees and fixed and floating rate charges over their assets to secure the above overdraft facility (see note 18).

Braemar Shipping Services plc

Annual Report 2012

32 Related party transactions

During the period the Group entered into the following transactions with joint ventures and investments:

Group	2012			2011
	Recharges to/(from) £'000	Dividends £'000	Balance due from £'000	Recharges to/(from) £'000	Dividends £'000	Balance due from £'000
Delphis UK	-	-	-	(24)	-	-
Braemar Quincannon Limited	3	-	51	(6)	-	48
Braemar Quincannon Pte Limited	(102)	74	5	33	-	33
London Tankers Broker Panel	261	-	-	258	-	-
London Central Cruise Moorings	15	-	-	15	-	-

All recharges to related parties are carried out on an arm's-length basis.

Under the Merger Agreement dated 7 March 2001 between the Company and Braemar Shipbrokers Ltd, the vendors gave a joint and several indemnity to the Company for any warranty and tax indemnity claims up to an aggregate of £10 million.

During the year ended 28 February 2006, the Company received an assessment for corporation tax and interest totalling £2.2 million which is recoverable under the indemnity and which is currently being appealed. Following receipt of the assessment the Company received funds of £1.6 million from the vendors which were paid to the Inland Revenue in order to prevent interest accruing. Such funds would become repayable to the vendors in the event that the appeal is successful. £0.6 million (2010: £0.6 million) remains outstanding pending the appeal result. The Company does not expect to incur any cost in respect of this assessment or these contingent liabilities.

The Chief Executive and a Director of the Group are Braemar Shipbrokers vendors and are therefore party to the transactions referred to above.

Key management compensation is disclosed in note 5.

During the year the Company entered into the following transactions with subsidiaries and joint ventures:

Company	2012			2011
	Recharges to/(from) £'000	Dividends £'000	Balance due from/(to) £'000	Recharges to/(from) £'000	Dividends £'000	Balance due to/(from) £'000
Braemar Shipbrokers Limited	-	2,561	(589)	(5,248)	5,248	(589)
Braemar Seascope Limited	251	-	466	235	-	215
Wavespec Limited	-	-	1,243	(308)	-	1,243
Cory Brothers Shipping Agency Limited	(2)	1,500	(7)	(5)	-	(5)
Braemar Howells Limited	-	1,000	-	-	-	-
Braemar Seascope Pty Limited	-	565	-	(126)	126	-
Braemar Falconer Pte Limited	-	818	-	-	-	-
Braemar Quincannon Pte Limited	-	74	-	-	-	-
Portabella Limited	-	-	(525)	-	-	(525)

33 Post balance sheet event

Braemar Shipping Services plc

Annual Report 2012

Five year financial summary

Consolidated income statement

| Continuing operations | 12 Months to February 2008
£'000 | 12 Months to February 2009
£'000 | 12 Months to February 2010
£'000 | 12 Months to February 2011
£'000 | 12 Months to February 2012
£'000 |
| --- | --- | --- | --- | --- | --- |
| Group revenue | 100,964 | 127,144 | 119,024 | 126,135 | 133,474 |
| Amortisation of other intangible assets | (452) | (1,074) | (1,480) | (1,565) | (1,458) |
| Non-recurring income and expense | – | – | – | – | 69 |
| Other operating expenses | (86,544) | (110,383) | (104,644) | (111,641) | (122,728) |
| Total operating expenses | (86,996) | (111,457) | (106,124) | (113,206) | (124,117) |
| Operating profit | 13,968 | 15,687 | 12,900 | 12,929 | 9,357 |
| Interest income – net | 380 | 291 | 191 | 163 | 181 |
| Share of profit from joint ventures | 370 | 246 | 400 | 103 | 252 |
| Profit before taxation | 14,718 | 16,224 | 13,491 | 13,195 | 9,790 |
| Taxation | (4,797) | (4,704) | (3,806) | (3,378) | (2,888) |
| Profit after taxation | 9,921 | 11,520 | 9,685 | 9,817 | 6,902 |
| Dividends | | | | | |
| Interim | 1,602 | 1,721 | 1,767 | 1,817 | 1,812 |
| Final proposed | 3,147 | 3,121 | 3,283 | 3,421 | 3,523 |
| | 4,749 | 4,842 | 5,050 | 5,238 | 5,335 |
| Earnings per ordinary share – pence | | | | | |
| Basic | 48.99p | 56.70p | 47.93p | 48.41p | 33.84p |
| Diluted | 48.69p | 55.72p | 47.26p | 47.43p | 32.53p |

60
Braemar Shipping Services plc
Annual Report 2012

2012 Review of Operations 01-15
Governance 16-27
Financial statements 26-61
Shareholder information 62-64

Five year financial summary

Consolidated balance sheet

	As at 29 Feb 2008 £'000	As at 28 Feb 2009 £'000	As at 28 Feb 2010 £'000	As at 28 Feb 2011 £'000	As at 29 Feb 2012 £'000
Assets
Goodwill	25,826	28,137	28,740	30,006	30,416
Other intangible assets	2,315	3,921	4,247	2,777	2,630
Property, plant and equipment	5,820	6,189	6,510	6,813	6,257
Investments	1,890	2,344	1,485	1,694	1,895
Deferred tax assets	754	810	1,208	1,797	1,665
Other receivables	155	176	169	238	233
	36,760	41,577	42,359	43,325	43,096
Current assets
Trade and other receivables	26,875	38,055	36,918	40,741	46,973
Derivative financial instruments	107	160	-	314	136
Restricted cash	3,952	-	5,521	-	335
Cash and cash equivalents	21,635	25,194	27,930	25,634	17,467
	52,569	63,409	70,369	66,689	64,911
Total assets	89,329	104,986	112,728	110,014	108,007
Liabilities
Current liabilities
Derivative financial instruments	49	649	571	-	7
Trade and other payables	39,540	46,221	41,706	41,062	36,953
Current tax payable	3,017	2,689	3,346	2,379	1,674
Provisions	48	88	288	267	345
Client monies held as escrow agent	3,952	-	5,521	-	335
	46,606	49,647	51,432	43,708	39,314
Non-current liabilities
Deferred tax liabilities	681	2,255	2,001	1,271	1,130
Trade and other payables	434	-	-	-	400
Provisions	81	137	168	217	325
	1,196	2,392	2,169	1,488	1,855
Total liabilities	47,802	52,039	53,601	45,196	41,169
Total assets less total liabilities	41,527	52,947	59,127	64,818	66,838
Equity
Share capital	2,061	2,104	2,108	2,110	2,160
Share premium	9,261	10,920	11,014	11,077	12,018
Shares to be issued	(2,527)	(3,479)	(3,198)	(3,275)	(3,695)
Other reserves	20,687	25,020	25,525	26,323	26,664
Retained earnings	11,717	18,268	23,534	28,424	29,471
	41,199	52,833	58,983	64,659	66,618
Minority interest	328	114	144	159	220
Total equity	41,527	52,947	59,127	64,818	66,838

Braemar Shipping Services plc
Annual Report 2012
61

62
Braemar Shipping Services plc
Annual Report 2012

Shareholder information

Registered Office
Braemar Shipping Services plc
35 Cosway Street
London
NW1 5BT
Company number: 2286034

Registrars
Capita Registrars
Northern House
Woodsome Park
Fenay Bridge
Huddersfield
West Yorkshire
HD8 0LA
Telephone: 0870 162 3100

Corporate stockbroker
Westhouse Securities
1 Angel Court
London
EC2R 7HJ

Public relations
Pelham Bell Pottinger
5th Floor Holborn Gate
330 High Holborn
London
WC1V 7QD

Legal advisor
Nabarro
Lacon House
84 Theobald's Road
London
WC1X 8RW

Bankers
The Royal Bank of Scotland plc
Shipping Business Centre
4th Floor
1 Prince's Street
London
EC2R 8PB

Independent auditors
KPMG Audit Plc
15 Canada Square
London
E14 5GL

Timetable
AGM: 20 June 2012
Ex dividend date for 2011/12 final dividend: 20 June 2012
2011/12 Final dividend record date: 22 June 2012
2011/12 Final dividend payment date: 25 July 2012
2012/13 Interim results announcement: Late October 2012

2012 Review of Operations 01-15
Governance 16-27
Financial statements 28-61
Shareholder information 62-64

Offices and contacts

Shipbroking

Businesses:
Braemar Seascope

Principal Offices:
35 Cosway Street
London
NW1 5BT
Great Eastern Centre
1 Pickering Street – #8/01
Singapore 048659

Other office UK:
Aberdeen

Other offices overseas:
Perth, Australia
Melbourne, Australia
Shanghai, China
Beijing, China
New Delhi, India
Mumbai, India
Genoa, Italy
Monte Carlo, Monaco

Web address:
www.braemarseascope.com

Technical

Businesses:
Braemar Offshore
Braemar Adjusting
Braemar Engineering
Braemar SA
Braemar Casbarian

Principal Offices:
Great Eastern Centre
1 Pickering Street – #8/01
Singapore 048659
10000 Memorial Drive,
Suite 150
Houston, TX77024
Marlow House
1A Lloyd's Avenue
London
EC2N 3AL
11-13 Crosswall
London
EC3N 2JY
Fullbridge Mill
Fullbridge
Maldon
Essex CM9 4LE

Other offices overseas:
Calgary, Canada
Miami, USA
Rio de Janeiro, Brazil
Jakarta, Indonesia
Kuala Lumpur, Malaysia
Mumbai, India
Perth, Australia
Shanghai, China
Shenzen, China
Tianjin, China
Vung Tau, Vietnam
Varna, Bulgaria
Accra, Ghana
Cape Town, South Africa
New York, USA
Tokyo, Japan
Trinidad & Tobago
New Orleans, USA

Web address:
www.braemarseascope.com

Web address:
www.braemar.com

Braemar Shipping Services plc
Annual Report 2012
63

64
Braemar Shipping Services plc
Annual Report 2012

Offices and contacts

continued

Logistics

Businesses:

Cory Brothers Shipping Agency
Cory Logistics

Principal Offices:

Cory House
21 Berth
Tilbury Docks
Essex RM18 7JT
Cory House
Haven Exchange
Felixstowe
Suffolk IP11 2QX
Great Eastern Centre
1 Pickering Street – #8/01
Singapore 048659

Other offices UK:

Bebington
Billingham
Bristol
Cardiff
Edinburgh
Falmouth
Grangemouth
Hull
Immingham
Invergordon
Ipswich
Isle of Grain
Milford Haven
Newport
Sheerness Docks
Southampton
Teesport

Other offices overseas:

Web address:

www.cory.co.uk

Environmental

Businesses:

Braemar Howells

Principal Offices:

The Docks
Milford Haven
Pembrokeshire SA73 3AQ
Empire Wharf
The Docks
Falmouth TR11 4NR

Other offices UK:

Barnsley
Belfast
Bristol
Didcot
Dundee
Harlow
Liverpool

Other offices overseas:

Lagos, Nigeria
Luanda, Angola
Portlaoise, Ireland
Perth, Australia

Web address:

www.braemarhowells.com

FSC
MIX
Paper from responsible sources
FSC® C016713

This annual report is printed on FSC certified material. This product is biodegradable, 100% recyclable and elemental chlorine free. Vegetable based inks were used during production.

Both the paper mill and printer involved in the production support the growth of responsible forest management and are both accredited to ISO 14001 which specifies a process for continuous environmental improvement.

Designed and produced by Carnegie Orr
+44 (0)20 7610 6140.
www.carnegieorr.com

2012 Review of Operations 01-15
Governance 16-27
Financial statements 28-61
Shareholder information 62-64

Braemar Shipping Services plc
35 Cosway Street
London NW1 5BT
United Kingdom
Telephone: +44 (0) 20 7535 2650
www.braemarplc.com

AI assistant

BRAEMAR PLC — Annual Report 2012

4770_10-k_2012-02-29_cf4b8dd7-6163-4b0e-b44b-79c2bf2318a5.pdf

Shipbroking + Technical + Logistics + Environmental

Our business

Well positioned

Financial highlights

Contents

2012 Review of Operations

Governance

Financial statements

Shareholder information

Operational highlights

Breadth

Expansion

Response

Diversification

Overview

Results

Acquisitions

Dividend

Outlook

Our services

Shipbroking

Logistics

Environmental

Our global coverage

Braemar offices

Overview

Colleagues

Alan Marsh FICS

Our vision

Our strategy

Markets

Client base

Drivers

Shipbroking

Offices

Services

Growth market

Dry bulk

Deep Sea tankers

Specialised tankers

Offshore

Containers

Sale and Purchase

Review of Operations

Technical

Offices

Services

Growth market

Logistics

Offices

Services

Growth market

Environmental

Offices

Services

Human Resources

Health and Safety

Community

Environment

Overview

Foreign exchange

Non-recurring items

Taxation

Cash flow

Principal risks and uncertainties

Market risk

Reputational risks

Operational risks

Foreign exchange risk

Liquidity risk

Credit risk

James Kidwell FCA

Non-executive Directors

John Denholm CA (55)

Alastair Farley (66)

David Moorhouse CBE, FNI (65)

Executive Directors

BRAEMAR PLC Annual Report 2012