31 August 2022

BRAEMAR SHIPPING SERVICES PLC

("Braemar", the "Company" or the "Group")

Annual Report and Notice of Readjourned General Meeting

Braemar Shipping Services Plc (LSE: BMS), a leading international Shipbroker and provider of expert advice in shipping investment, chartering, risk management and logistics services, today announces that it has published its Annual Report and Accounts for the year ended 28 February 2022 ("Annual Report").

As announced on 19 August 2022, the Company held its Annual General Meeting ("AGM") on Friday 19 August 2022 at the Company's offices. During that AGM, only the resolutions that were not dependent on the Company's financial results were voted on by shareholders. The remaining business (namely resolutions 1 to 3 (inclusive) and resolution 18 as set out in the Company's AGM Notice posted to shareholders on 27 July 2022) of the meeting was adjourned to a later date following the release of the full year results. Following the publication of the Annual Report today, the Company is pleased to confirm that it will hold the reconvened AGM to consider the remaining business at the Company's offices at One Strand, Trafalgar Square, London WC2N 5HR at 10:00 a.m. on Thursday 6 October 2022.

The Annual Report will be available on the Company's website (www.braemar.com) and will be submitted to the National Storage Mechanism and will shortly be available for inspection at: https://data.fca.org.uk/#/nsm/nationalstoragemechanism.  An AGM Notice and Form of Proxy for the reconvened AGM will be submitted to the National Storage Mechanism. Copies of these documents will be posted to those of the Company's shareholders that have elected to continue to receive hard copies.

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 Annual Report.

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 Committee, with support from a Management Risk Committee. The board is committed to maintaining a reputation for the highest standards of conduct in all aspects of its business, but in considering the other matters set out in Section 172 of the Companies Act 2006, the directors are mindful that the approach must be balanced with both Employee interests and the Group's need to foster business relationships.  As such, 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, but also to avoid a disproportionate administrative burden on employees, clients, and counterparties.  

Reporting to the Chair of the Audit Committee and administratively to the Chief Financial Officer, the Group Head of Internal Audit and Group Risk & Compliance Manager leads the Risk Management, Internal Controls and Compliance functions. 

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 teams have initial responsibility for identifying, monitoring, and updating business risks, while  

·        Group IT, HR, Legal and Finance management teams assess their respective functions for operational and functional risks not identified by senior management. 

The Group's Risk Management framework is managed via a new online system/solution which is accessible to the senior management team and operational and functional management teams globally. The new system's functionality has allowed for enhanced monitoring and reporting automation, which was a limitation of the system previously used.  The new 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 offset, where possible, by the implementation of control activities, which are evaluated 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. Key (or 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. Unmitigated 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 Committee, and the board.  

Oversight and evaluation of the effectiveness of Braemar's risk management framework is led by the Chief Financial Officer, supported by a Management Risk Committee whose membership includes the Chief Operating Officer, General Counsel, Group Head of Internal Audit and Group Risk and Compliance Manager, and representatives of other functions and locations of the business. The Committee monitors risks regularly, taking into consideration the appetite, tolerance, and potential impact for specific risks on the Group. 

Environment and Climate Change 

During FY21/22 Environment and Climate Change-related risk was assessed as part of ongoing discussions of key and emerging risks for the Group and the shipping and energy sectors within which it operates. Consideration of the potential short to medium-term impact of Environment and Climate Change risk resulted in its inclusion as a Group Principal Risk this year. Review and analysis of Group Principal Risks, including Environment and Climate Change risk, is a standing agenda topic for the Risk Committee, and as such was, discussed in Risk Committee meetings throughout FY21/22. Below is a summary of matters considered. 

Classification of environment and climate change risks 

The Risk Committee recognised that there are several specific environmental and climate-related risks. Under TCFD recommendations climate-related risks can be classified into two main categories:  

·     Transitional risks: The risks associated with transitioning to a lower-carbon economy which include regulatory, market and technology-related risks and adaptations related to climate change. 

·      Physical risks: The risks associated with acute weather events or longer-term shifts in climate patterns. 

Further work is in progress to develop a climate-related risk matrix which classifies all climate-related risks and opportunities into the two main categories and documents them in a way that is consistent with the Group's overall risk management framework.  

Timeframe 

The nature of climate-related risks is such that the potential impacts to the Group can be classified into short, medium, and long term. The Risk Committee have initially identified these timeframes as follows: 

·         Short-term: 0-2 years 

·         Medium-term: 3-10 years 

·         Long-term: Beyond 10 years 

Impacts to the Group's strategy 

The Risk Committee discussed several climate-related opportunities such a carbon offsetting, growing the Renewables desk and supporting clients with climate-friendly ship design and sustainable ship recycling via the Sale and Purchase desk. In the short-term carbon offsetting is a key part of the Group's strategy and further details of the implementation of the CHOOOSE platform can be found on page 39. 

Impacts on financial performance 

Management does not expect does not expect climate-related risks to have a material impact on the Group's short-term financial performance. The potential impact of climate change and other environmental issues has not formed a significant element in any key judgements or estimates disclosed in the Group's Financial Statements for the year ended 28 February 2022.  

Significance relative to other principal risks  

The Group has not ranked any of its principal risks and therefore the significance of environment and climate related-risks relative to the Group's other principal risks has not been assessed.  

The Chief Financial Officer was responsible for providing the board and the Audit Committee with updates on these discussions. After our financial year-end, the Group established a Climate Change Management Committee which has specific responsibility for identifying and managing the Group's climate-related risks and opportunities. The Climate Change Committee is Chaired by the Group's Chief Operating Officer and includes the Managing Director of the Singapore office plus other team members from Shipbroking and Corporate.  The Climate Change Committee will report to the board and the Audit Committee via the Chief Operating Officer.  The Risk Committee retains responsibility for monitoring this as a principal risk, incorporating this risk into the Group's overall risk management framework, and ensuring that the impacts of the risks are appropriately monitored and mitigated.   

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 Group Head of Internal Audit & Group Risk and Compliance Manager. 

·         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 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.  

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 alphabetically below.