Notice of AGM

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), and will shortly be submitted to, and available for inspection on, the National Storage Mechanism at: 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 Braemar operates in a global landscape of trade and financial sanctions with a variety of associated compliance requirements. This has been assessed as a new Principal Risk for the 2023 financial year.	Conducting business with sanctioned entities, through sanctioned regions and facilitating transport of sanctioned goods will lead to non-compliance with sanctioned regimes resulting in financial penalties/fines and reputational damage. Note: Increased scrutiny from regulatory bodies and rising geopolitical and macroeconomic issues, including the continued Russia/Ukraine conflict, has increased the potential impact of risks associated with breaches of sanctions and trade restriction requirements.	·      Enhanced KYC procedures performed and specialised legal team engage in constant monitoring of updates to applicable sanction regimes and regulations. ·      Technology solutions used to optimise the efficiency of sanction screening performed. ·      External assurance providers performing internal audit reviews over the sanctions process and providing recommendations which management intend to implement in the current financial year.	NEW RISK
Integration Risk As outlined in the 2022 Financial Year, Braemar's primary medium-term ambition is, through strategic hires and acquisitions, to increase the size of the business. Integrating and aligning any new acquisition with the Group poses various challenges from an operational and financial perspective. This has been assessed as a new Principal Risk for 2023 financial year.	Inefficiencies and/or reduced expected synergies realised after integrating new acquisitions into the Group and aligning them with the respective Group strategies.	·      Performance of new business is monitored through regular dialogue with relevant business leaders. ·      An integration strategy is monitored throughout the various stages of an acquisition. ·      Compliance and legal mechanisms in place to ensure the purchase meets any relevant regulatory requirements and the target company aligns appropriately with the relevant Group values. ·      Prioritisation of identified growth opportunities to ensure resources are appropriately allocated to opportunities with the best potential return on investment.	NEW RISK
Loss of key personnel and weak organisational culture Braemar is a people-based business and people are vital to its success. Inadequate policies and reward structures could incentivise negative behaviours, create internal conflict, lead to reputational damage, and contribute to failure in attracting and /or retaining skilled personnel. Failure to adapt to, or align with, market expectations, including the offering of flexible or hybrid working arrangements, could result in the inability to attract and retain skilled personnel. Lack of appropriate consideration of environmental and wider social issues could also contribute to the inability to attract and retain skilled personnel.	Employee relations claims / litigation / tribunals attributed to negative behaviours or actions, increases the potential for reputational damage because of negative publicity in the public domain. Loss of key staff could result in reduced revenue if former staff attempt to take contacts and business with them. The restrictive covenants included in employment contracts help to mitigate this risk. Strategic growth objectives may not be achieved if Braemar fails to attract and retain skilled personnel.	Ongoing review of policies including Conflicts of Interest, Code of Conduct, and the Employee Handbook, to ensure behavioural expectations and employment practices for managers and employees are clearly defined. Organisation structure changes included the creation of associate director roles to identify key employees and to better define progression opportunities. Ongoing development of a culture of engagement and professional development, including implementation of performance management objectives, clearly defined pathways for career progression, and succession planning at senior management levels. Annual review of compensation with external benchmarking helps to ensure remuneration packages continue to be appropriate and competitive. Ongoing consideration of roles potentially suitable for hybrid and flexible working arrangements.	UNCHANGED
Compliance with laws and regulations Braemar generates revenues from a global business that exposes the Group to risks associated with legal and regulatory requirements in multiple jurisdictions.	Legal and regulatory breaches could result in fines, sanctions being imposed on our business, and the loss of Braemar's ability to continue operating. Failure to meet all reporting obligations could lead to reputational damage which could then lead to loss of revenue and staff.	Group-wide training program to help ensure employee awareness of, and compliance with, all relevant legal and regulatory obligations: ·    Braemar corporate governance framework; ·    Braemar risk management methodology; ·    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.	INCREASED
Currency fluctuations 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.	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 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.	UNCHANGED
Cybercrime/data security Cybercrime could result in loss of business assets or disruption to the Group's IT systems and its business. Lack of appropriate data security could result in loss of data.	Loss of service and associated loss of revenue. Reputational damage. Potential for loss of cash due to fraud or phishing.	Globally, cyber-attacks increased significantly during and post the COVID pandemic. To address the persistent threat, and to enhance security measures already in place, Braemar has embarked on a global Cyber Security programme. This programme includes the implementation of the NIST Cyber Security Framework and ISO 27001 as Braemar's controls catalogue. Our Security Operations Centre is fully operational with 24/7 monitoring and coverage.	UNCHANGED
Disruptive technology Shipbroking is still largely a business that is transacted via personal 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.	Relationships could be devalued and replaced by disruptive technology platforms, resulting in increased competition, consequent price reductions, and loss of revenue.	Investment in technology through partnering with best-in-class providers, such as Zuma Labs, has effectively differentiated Braemar. Ongoing modernisation of our infrastructure to allow for focus on innovation and strategic direction.	UNCHANGED
Environment and Climate Change Seaborne transportation is estimated to create approximately 3% of the worlds carbon emissions and there will be increased pressure to reduce that in future years. Failure to monitor and address the risks associated with that reduction process could result in loss of revenue for Braemar and its customers and counterparties	The Group's P&L and liquidity could be negatively impacted if customers are lost as a result of Braemar not keeping pace with our peers and industry best-practice. Non-compliance with regulations or disclosure requirements could result in 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.	Investment in the offshore renewables market and technology to allow the Group and its clients to offset carbon emissions. Ongoing development of the EPSG strategy which allows the Group to monitor and report on environmental and climate-related risks.	UNCHANGED
Geopolitical and macroeconomic 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 crude oil price, restrictions in global trade due to pandemics such as COVID, sanctions, and changes in supply and demand.	A downturn in the world economy could affect transaction volumes, resulting in reduced revenue. Changes in shipping rates and/or changes in the demand or pricing of commodities could affect supply activity. Note: The continued conflict between Russia and Ukraine and related global sanctions has increased the potential impact of risks associated with both geopolitical and/or macroeconomic issues and compliance with relevant laws and regulations.	Diversification on a sector and geographic basis reduces dependency on individual business areas. Ongoing monitoring to ensure the Group is appropriately resourced across its activities and geographies. Ongoing management of costs based on current and reasonably foreseeable market conditions. Enhanced KYC procedures and ongoing monitoring of compliance with governance 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.	INCREASED

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 to/(from) £'000	Dividends £'000	Balance due(to)/ from £'000	Recharges to/(from) £'000	Dividends £'000	Balance due(to)/ from £'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 £'000	2022 £'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 [phone]
Grant Foley, Group Chief Financial Officer
Rebecca-Joy Wekwete, Company Secretary
Buchanan
Charles Ryland / Stephanie Whitmore / Jamie Hooper		Tel [phone]
Investec Bank plc
Gary Clarence / Harry Hargreaves / Alice King		Tel [phone]
Cavendish Securities PLC Ben Jeynes / Matt Lewis (Corporate Finance) Leif Powis /Dale Bellis/ Charlie Combe (Sales & ECM)		Tel [phone]

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 and follow Braemar on LinkedIn.

 

END