REG - Braemar PLC - Notice of AGM
23/11/2023 15:00
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RNS Number : 5108U Braemar PLC 23 November 2023
23 November 2023
BRAEMAR PLC
(the "Company")
Notice of Reconvened Annual General Meeting
Braemar Plc (LSE: BMS), a leading provider of expert investment, chartering,
and risk management advice to the shipping and energy markets, today announces
that the Reconvened Annual General Meeting ("AGM") of Braemar Plc will be held
at 10.00 a.m. on Monday, 18 December 2023 at the Company's offices at One
Strand, Trafalgar Square, London, WC2N 5HR.
The Company held its AGM on Wednesday, 9 August 2023. During that AGM, only
the resolutions that did not relate to the FY23 Annual Report and Accounts
were voted on by shareholders. The remaining business, (namely resolutions 1
to 4 (inclusive) as set out in the Company's AGM Notice posted to shareholders
on 17 July 2023) of the meeting was adjourned to a later date following the
release of the FY23 results.
The Annual Report is available on the Company's website (www.braemar.com
(http://www.braemar.com/) ), and will shortly be submitted to, and available
for inspection on, the National Storage Mechanism
at: https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism) .
Appendix
This appendix sets out the disclosures that the Company is required to make to
comply with Disclosure and Transparency Rule (DTR) 6.3.5R, namely: the
principal risks and uncertainties facing the Company; the directors'
responsibility statement made in respect of certain sections of the Annual
Report; and a statement regarding related party transactions. This information
has been extracted from the Annual Report in unedited text and is not a
substitute for reading the full Annual Report.
Page references and note references below refer to page numbers and numbers of
notes to the accounts in the 2023 Annual Report and Accounts.
Legal Entity Identifier: 213800EV6IKTTHJ83C19
Principal Risks and Uncertainties
Risk Management
Effective risk management forms an integral part of how we operate. It is
essential for delivering our strategic objectives as well as protecting our
relationships and reputation.
The Group's Risk Management Framework
Risk awareness is a key element of Braemar's organisational culture at all
levels and is key in managing risks to our business, helping to ensure the
process of risk identification, assessment and response is embedded within
daily operational and functional activities across the Group.
The board is responsible for managing the Group's risk, overseeing the
internal control framework, and determining the nature and extent of the
principal risks the Company is willing to take to achieve its long-term
objectives. The Group's risk management and internal control frameworks are
continually monitored and reviewed by the board and the Audit and Risk
Committee, with support from the Risk Committee. The board is committed to
maintaining the highest standards of conduct in all aspects of its business.
Group policies and procedures have been designed to ensure that the level of
risk to which the Group is exposed is consistent with the Group's risk
appetite and aligned with the Group's long-term strategy.
Reporting to the Chair of the Audit and Risk Committee and administratively to
the Group Chief Financial Officer, the Head of Internal Audit and Risk leads
the Internal Audit and Risk Management function.
Risk Management Process
The Group's Risk Management approach or framework incorporates both bottom-up
and top-down identification, evaluation, and management of risks. Within our
framework:
· Senior management have initial responsibility for identifying,
monitoring, and updating business risks, while
· Group IT, HR, Legal, Compliance and Finance management also
assess their respective functions for operational and functional risks.
The Group's Risk Management framework is managed via an online system which is
accessible to the senior management team and operational and functional
management teams globally. The system's functionality has allowed for enhanced
monitoring and reporting automation. The system allows for:
· Group-wide real-time updating,
· Distribution and completion of periodic internal control
self-assessment surveys,
· Ongoing monitoring of risks and mitigation activities at Group,
Operational, and Functional levels, and
· Risk Management reporting at Group, Regional, and Company
location levels.
The Group's risk management framework considers both the likelihood and the
impact of identified risks materialising. Risks are mitigated, where possible,
by the implementation of control activities, which are evaluated as part of
the risk-based internal audit plan to determine their effectiveness in
mitigating or reducing risk to acceptable levels.
All identified risks are aggregated and reviewed to assess their impact on the
Group's strategic objectives and the resources required to manage them
effectively. Principal risks are aggregated together with associated issues or
areas of uncertainty. The extent of controls and mitigation as well as the
potential for a material effect on the market value of the Group are then
assessed. Inherent risks can be significant, but our control processes and
management actions reduce the risk level.
The risk management process evaluates the timescale over which new or emerging
risks may occur. The risk management process also considers the potential
impact and likelihood of risks, as well as the timescale in which risks may
occur. The outcome of this process is then reviewed with further consideration
and assessment provided by the Risk Committee, the Audit and Risk Committee,
and the board.
Oversight and evaluation of the effectiveness of Braemar's risk management
framework is led by the Group Chief Financial Officer, supported by the Risk
Committee whose membership includes the Group Chief Operating Officer, Company
Secretary, Head of Internal Audit and Risk, Head of Compliance, and
representatives of other functions and locations of the business. The Risk
Committee monitors risks regularly, taking into consideration the appetite,
tolerance, and potential impact for specific risks on the Group.
Principal Risks
The principal risks which may impact the Group's ability to execute its
strategic objectives have changed since 2022. Three risks previously disclosed
as principal risks have been removed with two emerging risks added to the 2023
disclosure. The risks that follow, whilst not exhaustive, are those principal
risks which we believe could have the greatest impact on our business and have
been discussed at meetings of the board, the Risk Committee and the Audit and
Risk Committee. The board reviews these risks in the knowledge that currently
unknown, non-existent or immaterial risks could turn out to be significant in
the future and confirms that a robust assessment has been performed. The Audit
and Risk Committee review and approve the principal risks and any related
mitigation plans.
Sanctions and trade restrictions (New principal risk)
Exacerbated by the ongoing conflict in Ukraine, the increased significance and
prominence of sanctions and trade restrictions have been assessed as necessary
to disclose separately as a principal risk in its own right.
Integration Risk (New principal risk)
As outlined in the 2022 Annual Accounts, Braemar's primary medium-term
ambition is, through strategic hires and acquisitions, to increase the size of
the business. This means that integrating and aligning new acquisitions is an
area of increased focus of the operational and financial functions of the
Group.
Other changes
Three principal risks disclosed in 2022 have been omitted from the current
year's disclosure. Whilst the related risk has not been mitigated in its
entirety, they no longer reflect the most significant risk to which the board
considers the Group is exposed to. These risks are namely: 'Change
Management', 'Financial capacity' and 'Major business disruption'.
Risk Mitigation
The Group takes various measures to mitigate risk. Key steps in our risk
management process throughout the year included:
· Ongoing periodic review and updating of policies and procedures,
including AML and KYC, to enhance/strengthen the Group's governance framework,
with ongoing monitoring of employee compliance by the Head of Internal Audit
& Risk and Head of Compliance.
· A system of internal checks and authorisations, complemented by
independent assurance activities.
· Usage of common finance, HR and operations systems across the
Group supported by our IT team.
· Succession planning and strategic recruitment supported by the
Group HR team.
· Establishment of board-approved Group budgets with ongoing
performance monitoring against budgets/reforecasts and investigation of
significant variances.
· Regular reporting of Treasury management activity to the board by
the Group Chief Financial Officer. (Note: the Group does not enter speculative
treasury transactions.)
· Ongoing monitoring of contractual risk by the Group legal team.
· Operation of the Group's whistleblowing procedure.
· Maintenance of appropriate insurance cover
Group Risk Governance
Principal Risks
The Directors have carried out an assessment of the principal and emerging
risks facing the Company. The most significant risks to which the board
considers the Group is exposed, based on the evaluation process described in
the Group's Risk Management Framework are set out below.
Risk Summary of Impact Mitigating control and management actions Net risk change
Sanctions and trade restrictions Conducting business with sanctioned entities, through sanctioned regions and · Enhanced KYC procedures performed and specialised legal team NEW RISK
facilitating transport of sanctioned goods will lead to non-compliance with engage in constant monitoring of updates to applicable sanction regimes and
sanctioned regimes resulting in financial penalties/fines and reputational regulations.
damage.
Braemar operates in a global landscape of trade and financial sanctions with a
· Technology solutions used to optimise the efficiency of sanction
variety of associated compliance requirements. screening performed.
Note: · External assurance providers performing internal audit reviews
over the sanctions process and providing recommendations which management
This has been assessed as a new Principal Risk for the 2023 financial year. Increased scrutiny from regulatory bodies and rising geopolitical and intend to implement in the current financial year.
macroeconomic issues, including the continued Russia/Ukraine conflict, has
increased the potential impact of risks associated with breaches of sanctions
and trade restriction requirements.
Integration Risk Inefficiencies and/or reduced expected synergies realised after integrating · Performance of new business is monitored through regular dialogue NEW RISK
new acquisitions into the Group and aligning them with the respective Group with relevant business leaders.
strategies.
· An integration strategy is monitored throughout the various
As outlined in the 2022 Financial Year, Braemar's primary medium-term ambition stages of an acquisition.
is, through strategic hires and acquisitions, to increase the size of the
business. · Compliance and legal mechanisms in place to ensure the purchase
meets any relevant regulatory requirements and the target company aligns
Integrating and aligning any new acquisition with the Group poses various appropriately with the relevant Group values.
challenges from an operational and financial perspective.
· Prioritisation of identified growth opportunities to ensure
resources are appropriately allocated to opportunities with the best potential
return on investment.
This has been assessed as a new Principal Risk for 2023 financial year.
Loss of key personnel and weak organisational culture Employee relations claims / litigation / tribunals attributed to negative Ongoing review of policies including Conflicts of Interest, Code of Conduct, UNCHANGED
behaviours or actions, increases the potential for reputational damage because and the Employee Handbook, to ensure behavioural expectations and employment
of negative publicity in the public domain. practices for managers and employees are clearly defined.
Braemar is a people-based business and people are vital to its success. Loss of key staff could result in reduced revenue if former staff attempt to Organisation structure changes included the creation of associate director
take contacts and business with them. The restrictive covenants included in roles to identify key employees and to better define progression
Inadequate policies and reward structures could incentivise negative employment contracts help to mitigate this risk. opportunities.
behaviours, create internal conflict, lead to reputational damage, and
contribute to failure in attracting and /or retaining skilled personnel. Strategic growth objectives may not be achieved if Braemar fails to attract Ongoing development of a culture of engagement and professional development,
and retain skilled personnel. including implementation of performance management objectives, clearly defined
Failure to adapt to, or align with, market expectations, including the
pathways for career progression, and succession planning at senior management
offering of flexible or hybrid working arrangements, could result in the levels.
inability to attract and retain skilled personnel.
Annual review of compensation with external benchmarking helps to ensure
Lack of appropriate consideration of environmental and wider social issues remuneration packages continue to be appropriate and competitive.
could also contribute to the inability to attract and retain skilled
personnel. Ongoing consideration of roles potentially suitable for hybrid and flexible
working arrangements.
Compliance with laws and regulations Legal and regulatory breaches could result in fines, sanctions being imposed Group-wide training program to help ensure employee awareness of, and INCREASED
on our business, and the loss of Braemar's ability to continue operating. compliance with, all relevant legal and regulatory obligations:
· Braemar corporate governance framework;
Braemar generates revenues from a global business that exposes the Group to
risks associated with legal and regulatory requirements in multiple Failure to meet all reporting obligations could lead to reputational damage · Braemar risk management methodology;
jurisdictions. which could then lead to loss of revenue and staff.
· Compliance with our policies, including our AML/KYC policies'
(enhanced) customer due diligence requirements;
· Compliance with relevant laws & regulations, including
anti-bribery and corruption regulations.
Enhanced KYC procedures and ongoing monitoring of compliance with governance
policies and legal / regulatory requirements across the Group.
Ongoing monitoring to ensure insurance cover is maintained at adequate levels.
Currency fluctuations A change in exchange rates could result in a financial gain or loss. The board sets the treasury policy which details the level of exposure the UNCHANGED
board is comfortable with and the Group hedges to the level stipulated in the
treasury policy. Forward currency (US $) contracts are entered into to
mitigate the risk of adverse currency movements.
The Group is exposed to foreign exchange risk because of a large proportion of
its revenue being generated in US dollars while the cost base is in multiple
currencies.
Cybercrime/data security Loss of service and associated loss of revenue. Reputational damage. Potential Globally, cyber-attacks increased significantly during and post the COVID
for loss of cash due to fraud or phishing. pandemic. To address the persistent threat, and to enhance security measures
already in place, Braemar has embarked on a global Cyber Security programme. UNCHANGED
This programme includes the implementation of the NIST Cyber Security
Cybercrime could result in loss of business assets or disruption to the Framework and ISO 27001 as Braemar's controls catalogue. Our Security
Group's IT systems and its business. Lack of appropriate data security could Operations Centre is fully operational with 24/7 monitoring and coverage.
result in loss of data.
Disruptive technology Relationships could be devalued and replaced by disruptive technology Investment in technology through partnering with best-in-class providers, such UNCHANGED
platforms, resulting in increased competition, consequent price reductions, as Zuma Labs, has effectively differentiated Braemar.
and loss of revenue.
Ongoing modernisation of our infrastructure to allow for focus on innovation
Shipbroking is still largely a business that is transacted via personal and strategic direction.
relationships dependent on quality service. Hence the risk of technological
change, disintermediation and increased customer demands for enhanced
technological offerings could render aspects of our current services obsolete,
potentially resulting in loss of customers.
Environment and Climate Change The Group's P&L and liquidity could be negatively impacted if customers Investment in the offshore renewables market and technology to allow the Group UNCHANGED
are lost as a result of Braemar not keeping pace with our peers and industry and its clients to offset carbon emissions.
best-practice.
Seaborne transportation is estimated to create approximately 3% of the worlds
carbon emissions and there will be increased pressure to reduce that in future
Ongoing development of the EPSG strategy which allows the Group to monitor and
years. Failure to monitor and address the risks associated with that reduction Non-compliance with regulations or disclosure requirements could result in report on environmental and climate-related risks.
process could result in loss of revenue for Braemar and its customers and
counterparties fines or penalties.
Failure to appropriately monitor and mitigate these risks could lead to
Braemar suffering serious reputational damage.
Note:
Management does not expect climate-related risks to have a material impact on
the Group's short-term financial performance.
Geopolitical and macroeconomic A downturn in the world economy could affect transaction volumes, resulting in Diversification on a sector and geographic basis reduces dependency on INCREASED
reduced revenue. individual business areas.
Braemar's business is reliant on global trade flows and as such may be
negatively impacted by geopolitical and/or macroeconomic issues, such as Changes in shipping rates and/or changes in the demand or pricing of Ongoing monitoring to ensure the Group is appropriately resourced across its
changes in crude oil price, restrictions in global trade due to pandemics such commodities could affect supply activity. activities and geographies.
as COVID, sanctions, and changes in supply and demand.
Ongoing management of costs based on current and reasonably foreseeable market
conditions.
Note:
The continued conflict between Russia and Ukraine and related global sanctions
has increased the potential impact of risks associated with both geopolitical Enhanced KYC procedures and ongoing monitoring of compliance with governance
and/or macroeconomic issues and compliance with relevant laws and regulations. policies, sanctions, and other legal / regulatory requirements across the
Group to help ensure laws and regulations are not breached.
Braemar's diverse service offering, led by experts in their fields, means the
Group is in the best position to find new opportunities in volatile market
conditions and able to take advantage of market turnarounds.
Directors' responsibilities pursuant to DTR4:
The directors confirm that to the best of their knowledge:
• the Group Financial Statements have been prepared in accordance
with the applicable set of accounting standards, give a true and fair view of
the assets, liabilities, financial position and profit or loss of the Group;
and
• the Annual Report includes a fair review of the development and
performance of the business and the financial position of the Group and
Company, together with a description of the principal risks and uncertainties
that they face.
The directors confirm that they consider this Annual Report, taken as a whole,
is fair, balanced and understandable and provides the information necessary
for the Company's shareholders to assess the Group's position, performance,
business model and strategy.
Related party transactions
During the period, the Group entered into the following transactions with
joint ventures and investments:
2023 2022
Group Recharges Dividends Balance Recharges Dividends Balance
to/(from)
£'000
due(to)/ from
to/(from)
£'000
due(to)/ from
£'000
£'000
£'000
£'000
AqualisBraemar LOC ASA N/A N/A N/A 221 - 282
AqualisBraemar LOC ASA
AqualisBraemar LOC ASA was a related party until the Group sold its
significant shareholding in the entity and lost its representation on the
board, on 19 May 2022. All transactions with Aqualis Braemar LOC ASA in the
prior year have been included as related party transactions. Recharges to
AqualisBraemar LOC ASA consisted primarily of rent, IT services and HR
services in accordance with a transitional services agreement. In the prior
year, the net recharge to AqualisBraemar LOC ASA included a fee payable to the
Group's former Chairman, Ronald Series of £3,750.
The balance due from AqualisBraemar LOC ASA is unsecured, interest-free and
immediately repayable.
Key management compensation is disclosed in Note 6 of the 2023 Annual Report
and Accounts.
Transactions with wholly owned subsidiaries
Transactions with wholly owned subsidiaries Transactions between the Company
and its subsidiaries, which are related parties, have been eliminated on
consolidation and are not disclosed in this Note. A list of the Group's
subsidiary undertakings is on pages 163 to 165. Unless otherwise indicated,
all shareholdings owned directly or indirectly by the Company represent 100%
of the issued share capital of the subsidiary and the share capital comprises
ordinary shares. All entities primarily operate in their country of
incorporation.
Key management compensation
The remuneration of key management is set out below. Further information about
the remuneration of individual directors is provided in the Directors'
Remuneration Report on pages 84 - 108. Key management represents the board of
the Company.
2023 2022
£'000
£'000
Salaries, short-term employee benefits and fees 5,879 3,484
Other pension costs 52 41
Share-based payments 1,226 521
Total 7,157 4,046
Pension costs relate to contributions made to a defined contribution pension
scheme on behalf of three (2022: three) members of key management.
ENDS
For further information, contact:
Braemar Plc
James Gundy, Group Chief Executive Officer Tel +44 (0) 20 3142 4100
Grant Foley, Group Chief Financial Officer
Rebecca-Joy Wekwete, Company Secretary
Buchanan
Charles Ryland / Stephanie Whitmore / Jamie Hooper Tel +44 (0) 20 7466 5000
Investec Bank plc
Gary Clarence / Harry Hargreaves / Alice King Tel +44 (0) 20 7597 5970
Cavendish Securities PLC
Ben Jeynes / Matt Lewis (Corporate Finance) Tel +44 (0) 20 7220 0500
Leif Powis /Dale Bellis/ Charlie Combe (Sales & ECM)
Notes to Editors:
About Braemar Plc
Braemar provides expert investment, chartering, and risk management advice
that enable its clients to secure sustainable returns and mitigate risk in the
volatile world of shipping and energy. Our experienced brokers work in tandem
with specialist professionals to form teams tailored to our customers' needs,
and provide an integrated service supported by a collaborative culture.
Braemar joined the Official List of the London Stock Exchange in November 1997
and trades under the symbol BMS.
For more information, including our investor presentation,
visit www.Braemar.com (http://www.braemar.com/) and follow Braemar
on LinkedIn (https://www.linkedin.com/company/braemar-ltd) .
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