Clarkson

Clarkson PLC Annual Report 2013 

The heart of  
global shipping  

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Strategic report
12  Group at a glance
14  Group performance
15  Chairman’s review
16  Strategy and operations
20  Business and financial review
30  Corporate responsibility and Clarksons

Governance
34  Board of directors
36  Corporate governance statement
39  Directors’ remuneration report
54  Audit committee report
55  Report of the directors
56  Statement of directors’ responsibilities
57 

Independent auditors’ report

Accounts
60  Consolidated income statement 
60  Consolidated statement of comprehensive income 
61  Consolidated and parent company balance sheets
62  Consolidated statement of changes in equity
63  Parent company statement of changes in equity
64  Consolidated and parent company cash flow statements
65  Notes to the financial statements

Other information
97  Glossary
100  Five year financial summary
101  Principal trading offices

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Our depth of knowledge, 
global network, specialist 
teams and range of 
skills make up Clarksons’ 
world-leading integrated 
shipping service.
Intermediating between 
maritime owners and their 
assets, and cargo providers 
and their freight, to keep 
commodities and finished 
goods moving around the 
world makes our services 
critical to enabling global 
trade where…

Annual Report 2013  Clarkson PLC  1

 
 
…our research, probably the best 
in the world, tracks 114,000 vessels 
carrying over 1,000 different grades 
of bulk commodity across 100,000 
global trade routes.  
Our online databases, publications, 
reports and bespoke analysis 
tailored to clients’ needs, underpin 
knowledge throughout the maritime 
and offshore world…

2  Clarkson PLC  Annual Report 2013 
2  Clarkson PLC  Annual Report 2013 

Enabling  global trade i

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No.1

Oil is the number one 
seaborne traded commodity: 
1.9 billion tonnes annually

Annual Report 2013  Clarkson PLC  3
Annual Report 2013  Clarkson PLC  3

Enabling  global trade  
 
4  Clarkson PLC  Annual Report 2013 
4  Clarkson PLC  Annual Report 2013 

Enabling  global trade …where our brokers, and their 
analysts, consult with clients and 
execute their transactions, in either 
the assets or the use of those assets, 
across every market segment 
of the maritime world, using our 
unparalleled network of intelligence, 
contacts and market expertise…

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200%

expected increase in US LPG 
export capacity by 2017

Annual Report 2013  Clarkson PLC  5
Annual Report 2013  Clarkson PLC  5

Enabling  global trade  
 
…whilst our financial teams help 
clients in either their search for 
finance from the debt, private equity 
or public markets or by assisting 
in managing the financial risks 
associated with the cost of freight 
or the value of commodities carried…

6  Clarkson PLC  Annual Report 2013 
6  Clarkson PLC  Annual Report 2013 

Enabling  global trade i

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400m

tonnes of agriculture commodities 
are transported annually by sea

Annual Report 2013  Clarkson PLC  7
Annual Report 2013  Clarkson PLC  7

 
 
8  Clarkson PLC  Annual Report 2013 
8  Clarkson PLC  Annual Report 2013 

Enabling  global trade …and all maritime and offshore 
transactions need day-to-day support 
in and around ports, where the final 
link in our integrated value chain is 
to provide 24/7 services and supplies 
to ensure uninterrupted trade.

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1.2bn

International seaborne coal  
trade has doubled in the last  
10 years to reach 1.2 billion 
tonnes per year

Annual Report 2013  Clarkson PLC  9
Annual Report 2013  Clarkson PLC  9

 
 
Clarksons’ business 
model provides an 
unrivalled level of  
service and information 
that creates value 
from being the heart 
of global shipping… 
to enabling global trade.

10  Clarkson PLC  Annual Report 2013 

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A ss e t s

  Global Trade

Broking 
 Shipping 

O

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Support

Research

Financial

C

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o

Broking 
Offshore 

Freight

Annual Report 2013  Clarkson PLC  11

 
 
Group at a glance

Our unique breadth enables us to support clients in every area 
of need, develop our relationship with them and ensure that even 
in challenging trading conditions the group can be at the forefront 
of activity, whichever sector of the market it is in.

Broking
Clarksons’ shipbroking services are 
unrivalled – in terms of the number and 
calibre of our brokers, our breadth of 
market coverage, geographical spread 
and depth of intelligence resources.

Financial
From derivative products that have been 
pioneered at Clarksons, to full investment 
banking services and tailored debt 
solutions, we help our clients manage 
risk, fund transactions and conclude 
deals that would often be impossible 
via other, more traditional routes.

Services

 – Containers
 – Deep sea tankers
 – Dry bulk
 – LPG and ammonia
 – LNG
 – Offshore 

Revenue

 – Petrochemical gas
 – Sale and purchase
 – Shortsea
 – Specialised products
 – Market analysts

Services

 – Investment services
 – Futures broking
 – Financial services

Revenue

US$18.2m

2013

2012

2011

Sector split

6%

US$m

18.2

8.4

19.5

US$251.0m

2013

2012

2011

Sector split

81%

US$m

251.0

232.1

263.4

12  Clarkson PLC  Annual Report 2013 

The facts

162

years 

1,033

employees worldwide

42

offices

18

countries

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Support
Our port services team provides the 
highest level of support with 24/7 
attendance to vessel owners, operators 
and charterers at a wide range of 
strategically located ports.

Research
Clarkson Research Services is respected 
worldwide as the most authoritative 
provider of intelligence for global shipping, 
and is at the heart of everything we do.

Services

 – Port services
 – Property services

Revenue

£16.4m

2013

2012

2011

Sector split

8%

Services

 – Offshore and energy
 – Shipping and trade
 – Valuations

Revenue

£9.7m

2013

2012

2011

Sector split

5%

£m

16.4

16.0

10.8

£m

9.7

9.2

8.1

Annual Report 2013  Clarkson PLC  13

 
 
Group performance

Revenue

US$310.0m

2013

2012

2011

2010

2009

Revenue Sterling equivalent

£198.0m

2013

2012

2011

2010

2009

US$m

310.0

280.7

313.3

312.6

277.2

Profit before taxation
(before exceptional item and acquisition costs)

Profit before taxation
(after exceptional item and acquisition costs)

£25.1m

2013

2012*

2011

2010

2009

£22.0m

2013

2012*

2011

2010

2009

£m

25.1

20.0

32.2

32.4

22.5

Earnings per share
(before exceptional item and acquisition costs)

Dividend per share

2013

2012*

2011

2010

2009

* Restated for the effects of IAS 19 (revised)

pence

98.0

74.8

121.5

125.4

90.0

2013

2012

2011

2010

2009

£m

198.0

176.2

194.6

202.6

176.7

£m

22.0

22.9

35.4

32.4

22.5

pence

56

51

50

47

43

14  Clarkson PLC  Annual Report 2013 

98.0p56pi

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Chairman’s review

The shipping markets have begun to show 
signs of improvement, and we are confident 
that our strategy to provide the best service 
to our clients should in turn provide enhanced 
shareholder return.
Bob Benton Chairman

Overview
I am delighted to report that Clarksons has 
delivered a strong result for the year. Whilst the 
last quarter of 2013 saw significant improvement 
in the trading conditions of some of our markets, 
the year as a whole was not without its challenges, 
following an extended period where markets 
reached historic lows. 
This good performance demonstrates that despite 
the ongoing challenges of recent years, Clarksons 
has remained focused on the future. Andi and 
the management team have refined the group’s 
strategy and carefully invested in the business. 
This investment in technology, tools and, most 
importantly, people, will ensure that as the markets 
start to improve we will continue to be able to 
take full advantage by being at the forefront of 
market activity. 

Results
Underlying profit before taxation of £25.1m 
(2012: £20.0m) was 26% higher than the prior 
year. This was ahead of expectations, reflecting 
improved trading conditions in the fourth quarter, 
with activity levels across the group during 
December being particularly strong. 

Underlying earnings per share were 98.0p 
(2012: 74.8p) and basic earnings per share, after 
the exceptional item and acquisition costs were 
82.2p (2012: 85.2p). 

Dividend
Once again, for the eleventh consecutive year, 
Clarksons intends to raise the dividend paid to our 
shareholders. The board is recommending a final 
dividend of 37p (2012: 33p). The interim dividend 
was 19p (2012: 18p), giving a total dividend for the 
year of 56p (2012: 51p). 

The dividend will be payable on 6 June 2014 to 
shareholders on the register as at 23 May 2014, 
subject to shareholder approval.

Acquisitions
During the year, Clarkson Port Services 
(CPS) acquired the Aberdeen-based specialist 
tool supplier Gibb Tools Limited. 

In line with our clear business goal to further 
strengthen and improve our unique product 
service breadth, this acquisition provides an 
important step change in CPS’s client offer, 
complementing its existing port & agency and 
supply services with Gibb Tools’ leading tool 
supply offer. 

People
One of the characteristics that has struck me most 
during my time as chairman is the expertise and 
dedication of the Clarksons team and the ‘can-do’ 
cultural approach. 
Management are committed to not only recruiting 
and retaining the best people, but ensuring they 
have the right tools to do their job, investing in 
training and technology to enable them to offer 
the market-leading service our clients have come 
to expect from Clarksons. 
These results are testament to the hard work 
of ‘Team Clarksons’ and on behalf of the board 
I would like to thank each and every member 
of the team. 

Chairman
As previously announced, Philip Green stepped 
down as chairman on 6 March 2014 and will be 
leaving the board from the AGM on 9 May 2014. 
Consequently, as requested by the board, I have 
resumed the role of chairman until a new chairman 
is firmly in place. On behalf of the board, I thank 
Philip for his valuable contribution over the past 
year and wish him well with his new endeavours. 
Peter Backhouse, the senior independent director, 
will lead the search process for a new chairman.

The future/current trading
An increased forward order book within broking, 
momentum in revenue growth from both the 
financial and research divisions, and an enlarged 
support team incorporating Gibb Tools, means 
that we begin 2014 with a degree of optimism. 
The shipping markets have begun to show 
signs of improvement and, with that, increased 
interest in shipping within the capital markets. 
We are confident that our strategy to provide the 
best service to our clients should in turn provide 
enhanced shareholder return in the future.

Bob Benton Chairman

Annual Report 2013  Clarkson PLC  15

 
 
Strategy and operations

Market trends are encouraging but are still in 
their infancy; importantly the long-term drivers 
for our markets remain clear.
Andi Case Chief executive

Our strategy
Clarksons’ history dates back to 1852 and 
whilst 162 years of marine broking heritage are 
ingrained throughout our business, our strategy 
and business model are now more than ever 
focused on the needs of our clients, both 
today and for the future, and are aligned to the 
long-term fundamental growth drivers behind 
our markets.

Clarksons offers the ‘best in class’ service to 
an increasingly diverse client base across all 
sectors of the shipping and offshore industry 
by providing those clients with unrivalled 
professionalism and support in all the markets 
where they operate. There are also many 
opportunities to assist clients and investors 
who are in multiple markets. 

Whilst our world-class broking operation remains 
core to our business, we have enhanced our 
client offer in recent years, pre-empting clients’ 
needs and global market trends, to develop 
an integrated maritime financial services 
and risk management business as well as a 
comprehensive support function all underpinned 
by our market-leading research and analysis. 
We are the only truly global operator, able to 
offer clients breadth and depth of service on 
an international scale, placing us at the heart of 
global trade. To maintain and extend our industry 
position, we work towards a clear strategy, 
based on six key objectives; Global reach, 
Strength in depth, Validation, People, Client focus 
and Growth.

The market
Since the credit crunch of 2009 we have 
witnessed some of the worst market conditions 
ever seen in shipping, with rates in the first 
half of 2013 often below operating costs and 
asset values reaching all-time lows in some 
sectors. This has led to significant distress 
within the industry. Nevertheless, demand 
for seaborne trade, the ultimate driver of any 
shipping cycle, has continued its increase, with 
10bn tonnes (1990: 4bn tonnes) of cargo now 
being moved around the globe, representing 
approximately 1.4 tonnes per person on the 
planet (1990: 0.8 tonnes); this at a time following 
a period of reduced availability of credit, a fall 
in newbuildings contracted and increased 
scrapping. When last year we spoke about the 
signs of recalibration in the shipping markets, 
with demand and supply getting closer, we saw 
the potential for 2013 and more specifically the 
second half, entering the ‘spike zone’ where 
localised demand/supply imbalances could 
lead to significant rate improvements, albeit 
not necessarily sustained, showing that markets 
are tighter, fast to react and hence much closer 
to a more sustained recovery.

Although volatile, the second half of 2013 did 
indeed bring with it some tentative signs of that 
recovery. The year ended with the ClarkSea 
index up 79% (from an all-time low) and 
seaborne trade, growing by a healthy 3.8%, 
close to the 50-year average. Changes  
to the fundamental supply/demand balance 
and rate spikes have caused renewed interest 
to both acquire secondhand vessels and order 
new more efficient tonnage. Although many 
despair at new tonnage being ordered when the 
markets are already over supplied, the necessity 
to address bunker consumption has been a real 
driver and in many cases orders were placed 
at prices below the cost of building. As new 
more fuel efficient designs start to deliver they 
will begin to put pressure on older tonnage. 
The overall improvement in shipping rates has 
resulted in additional interest and activity in the 
capital markets. Clarksons’ performance over 
the period shows once again the strength of our 
strategy and understanding of the markets. 

16  Clarkson PLC  Annual Report 2013 

 
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Clarksons has 42 offices  
in 18 countries

Clarksons aims to be the 
best in class intermediary 
in every major sector 
of maritime trade

Progress against our plans
1. Global reach
Our global presence enables us to meet client 
needs wherever and whenever they arise; both 
on a local and a global scale. Our goal is to give 
clients global reach on a local level. The year 
saw us expand further to 42 offices across 18 
countries with new broking offices in Morocco 
and Sweden and further investment to grow our 
Singapore and Dutch offices. Within Clarkson 
Capital Markets (CCM), we refocused our 
activities, exiting from Dubai DIFC as announced 
last year, but investing in growing the team in 
New York and Houston; the profits achieved 
in the second half by CCM indicate that this 
strategy was the right one for the business, 
and stands us in good stead for the future. 
Across our port services business we were also 
pleased to open a new branch of our industrial 
supplies business in Great Yarmouth, and new 
agency offices in Leith and Lerwick.

Today over 46% of our workforce is based 
outside of the UK with 42% of group revenue 
generated overseas. Our ability to deliver a truly 
local service worldwide is key to our international 
growth and we share understanding, culture, IT 
platforms and the highest standards of corporate 
governance across our business to ensure this.

2. Strength in depth 
With an industry-leading range of products and 
services that span the maritime and financial 
markets, we believe we are uniquely placed to 
deliver the best, bespoke commercial solutions 
to all our clients – large or small. We are one 
of the leading service providers in every major 
sector of maritime trade, where we aim to be 
best in class in every operation, with no single 
company being our lead competitor in more 
than one market. This unique breadth enables 
us to support clients in every area of need, 
develop our relationship with them and ensure 
that even in challenging trading conditions 
the group can be at the forefront of activity, 
whichever sector or geography of the market 
it is in. And in line with our consultancy and 
execution model, each area of the business is 
supported by leading research and analysis. 
It is this research and analysis that has also 
assisted us in the significant growth of banking 
transactions undertaken by CCM during 2013.

During 2013 and into 2014 we continue to 
make further organic investment, extending our 
business services into barge broking, increasing 
our team within iron ore swaps broking and 
improving our sale and purchase capabilities 
in container and specialised product assets. 
In October we were also delighted to announce 
the acquisition of Aberdeen-based Gibb Tools, 
a leading specialist tool supplier to the industrial 
maritime and offshore sector. The acquisition 
extends further the strategy for our established 
port and agency and supplies businesses, 
providing a step change to our client offer, and 
significantly increasing our capability to tender 
for larger offshore and renewable contracts.

Annual Report 2013  Clarkson PLC  17

 
 
Strategy and operations

Clarksons processes 
10,500 vessel  
positions each minute 
of every day

Clarksons’ client base 
is second-to-none

3. Validation
Clarksons is the industry’s leading provider of 
data and market intelligence on the shipping 
and offshore industries. Clarkson Research 
Services (CRS) is by far the largest 
commercially-led research unit in the maritime 
world, providing historic intelligence through 
registers, databases, periodicals and on 
a more client bespoke level through valuations 
and consulting. Our databases track around 
114,000 vessels and 6,000 offshore fields and 
Shipping Intelligence Network is viewed more 
than two million times per year.

In 2013, CRS delivered excellent underlying 
revenue growth of 10% as we continued to 
enhance our offer and develop our branding 
with two particular areas of focus being 
our offshore intelligence data and further 
development of our World Fleet Register.

The CRS client base is extensive and ever-
evolving, with good market penetration across 
the financial, vessel owning, marine equipment, 
insurance, private equity, governmental, 
energy company, shipyard, fabrication and 
oil service sectors. Sales to Asia Pacific have 
grown particularly strongly and our headcount 
in the region has also expanded during 2013. 
Our valuation business now produces more 
than 20,000 ship values per annum and is used 
by the majority of maritime debt providers.

In addition, the company has further invested to 
expand the market analysis team, which works 
within the broking division to bring real-time 
sentiment and analysis to our broking clients, 
fundamental to Clarksons’ consultancy and 
execution model, and important in assisting our 
clients take decisions that can be stress tested 
and validated.

Finally, the 9 analysts within CCM now publish 
research on 113 listed companies across 
5 verticals: shipping, oil services, E&P, coal 
and mining and Master Limited Partnerships 
(MLPs).

Overall just over 10% of the group is now 
dedicated to giving clients better information 
and tools to conduct their business; far bigger 
than any of our competitors. But we are also 
committed to developing the best technology 
to support our research offer, incorporating 
the capture and reporting of information 
internally across global offices ensuring our 
broking and banking teams have the best and 
most up-to-date information to service our 
clients. Further development of client-facing 
systems also ensures efficient dissemination 
of information, not only through more traditional 
methods but the use of social media tools 
as well.

4. Client focus 
From oil majors, raw materials producers 
and other multinationals, to long-established 
shipowning families, listed shipowners and 
other operators, and investors, our client base 
is second-to-none. We have worked with many 
of these clients for generations, building a deep 
understanding of their businesses and providing 
the services that have helped them prosper.

Increasingly we are working towards 
a consulting and execution model with 
continued investment in research and analysis 
underpinning this offer. Further investment 
in international offices over recent years has 
also ensured that we can help clients on both 
a global and local level. Most importantly 
however, the unique product breadth of our 
offer means that once working with a client, we 
are able to facilitate all areas of their global trade 
requirements, and guide on other influences that 
are not always taken into account.

18  Clarkson PLC  Annual Report 2013 

 
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Clarksons’ employees 
include 14% who 
have more than 
10 years’ service 

11 years of 
increased dividends

10 years

5. People
We believe in empowering our people to 
fulfil their potential. We want Clarksons to be 
recognised as the place where the best people 
are empowered to do their best work. We hire 
the brightest and most dedicated talents and 
give them the tools to shine, including leading 
edge in-house developed IT systems, high 
quality training and development and the best 
market information. Continued investment in the 
best tools for trade ultimately helps drive team 
results and thus financial reward.

We believe it is important to develop our own 
talent and run internships and recruitment 
schemes for both school leavers and 
graduates, helping them to develop their 
skills and equipping them for a career in 
our industry. We also organise a number of 
lunchtime and evening training programmes 
focusing on clients’ needs, market operations 
and technology.

6. Shareholder value
Despite a turbulent market backdrop, which 
saw the average annual ClarkSea index 
fall from 30,753 in 2008 to 9,586 in 2012, 
Clarksons has been consistently profitable and 
cash generative. This has enabled the board 
to continue to invest in the business during 
these challenging times, thus ensuring that 
we are positioned for growth as activity in our 
markets resumes.

In 2013 we continued to invest in the business, 
growing head count to 1,033 (December 
2012: 964) and expanding our office network 
to 42 locations. One area of particular focus 
in 2013 was to continue the progress within 
CCM, where following significant increases 
in revenue and cost rationalisation from the exit 
in Dubai, the second six months showed a profit 
and the platform is now proving the strategy 
for combining financing with execution of use 
of proceeds.

Our strong balance sheet has enabled us to 
make selective acquisitions where appropriate 
to further strengthen our product breadth and 
we will continue to look to invest organically and 
acquisitively where appropriate.

We remain focused on shareholder returns and 
are delighted to have increased dividends each 
year for the past 11 years. 

Andi Case Chief executive

Annual Report 2013  Clarkson PLC  19

 
 
Business and financial review
Overview

Clarksons delivered a strong 
trading performance over 
the course of 2013, against a 
challenging market backdrop. 
Market conditions started to 
improve in the fourth quarter 
and activity levels across 
the group were particularly 
strong. As a result, and as 
announced in our pre-close 
statement on 6 January 2014, 
the full year result was ahead 
of expectations. 

The results are summarised in the chairman’s review on page 15.

20  Clarkson PLC  Annual Report 2013 

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Revenue

Segment result

Forward order book for 2014

US$251.0m
2012: US$232.1m

£27.5m
2012: £25.2m

US$100m*
At 31 December 2012 
for 2013: US$81m*

* Directors’ best estimates of deliverable FOB

Dry bulk
In the first half of the year dry bulk freight rates 
were under pressure as anticipated and 11% 
weaker year-on-year. On capesizes, seasonal 
iron ore supply disruption affected Brazilian 
exports, which in turn reduced sea miles. For the 
smaller vessels, record South American grain 
crops and severe port congestion in those grain 
ports buffered the slide in the Baltic Dry Index.

The second half of the year saw economical/
slow steaming and an increase in Brazilian 
exports and iron ore imports into China 
creating good sea miles. Capesize rates rose 
just under fourfold in the first 6 months of the 
year. The panamax market showed a good 
improvement in the final quarter of 2013 with the 
larger panamaxes lifting additional coal cargoes. 
Supramax vessels traded well for most of 2013, 
ending with a very robust fourth quarter.

Deliveries slowed by 43% year-on-year while 
scrapping slowed by 28%. This led to a net 
fleet growth of 6.3%. Fleet expansion continued 
into the second half of the year, with a total of 
106 capesizes delivering, and a final scrapping 
of 45 ships. This left an increase on the capesize 
fleet of 14m tons dwt. The panamax sector saw 
249 ships delivered and only 64 scrapped, and 
in the supramax sector there were 247 deliveries 
and 68 scrapped.

Seaborne demand growth is increasing in all 
sectors, from grain to steel to coal. As mining 
supply logistics improve, export volumes rise, 
specifically in iron ore volumes from Australia. 
The global economy is forecast to grow by 3.6% 
in 2014 and this will help towards a forecast 
growth in seaborne dry bulk trade of 4.9%.

Clarksons is well placed to increase its volumes 
and activities in line with the increase of world 
trade in all sectors. We have strengthened our 
broking teams worldwide from Shanghai to 
Singapore to Dubai and across into London 
and Europe.

Containers
In the face of a challenging market, Clarksons’ 
container team has performed well with 
increased volumes fixed on the chartering 
desk. Strong interaction in the group resulted 
in multiple secondhand sale and purchase and 
newbuilding transactions as well as a major 
project deal concluded in the final quarter, 
as funding was again available in the market.

By nature, the containership business is forward 
business and our container team has managed 
to build a solid forward book for the group.

The new Panama Canal will be a ‘game-
changer’ for the industry as it allows for new 
containership designs to be deployed with 
significantly better fuel economy.

2013 was going to be a difficult trading period 
when looking at the newbuilding delivery 
schedules early in the year. Notwithstanding  
the scale of the post-panamax deliveries, 
economically the world failed to recover 
sufficiently to absorb fully these super ‘eco’ 
giants. There is no doubt of the economies 
they provide, and with the Panama Canal’s 
now imminent widening about to impact, ‘big 
is beautiful’ is the way forward. However, as 
always, it is a question of timing, which to date 
is still out of sync.

Against this rather uninspired prevailing market, 
the container team has managed to perform 
well. With period business not the order of 
the day, the lines continued to fix short with 
optionality, meaning that revenue levels from 
broking remained under extreme pressure. 
However we have managed again to grow 
our volumes of business concluded and our 
client base in the period.

Annual Report 2013  Clarkson PLC  21

 
 
Business and financial review

 Broking

All of our deep sea 
tanker offices are 
performing well in the 
crude market

We have seen a 
reduction in the supply/
demand imbalance in 
our specialised sector

Tankers 
Deep sea
2013 proved to be another challenging period for 
the deep sea tanker business. Early in the year 
rates were low and the returns for shipowners 
handling crude oil were set to be even lower 
than in 2012. Average earnings in the first nine 
months of the year for a VLCC were US$7,296 
per day compared to US$16,573 for the whole 
of 2012. However there was a significant spike 
in the fourth quarter and daily earnings averaged 
US$36,258 to give a full year average of 
US$14,536. The suezmax and aframax markets 
also suffered depressed rates for most of the 
year, but as with the VLCC market, the final 
quarter has shown significant improvement 
as the global economic recovery continues 
and the seasonal winter market kicks in.

Many challenges remain, but our global strategy 
has Clarksons extremely well placed to develop 
our team further. As ever the market remains 
sensitive to the geo political situation, but there 
is a greater sense of optimism in the market than 
at any time since the economic crash in 2008.

All of our deep sea tanker offices are performing 
well in the crude market and our most recently 
established office in New Delhi is showing 
positive growth signs. 

Should the positive sentiment in the fourth 
quarter be replicated in 2014, our global 
coverage and extensive client portfolio will allow 
us to capitalise further still.

Products
The larger vessels in the product market have 
seen a slight fall off in rates whilst the medium 
sized vessels saw a reasonable increase. 
Average earnings for MR clean tankers in 2013 
increased by 25% to US$13,226 per day relative 
to 2012. Our global strategy continues to pay 
dividends with a number of our overseas 
offices achieving significant growth. 
Market share remains the focus of our 
business and we will look to strengthen our 
Houston operation to capitalise on the greatly 
increased export volumes from the US. 

The ability for all of our teams around the globe 
to work together cannot be underestimated as 
this allows the company to leverage its 
unrivalled position.

Specialised
Clarksons’ specialised products team entered 
2013 in a robust position whilst recognising that 
the year ahead would be challenging.

We have seen a reduction in the supply/demand 
imbalance throughout the year. A number of 
encouraging structural demand drivers have 
come to the fore, and a dearth of delivered 
newbuildings has constrained fleet growth.

The overall order book remains at a lower 
level compared to historical highs, but we 
have seen investor appetite around a small 
number of sub-sectors which has resulted 
in fresh contracting activity and secondhand 
deals. The specialised product sector is now 
beginning to resonate with the wider investment 
community. A relative scarcity of shipbuilding 
expertise and capacity exists especially at the 
more sophisticated end of the spectrum.

Although undoubtedly there is still some distress 
in the owning markets, the majority of those listed 
participants are now profitable again, echoing the 
gradually changing market dynamics. Despite this, 
some established specialty chemicals players 
continue to seek an all-important critical mass 
of tonnage through strategic joint ventures in order 
to leverage trading opportunities.

With the global specialised products markets 
inherently linked with wider macroeconomic 
performance, there remains a degree of 
uncertainty for all participants. Chinese appetite 
for specialised products imports remains a major 
driver for global seaborne demand, though 
concerns remain about the sustainability of 
this performance. In the US Gulf there are new 
exports as a result of the shale gas phenomenon. 
These two factors have resulted in long-haul 
volume growth to the East and an increase in 
overall tonne-day demand throughout the year.

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90% of world trade  
by volume is transported  
by sea

The seasonality continues to affect the 
specialised product spot markets, however at 
the year-end a considerable upswing was only 
noted on the transpacific trade lane, with other 
main arterial routes trading in a narrow range. 
Contracts of affreightment, a useful barometer 
for the wider sector due to the sheer volume 
of tonnage procured under this method, have 
generally been renewed at increased levels 
and likewise the period charter markets have 
typically experienced positive trends.

The long-term outlook for the specialised 
products market continues to be healthy. 
Fleet growth looks set to be limited, amidst 
steadily improving seaborne demand 
fundamentals, despite a recent concentration 
of ordering activity in some sectors.

The range of services offered by Clarksons now 
encompasses barging and projects in a drive 
to increase market share within the organic and 
inorganic commodity sector.

PCG and small LPG
The European petrochemical sector has 
continued to face challenging trading conditions, 
as a result of competition from US shale gas. 
Consequently some European crackers were 
running below capacity and a number of 
loss-making plants were closed. That said, 
the coaster semi-refrigerated/ethylene market 
enjoyed good employment prospects as a result 
of relatively static fleet supply with earnings also 
stable. Looking into 2014 we anticipate this will 
continue with little in the way of newbuildings to 
alter this balanced position.

The market for the 8-12,000 cbm’s, which is 
more reliant on long haul, proved challenging 
as seaborne petrochemical trade contracted 
year-on-year and as the units were further 
marginalised by the handygas sector who 
were able to offer charterers better economies 
of scale. The expectation is that employment 
prospects are unlikely to change near-term as 
the market absorbs new deliveries.

The coastal pressure market fared well with 
increases in time charter rates being witnessed 
across the sizes, although spot activity has 
had seasonal challenges to overcome. Overall, 
the market welcomed increased shipping 
opportunities over the period with notable 
increases in exports from the Black Sea. 

Gas
Main gas team
2013 provided the team with several challenges 
as the gas markets prepared for some very 
significant structural changes in export and fleet 
supply. The year started with a contraction in 
LPG trade and fairly depressed rates on the 
larger vessels. This was compounded by a very 
illiquid spot market in the ammonia markets. 
Some new LPG projects which were expected 
to come on-line by the end of the year were 
pushed back and downgraded. 

In contrast the commodity brokerage business 
was strong in all areas of activity, including Asia, 
Europe, West Africa and the Americas and this 
increase in activity remained positive throughout 
the year. Handy to mid-size shipping benefited 
from more stable rate levels where we were 
able to record some success on term business. 
Asset-related business was steady although the 
number of deals concluded was not greatly up 
on last year. The second half of 2013 saw much 
better rate levels on the large LPG sectors which 
helped to turn the year into an overall success. 

We are prepared for changing industry 
dynamics and we are already seeing the 
benefit of efforts we have made developing an 
expanded cross-section of clients and emerging 
markets. LPG commodity broking is expected 
to face competition from screen-based 
trading platforms which are currently under 
development. However, shipping markets are 
expected to remain fairly buoyant.

LNG
Although we saw a significant fall in both spot 
and time charter rates in 2013, rates are still at 
reasonably strong levels with spot market fixtures 
in December still around US$100,000 per day. 

Annual Report 2013  Clarkson PLC  23

 
 
Business and financial review

 Broking

Vessel values have risen as 
much as 30% from January 
through to December

Vessels were contracted 
with a value in excess 
of US$5.5bn

The number of deals concluded has started to 
increase as a result of this fall. We are beginning 
to gain traction in the market and a number of 
interesting deals with new charterers have been 
concluded; we concluded the last significant 
time charter deal of 2013. As the market 
matures, the opportunity to do more business 
irrespective of market conditions will allow our 
team to develop further. We continue to provide 
consultancy services as this remains a key entry 
point to many of the longer term time charter 
projects and newbuilding contracts.

Sale and purchase
Secondhand
The positive momentum of the first half of the 
year, continued to strengthen throughout the 
second half which allowed us to conclude a 
pleasing number of high capital transactions 
towards the end of the year. Some of these 
were on the basis of very prompt income for 
2013 and some of which show in our forward 
book for 2014 and beyond.

Whilst we have no doubt been assisted by the 
steady increase in vessel values from January 
through to December (as much as 30% across 
the board in dry cargo and only slightly less 
in tankers), our successes were enhanced 
once again by the excellent dovetailing of 
resources from our chartering teams, having 
specific market knowledge of containers, gas 
and specialised tankers, with newbuilding, 
secondhand and projects desks and valuable 
assistance from our colleagues in the capital 
markets. This has allowed us to deliver some 
of the larger, more complex transactions which 
were concluded in the market during 2013.

Looking into 2014 we are confident that 
with continued hard work and provision of a 
professional, all round service to our clients, 
we will continue to be rewarded, via their loyal 
support, with similar levels of success.

Offshore
In contrast to merchant shipping, offshore 
has seen a more cautionary approach to new 
investment with many companies preferring to 
concentrate on fixing their assets away on term 
charters before adding to an already swollen 
order book. 

The chartering teams in Aberdeen and 
Singapore have been able to take advantage 
of this increased focus on chartering and we 
have continued to grow market share across all 
sectors with particular focus on Asia, North Sea, 
West Africa and Latin America. During 2013, we 
have made significant in-roads into a number 
of oil companies and subsea contractors and 
feel extremely well positioned to grow these 
relationships further in 2014. 

On the newbuilding and secondhand side of our 
offshore business, a number of transactions that 
we had hoped would be completed by year-end 
have in fact been pushed into 2014. However, 
we are extremely well positioned for 2014 with 
a number of significant projects in the pipeline.

Newbuilding
2013 saw a strong performance from the 
newbuilding team which worked closely 
with most departments in the group, and 
exceeded previous peak volumes placed 
under considerably more conducive market 
conditions. We improved market share in a 
lower volume market, and ordered vessels 
in every major category, giving the benefit of 
a broader forward order book. The depth of 
service and internal synergies that the Clarksons 
team both leverages and delivers, allowed us to 
grow and build our presence into the corporate 
and financial segments of the market and this 
has been key in an evolving newbuilding climate, 
where sources of capital showed a notable 
shift in 2013 from the historical bedrock of 
private investment.

We continue to push forward with a strong 
forward order book and with the start of 2014 
active, we are poised to deliver promising results.

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Revenue

Segment result

US$18.2m
2012: US$8.4m

£3.3m loss
2012: £9.9m loss

The need for financing 
and capital in the shipping  
sector has remained an 
essential component required 
to facilitate new investment

+%

Investment services
For Clarkson Capital Markets (CCM), 2013 
was a transformative year in which the group 
participated and closed twenty transactions 
raising a total of over US$3.9bn versus four 
transactions in 2012. The deals included private 
equity, Initial Public Offerings (IPOs), follow-on 
equity offerings, convertible bonds, high yield 
bonds and financial advisory assignments.

Market sentiment picked up dramatically in the 
spring of 2013 from the institutional investor 
community as they focused on investing at what 
they believed to be the bottom of the current 
cycle in shipping. Product tanker interest was 
the first to pick up, followed by the LPG sector 
in the summer and then the dry bulk sector in 
the fall. In the very recent past, interest in the 
crude sector picked up dramatically as it was 
one of the last sectors to show evidence of 
a turn and investor interest heightened.

Due to this interest, we saw the first IPOs for 
shipping companies in the US in over 15 months 
in the second half of the year. The first to market 
was Ardmore Shipping, in which CCM acted 
as a joint book runner on the transaction. 
There was also a very large pick-up in activity 
on the Oslo OTC market as institutional investors 
largely in the US and issuers capitalised on the 
often quicker model of the OTC market to raise 
in excess of US$2bn for largely start-up ventures 
partnered with establishing shipping operators. 
Many of these projects funded newbuildings 
across most major sectors of shipping and will 
be listed either on the Oslo Bors or the stock 
exchanges in New York in the coming years.

Futures broking
The first five months of the year were weak with 
the cape 4tc index averaging roughly US$5,500 
up to mid-June. From here, values rose sharply 
with the index doubling, trebling and reaching 
a peak of over US$42,000 by the end of 
September. A slump ensued down to the lower 
US$16,000s from which we have only recently 
elevated back up to low US$30,000s. 

A very poor start developed into a highly volatile 
market which provided Clarkson Securities 
with a better platform from which to perform. 
The panamax and supramax sectors have been 
less volatile but suffered from a similar first-half 
malaise. Volumes were poor in the first half but 
responded well as the market rose. The higher 
volatility has benefited the options market where 
our team have performed well and increased 
market share. 

In Singapore we have increased our iron ore 
team to reflect the increase in volumes being 
transacted in the Asian day. We have similarly 
identified more trading in dry FFAs within the 
Asian hours and have moved one of the team 
to cover that market from our Singapore office. 
Whilst the early months of 2013 displayed some 
of the worst conditions possible in which to 
operate, the performance in the second half has 
been strong and we anticipate that volatility and 
improved volumes will be a feature of the FFA 
market into 2014.

Financial services
In terms of investment appetite, the landscape 
post the 2008 financial crisis, particularly in 
the financial markets, has been extremely 
challenging. Nonetheless, the need for financing 
and capital in the shipping sector has remained 
an essential component required to facilitate 
new investment. Additionally, it is not just the 
volume of finance/capital that is needed; it also 
needs to be structured in such a way as to 
permit the borrower to achieve its strategic and 
operational objectives. The assistance that we 
are able to offer through Team Clarksons is the 
ability to help a client achieve their objectives 
through our validation and deep seated 
knowledge of the market fundamentals in which 
it operates, providing independent confirmation 
to the financiers of the project parameters 
whilst mitigating risk factors to assist with their 
approval processes.

Annual Report 2013  Clarkson PLC  25

 
 
Business and financial review

 Support

Revenue

£16.4m
2012: £16.0m

Segment result

£3.1m
2012: £4.2m

2013 has been another 
year of expansion for 
Clarkson Port Services

Port services
2013 has been another year of expansion for 
Clarkson Port Services (CPS) with the opening of 
the Leith and Lerwick offices, the acquisition of 
Gibb Tools and the opening of a branch of Opex 
Industrial Supplies (OIS) in Great Yarmouth.

Gibb Tools and Opex Supplies 
On 31 October 2013 CPS acquired the 
Aberdeen-based specialist tool supplier 
Gibb Tools Limited (GTL). This acquisition 
complements CPS’s existing port & agency 
and supply services and also significantly 
increases our capability to tender for 
larger offshore and renewable contracts. 
Trading since the acquisition has been in line 
with our expectations and we are already 
beginning to see the efficiencies of GTL and OIS 
working together.

OIS have experienced reduced sales in 2013 
compared with the previous year, caused by 
reduced project requirements in the North Sea 
oil and gas sector. We are confident that as 
EnShip are starting to see new enquiries for 
projects in the early part of this year this will 
also lift OIS’s figures. On 1 September 2013 
we opened a branch of OIS in Great Yarmouth 
to take advantage of the offshore market in that 
area. Whilst the Great Yarmouth branch will 
specialise in safety work wear, it will also be able 
to offer the full range of services supplied by OIS 
and GTL in Aberdeen.

Agency
The southern CPS offices experienced record 
profits despite the UK harvest being poor. 
This was largely due to the increase in imports 
of high quality grain in to the UK to satisfy 
domestic demand. Coal, bio fuel, and animal 
feed import volumes have also remained high.

For 2014 the grain plantings have been good, 
indicating a better harvest and a return to our 
more traditional export business.

In the North we have seen a slower year due to 
the decrease in activity of our major offshore oil 
and gas customers in the North Sea. We have, 
during 2013, concentrated on strengthening 
our teams and are now able to offer unrivalled 
agency, project and logistic services. We have 
started to see an increase in enquiries, with 
new major projects commencing in December 
and January.

Our newly opened offices in Leith and Lerwick 
have remained busy; Lerwick supporting 
offshore oil and gas, and Leith handling both 
offshore and conventional bulk tonnages.

Stevedoring
Our facility in Ipswich experienced lower than 
normal volumes in 2013 due to the poor 2012 
harvest, and although grain export from the UK 
picked up in the second half of 2013, this was 
predominately fixed in larger tonnage unsuitable 
for Ipswich. 

In order to minimise the effects of the poor 
exports, CPS have sought to find new areas 
of business, such as the import of rice and 
seed, and have ensured that overheads have 
remained under control.

Freight forwarding
CPS’s Great Yarmouth-based freight forwarding 
business has continued to expand in 2013, and 
continues to perform ahead of expectation, 
with major contracts from offshore drilling rig 
operators, along with support from CPS’s 
existing activities.

Property services
Within the support segment are the revenues 
and profits derived from property services. 
Clarkson PLC holds the head lease of 
St. Magnus House in Lower Thames Street, 
London EC3, with an unexpired term of just 
under two years. Clarksons occupies 33% of the 
available space, with the remainder sublet on full 
commercial rents. Clarkson PLC also owns the 
freehold of Hamilton Barr House in Godalming, 
which is also let on a full commercial rent.

26  Clarkson PLC  Annual Report 2013 

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Revenue

£9.7m
2012: £9.2m

Segment result

£3.0m
2012: £2.8m

Sales from digital 
products increased by 
11% during the year

new data areas within their offering including 
trade and commodity flows, machinery 
packages on board ships and subsea and 
pipeline infrastructure.

Publications
CRS produces weekly, monthly, quarterly 
and annual publications, registers and maps. 
Over recent years our well-established 
shipping range has been supplemented by 
a comprehensive offshore offering to which 
we made a number of enhancements in 2013. 
Publications remain an important aspect of 
CRS’s overall offering besides generating 
important provenance.

Customer services 
and valuations
CRS continues to expand its provision of 
customer service contracts to a range of large 
corporate and institutional clients in both the 
shipping and offshore industries. A specialist 
team concentrates on managing retainers 
and providing bespoke research, valuations 
and data for banks, shipyards, fabricators, 
engineering companies, insurers, governments 
and other corporates. This continues to be an 
important growth area, with sales growing by 
27% in 2013. CRS continues to be a leading 
provider of data to clients, producing capital 
market prospectuses, while Clarkson Valuations 
remains the leading provider of valuation 
services to the industry.

Research revenues grew strongly during 2013, 
with an increase in underlying revenues of 
10%, supported by strong demand for our 
market-leading digital shipping products and a 
good performance by our service contract and 
valuation business.

The Clarkson Research Services (CRS) client 
base remains extensive with good market 
penetration across the financial, vessel owning, 
marine equipment, insurance, private equity, 
governmental, energy company, shipyard, 
fabrication and oil service sectors. Sales to Asia 
Pacific have grown particularly strongly in recent 
years while the CRS headcount in the region 
has also expanded during 2013.

Income is derived from the following 
principal sources:

Digital sales
All of our publications are available digitally and 
new e-reader solutions have been developed 
during 2013. Sales from digital products 
increased by 11% during the year, taking our 
share of revenue from digital to 41%. Sales of 
Shipping Intelligence Network (SIN), our flagship 
commercial database, grew despite the difficult 
shipping markets. The roll-out during the year 
of an upgrade to World Fleet Register (WFR), 
our leading online vessel register, helped grow 
sales significantly and the WFR is now firmly 
established as an authoritative source across 
our corporate and institutional client base. 

Continued data and product enhancements 
have helped CRS remain the leading provider 
of offshore data to the insurance market while 
the development of a broad digital offering within 
offshore is now well advanced. Our offshore 
database now offers our clients comprehensive 
access to market intelligence on structures 
and companies, oil and gas fields, offshore 
project intelligence, global Geographical 
Information System coverage and wide-ranging 
commercial data. CRS continues to develop 

Annual Report 2013  Clarkson PLC  27

 
 
Business and financial review

Financial information

Reflecting improved trading conditions, 
Clarksons’ underlying profit before tax was 
£25.1m, 26% higher than the prior year.
Jeff Woyda Finance director

Underlying profit before taxation was £25.1m 
(2012: £20.0m) and is before the exceptional 
item and acquisition costs. Profit before taxation 
was £22.0m (2012: £22.9m).

Foreign exchange
The average sterling exchange rate during 2013 
was US$1.57 (2012: US$1.59). At 31 December 
2013 the spot rate was US$1.66 (2012: US$1.63).

Exceptional item
During the year, as previously reported, Clarkson 
Capital Markets was restructured and an 
exceptional charge of £1.0m incurred.

Acquisition costs
Acquisition costs of £2.1m are shown in the 
2013 income statement. The increase over 
2012 reflects the initial impact of the Gibb Tools 
acquisition. Estimated acquisition costs for 2014 
will amount to £3.2m.

Taxation
The group’s effective tax rate, before the 
exceptional item and acquisition costs, was 
27.4%, a decrease of 2.8% on the 30.2% rate 
incurred in 2012. After the exceptional item 
and acquisition costs, the rate was 30.5% 
(2012: 30.6%).

Earnings per share (EPS)
Basic EPS before the exceptional item and 
acquisition costs was 98.0p (2012: 74.8p). 
After the exceptional item and acquisition 
costs the basic EPS was 82.2p (2012: 85.2p).

Dividends
The board is recommending a final dividend 
of 37p (2012: 33p). The interim dividend was 
19p (2012: 18p) which, subject to shareholder 
approval, would give a total dividend of 56p 
(2012: 51p). 

In taking its decision, the board took into 
consideration the 2013 performance, the 
strength of the group’s balance sheet and its 
ability to generate cash and the forward order 
book. The dividend is covered 1.5 times by 
basic EPS.

Cash and borrowings
The group remains cash generative. The group 
ended the year with cash balances of 
£96.9m (2012: £89.4m); this is after allowing 
for increased dividends, cash required for 
working capital and acquisitions. Additionally 
£25.2m (2012: £25.2m) was held in short-
term notice accounts; these are classified 
as current investments on the balance sheet. 
During 2014 cash payments relating to 2013 
will be made including performance-related 
bonuses. After deducting these items, net 
cash and available funds amounted to £75.0m 
(2012: £75.2m).

Balance sheet
Net assets at 31 December 2013 were £137.7m 
(2012: £126.0m). The balance sheet quality 
continues to improve with net current assets 
and investments exceeding non-current liabilities 
(excluding pension provisions) by a further 
£5.3m to £77.4m.

A detailed review of our business has 
determined no requirement for an impairment 
charge in 2013.

The overall provision for impairment of trade 
receivables has reduced by a net £2.5m, of 
which £1.4m was amounts written off as no 
longer recoverable and £1.1m net was due to 
the successful conclusion of discussions on 
various previously provided trade receivables.

The group’s pension schemes have a 
combined liability before deferred tax of £1.8m 
(2012: £9.4m). This improvement was as a result 
of positive investment returns, contributions by 
the company and an increased discount rate 
which were partially offset by an increase in 
the CPI.

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Net assets

Earnings per share*

Dividend per share

£137.7m
2012: £126.0m

98.0p
2012: 74.8p

56p
2012: 51p

* Before exceptional item and acquisition costs

Principal risks
Credit risk
The group has an extensive client base, across 
all regions of the world, and is exposed to 
credit-related losses from the non-payment of 
invoices by these clients. The group mitigates 
this risk by closely monitoring outstanding 
amounts, both locally and globally, and by 
adopting a conservative approach to accounting 
for bad debt. Uncertainty in freight markets 
continues to affect the amount of debt that may 
be irrecoverable.

Liquidity risk
The group’s policy is to maintain sufficient funds 
to meet all of its foreseeable requirements. 
The strong generation of cash flow in the 
business, combined with the cash available 
in the balance sheet, means that the group is 
well placed to fund future developments of its 
global business.

Foreign exchange risk
The major trading currency of the group is the 
US dollar. Movements in the US dollar relative to 
other currencies, particularly sterling, have the 
potential to impact the results of the group both 
in terms of operating results and the revaluation 
of the balance sheet. The group assesses the 
rate of exchange and non-sterling balances held 
continually, and has predominantly sold in the 
spot market during 2013, though some forward 
cover for 2014 and 2015 has been taken.

Interest rate risk
The group has no borrowings. Monies held on 
longer 100 day notice accounts earn interest 
based on a margin above LIBOR, the actual 
interest rate is reset each month.

Reputational risk
The group has built an enviable reputation in 
the market over the past 162 years, and relies 
upon this to attract business from all major 
participants in its markets. Clarksons protects 
against reputational risks by promoting an 
ethical work environment and providing 
training programmes where appropriate. 
A dedicated training officer has been appointed 
and a training programme implemented 
to improve consistency and approach. 
Investment in compliance, quality assurance 
and legal functions also act to ensure that best 
practices are put in place throughout the group.

Operational risk
Operational risks are where the group may 
suffer direct or indirect losses from people, 
systems, external influences or failed processes. 
The group continually reviews the systems in 
place to mitigate against operational risk, and 
puts in place plans to protect against such risks 
wherever they are significant and practicable. 
Examples include Business Continuity Plans, 
Staff Contracts and IT security arrangements. 
The group also keeps in place and under review 
appropriate levels of insurance cover.

Jeff Woyda Finance director

Annual Report 2013  Clarkson PLC  29

 
 
Corporate responsibility and Clarksons

Our four key principles 
of integrity, excellence, 
fairness and transparency 
have been built up over 
more than 160 years of 
servicing the international 
maritime markets

We align responsible 
business practices with 
a sustainable business 
model to deliver 
best value to all our 
stakeholders

As the world’s leading provider of integrated 
shipping services, Clarksons has an enviable, 
hard-earned reputation for integrity, excellence, 
fairness and transparency built over more than 
160 years of servicing the international maritime 
markets. These four key principles form our 
corporate values, detailed in the group’s Code 
of Business Conduct and Ethics, are delivered 
by our employees in their dealings with our 
clients, investors, colleagues and suppliers. 
This approach is mirrored by our commitment 
to corporate responsibility – aligning responsible 
business practices with a sustainable 
business model to deliver best value to all 
our stakeholders.

Our people
Our people are our business. Without 
enthusiastic and engaged employees we simply 
could not do our job delivering the highest 
quality service to our clients. Employees are 
expected to use good judgement and act in the 
best interests of Clarksons and our clients at all 
times and each and every member of ‘Team 
Clarksons’ shares our common values and 
aspirations to conduct our business in an 
ethical, honest and professional manner 
wherever we operate. 

The company aims to create a working culture 
that is inclusive for all and to maintain high 
standards and good employee relations. 
We believe that it is vital to look after our staff 
by making sure that they have a safe place to 
work. High standards of health and safety are 
maintained and designed to minimise the risk 
of injury and ill health of all employees and any 
other parties involved in the conduct of our 
business operations. 

Clarksons is an equal opportunities employer 
which depends on the maintenance of its 
reputation and market lead by entrusting 
it to more than 1,000 highly motivated and 
outstanding employees around the world.

We seek to appoint the best candidate for each 
and every vacancy. All appointments within the 
group are based on merit, and candidates are 
considered against objective criteria, having 
due regard to the benefits of diversity, including 
ethnicity, gender and age. We give full and fair 
consideration to all suitable applications for 
employment from disabled persons and ensure 
that any reasonable adjustments are made 
to job content or workplace to accommodate 
a person’s disabilities. As at 31 December 2013, 
there were seven directors of Clarkson PLC, 
all of whom were male. Of the 1,033 staff within 
the group, 263 or 25% were female and of the 
staff recruited in the last five years, 28% were 
female. There were 212 senior managers within 
the group, of which 21 or 10% were female.

Clarksons has undergone significant growth 
over the last decade, which means that many 
staff have, by definition, been employed for less 
than ten years. Nevertheless, we are proud 
that 14% of Clarksons employees have been 
with the organisation for more than ten years 
as staff commitment to the company and its 
values ensures that there is continuity of practice 
throughout the organisation and a sophisticated 
understanding of how the Clarksons’ business 
model is maintained. 

30  Clarkson PLC  Annual Report 2013 

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We hire the brightest 
talents and give them 
the tools to shine

Participation in the company’s Save-As-You-
Earn share scheme allows UK employees 
to participate in the company’s share price 
performance, and offers the opportunity, on 
maturity of the scheme, for employees to 
become shareholders in the company and 
share in its continued growth and success. 

Communicating with employees is an important 
priority. Our flat management structure means 
that any employee has direct access to the 
senior management team, with divisional 
managing directors working side by side with 
the trainees they recruit. All employees have 
access to the employee intranet which contains 
current news, details of employee policies and 
other relevant information. Employees have 
opportunities to attend briefings about the 
company’s business and Clarkson News, 
the company’s periodic in-house magazine, 
provides current and former employees 
with information about the company’s 
operations and colleagues around the world. 
Employees also have access to the company’s 
financial and regulatory publications, which are 
available on the company’s corporate website.

We are a global business with an international 
workforce and the combination of languages, 
cultures and ideas brings a level of diversity 
and cultural richness that is the envy of our 
competitors. Our global presence also means 
that we can offer our employees significant 
opportunities for mobility and development 
throughout the Clarksons group. 

Our investment in our people
We want to be recognised as the place where 
people are empowered to do their best work. 
We hire the brightest talents and give them 
the tools to shine – including leading-edge 
IT systems and high quality training and 
development as well as financial reward. 
Clarksons is committed to investing in talent 
retention and staff development, ensuring 
that as we grow (both organically and through 
acquisition) the right people are identified and 
developed. Our training schemes remain unique 
in our industry, blending the collective skilled 
counsel and guidance of our staff with the 
tutelage of external experts from all areas of 
the shipping, trading and commodity markets. 

We have opened up our Trainee Broker Scheme 
to include school and college leavers, in 
addition to the on-going graduate recruitment 
programme, believing that the qualities of 
commitment, talent and passion we seek in 
a trainee requires a more diverse approach to 
recruitment. Trainees can expect a fully-rounded 
education where their individual talents are 
nurtured and developed into what we hope will 
enable them to become the future leaders of our 
business. In addition we offer a small number 
of paid internships to students each year and 
through long-standing relationships with schools 
and academies we are able to offer regular work 
experience opportunities in our broking and 
research divisions. 

Annual Report 2013  Clarkson PLC  31

 
 
Corporate responsibility and Clarksons

We identified three 
potential areas towards 
which support should be 
focused: maritime causes, 
children’s charities and 
health issues

Clarksons has supported staff 
worldwide in their charitable 
endeavours – supporting more 
than 30 different charities

Our local community support
Supporting the local community and the wider 
world has always formed an important part of 
our attitude to corporate responsibility, whether 
in terms of direct donations or in supporting 
our employees as they strive to make a 
difference to society. In 2013, as part of this 
continuing commitment, we formalised these 
activities by establishing a new philanthropy 
committee, chaired by the finance director 
and comprising representatives from different 
parts of our business. The committee identified 
three potential areas towards which support 
should be focused: maritime causes, children’s 
charities and health issues. As a result individual 
donations were made to:

The Docklands Sailing and Watersports 
Centre which offers sailing, windsurfing and 
canoeing courses for disabled as well as able 
bodied participants and runs a weekly youth 
club and school holiday programmes for local 
children, many of whom would not otherwise 
experience watersports. 

The White Ensign Association which provides 
advice and assistance to serving and former 
members of the Royal Navy, Royal Marines, 
Reserves and their families on finance, career 
transition, welfare and personal problems. 
Last year, its full time staff of four handled 
over 1,000 enquiries. 

Richard House Children’s Hospice in the 
borough of Newham – London’s first children’s 
hospice, which began offering home care 
in 2000 and opened its residential unit two 
years later. 

The School of Hard Knocks – a nationwide 
charity which uses the game of rugby to help 
tackle issues including unemployment, crime, 
disengagement from formal education and 
anti-social behaviour. 

In the latter part of 2013, in recognition of the 
devastation caused by Typhoon Haiyan in the 
Philippines we made donations to the Disasters 
Emergency Committee and the Sailors’ Society 
in order to support relief efforts.

Additionally Clarksons has supported staff 
worldwide in their charitable endeavours – 
supporting more than 30 different charities 
through matched funding. In total during 2013, 
we donated £174,000 to charities compared to 
£73,000 in 2012.

In 2013 we also welcomed students from 
some of the poorest communities surrounding 
our London headquarters for valuable work 
placements, building understanding of what 
we do, raising the expectations of young people 
and encouraging our staff to act as mentors.

Environment
This section includes the company’s mandatory 
reporting of greenhouse gas emissions 
pursuant to the Companies Act 2006 (Strategic 
Report and Directors’ Report) Regulations 
2013 for which our reporting year is the same 
as our fiscal year, being 1 January 2013 to 
31 December 2013. 

In 2013, a survey was conducted to quantify 
energy usage across the group. We report all 
material emission sources which we deem 
ourselves to be responsible for using an 
operational control approach to define our 
organisational boundary. These sources align 
with our operational control. We do not have 
responsibility for any emission sources that 
are beyond the boundary of our operational 
control (for example, business travel other than 
by car) including, for example, commercial 
flights and, therefore, are not considered 
to be our responsibility. 

32  Clarkson PLC  Annual Report 2013 

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Emissions data has 
been reported for our 
principal trading offices 
in 12 countries

The company continues 
to make extensive use 
of its video conferencing 
facility in order to contain 
executive travel

We have undertaken a practicality assessment 
and excluded from our reported emissions 
those offices where we have very limited 
operations and for which it is not practical to 
obtain energy usage data. However, we will 
re-assess this practicality in each reporting 
year and capture such data for future reporting 
if appropriate.

Emissions data has been reported for our 
principal trading offices in Australia, China, 
Germany, Greece, India, Italy, North America, 
Norway, Singapore, Switzerland, the United 
Arab Emirates and the UK. The methodology 
used to calculate our emissions is based on the 
Environmental Reporting Guidelines: including 
mandatory greenhouse gas emissions reporting 
guidance (June 2013) issued by the Department 
for Environment, Food and Rural Affairs. 

Global greenhouse gas 
emissions data

Tonnes 
of 
CO2e

866

2,815

For the period 1 January to 31 December 2013

Combustion of fuel and operation 
of facilities

Electricity, heat, steam and cooling 
purchased for own use

Company’s chosen 
intensity measurement:
– Emissions reported above 

normalised to tonnes of CO2e 
per full time equivalent employee

3.75

Intensity ratio
In order to express our annual emissions in 
relation to a quantifiable factor associated with 
our activities, we have used full-time equivalent 
employees as our intensity ratio which gives an 
indication of our growth and provides for the 
best comparative measure over time. 

Clarksons acknowledges the importance of 
ensuring that its business is conducted with 
care and consideration for the environment 
and is continuing to grow and develop an 

environmental strategy which is integrated 
into its business strategy and is committed to 
reducing utility usage and ongoing energy costs. 

The company’s most critical environmental 
and sustainability impact areas include carbon 
emissions linked to energy use and travel and 
the company continues to make extensive 
use of its video conferencing facility in order to 
contain executive travel. In the UK, Clarksons 
successfully operates a cycle to work scheme 
which, combined with the provision of a secure 
bike store and shower facilities where possible, 
encourages staff to use bicycles.

At the company’s biggest office, St Magnus 
House in London, an environmental 
management system is in place for lighting and 
air conditioning controlled by a supervisory PC 
utilising the latest software and a wide scale 
cleaning tender exercise, into which a Waste 
Management Contract has been incorporated, 
has been carried out. This will result in an 
increase in the number of recycling streams 
and a reduction in waste going to incinerators 
and landfill. 

Combustion of fuel and operation of facilities 24%
Electricity, heat, steam and cooling purchased for 
own use 76%

Annual Report 2013  Clarkson PLC  33

 
 
Board of directors

Bob Benton 
Chairman

Andi Case  
Chief executive

Jeff Woyda 
Finance director

Jeff Woyda, 51, was 
appointed to the board 
on 1 November 2006. 
He qualified with KPMG 
and before joining 
Clarksons was a member 
of the executive committee 
of Gerrard Group PLC 
and spent 13 years at 
GNI where he was chief 
operating officer. 

Andi Case, 47, was 
appointed to the board as 
chief executive on 17 June 
2008, having previously 
been Clarksons’ chief 
operating officer. He joined 
Clarksons in 2006 as 
managing director of the 
group’s shipbroking arm, 
H Clarkson & Company 
Limited. He began his 
shipbroking career with 
C W Kellock and later 
Eggar Forrester. Prior to 
joining Clarksons he was 
with Braemar Seascope 
for 17 years, latterly as 
head of sale and purchase 
and newbuildings.

Bob Benton, 56, joined 
the board on 25 May 
2005 and was chairman 
from 28 August 2008 to 
1 August 2013. He was 
re-appointed to act as 
chairman from 6 March 
2014 in recognition of the 
continuity and support 
he provides to the board. 
He is managing director 
of Bob and Co Limited, 
a media consulting and 
investment company, and 
a non-executive director 
of Talent Group PLC. 
Former appointments 
include: non-executive 
chairman of Handmade 
PLC, managing director 
and head of media at 
Canaccord Adams 
Limited, chief executive 
of Ingenious Securities 
Limited, chairman of 
Bridgewell Securities 
Limited, chairman and chief 
executive of Charterhouse 
Securities Limited, global 
head of sales at ABN 
AMRO, and managing 
director of HSBC James 
Capel Limited. 

Peter Backhouse 
Senior independent director

Peter Backhouse, 62, 
was appointed to the 
board on 16 September 
2013 and became senior 
independent director 
on 5 November 2013. 
He is a non-executive 
director of BG Group 
PLC, the international 
energy company, and is 
a member of the Advisory 
Board of private equity 
firm Riverstone Energy 
Partners. Peter has 
40 years’ experience in 
the international energy 
business and considerable 
experience in international 
gas development. 
Former appointments 
include: chairman and 
chief executive of BP 
Europe; executive vice-
president of global refining 
and marketing, head of 
North Sea oil development 
and head of mergers and 
acquisitions at BP PLC.

34  Clarkson PLC  Annual Report 2013 

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Ed Warner OBE  
Non-executive director

James Morley  
Non-executive director

Philip Green 
Non-executive director

Philip Green, 60, joined 
the Clarksons board on 
1 April 2013 and was 
appointed chairman on 
1 August 2013. Since his 
appointment he has taken 
on a number of new roles, 
and both he and the board 
recognise that it would be 
difficult for him to devote 
sufficient time to Clarksons’ 
growing business. 
Philip stepped down as 
chairman on 6 March 2014 
and will resign as a director 
of the company with effect 
from 9 May 2014. 

Ed Warner, 50, was 
appointed to the board 
on 27 June 2008. He is 
chairman of investment 
bank Panmure Gordon, 
derivatives exchange LMAX 
and the Standard Life 
European Private Equity 
Trust PLC. He is a non-
executive director of Grant 
Thornton UK LLP, a leading 
accountancy and advisory 
practice, and the Blackrock 
Commodities Income 
Investment Trust PLC. 
He was previously chief 
executive of IFX Group PLC 
and Old Mutual Financial 
Services UK, head of Pan 
European Equities at BT 
Alex Brown, and head of 
global research at Dresdner 
Kleinwort Benson. He is 
chairman of UK Athletics, 
the sport’s governing body. 

James Morley, 65, was 
appointed to the board on 
5 November 2008. He is 
a chartered accountant 
with 25 years of experience 
as an executive board 
member at both listed 
and private companies. 
He is currently senior 
independent director of 
Costain Group PLC and 
The Innovation Group 
PLC, and a non-executive 
director of Speedy Hire 
PLC. Previously he was 
chief operating officer at 
Primary Insurance Group, 
group finance director at 
Cox Insurance Holdings, 
group finance director at 
Arjo Wiggins Appleton PLC, 
group executive director 
(finance) at Guardian 
Royal Exchange, deputy 
chief executive and 
group finance director at 
AVIS Europe PLC, and a 
non-executive director of 
The Bankers Investment 
Trust PLC, W S Atkins 
PLC and Trade Indemnity 
Group PLC. 

Annual Report 2013  Clarkson PLC  35

 
 
Corporate governance statement

Principles statement
Good corporate governance underpins the company’s 
objectives, strategy and business model, as set out in the 
strategic report on pages 12 to 33. The board is committed 
to a high standard of corporate governance, which is critical 
to maintaining investor trust in the company and in the board 
as custodian of the company’s assets and values. 

Statement of compliance
The statement of corporate governance practices set out on 
pages 34 to 59, and information incorporated by reference, 
constitutes the corporate governance report of Clarkson PLC 
setting out how the board has applied the principles of the UK 
Corporate Governance Code (September 2012) issued by the 
Financial Reporting Council (the Code), which is available at 
www.frc.org.uk. As a result of changes to the composition of 
the board during 2013, there was a brief period prior to Philip 
Green’s appointment, and subsequent to his appointment as 
chairman, when there was no senior independent director. The 
group has otherwise complied with the Code during the year.

Leadership
The names and biographical details of the directors who were in 
office during the year and up to the date of signing the financial 
statements are set out on pages 34 and 35. On appointment, 
Philip Green, Bob Benton, Peter Backhouse, James Morley 
and Ed Warner met the independence criteria set out under 
the Code. The continuing independence of each non-executive 
director is assessed regularly and the senior independent 
director has evaluated the chairman’s performance with each 
of the other directors.

The board provides effective leadership and overall control 
of the company and is accountable to shareholders for its 
long-term success. 

At the head of the company, the roles of chairman and chief 
executive are not exercised by the same individual. There 
is a clear division between the chairman’s non-executive 
responsibility for leading the board, ensuring its effectiveness 
and promoting high standards of corporate governance, and 
the chief executive’s responsibility for running the day-to-day 
business and implementing the board’s strategy. 

The non-executive directors have a vital role to ensure that 
the strategies proposed by the executive directors are given full 
and critical debate. They also help scrutinise the performance 
of management against the board’s strategic objectives and 
monitor the integrity of the company’s financial information and 
systems of control and management. The chairman maintains 
direct communication with each of the non-executive directors 
without the executive directors present where necessary.

One of the key tenets of the Code is that all directors should be 
able to allocate sufficient time to the company to discharge their 
responsibilities effectively. Since Philip Green’s appointment as 
senior independent director and chairman on 1 April 2013 and 
1 August 2013 respectively, he has taken on a number of new 
roles in light of which both he and the board recognise that it 
would be difficult for him to devote sufficient time to Clarksons’ 
growing business. Consequently, Philip stepped down 
as chairman on 6 March 2014 and will resign as a director 
of the company with effect from 9 May 2014. 

36  Clarkson PLC  Annual Report 2013 

It is imperative that the combined experience and knowledge 
represented by the board of directors is appropriate to lead 
the company in maintaining its market-leading position and 
achieving its strategic objectives. The board, with advice 
from the nomination committee, having regard to the balance 
of experience and knowledge on the board, appointed Bob 
Benton as chairman on 6 March 2014. Peter Backhouse, 
the senior independent director, will lead the search process 
for a new chairman. 

Peter Backhouse was appointed as a non-executive director on 
16 September 2013 and, following Philip Green’s appointment as 
chairman, as senior independent director on 5 November 2013. 
On 25 May 2014 Bob Benton will have served on the board 
for nine years. The board seeks to strike a balance between 
refreshment and tenure on the board and recognises the 
contribution and continuity that Bob, as a long-serving director, 
brings to the board overall and the support he can provide to 
Peter Backhouse and the board while the search for a new 
chairman is conducted.

Powers of the board
The board meets regularly with at least four scheduled meetings 
each year plus additional meetings to address matters that 
arise other than in the normal course of business. Members 
of the board also sit on a number of committees established 
by the board, which are referred to in detail later in this report. 
Directors’ attendance at board and committee meetings is 
shown in the table on page 38. 

The board has the powers and duties as set out in all relevant laws 
and the company’s Articles of Association. Amendments to the 
company’s Articles of Association may be made in accordance 
with the provisions of the Companies Act 2006. The board has 
also adopted a formal schedule of matters it reserves for its own 
decision. Such matters include decisions relating to strategy, the 
group’s corporate and capital structure, financial reporting and 
controls, material contracts, shareholder communications, board 
and other senior management appointments and membership of 
board committees, executive remuneration, corporate governance 
procedures and other group policies.

Procedure to deal with directors’ conflicts 
of interest
A director has a duty to avoid a situation in which he or she 
has a direct or indirect interest that conflicts, or possibly may 
conflict, with the interests of the company. The board may 
authorise conflicts and potential conflicts, where appropriate, 
in accordance with the company’s Articles of Association. 
The company has established comprehensive procedures 
for the disclosure by directors of any such conflicts, and also 
for the consideration and authorisation of these conflicts by 
the board. The board considers each conflict situation separately 
on its particular facts and in the context of the other duties owed 
by the director to the company. Records are kept of any conflict 
authorised by the board and the scope of any such approval, 
and this record of conflicts is regularly reviewed. 

Ed Warner, a non-executive director, is also non-executive 
chairman of Panmure Gordon, the company’s joint stockbroker. 
Where a potential or possible conflict of interest arises, 
Ed Warner declares his interest and removes himself from the 
decision making process in respect of the relevant business. 

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Effectiveness

Succession planning
The board oversees the group’s senior management succession 
plan, including the procedure for the appointment of new 
directors to the board to ensure that there are appropriate skills 
and experience within the company and on the board. 

The process for board appointments is led by the nomination 
committee which, in accordance with its terms of reference, 
evaluates the balance of skills, experience, independence and 
knowledge on the board and makes recommendations for 
appointments in light of this evaluation. 

Non-executive directors are appointed for a specific term. Details 
of their service contracts are set out on page 45. A report on the 
work carried out by the nomination committee during the year is 
set out below. 

Director induction, training and support
A careful assessment is made of the time commitment required 
from the chairman and the non-executive directors to discharge 
their roles properly and, on appointment, new directors are 
provided with an induction relating to the company’s business. 
Directors have the opportunity to highlight any areas in which 
they feel development would be beneficial – either individually 
or as a unit – during the annual board evaluation process. 
The board has access to the company secretary who advises 
the board on corporate governance matters when required. 
The company secretary is responsible for ensuring that the 
board has access to the information it requires, and that such 
information is of appropriate quality to enable it to discharge its 
duties. In addition, directors may take independent professional 
advice at the company’s expense if necessary in the course of 
discharging their duties. 

The company purchased and maintained directors’ and officers’ 
liability insurance throughout 2013 and this cover has been 
renewed for 2014. 

Performance evaluation
During the year, the board conducted an internal evaluation of 
its own performance and that of its committees and individual 
directors. A questionnaire was circulated to all directors seeking 
their evaluation of a number of matters, including board culture, 
balance, meetings and processes.

This was followed up in separate discussions with each of the 
directors to take a note of their detailed feedback. The principal 
conclusions were then presented to the board, and key points and 
actions discussed. The board concluded that the board operates 
effectively and in an open manner. Peter Backhouse has evaluated 
the chairman’s performance with each of the other directors.

Appointment of directors
The Articles of Association provide that shareholders have the 
opportunity to elect directors at the AGM following their initial 
appointment by the board, and one-third of directors, excluding 
the chairman and chief executive, are subject to retirement by 
rotation each year in accordance with the Articles of Association. 
Shareholders are provided with comprehensive information 
about the directors subject to election or re-election, including 
their commitment to the role, in the notice of AGM each year. 

At the forthcoming AGM, resolutions for the election of Peter 
Backhouse will be proposed following his appointment by the 
board since the last AGM and for the re-election of Ed Warner 
and Jeff Woyda who will retire by rotation and will offer 
themselves for re-election at the forthcoming AGM. 

Accountability
The board is responsible for assessing the company’s 
position and prospects and for ensuring that the information 
presented to shareholders is fair, balanced and understandable. 
Further details of the directors’ responsibilities for preparing the 
company’s financial statements are set out in the statement 
of directors’ responsibilities on page 56. 

The board is responsible for determining the nature and extent 
of the risks it is willing to take in achieving its strategic objectives, 
for maintaining the company’s system of internal controls and 
risk management, and for reviewing the effectiveness of these 
systems annually. The audit committee is responsible for the 
independent review and challenge of the adequacy and 
effectiveness of the risk management approach and for 
reporting its findings in this respect to the board.

Risk management and internal control
Managing risk to deliver opportunities is a key element of 
the company’s business activities, and is undertaken using 
a practical and flexible framework which provides a consistent 
and sustained approach to risk evaluation. 

The board has established policies and risk management 
procedures together with key controls, which are reviewed 
in accordance with applicable regulations and best practice 
guidelines, to ensure that they continue to be effective and 
protect the company’s stakeholders.

The company’s internal control system encompasses 
controls over areas including financial reporting, operations 
and compliance and risk management procedures. Such 
a system is designed to evaluate and manage rather than 
eliminate risk and can only provide reasonable and not 
absolute assurance against material misstatement or loss. 

There is a comprehensive budgetary process in place with both 
annual and regular forecasts being considered and approved by 
the board and monthly monitoring of trading results taking place 
in order to mitigate risks associated with financial reporting and 
the preparation of consolidated accounts. An established 
compliance, legal and governance process is in place to monitor 
regulatory developments and to ensure that all existing and 
forthcoming regulations are complied with. 

The company issues a Code of Business Conduct and Ethics, 
to which all staff are expected to adhere, in order to maintain 
Clarksons’ status as a responsible and trustworthy business. 
All staff are responsible for ensuring compliance with group 
policies and for identifying risks within their business and to 
make sure that these risks are controlled and monitored in the 
appropriate way. 

Annual Report 2013  Clarkson PLC  37

 
 
Corporate governance statement

The board has established arrangements by which employees 
of the company may, in confidence, raise concerns about 
possible improprieties or wrongdoing in financial reporting 
or other matters, and the audit committee regularly reviews 
this arrangement.

The board, with advice from the audit committee, has carried 
out an annual review of the effectiveness of the system of internal 
control and risk management and confirms that the ongoing 
process for identifying, evaluating and managing the group’s 
significant risks has operated throughout the year and up to 
the date of the approval of this annual report. 

Audit committee
The members of the audit committee are the non-executive 
directors, James Morley, Peter Backhouse and Ed Warner. 
James Morley chairs the committee and has been determined 
by the board to have recent and relevant financial experience. 
The chairman of the board, the chief executive, finance director 
and other senior managers may be invited to attend meetings 
when appropriate and the external auditor is invited to attend 
on a regular basis, including in the absence of management 
when necessary. Further details on the work of the audit 
committee are shown in the audit committee report on page 54.

Remuneration committee
The members of the remuneration committee are the non-
executive directors. The committee is chaired by Ed Warner 
and is responsible for determining with the board the policy 
on remuneration of the chairman, chief executive, executive 
directors and certain other senior staff. The remuneration of 
the non-executive directors is decided by the chairman and 
executive directors. Further details on the work of this committee 
are contained within the directors’ remuneration report on pages 
39 to 53.

Nomination committee
The nomination committee comprises all the non-executive 
directors and is chaired by the group chairman (save for when 
the committee is dealing with the appointment of a successor 
to the chairmanship of the group). The committee leads the 
process for board and committee appointments, and makes 
recommendations to the board based on the balance of skills 
and experience of the board membership. The committee also 
reviews future succession planning for the board and, in 
particular for the key roles of chairman and chief executive.

Details of Clarksons’ policy on diversity, including gender, are set 
out in the strategic report on pages 30 and 31.

During the year the committee recommended the appointment of 
two new non-executive directors including a candidate to act as 
senior independent director. All appointments are made following 
extensive search and selection. Independent executive search 
firms, Blackwood Group and JCA Group, were used in the 
appointment of Philip Green and Peter Backhouse respectively.

Board engagement with investors and 
relations with shareholders
The AGM gives all shareholders the opportunity to communicate 
directly with the board and encourages their participation. The 
company’s 2014 AGM will be held on 9 May 2014. Further details 
of the business to be addressed at the meeting can be found 
in the notice of meeting.

The executive directors meet regularly with the company’s major 
shareholders and make presentations to analysts, institutional 
investors and investment managers following the announcement 
of the interim and full year results. The non-executive directors 
are fully briefed on the opinions of investors after such meetings.

The primary means of communication with the majority of our 
shareholders is via the company’s annual and interim reports 
and website on which the company publishes its Interim 
Management Statements and trading updates. 

Board committees
In accordance with the requirements of the Code, the board has 
established an audit committee, a nomination committee and a 
remuneration committee. The responsibilities of each committee 
are set out in their respective terms of reference, which are 
approved by board.

The attendance of members of the board at board and 
committee meetings during the year were as follows: 

Audit
 committee

Remuneration
 committee

Nomination
 committee

Board

Total number  
of meetings  
held in the year
Bob Benton1
Andi Case

Jeff Woyda
Peter Backhouse2

Ed Warner

James Morley
Philip Green3 

* attends by invitation only.

6

4

5

6

1

5

6

3

3

3*

1*

3*

1

2

3

2*

3

3

1*

3*

1

3

3

1

2

2

2*

2*

1

2

2

1

1   Stepped down as chairman of the board on 1 August 2013, and was 

re-appointed on 6 March 2014. 

2  Appointed as a director on 16 September 2013.

3   Appointed as a director on 1 April 2013 and chairman of the board on 

 1 August 2013. Stepped down as chairman on 6 March 2014.

38  Clarkson PLC  Annual Report 2013 

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Directors’ remuneration report
Statement by the chairman of the remuneration committee 

I am pleased to introduce the directors’ remuneration report for the year ended 31 December 2013. This report will be subject 
to two shareholder votes at the forthcoming AGM:

• the directors’ remuneration policy report sets out the forward looking directors’ remuneration policy for the company which will 

operate from 1 January 2014 and will, subject to shareholder approval, become formally effective from the 2014 AGM; and

• the annual report on remuneration provides details of how the policy for 2014 will be operated and the remuneration earned 

by directors in the year ended 31 December 2013.
Remuneration policy
Our objective in setting remuneration policy at Clarksons is to attract and retain the best talent in our markets, while at the same time 
ensuring a close alignment between the interests of shareholders and management. We have had a consistent policy since 2006 
and believe that it has served the company’s shareholders well since then. There is a consistent approach to the application of the 
remuneration policy across the whole company, in particular, bonus plans are operated company-wide and all UK employees have  
the opportunity to participate in share plans. The major elements of the executive directors’ reward structures are as follows:

• base salaries are reviewed annually. They have not increased over the past seven years;

• annual bonuses are determined by adjusted pre-tax profits. There is a lower threshold below which no bonuses are earned, with 
higher hurdles which trigger increased bonus rates. Following several years of the hurdles increasing they were frozen for 2013 
recognising the challenging market conditions facing the business, however, they have once again been increased by 5% for 2014;

• the chief executive continues to have the potential to earn a bonus higher than that determined by the pre-tax profit formula 

dependent on shipbroking revenues that he generates personally. The past six years have however been paid in accordance with 
the annual bonus plan described on page 41;

• the executive directors sacrificed 10% of the bonuses they were eligible to receive in both 2013 and 2012 to enable the company 

to reward other senior members of staff. In the previous two years they sacrificed 5% of the bonuses they were entitled to;

• 10% of annual bonuses are paid in Clarkson PLC shares which are deferred for four years; and

• there is a Long Term Incentive Plan (LTIP) that grants awards over shares with vesting dependent on continued service and 

a combination of earnings per share (EPS) and total shareholder return (TSR) targets. As a result of the LTIP reaching the end 
of its ten-year life, shareholder consent for a new plan, based on the existing arrangements but updated in a number of areas 
to comply with best practice, will be sought at the 2014 AGM. 

Both executive directors are shareholders in Clarksons and accordingly understand the imperative to deliver long-term returns 
for the company’s owners. Their short-term rewards are directly aligned to the profitability of the company.

Performance and reward for 2013
The annual profit for 2013 was ahead of expectations following a particularly active final quarter and this has been reflected in the 
annual bonuses for 2013. However, the challenging EPS targets set under the LTIP granted in 2011 were not achieved albeit TSR 
vested in full.

The remuneration committee believes these to be correct principles for a business such as Clarksons and I commend this 
remuneration policy to you. Should you have any questions, please contact me at the company address.

Ed Warner

Annual Report 2013  Clarkson PLC  39

 
 
Directors’ remuneration report
Directors’ remuneration policy

This remuneration policy report will be put to a binding shareholder vote at the 2014 AGM and the policy will take formal effect 
from that date. 

How the remuneration committee operates to set the remuneration policy
The remuneration committee is responsible, on behalf of the board for:

• setting the senior executives’ remuneration policy and actual remuneration;

• reviewing the design of all share incentive plans for approval by the board and shareholders; and

• approving the design of, and recommending targets for, any performance-related pay schemes the company operates for 

senior executives.

The remuneration committee encourages dialogue with shareholders and engages with the company’s major shareholders on a 
regular basis. Major shareholders will be consulted on a timely basis on any material changes proposed for the remuneration policy.

Summary of overall remuneration policy
The policy of the company is to ensure that executive rewards are linked to performance, to provide an incentive to achieve the key 
business aims, deliver an appropriate link between reward and performance and maintain a reasonable relationship of rewards 
to those offered in other competitor companies in order to attract, retain and motivate executives within a framework of what is 
acceptable to shareholders.

There are few comparable UK public companies involved solely in the business of providing shipping and related wholesale 
financial services. Comparisons are therefore made with City-based companies and private companies in the shipping sector, 
many of which are headquartered overseas. In the highly competitive global labour market which operates within the shipping 
services sector where business is based around personal client relationships, the retention of key talent is critical to continued 
business success. Remuneration levels are set to attract and retain the best talent and to ensure that market competitive rewards 
are available for the delivery of strong business and personal performance within an appropriate risk framework.

It is recognised by the remuneration committee that the current management team is highly regarded and would be attractive to 
Clarksons’ competitors in the shipping industry, and, increasingly, wholesale brokerage and agency businesses. Retention of key 
talent in this context is critical, whilst recognising the need for appropriate succession planning.

The proportionate breakdown of the total remuneration is such that, in line with most other wholesale brokerage and agency 
companies, a very high proportion of the package is performance-related. The chief executive’s bonus recognises that he performs 
the duties and responsibilities incumbent with the role of group chief executive and in addition, as a shipbroker, generates  
significant revenues.

Consideration of shareholder views
The company is committed to maintaining good communications with investors. The remuneration committee considers the AGM 
to be an opportunity to meet and communicate with investors, giving shareholders the opportunity to raise any issues or concerns 
they may have. In addition, the remuneration committee seeks to engage directly with major shareholders should any material 
changes be made to the directors’ remuneration policy. On this basis, major shareholders were contacted in respect of the renewal 
of the LTIP at the start of 2014.

Details of the votes cast in respect of the resolution to approve last year’s remuneration report and any matters discussed with 
shareholders during 2013 are set out in the annual report on remuneration on page 53.

40  Clarkson PLC  Annual Report 2013 

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Remuneration policy report
Key elements of remuneration policy are set out below:

Purpose and link to strategy

Operation

Maximum opportunity

Performance framework

Base 
salary

• To attract and retain high 
performing executive 
directors who are critical 
for the business

• Set at a level to provide 
a core reward for the 
role and cover essential 
living costs

• Reviewed periodically
• Paid monthly
• Salaries are determined 

taking into account:
 – the experience, 
responsibility, 
effectiveness and market 
value of the executive
 – the pay and conditions 

in the workforce

Benefits 

• To provide a market 

• Taxable benefits include:

standard suite of basic 
benefits in kind to ensure 
the executive directors’ 
well-being

Annual 
bonus 
(including 
deferred 
shares)

• To reward significant 

annual profit performance
• To ensure that the bonus 

plan is competitive with our 
peers. As a result, bonus 
forms a significant 
proportion of the 
remuneration package
• To ensure that if there is a 

reduction in profitability, the 
level of bonus payable falls 
away sharply

 – car allowance
 – healthcare insurance
 – club membership

• Participation in Sharesave
• Other benefits may be 

payable where appropriate
• 90% of the bonus is paid 
in cash and although they 
have no contractual 
obligation, the directors 
have agreed that 10% 
of annual bonus payable 
is deferred in shares, 
vesting after four years

• Directors have voting rights 

and receive dividends 
on deferred shares

• Performance criteria are 

reviewed and re-calibrated 
carefully each year to 
ensure they are linked 
to strategic business 
goals, take full account 
of economic conditions 
and are sufficiently 
demanding to control 
the total bonus pool 
and individual allocations 

• Clawback provision 

operates for overpayments 
due to misstatement 
or error

• There is no prescribed 

n/a

maximum annual increase. 
The committee is guided 
by the general increase for 
the broader workforce but 
on occasion may recognise 
an increase in certain 
circumstances, such 
as assumed additional 
responsibility or an increase 
in the scale or scope 
of the role

• A car allowance in line with 
market norm. The value of 
other benefits is based on 
the cost to the company 
and is not predetermined
• Sharesave up to prevailing 

HMRC limits

• In line with Clarksons’ 

peers, the annual bonus is 
not subject to a formal 
individual cap

• The chief executive will 
receive the higher of the 
executive annual bonus 
and the bonus determined 
by his continuing broking 
activities. This underpin 
was agreed when the chief 
executive joined the board

n/a

• For the chief executive and 
finance director, bonus 
is determined by group 
performance measured 
over one year on the 
following basis:
 – below a ‘profit floor’ set 
by the committee each 
year no bonus is triggered

 – above the floor, an 

escalating percentage 
of profits is payable 
into a bonus pool for 
progressively higher profit 
before tax performance

 – profit for bonus 

calculations may 
be adjusted by the 
remuneration committee 
where appropriate 
and does not include 
mark-to-market 
valuations or business 
that has not 
been invoiced

 – for the chief executive 

a further key determinant 
of his annual bonus is 
the significant broking 
revenues generated 
by him personally

Annual Report 2013  Clarkson PLC  41

 
 
 
Directors’ remuneration report

Purpose and link to strategy

Operation

Maximum opportunity

Performance framework

Long Term 
Incentives 

• To incentivise and reward 

significant long-term 
financial performance and 
share price performance 
relative to the stock market

• Awards are performance-
related and are normally 
structured as nil 
cost options

• Awards are granted each 

• To encourage share 

ownership and provide 
further alignment with 
shareholders

year following the 
publication of annual results

• Clawback provision 

operates for overpayments 
due to misstatement 
or error

• Annual maximum limit of 
150% of basic salary for 
awards subject to long-
term performance targets 
(200% of basic salary in 
exceptional circumstances)

• Dividend equivalents 

(in cash or shares) may 
accrue between grant and 
vesting, to the extent that 
shares under award 
ultimately vest

• The awards are subject 

to performance conditions 
measured on a combination 
of three year EPS growth 
and relative TSR
• Normally measured 
over a three year 
performance period

• 25% of an award will vest 
for achieving threshold 
performance, increasing 
pro-rata to full vesting for 
the achievement of stretch 
performance targets

Pension

• To provide a market 
competitive pension 
arrangement 

Non-
executive 
directors’ 
fees

• To attract and retain high 
calibre non-executive 
directors through the 
provision of market 
competitive fees

• Executive directors 

participate in a company 
defined contribution 
pension scheme and/or 
receive a cash allowance in 
lieu of pension 
contributions

• Reviewed annually
• Paid monthly
• Fees are determined taking 

into account:
 – the experience, 
responsibility, 
effectiveness and time 
commitments of the 
non-executive

 – the pay and conditions 

in the workforce

n/a

n/a

• Employer contributions 
are up to 15% of basic 
salary or an equivalent 
cash allowance net 
of employer’s NI

• As for the executive 
directors there is no 
prescribed maximum 
annual increase. Fee 
increases are guided by 
the general increase for 
the broader workforce but 
on occasion may recognise 
an increase in certain 
circumstances, such 
as assumed additional 
responsibility or an increase 
in the scale or scope 
of the role

Notes:

1   A description of how the company intends to implement the above policy for 2014 is set out in the annual report on remuneration on page 46.

2  The annual bonus performance measures are focused on profit before tax to reflect how successful the company has been in managing its operations. 

 The LTIP performance measures, EPS and TSR, reward significant long-term returns to shareholders and long-term financial growth. EPS growth is derived from the 
audited financial statements while TSR performance is monitored on the remuneration committee’s behalf by New Bridge Street. 

 Targets are set on a sliding scale that takes account of internal strategic planning and external market expectations for the company. Only modest rewards are available 
for achieving threshold performance with maximum rewards requiring substantial out-performance of challenging strategic plans approved at the start of each year.

3   The committee operates the annual bonus and LTIP plans according to their respective rules, and in accordance with the Listing Rules and HMRC rules where relevant. 

Consistent with market practice, the committee retains flexibility and discretions in a number of key areas.

4   The remuneration policy for the executive directors is designed with regard to the policy for employees across the group as a whole and is consistent between the 
executive directors and the remainder of the workforce. In particular there has been a widespread salary freeze for all employees earning salaries of £100,000 p.a. 
or more. In contrast, salaries for lower paid employees have generally increased (on average across the population) each year. The annual bonus plan operates on a 
similar profit-driven basis across the group and there is a relatively high level of employee share ownership across the group. The key differences in policy for executive 
directors relates to participating in the long-term incentive share awards, which have strict vesting conditions. This is considered appropriate to provide a link for a 
proportion of performance pay with the longer term strategy thereby creating stronger alignment of interest with shareholders.  
The committee does not formally consult with employees in respect of the design of the company’s executive director remuneration policy, although the committee 
will keep this under review. 

5   For the avoidance of doubt, in approving this directors’ remuneration policy, authority is given to the company to honour any commitments entered into with current 

or former directors (such as, the payment of a pension or the vesting or exercise of past share awards) that have been in previous remuneration reports. Details of any 
payments to former directors will be set out in the annual report on remuneration as they arise.

42  Clarkson PLC  Annual Report 2013 

 
 
 
Directors’ remuneration scenarios
The company’s remuneration policy results in a proportionate breakdown of total remuneration such that, in line with most other 
wholesale brokerage and agency companies, a very high proportion of the package is performance-related.

The charts below show an estimate of the potential future remuneration payable for the executive directors in 2014 at different levels 
of performance. The charts highlight that the performance-related elements of the package comprise a highly significant portion of the 
executive directors’ total remuneration at target and maximum performance. 

Chief executive

Maximum

11%

On-target

14%

Minimum

100%

Finance director

76%

78%

13%

£000

6,383

Maximum

8%

4,899

On-target

17%

23%

61%

22%

63%

14%

680

Minimum

100%

£000

1,715

1,299

300

Total fixed pay

Annual bonus

Long Term Incentive Plan

Total fixed pay

Annual bonus

Long Term Incentive Plan

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Notes:

1  Basic salary levels applying on 1 January 2014.

2  The value of taxable benefits is based on the cost of supplying those benefits (as disclosed) for the year ending 31 December 2013. 

3  The value of the pension receivable is 15% of basic salary.

4   Minimum performance assumes no award is earned under the annual bonus plan and no vesting is achieved under the LTIP; on-target performance assumes an 

annual bonus calculated by reference to profit before taxation of £32.0m being the market consensus at the time of signing these accounts and 50% being achieved 
under the LTIP; and maximum performance assumes profit before taxation outperforms the consensus by 15% and full vesting under the LTIP. It should, however, 
be noted, that there is in fact no upper limit as explained on page 41 and the above charts are purely for illustrative purposes.

5  Share price movement has been excluded from the above analysis. 

Directors’ recruitment and promotions 
The committee has the objective to attract, retain and motivate the best talents in our markets, while at the same time ensuring a close 
alignment between the interests of shareholders and management. 

If a new executive director was appointed, the company would seek to align the remuneration package with the remuneration policy 
approved by shareholders, including the maximum limit for the LTIP and an annual bonus pool entitlement in line with that of the other 
executive directors. However, flexibility would be retained to offer remuneration on appointment in respect of deferred remuneration 
arrangements forfeited on leaving a previous employer. The committee will look to replicate the arrangements being forfeited as 
closely as possible and in doing so, will take account of relevant factors including the nature of the deferred remuneration, 
performance conditions and the time over which they would have vested or been paid.

The initial notice period for a service contract may be longer than the policy of one year, provided it reduces to one year within a short 
space of time. 

For an internal appointment, any ongoing remuneration obligations existing prior to appointment may continue.

The committee may also agree that the company will meet certain relocation and incidental expenses as appropriate. 

Annual Report 2013  Clarkson PLC  43

 
 
Directors’ remuneration report

Directors’ service contracts and payments for loss of office
The remuneration committee reviews the contractual terms for executive directors in light of developments in best practice and 
practice in our sector. The remuneration-related elements of the current contracts for executive directors are shown in the table below:

Provision

Detailed terms

Notice period

One year by the company or the director. 

Termination payment

Chief executive:
The company may elect to pay in lieu of notice:
• an amount equivalent to 12 months’ base salary plus the cost of contractual benefits; plus

• an amount equivalent to 50% of the last bonus received.

In addition:
• if not already paid, any bonus in respect for the prior year is payable (if not agreed, an amount equal 

to the last bonus received); and

• a pro-rated bonus for the period of the year worked is payable.

Finance director:
The company may elect to pay in lieu of notice:
• an amount equivalent to base salary, benefits and bonus for the relevant period of notice.

The remuneration committee recognises that it is unusual in the context of listed PLCs to pay an 
amount in lieu of annual bonus for the notice period but considers that the policy is appropriate for 
the following reasons:
• salary forms a lower proportion of remuneration than in most other UK companies;

• typically in the shipbroking industry, income from business conducted is received over a number 

of years in arrears;

• bonuses are only payable if profit thresholds and targets are achieved i.e. there is no automatic 

entitlement to a bonus; and

• unvested awards under the LTIP are capable of vesting subject to performance.

For unvested entitlements to share awards under the 2004 Clarkson LTIP (about to reach the end 
of its 10 year life), the rules contain discretionary provisions setting out the treatment of awards 
where a participant ceases to be employed by the Clarkson group for designated reasons. In the 
case of the participant’s injury, disability, statutory redundancy, retirement, a sale of their employing 
company or business in which they were employed or for any other reason at the discretion of the 
committee, the participant’s awards will not be forfeited but will vest on the date of cessation 
of employment, subject to the satisfaction of the relevant performance conditions. In the case 
of a participant’s death, any unvested awards will vest in full on the date of cessation.

For unvested entitlements to share awards under the proposed 2014 Clarkson LTIP, where 
a participant ceases to be employed by the Clarkson group due to ill-health, injury, disability, 
redundancy, retirement, a sale of his employing company or business or for any other reason at the 
discretion of the committee (‘good leaver circumstance’), then he will be entitled to keep his award 
as described below:

• performance-related awards will normally vest at the normal vesting dates (unless the remuneration 
committee determines that they should vest at cessation) subject to the satisfaction of the relevant 
performance conditions and time pro-rating (unless the remuneration committee decides to disapply 
time pro-rating). In the case of a death or ill-health, awards will vest at cessation subject to the 
relevant performance conditions; and
• deferred bonus awards will vest in full. 

44  Clarkson PLC  Annual Report 2013 

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Change of control

Chief executive:
If, within 18 months of a change of control, the company gives the chief executive notice (except for 
reasons of gross misconduct or material breach of contract) or the chief executive gives notice as a 
result of a material breach of his contract or the company limits his ability to earn future bonuses, the 
chief executive will, within 30 days of termination, receive an amount equivalent to one year’s basic 
salary, 150% of the last annual bonus received, the gross annual value of contractual benefits 
(pro-rated). In these circumstances, the chief executive’s notice period is reduced to four weeks.

Finance director:
Within one year of a change of control the executive or the company may give notice (of not less 
than four weeks in the case of the former) whereupon the executive will receive immediately an 
amount equivalent to one year’s basic salary, contractual benefits, employer pension contributions 
and annual bonus.

All unvested awards under the 2004 Clarkson LTIP would vest, to the extent that any performance 
conditions attaching to the relevant award have been achieved. 

All unvested awards under the 2014 Clarkson LTIP would vest, to the extent that any performance 
conditions attaching to the relevant award have been achieved. To the extent that any performance 
conditions have been met, the committee will consider whether time pro-rating should apply. 
In August 2008 it was however contractually agreed with the current finance director, Jeff Woyda, 
that no time pro-rating will be applied to his LTIP awards.

The remuneration committee recognises that it is now unusual, in the context of listed PLCs, for 
service contracts to contain change of control provisions and will therefore seek to avoid such 
provisions for future executive appointments to the board.

Details of the current executive directors’ service contracts are as follows:

Andi Case

Jeff Woyda

Date of contract

17 June 2008

3 October 2006

Unexpired term at
31 December 2013 

12 months

12 months

Notice  
period 

12 months

12 months

Service contracts are available for inspection at the company’s registered office. 

Details of the non-executive directors’ appointment terms are as follows:

Bob Benton

Peter Backhouse

Ed Warner

James Morley

Philip Green

Date of appointment

25 May 2005

16 September 2013 

27 June 2008

5 November 2008

1 April 2013 

Unexpired term at
31 December 2013 

5 months

33 months

6 months

10 months

27 months

Notice  
period 

3 months

3 months

3 months

3 months

3 months

Non-executive directors are appointed by letter of appointment for a fixed term not exceeding three years, renewable on the 
agreement of both the company and the director and are subject to re-election at the AGM following appointment, and thereafter 
every three years. Each appointment can be terminated before the end of the three-year period with three months’ notice due.

Fees payable for a new non-executive director appointment will take into account the experience of the individual and the current 
fee structure.

Annual Report 2013  Clarkson PLC  45

 
 
Directors’ remuneration report
Annual report on remuneration

Implementation of the remuneration policy for 2014

Base salary 

Andi Case

Jeff Woyda

2014
£000

550

250

2013
£000

550

250

% change

0%

0%

Annual bonus for 2014 
For 2014, the annual bonus opportunity will remain uncapped and will continue to be based on a bonus pool derived from group profit 
before tax as follows:

• below a ‘profit floor’ set by the committee no bonus is triggered; and

• above the floor, an escalating percentage of profits is payable into a bonus pool for progressively higher profit before tax 

performance.

Profit for bonus calculations may be adjusted by the remuneration committee where appropriate and does not include mark-to-market 
valuations or business that has not been invoiced.

The profit floor and hurdles for 2014 have not been disclosed on a prospective basis although will be disclosed retrospectively in next 
year’s remuneration report.

Consistent with prior years, the chief executive continues to have the potential to earn a bonus higher than that determined by the 
pre-tax profit formula dependent on shipbroking revenues that he generates personally. This has not been a factor in any of the past 
six years.

Consistent with the policy applied to the majority of senior employees, 90% of the bonus payable will be paid in cash with 10% 
voluntarily deferred into shares for four years and clawback provisions will continue to apply. 

Long term incentive awards to be granted in 2014
As a result of the LTIP reaching the end of its ten-year life, shareholder consent for a new plan, based on the existing arrangements but 
updated in a number of areas to comply with best practice, will be sought at the 2014 AGM. The maximum LTIP potential will, subject 
to shareholder approval, remain at 150% of basic salary (200% of basic salary in exceptional circumstances). It is envisaged that 
executive directors will receive awards over shares worth 150% of salary in 2014. Consistent with past awards:

• the vesting of 50% of the award will be determined by the company’s EPS for 31 December 2016, as shown in chart (i) below. The 

EPS for 2013 is shown (black line) for reference; and

• the vesting of the remaining 50% will be determined by the company’s TSR performance from 1 January 2014 to 31 December 2016 

against the constituents of the FTSE SmallCap Index (excluding investment trusts), as shown in chart (ii) below. The level of total 
shareholder return achieved against the FTSE SmallCap over the last three-year cycle is shown (black line) for reference.

EPS and relative TSR are considered to be the most appropriate measures of long-term performance for the group, in that they ensure 
executives are incentivised and rewarded for the earnings performance of the group as well as returning value to shareholders.

The awards will be subject to clawback provisions. 

(i) EPS target range for 2014 award (50% of award)

(ii) TSR target range for 2014 award (50% of award)

100%

)

d
r
a
w
a

100%

)

d
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a
w
a

f

o
%
0
5

(

g
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s
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v
d
r
a
w
a
S
P
E

f

o
%

75%

50%

25%

0%

f

o
%
0
5

(

98p

120p

160p

g
n
i
t
s
e
v
d
r
a
w
a
R
S
T

f

o
%

75%

50%

25%

0%

Median

Upper quartile

1st place

EPS target (pence) for financial year ended 31 December 2016 for 2014 award

TSR ranking at end of three-year performance period

Vesting schedule for 2014 awards        2013 EPS

TSR performance range        Actual result in last three-year TSR cycle

46  Clarkson PLC  Annual Report 2013 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
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Directors’ remuneration (audited)
Details of emoluments and compensation payable in their capacity as directors during the year are set out below:

2013

Executive directors
Andi Case

Jeff Woyda

Non-executive directors
Bob Benton 

Peter Backhouse

Ed Warner

James Morley 

Philip Green

2012

Executive directors
Andi Case

Jeff Woyda

Non-executive directors
Bob Benton 

James Morley 

Ed Warner

Former directors
Martin Stopford

Paul Wogan

Notes:

Basic salary 
and fees 
£000

Benefits 
£000

Pension 
£000 

Performance- 
related  
bonus 
£000

Total 
remuneration
before LTIP
£000

Long term 
incentives 
£000

Total 
remuneration 
£000

550

250

92

18

66

66

72

22

12

–

–

–

–

–

74

38

–

–

–

–

–

2,584

551

3,230

851

714

325

3,944

1,176

–

–

–

–

–

92

18

66

66

72

–

–

–

–

–

92

18

66

66

72

1,114

 34

112

3,135

4,395

1,039

5,434

Basic salary 
and fees 
£000

Benefits 
£000

Pension 
£000 

Performance- 
related  
bonus 
£000

Total  
remuneration
before LTIP
£000

Long term 
incentives 
£000

Total 
remuneration 
£000

550

250

120

66

66

42

7

1,101

26

12

–

–

–

8

–

71

38

–

–

–

–

–

2,102

448

2,749

748

737

335

3,486

1,083

–

–

–

–

–

120

66

66

50

7

–

–

–

–

–

120

66

66

50

7

 46

109

2,550

3,806

1,072

4,878 

1  Benefits include cash allowances in lieu of company cars, healthcare insurance and club memberships.

2  Pension includes pension contributions and cash supplements where relevant.

3  Annual bonus for 2013 was based on the allocation of the following pool:

Profit before taxation & bonus

% of pre-bonus profit

Actual profit

Actual bonus pool

< £16.8m

£16.8m – £33.7m

£33.8m – £39.4m

> £39.4m

0%

13%

20%

25%

–

£25.1m

–

–

–

£3.8m

–

–

% of pool allocated to  
executive directors

–

82%

–

–

 The bonus is paid 90% in cash and although they have no contractual obligation the directors have agreed that 10% of the bonus will be deferred in shares, vesting 
after four years. Both the cash and share element of the bonus are subject to clawback where overpayments may be reclaimed in the event of misstatement or error. 

Annual Report 2013  Clarkson PLC  47

 
 
 
Directors’ remuneration report

Directors’ remuneration (audited) continued

Notes: continued

4   Long term incentives relates to awards granted on 25 May 2011 which vest in May 2014 based on performance to the year ended 31 December 2013.  

The performance conditions attached to this award and actual performance against these conditions is as follows:

Performance measure

Performance condition

Threshold target

Stretch target

Actual

% vesting

Earnings per share

Total shareholder 
return 

Total vesting

25% of award vesting 
at threshold up to 
100% of award 
vesting at stretch on 
straight-line basis

25% vesting of award 
at threshold up to 
100% of award 
vesting at stretch 
on straight-line basis

108.5p

140.0p

98.0p

0%

Median

Upper quartile

Upper quartile 
126.3%

100%

50%

Estimated value of 
vested sharesA 
£000

714

325

The award details for the executive directors are as follows: 

Executive  
director

Andi Case

Jeff Woyda

Notes:

Number of  
shares granted

67,237

30,562

Number of  
shares to vest

33,618

15,281

Number of  
shares to lapse

33,619

15,281

A  The estimated value of the vested shares is based on the average share price during the three month period from 1 October to 31 December 2013 of £21.24. These 
shares will vest on the third anniversary of grant, subject to continued employment. The share price at vesting for the 2010 awards which vested in December 2013 and 
were based on the three-year performance period to 31 December 2012 was £20.15.

48  Clarkson PLC  Annual Report 2013 

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Fees for the non-executive directors 
Non-executive director fee levels are as follows:

Chairman

Non-executive director

Chair of committee

Senior independent director

2014
£000

125

55

15

15

2013
£000

120

51

15

15

% change

+4%

+8%

0%

0%

Directors’ outstanding share incentives (audited) 
The table below sets out details of outstanding share awards held by the executive directors. The share awards have been granted 
as nil cost options under the LTIP, subject to the EPS and TSR performance criteria (50% of the award each) detailed in the LTIP 
section of this report on page 42.

Interests 
under plan 
at 1 January
2013

Scheme

Awards 
granted in 
year

Awards 
vested in 
year

Awards 
lapsed in 
year

Interests 
under plan at
31 December
2013

Face value at 
31 December 
2013
£

% vesting at 
threshold 

performance  Grant date

End of 
performance 
period

Vesting  
date

Date 
exercisable  

until

Executive  
directors

Andi Case

LTIP

LTIP

LTIP

LTIP

LTIP

Jeff Woyda LTIP

LTIP

LTIP

LTIP

LTIP

Notes:

99,388¹

36,581²

67,237³

61,9374

–

–

–

–

–

51,4345

45,182¹

16,628²

30,562³

28,1534

–

–

–

–

–

23,3795

–

36,581

–

–

–

–

16,628

–

–

–

–

–

33,619

–

–

–

–

15,281

–

–

99,388

36,581

33,618

61,937

51,434

45,182

16,628

15,281

28,153

23,379

1,988,754

25% 16 Dec 09

Dec 11

15 Dec 12

15 Dec 19

731,986

672,696

1,239,359

1,029,194

904,092

332,726

305,772

563,344

467,814

25% 24 Dec 10

Dec 12

23 Dec 13

23 Dec 20

25% 25 May 11

Dec 13

24 May 14

24 May 21

25% 11 May 12

Dec 14

10 May 15

25% 10 May 13

Dec 15

9 May 16

–

–

25% 16 Dec 09

Dec 11

15 Dec 12

15 Dec 19

25% 24 Dec 10

Dec 12

23 Dec 13

23 Dec 20

25% 25 May 11

Dec 13

24 May 14

24 May 21

25% 11 May 12

Dec 14

10 May 15

25% 10 May 13

Dec 15

9 May 16

–

–

The share price on the date of the award was 1. £8.06, 2. £11.22, 3. £9.63, 4. £13.50, 5. £16.04.

Annual Report 2013  Clarkson PLC  49

 
 
Directors’ remuneration report

Directors’ interests in shares
The company requires executive directors to build a shareholding equivalent to 100% of the executive directors’ salary. Until this is 
attained they are required to retain 50% of any share award that vests.

The beneficial interests of the directors in the share capital of the company at 31 December was as follows:

Number of ordinary shares

% of salary required to be held 
in shares under the shareholding 
guidelines

Guideline met?

Bob Benton

Andi Case

Jeff Woyda

Peter Backhouse

Ed Warner

James Morley

Philip Green

2013

4,700¹

648,976²

60,465²

3,500

15,000

4,500

3,000

2012

4,700¹

662,939²

66,262²

n/a

15,000

4,500

n/a

n/a

100%

100%

n/a

n/a

n/a

n/a

1  The beneficial owner of these shares is Marianne Kingham who is married to Bob Benton.

2  These figures include restricted shares granted as part of annual bonus as follows:   

Andi Case

Jeff Woyda

Bonus year

Vesting date

2009

April 2014

26,689

5,694

Number of shares

2010

April 2015

34,971

7,461

2011

April 2016

29,241

6,235

n/a

Yes

Yes

n/a

n/a

n/a

n/a

2012

April 2017

13,103

2,795

There have been no changes in the above numbers of shares between the year-end and the date this report was signed.

Further restricted share awards will be made in 2014 in respect of up to 10% of the directors’ 2013 bonus.

Directors’ interests in share options over ordinary shares are as follows:

Options 
held at 
1 January 
2013

Options 
granted 
during 
the year 

Options 
exercised 
during 
the year

Options 
lapsed  
during  

the year

Options 
held at 
31 December 
2013

Exercise  
price
£

Date from which 
exercisable

Expiry date

Executive directors
Andi Case Other 
options

25,000¹

Sharesave

Jeff Woyda Sharesave

831

831

–

–

–

–

–

–

–

–

–

1  These options are fully vested and were granted for nil consideration.

25,000¹

9.91 26 October 2010

25 October 2017

831

831

10.82

10.82

1 July 2015 31 December 2015

1 July 2015 31 December 2015

Pensions (audited) 
Pension contributions were £8,000 (2012: £50,000) for Andi Case and £37,500 (2012: £37,500) for Jeff Woyda, with the balance 
for Andi Case (up to 15% of salary) paid as a cash supplement in lieu of pension (net of employer’s NI) and included in the table on 
page 47 as pension.

50  Clarkson PLC  Annual Report 2013 

 
 
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Payment to former director (audited) 
No payments falling for disclosure were made to past executive directors during the year ended 31 December 2013.

Payments for loss of office (audited) 
No payments were made in respect of loss of office during the year ended 31 December 2013. 

Performance graph 
This graph shows total shareholder return (that is, share price growth assuming re-investment of any dividends) of the company 
over the last five financial years compared to the FTSE SmallCap Index, which the committee considers an appropriate index for 
comparison purposes, and compared to the total remuneration of the chief executive.

Clarkson PLC        FTSE SmallCap Index        Chief executive’s remuneration

800

700

600

500

400

300

200

100

0

31/12/08

31/12/09

31/12/10

31/12/11

31/12/12

31/12/13

This graph shows the value, by 31 December 2013, of £100 invested in Clarkson PLC on 31 December 2008 compared with the value of £100 invested in the FTSE SmallCap Index and the
remuneration of the chief executive for each year, rebased from 100 units from 31 December 2008. The other points plotted are the values at intervening financial year-ends. 

The LTIP award vesting level as a percentage of the maximum opportunity for the chief executive for each of the last five years is 
as follows:

LTIP vesting %

2013

50%

2012

47%

2011

98%

2010

44%

2009

50%

Annual Report 2013  Clarkson PLC  51

 
 
Directors’ remuneration report

Percentage change in remuneration levels 
The table below shows the movement in salary, benefits and annual bonus for the chief executive between the 2012 and 2013 
financial years, compared to the average for all employees:

Chief executive
Salary and benefits

Bonus

All employees
Salary and benefits

Bonus

Relative importance of spend on pay
The following table sets out the percentage change in profit, dividends and overall spend on pay in 2013 compared to 2012:

Underlying profit after tax

Dividends

Employee remuneration costs, of which:

Executive directors’ total pay excluding LTIP (continuing)

Executive directors’ annual bonus (continuing)

2013  
£m

18.2

9.6

129.3

4.1

3.1

2012  
£m

14.0

9.4

112.8

3.5

2.6

% change

-0.7%

+22.9%

+2.3%

+16.9%

% change

+30.0% 

+2.1%

+14.6%

+17.1%

+19.2%

Remuneration committee
During the year the remuneration committee comprised all the non-executive directors – Bob Benton, Philip Green (from 1 April 2013), 
Peter Backhouse (from 16 September 2013), Ed Warner and James Morley. The committee is chaired by Ed Warner. None of the 
committee members have day-to-day involvement with the business nor do they have any personal financial interest in the matters 
to be recommended. The company secretary acts as secretary to the committee. The number of formal meetings held and the 
attendance by each member is shown in the table below. The committee also held informal discussions as required.

Number of meetings attended out of potential maximum

Bob Benton
Peter Backhouse1
Ed Warner

James Morley
Philip Green2

1  Appointed to the board on 16 September 2013.

2  Appointed to the board on 1 April 2013.

3 out of 3

1 out of 1

3 out of 3

3 out of 3

1 out of 1

In particular the board is satisfied that the committee has the range of skills and relevant business experience to reach an independent 
judgement on the suitability of the remuneration policy. The committee’s remit already covers remuneration arrangements for all 
employees (where the committee reviews bonus payments for all employees in the business) and consideration of risk is foremost 
in the committee’s deliberations. 

52  Clarkson PLC  Annual Report 2013 

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External advisors
New Bridge Street (NBS) are appointed by the committee to provide independent advice and services that materially assist the 
committee in their consideration of matters relating to directors’ remuneration, design of share incentive plans and measurement 
of performance against vesting targets. Neither NBS nor its parent company, Aon plc, has any other connection with the company.

The fees paid by the company to NBS during the financial year for advice to the remuneration committee was £58,135. No additional 
fees were paid by the group to Aon plc in respect of other services.

NBS is a signatory to the Remuneration Consultants’ Code of Conduct which requires its advice to be objective and impartial.

Statement of shareholder voting at AGM
At the 2013 AGM, the directors’ remuneration report received the following votes from shareholders:

For

Against 

Abstentions 

Total number of votes

% of votes cast

11,039,510

1,775,351

242,939

13,057,800

86.15%

13.85%

–

100%

At the AGM to be held on 9 May 2014 a resolution approving this report is to be proposed as an ordinary resolution.

This report to shareholders provides information on the remuneration and share interests of all Clarkson PLC directors and the 
criteria by which that remuneration has been determined. It has been prepared in accordance with the Companies Act 2006 and 
the applicable Listing Rules.

This report was approved by the board and signed on its behalf by:

Ed Warner Remuneration committee chairman

7 March 2014

Annual Report 2013  Clarkson PLC  53

 
 
Audit committee report

The primary function of the audit committee is to assist the board 
in fulfilling its oversight responsibilities.

The audit committee is responsible for:

• scrutinising the robustness and integrity of the group’s financial 

reporting, including accounting issues and judgements; 

• monitoring and reviewing the group’s internal control systems, 
including internal financial reporting controls, and identifying 
any significant deficiencies or material weaknesses in 
their operation; and

• monitoring and reviewing the activities and performance of 

the external auditor, and notifying the board of any significant 
concerns arising from their audit work.

In addition to the above responsibilities, the committee has also 
reviewed the prevention, detection and reporting of fraud and the 
group’s anti-fraud and ethics policies.

The committee’s terms of reference are reviewed on an ongoing 
basis to ensure compliance with the requirements of the Code.

The committee met three times during 2013 and addressed 
three main areas in the year:

The company continually seeks to improve and update existing 
procedures and to introduce new controls where necessary. 
The risk management system is designed to identify key risks 
and to provide assurance that these risks are fully understood 
and managed. As an ongoing process, the executive oversees 
the development of the internal control procedures which provide 
assurance to the committee that the controls which are operating 
in the group are effective and sufficient to counteract the risks to 
which it is exposed.

The need for an internal audit function is reviewed annually by the 
board and the audit committee. After taking into account the size 
and structure of the group, it has been concluded that there is 
at present no requirement for an internal audit function. The audit 
committee, in conjunction with the board, has established 
arrangements by which staff of the group may, in confidence, 
raise concerns about possible improprieties or wrongdoing.

The audit committee is responsible for reviewing the adequacy 
and effectiveness of the group’s risk management systems and 
processes. Further details of risk management are shown on 
page 29.

Financial reporting and 
significant issues
The committee reviewed and considered the following areas 
in respect of financial reporting and preparation of the interim 
and annual financial statements:

• the appropriateness of accounting policies used;

• compliance with internal and external financial reporting 

standards and policies;

• principal judgemental accounting matters, based on reports 

from management and external auditors; and

• whether or not the annual report, taken as a whole, is fair, 

balanced and understandable and provides the information 
necessary for shareholders to assess the company’s 
performance and business model.

The committee also reviews reports by the external auditor 
on the full-year and half-year results which highlight any issues 
with respect to the work undertaken on the audit. 

In addition to the items noted above, the committee has set out 
the significant issues that it considered in relation to the financial 
statements, and how they were addressed. The primary matter 
considered was that of the impairment of trade receivables. 
A number of judgements are made in the calculation of the 
impairment, primarily the age of the invoice, the underlying 
transaction and the debtor’s financial position. The committee 
discussed with the management the results of its review, the 
internal controls and the composition of the related financial 
information. The committee also discussed with the external 
auditors their review of the provision. The committee is satisfied 
that the judgements made by management are reasonable, and 
that appropriate disclosures have been included in the accounts.

Internal control, internal audit and risk 
management
The committee undertakes an annual review of the group’s 
internal controls, including financial, operational, compliance 
and risk management and reviews the external auditor’s report 
in relation to internal control observations. 

54  Clarkson PLC  Annual Report 2013 

External auditor
The committee reviews and makes recommendations to the 
board regarding the re-appointment and remuneration of the 
external auditor.

The audit committee considered the following:

• the quality and effectiveness of the audit for the prior year;

• the external audit strategy for the current year;

• the overall work plan;

• the terms of engagement;

• PwC’s overall performance and independence; 

• the effectiveness of the overall audit process; and

• the length of appointment as external auditors (current length: 

five years).

To ensure that the auditors maintain their independence and 
objectivity, the audit committee has implemented a policy which is 
designed to ensure that the provision of non-audit services does 
not have an impact on the external auditors’ independence and 
objectivity. It restricts the engagement of the auditor in relation to 
non-audit services, whilst recognising that there are some types 
of work, such as accounting and tax advice, where a detailed 
understanding of the company’s business is advantageous. 

It also requires that individual engagements above a certain fee 
level may only be undertaken with appropriate authority from 
the committee or the committee chairman.

During the year the auditors provided tax advisory and 
compliance services and other assurance and advisory services 
with fees of £0.2m and £0.1m respectively. A fee breakdown is 
shown in note 3.

The committee meets privately on a regular basis with the 
external auditors in the absence of management.

Having considered the performance of the current external 
auditor, PricewaterhouseCoopers LLP (PwC), the committee 
does not consider that their independence or effectiveness is 
impaired. The audit committee recommended to the board that 
PwC be re-appointed as auditor and that a resolution be put to 
shareholders at the AGM.

James Morley Audit committee chairman

7 March 2014

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Report of the directors

The strategic report provides information relating to the group’s 
activities, its business and strategy and the principal risks and 
uncertainties faced by the business, including analysis using 
financial and other key performance indicators where necessary. 
These sections, together with the directors’ remuneration report 
and corporate governance report provide an overview of the 
group, including environmental and employee matters and give 
an indication of future developments in the group’s business, 
so providing a fair, balanced and understandable assessment 
of the group’s position and prospects, in accordance with the 
latest narrative reporting requirements. The group’s principal 
subsidiary undertakings are disclosed in the notes to the 
financial statements. 

Shareholder information

Share capital and control
Details of the company’s share capital as at 31 December 2013 
are shown in note 23 to the financial statements. The rights and 
obligations attaching to the ordinary shares are set out in the 
Articles of Association, copies of which can be obtained from 
Companies House in the UK.

The executive directors are expected to maintain a shareholding 
equivalent to 100% of their respective salaries. 

To be registered, a transfer of shares must be in relation to 
shares which are fully paid up. The transfer must be in favour 
of a single transferee or no more than four joint transferees 
and it must be duly stamped (if required). The transfer must be 
delivered to our registered office or our Registrars accompanied 
by the certificate to which it relates or such other evidence that 
proves the title of the transferor.

The holders of ordinary shares are entitled to receive dividends 
when declared, to receive the company’s report and financial 
statements, to attend and speak at general meetings of the 
company, and to appoint proxies and exercise voting rights. No 
ordinary shares carry any special voting rights with regard to 
control of the company and there are no restrictions on voting 
rights. Major shareholders have the same voting rights per share 
as all other shareholders. There are no known arrangements 
under which financial rights are held by a person other than the 
holder of the shares and no known agreements or restrictions 
on share transfers or on voting rights. Shareholders who wish to 
appoint a proxy to exercise their voting rights on their behalf at the 
AGM are required to submit a proxy voting form to the company 
by no later than 48 hours prior to the time of the meeting.

Shares acquired through Clarksons’ share schemes and 
plans rank equally with the other shares in issue and have 
no special rights. 

Change of control
The company is not party to any significant agreements that 
would take effect, alter or terminate upon a change of control 
following a takeover bid. 

Details of the executive directors’ service contracts, including 
contractual arrangements in connection with a change of control 
of the company, are set out in the directors’ remuneration report 
on pages 44 and 45.

Upon a change of control, all unvested awards under the 
2004 Clarkson PLC LTIP would vest to the extent that any 
performance conditions attaching to the relevant award have 
been achieved.

Notifiable interests in share capital
As at 31 December 2013, the company had received the 
following disclosures (which have not subsequently been 
changed) of major holdings of voting rights pursuant to the 
requirements of Rule 5 of the Financial Conduct Authority’s 
Disclosure and Transparency Rules (DTR): 

Mason Hill Advisors, LLC 
Franklin Templeton Investment Management Limited 
Heronbridge Investment Management LLP 
Blackrock, Inc. 
Kames Capital 
First Pacific Advisers LLC 
CRE Capital LLC and CRE Fiduciary Services Inc 

6.66% 
5.75% 
5.20% 
4.83% 
4.01% 
3.16% 
3.10%

Information provided to the company pursuant to the DTR 
is published on a Regulatory Information Service and on the 
company’s website.

In addition, as at 28 February 2014, employees directly held 
7.10% of the company’s share capital, and 10.43% was held 
by employee share trusts for use under the company’s various 
incentive schemes.

Interests in the shares of the company, or derivatives or any other 
financial instrument relating to those shares, conducted by the 
directors of the company on their own account, notified to the 
company pursuant to Rule 3 of the DTR, are set out in the 
directors’ remuneration report on pages 49 and 50.

At the 2013 AGM the company’s shareholders authorised the 
company, for the purposes of Section 701 of the Companies 
Act 2006, to make market purchases of its own shares up to a 
maximum aggregate amount of 1,898,469 shares (representing 
10% of the company’s share capital as at 3 April 2013). This 
authority is due to expire at the end of the 2014 AGM and a 
resolution will be put to shareholders at that meeting to extend 
the authority for a further period. The company has not acquired 
or disposed of any interests in its own shares.

Financial instruments
Details of the group’s risk management objectives and policies 
relating to the use of financial instruments and the group’s 
exposure to the risks arising from such instruments are set out 
in notes 26 and 27 to the financial statements respectively.

By order of the board

Penny Watson Secretary

7 March 2014

Annual Report 2013  Clarkson PLC  55

 
 
Statement of directors’ responsibilities

The group has considerable financial resources available and 
a strong balance sheet, as explained in the financial review on 
pages 28 and 29. As a result of this, the directors believe that the 
group is well placed to manage its business risks successfully 
despite the challenging market backdrop. The directors have 
a reasonable expectation that the company has sufficient 
resources to continue in operation for the foreseeable future. 
For this reason, they continue to adopt the going concern basis 
in preparing the financial statements.

Each of the directors, whose names and functions are listed 
on pages 34 and 35 of this annual report confirm that:

• to the best of their knowledge, the consolidated financial 

statements, which have been prepared in accordance with 
IFRSs as adopted by the European Union, give a true and fair 
view of the assets, liabilities, financial position and profit of the 
group and the undertakings included in the consolidation taken 
as a whole; 

• to the best of their knowledge, the management report 
represented by the report of the directors, and material 
incorporated by reference, includes a fair review of the 
development and performance of the business and the 
position of the group and the undertakings included in the 
consolidation taken as a whole, together with a description 
of the principal risks and uncertainties that they face; and

• they consider the annual report, taken as a whole, is fair, 

balanced and understandable and provides the information 
necessary for shareholders to access the company’s 
performance, business model and strategy.

On behalf of the board

Bob Benton Chairman

7 March 2014

The following statement, which should be read in conjunction 
with the auditors’ statement of their responsibilities set out in their 
report on pages 57 to 59, is made with a view to distinguishing for 
shareholders the respective responsibilities of the directors and 
of the auditor in relation to the financial statements. 

The directors are responsible for preparing the annual report, 
the directors’ remuneration report and the financial statements 
in accordance with applicable law and regulations.

Company law requires the directors to prepare financial 
statements for each financial year. Under that law the directors 
have prepared the group and parent company financial 
statements in accordance with International Financial Reporting 
Standards (IFRSs) as adopted by the European Union. 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 the company and of 
the profit or loss of the group for that period. In preparing these 
financial statements, the directors are required to:

• select suitable accounting policies and then apply them 

consistently;

• make judgements and accounting estimates that are 

reasonable and prudent; and

• state whether applicable IFRSs as adopted by the European 
Union have been followed, subject to any material departures 
disclosed and explained in the financial statements.

The directors are responsible for keeping adequate accounting 
records that are sufficient to show and explain the company’s 
transactions and disclose with reasonable accuracy at any time 
the financial position of the company and the group and enable 
them to ensure that the financial statements and the directors’ 
remuneration report comply with the Companies Act 2006 
and, as regards the group financial statements, Article 4 of the 
IAS Regulation. They are also responsible for safeguarding the 
assets of the company and the group and hence for taking 
reasonable steps for the prevention and detection of fraud 
and other irregularities.

The directors are responsible for the maintenance and integrity 
of the company’s website. Legislation in the United Kingdom 
governing the preparation and dissemination of financial 
statements may differ from legislation in other jurisdictions.

In accordance with Section 418 of the Companies Act 2006, 
each person who is director at the time of approval of this report 
confirms that so far as he is aware, there is no relevant audit 
information of which the auditor is unaware, and the director has 
taken all the steps that he ought to have taken as a director in 
order to make himself aware of relevant audit information and 
to establish that the auditor is aware of that information.

The group’s business activities, together with the factors likely 
to affect its future development, performance and position are 
set out in the strategic report on pages 12 to 33. The financial 
position of the group, its cash flows and liquidity position are 
described in the financial review. The risk management section 
of the financial review and note 26 to the financial statements 
include a description of the group’s objectives, policies and 
processes for managing its capital, its financial risk management 
objectives, details of its financial instruments and hedging 
activities; and its exposures to credit risk and liquidity risk. 

56  Clarkson PLC  Annual Report 2013 

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Independent auditors’ report 
to the members of Clarkson PLC

Our opinion  
In our opinion:

• the financial statements, defined below, give a true and fair 

view of the state of the group’s and of the parent company’s 
affairs as at 31 December 2013 and of the group’s profit and 
of the group’s and parent company’s cash flows for the year 
then ended;

• the group financial statements have been properly prepared in 
accordance with International Financial Reporting Standards 
(IFRSs) as adopted by the European Union;

• the parent company financial statements have been properly 

prepared in accordance with IFRSs as adopted by the 
European Union and as applied in accordance with the 
provisions of the Companies Act 2006; 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.

This opinion is to be read in the context of what we say in the 
remainder of this report.

What we have audited
The group financial statements and parent company financial 
statements (‘the financial statements’), which are prepared by 
Clarkson PLC, comprise:

• the consolidated and parent company balance sheets as at 

31 December 2013;

• the consolidated income statement and consolidated 

statement of comprehensive income for the year then ended;

• the consolidated and parent company statements of changes 

in equity and cash flow statements for the year then 
ended; and

• the notes to the financial statements, which include a 
summary of significant accounting policies and other 
explanatory information.

The financial reporting framework that has been applied in their 
preparation comprises applicable law and IFRSs as adopted by 
the European Union and, as regards the parent company, as 
applied in accordance with the provisions of the Companies 
Act 2006.

Certain share-based payments and directors’ remuneration 
disclosures which are required by the financial reporting 
framework have been presented in the directors’ remuneration 
report, rather than in the notes to the financial statements. 
These are cross-referenced from the financial statements in 
notes 21 and 28 respectively and are identified as audited.

What an audit of financial statements 
involves 
We conducted our audit in accordance with International 
Standards on Auditing (UK & Ireland) (‘ISAs (UK & Ireland)’).

An audit involves obtaining evidence about the amounts 
and disclosures in the financial statements sufficient to give 
reasonable assurance that the financial statements are free 
from material misstatement, whether caused by fraud or error. 
This includes an assessment of:

• whether the accounting policies are appropriate to the 

group’s and parent company’s circumstances and have 
been consistently applied and adequately disclosed;

• the reasonableness of significant accounting estimates 

made by the directors; and 

• the overall presentation of the financial statements. 

In addition, we read all the financial and non-financial information 
in the annual report to identify material inconsistencies with the 
audited financial statements and to identify any information 
that is apparently materially incorrect based on, or materially 
inconsistent with, the knowledge acquired by us in the course 
of performing the audit. If we become aware of any apparent 
material misstatements or inconsistencies we consider the 
implications for our report.

Overview of our audit approach

Materiality
We set certain thresholds for materiality. These helped us to 
determine the nature, timing and extent of our audit procedures 
and to evaluate the effect of misstatements, both individually and 
on the financial statements as a whole. 

Based on our professional judgement, we determined materiality 
for the group financial statements as a whole to be £1.2m. 
In arriving at this judgement we have had regard to profit before 
taxation, adjusted for exceptional items and acquisition-related 
costs, because in our view this represents the most appropriate 
measure of underlying performance. Our materiality represents 
approximately 5% of this measure.

We agreed with the audit committee that we would report to 
them misstatements identified during our audit above £0.1m 
as well as misstatements below that amount that, in our view, 
warranted reporting for qualitative reasons.

Overview of the scope of our audit
The group financial statements are a consolidation of a number 
of reporting units, comprising the group’s operating businesses 
and centralised functions. 

In establishing the overall approach to the group audit, we 
determined the type of work that needed to be performed at 
the reporting units by us, as the group engagement team, or by 
component auditors within PwC UK or other PwC network firms 
and other firms operating under our instruction. Where the work 
was performed by component auditors, we determined the level 
of involvement we needed to have in the audit work at those 
reporting units to be able to conclude whether sufficient 
appropriate audit evidence had been obtained as a basis 
for our opinion on the group financial statements as a whole. 

7 reporting units, comprising some operating businesses and 
centralised functions, required an audit of their complete financial 
information due to their size. We also conducted specific audit 
procedures on certain balances and transactions in respect of 
a number of other reporting units. This gave us coverage of 84% 
of the group’s profit before taxation adjusted for exceptional 
items and acquisition-related costs and 80% of revenue, and 
together with the additional procedures performed at the group 
level, including testing the consolidation process, gave us the 
evidence we needed for our opinion on the group financial 
statements as a whole.

Annual Report 2013  Clarkson PLC  57

 
 
Independent auditors’ report to the members of Clarkson PLC

Areas of particular audit focus
In preparing the financial statements, the directors made 
a number of subjective judgements, for example in respect 
of significant accounting estimates that involved making 
assumptions and considering future events that are inherently 
uncertain. We primarily focused our work in these areas by 
assessing the directors’ judgements against available evidence, 
forming our own judgements, and evaluating the disclosures 
in the financial statements.

In our audit, we tested and examined information, using sampling 
and other auditing techniques, to the extent we considered 
necessary to provide a reasonable basis for us to draw 
conclusions. We obtained audit evidence through testing 
the effectiveness of controls, substantive procedures 
or a combination of both. 

We considered the following areas to be those that required 
particular focus in the current year. This is not a complete list of 
all risks or areas of focus identified by our audit. We discussed 
these areas of focus with the audit committee. Their report 
on those matters that they considered to be significant issues 
in relation to the financial statements is set out on page 54. 

Area of focus specific to Clarkson PLC:

Area of focus

Provision for 
impairment of 
trade receivables 
We focused on this 
area because it 
required a high level of 
management judgement 
given uncertainty 
regarding the ability 
of certain customers 
to settle their debts 
in a challenging 
economic environment.

How the scope of our audit addressed 
the area of focus

We tested the appropriateness of 
the provision for impairment of trade 
receivables by assessing evidence 
of impairment including whether 
balances were overdue and whether 
any post year-end payments had 
been received. We also understood 
the status of attempts by 
management to recoup the amounts 
outstanding and tested movements 
in the provision during the year. We 
also tested aged balances where no 
provision was recognised to check 
whether this was appropriate. 

Fraud in revenue 
recognition 
ISAs (UK & Ireland) 
presume there is a risk 
of fraud in revenue 
recognition.

Area of focus required by ISAs (UK & Ireland) on every audit:
As part of the evidence we obtained 
regarding the revenue recognised 
during the year, we evaluated the 
relevant IT systems and tested 
the internal controls over the 
completeness, accuracy and 
timing of revenue recognised in the 
accounts. We also tested journal 
entries posted to revenue accounts 
to identify unusual or irregular items.

We also tested the timing of revenue 
recognition, taking into account 
contractual obligations. 

58  Clarkson PLC  Annual Report 2013 

Area of focus

Risk of management 
override of 
internal controls 
ISAs (UK & Ireland) 
require that we 
consider this to be 
a significant risk.

How the scope of our audit addressed 
the area of focus

We assessed the overall control 
environment of the group, including 
the arrangements for staff to ‘whistle-
blow’ inappropriate actions, and 
interviewed senior management. We 
examined the significant accounting 
estimates and judgements relevant to 
the financial statements for evidence 
of bias by the directors that may 
represent a risk of material 
misstatement due to fraud. We also 
tested journal entries, including 
material consolidation journals.

Going concern
Under the Listing Rules we are required to review the directors’ 
statement, set out on page 56, in relation to going concern. 
We have nothing to report having performed our review.

As noted in the directors’ statement, the directors have 
concluded that it is appropriate to prepare the group’s and 
parent company’s financial statements using the going concern 
basis of accounting. The going concern basis presumes that the 
group and parent company have adequate resources to remain 
in operation, and that the directors intend them to do so, for at 
least one year from the date the financial statements were 
signed. As part of our audit we have concluded that the 
directors’ use of the going concern basis is appropriate.

However, because not all future events or conditions can be 
predicted, these statements are not a guarantee as to the 
group’s and the parent company’s ability to continue as a 
going concern.

Opinions on other matters prescribed 
by the Companies Act 2006
In our opinion:

• the information given in the strategic report and the report 
of the directors for the financial year for which the financial 
statements are prepared is consistent with the financial 
statements;

• the part of the directors’ remuneration report to be audited 

has been properly prepared in accordance with the 
Companies Act 2006; and

• the information given in the corporate governance statement 
in the annual report with respect to internal control and risk 
management systems and about share capital structures is 
consistent with the financial statements.

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Other matters on which we are required 
to report by exception

Adequacy of accounting records and 
information and explanations received
Under the Companies Act 2006 we are required to report to 
you if, in our opinion:

• we have not received all the information and explanations 

we require for our audit; or

Other information in the annual report
Under ISAs (UK & Ireland), we are required to report to you if, 
in our opinion, information in the annual report is:

• materially inconsistent with the information in the audited 

financial statements; or

• apparently materially incorrect based on, or materially 

inconsistent with, our knowledge of the group and parent 
company acquired in the course of performing our audit; or

• is otherwise misleading.

• adequate accounting records have not been kept by the parent 

We have no exceptions to report arising from this responsibility.

Responsibilities for the financial 
statements and the audit

Our responsibilities and those of the directors 
As explained more fully in the statement of directors’ 
responsibilities set out on page 56, the directors are responsible 
for the preparation of the group and parent company 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 group 
and parent company financial statements in accordance with 
applicable law and ISAs (UK & Ireland). Those standards require 
us to comply with the Auditing Practices Board’s Ethical 
Standards for Auditors. 

This report, including the opinions, has been prepared for and 
only for the company’s members as a body in accordance with 
Chapter 3 of Part 16 of the Companies Act 2006 and for no 
other purpose. We do not, in giving these opinions, accept or 
assume responsibility for any other purpose or to any other 
person to whom this report is shown or into whose hands it 
may come save where expressly agreed by our prior consent 
in writing.

Andrew Paynter Senior statutory auditor 
for and on behalf of PricewaterhouseCoopers LLP 
Chartered accountants and statutory auditors

London

7 March 2014

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.

We have no exceptions to report arising from this responsibility.

Directors’ remuneration
Under the Companies Act 2006 we are required to report to you 
if, in our opinion, certain disclosures of directors’ remuneration 
specified by law have not been made, and under the Listing 
Rules we are required to review certain elements of the report to 
shareholders by the board on directors’ remuneration. We have 
no exceptions to report arising from these responsibilities.

Corporate governance statement
Under the Companies Act 2006, we are required to report to 
you if, in our opinion a corporate governance statement has not 
been prepared by the parent company. We have no exceptions 
to report arising from this responsibility.

Under the Listing Rules we are required to review the part of 
the corporate governance statement relating to the company’s 
compliance with nine provisions of the UK Corporate 
Governance Code (‘the Code’). We have nothing to 
report having performed our review.

On page 56 of the annual report, as required by the Code 
Provision C.1.1, the directors state that they consider the 
annual report taken as a whole to be fair, balanced and 
understandable and provides the information necessary for 
members to assess the group’s performance, business model 
and strategy. On page 54, as required by C.3.8 of the Code, 
the audit committee has set out the significant issues that it 
considered in relation to the financial statements, and how they 
were addressed. Under ISAs (UK & Ireland) we are required to 
report to you if, in our opinion:

• the statement given by the directors is materially inconsistent 
with our knowledge of the group acquired in the course of 
performing our audit; or

• the section of the annual report describing the work of the 
audit committee does not appropriately address matters 
communicated by us to the audit committee.

We have no exceptions to report arising from this responsibility.

Annual Report 2013  Clarkson PLC  59

 
 
Consolidated income statement 
for the year ended 31 December

Before 
exceptional 
item and 
acquisition 
costs 
£m

Exceptional 
item 
(note 5) 
£m

Acquisition 
costs  
(note 6)  
£m

198.0

(6.2)

191.8

–

(166.9)

24.9

0.7

–

(0.5)

25.1

(6.9)

18.2

–

–

–

–

(1.0)

(1.0)

–

–

–

(1.0)

0.1

(0.9)

–

–

–

–

(2.0)

(2.0)

–

(0.1)

–

(2.1)

0.1

(2.0)

2013 
After 
exceptional 
item and 
acquisition 
costs 
£m

Before 
exceptional 
item and 
acquisition 
costs
£m

198.0

(6.2)

191.8

–

176.2

(6.3)

169.9

–

(169.9)

(150.8)

21.9

0.7

(0.1)

(0.5)

22.0

(6.7)

15.3

19.1

1.2

–

(0.3)

20.0

(6.0)

14.0

Exceptional 
item 
(note 5) 
£m

Acquisition 
costs  
(note 6) 
£m

–

–

–

4.5

–

4.5

–

–

–

4.5

(1.1)

3.4

–

–

–

–

(1.5)

(1.5)

–

(0.1)

–

(1.6)

0.1

(1.5)

Group

2012* 
After 
exceptional 
item and 
acquisition 
costs
£m

176.2

(6.3)

169.9

4.5

(152.3)

22.1

1.2

(0.1)

(0.3)

22.9

(7.0)

15.9

18.2

(0.9)

(2.0)

15.3

14.0

3.4

(1.5)

15.9

98.0p

95.8p

82.2p

80.4p

74.8p

73.8p

85.2p

84.0p

Revenue

Cost of sales

Trading profit

Other income

Administrative expenses 

Operating profit

Finance revenue 

Finance costs 

Other finance costs – 
pensions 

Profit before taxation

Taxation 

Profit for the year

Attributable to: 

Equity holders of the parent 

Earnings per share 

Basic

Diluted

*Restated. Refer to note 2.

Notes

3, 4 

3, 4 

3

3

3, 22

7

8

8

Consolidated statement of comprehensive income 
for the year ended 31 December

Profit for the year

Other comprehensive income:

Items that will not be reclassified to profit or loss:

  Actuarial gain/(loss) on employee benefit schemes – net of tax 

Items that may be reclassified subsequently to profit or loss:

  Foreign exchange differences on retranslation of foreign operations 

  Foreign currency hedge – net of tax

Total comprehensive income for the year 

Attributable to: 

Equity holders of the parent 

*Restated. Refer to note 2.

60  Clarkson PLC  Annual Report 2013 

Notes

22

24

24

2013  
£m

15.3

Group

2012*  
£m

15.9

4.5

(3.5)

(1.8)

2.3

20.3

(1.3)

1.5

12.6

20.3

12.6

 
 
 
 
 
Consolidated and parent company balance sheets
as at 31 December

Non-current assets 

Property, plant and equipment

Investment property

Intangible assets

Trade and other receivables

Investments

Investments in subsidiaries

Deferred tax asset

Current assets 

Inventories

Trade and other receivables

Income tax receivable

Investments

Cash and cash equivalents

Current liabilities

Trade and other payables

Income tax payable

Net current assets

Non-current liabilities

Trade and other payables

Provisions

Employee benefits

Deferred tax liability

Net assets

Capital and reserves 

Share capital

Other reserves

Retained earnings

Total equity 

10

11

12

14

15

16

7

17

14

15

18

19

19

20

22

7

23

24

Notes

2013  
£m

Group

2012 
£m

8.0

0.4

39.8

0.4

1.9

–

14.7

65.2

–

33.2

0.3

25.2

89.4

8.5

0.4

40.2

0.5

1.8

–

12.5

63.9

0.9

45.2

2.6

25.2

96.9

170.8

148.1

(85.5)

(3.9)

(89.4)

81.4

(1.3)

(2.0)

(1.8)

(2.5)

(7.6)

137.7

4.7

35.7

97.3

137.7

(69.7)

(2.5)

(72.2)

75.9

(1.7)

(1.8)

(9.4)

(2.2)

(15.1)

126.0

4.7

37.5

83.8

126.0

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2013 
£m

2.8

0.4

–

0.1

0.2

54.0

3.8

61.3

–

13.2

2.0

25.2

0.6

41.0

(14.4)

–

(14.4)

26.6

–

(2.0)

(1.8)

–

(3.8)

84.1

4.7

32.5

46.9

84.1

Company

2012 
£m

3.4

0.4

–

0.1

0.2

53.9

5.1

63.1

–

24.7

0.1

13.1

11.1

49.0

(7.1)

–

(7.1)

41.9

–

(1.8)

(9.4)

–

(11.2)

93.8

4.7

32.4

56.7

93.8

The financial statements were approved by the board on 7 March 2014, and signed on its behalf by:

Bob Benton Chairman 

Jeff Woyda Finance director

Registered number: 1190238

Annual Report 2013  Clarkson PLC  61

 
 
Consolidated statement of changes in equity
for the year ended 31 December

Group  
Attributable to equity holders of the parent

Notes

Share  
capital  

£m

4.7

Other  
reserves  
£m

37.5

22

24

24

24

24

7

9

–

–

–

–

–

–

–

–

–

–

–

–

4.7

–

–

(1.8)

2.3

0.5

(3.3)

–

1.0

–

–

–

(2.3)

35.7

Retained 
earnings  
£m

83.8

15.3

Total  
equity  
£m

126.0

15.3

4.5

4.5

–

–

19.8

–

0.2

–

2.7

0.4

(9.6)

(6.3)

97.3

(1.8)

2.3

20.3

(3.3)

0.2

1.0

2.7

0.4

(9.6)

(8.6)

137.7

Group * 
Attributable to equity holders of the parent

Notes

Share  
capital  
£m

4.7

Other  
reserves  
£m

37.5

22

24

24

24

24

7

9

–

–

–

–

–

–

–

–

–

–

4.7

–

–

(1.3)

1.5

0.2

(0.8)

0.6

–

–

(0.2)

37.5

Retained 
earnings  
£m

81.1

15.9

Total  
equity  
£m

123.3

15.9

(3.5)

(3.5)

–

–

12.4

–

–

(0.3)

(9.4)

(9.7)

(1.3)

1.5

12.6

(0.8)

0.6

(0.3)

(9.4)

(9.9)

83.8

126.0

Balance at 1 January 2013

Profit for the year 

Other comprehensive income:

  Actuarial gain on employee benefit schemes – net of tax

  Foreign exchange differences on retranslation  

  of foreign operations

  Foreign currency hedge – net of tax

Total comprehensive income for the year 

Transactions with owners:

  Net ESOP shares acquired

  Gain on ESOP shares

  Share-based payments

  Tax on other employee benefits

  Tax on other items in equity

  Dividend paid

Balance at 31 December 2013

Balance at 1 January 2012

Profit for the year 

Other comprehensive income:

  Actuarial loss on employee benefit schemes – net of tax

  Foreign exchange differences on retranslation  

  of foreign operations

  Foreign currency hedge – net of tax

Total comprehensive income for the year 

Transactions with owners:

  Net ESOP shares acquired

  Share-based payments

  Tax on other employee benefits

  Dividend paid

Balance at 31 December 2012

*Restated. Refer to note 2.

62  Clarkson PLC  Annual Report 2013 

 
 
Parent company statement of changes in equity
for the year ended 31 December

Company  
Attributable to equity holders of the parent

Notes

Share  
capital  
£m

4.7

Other 
reserves  
£m

32.4

Balance at 1 January 2013

Loss for the year 

Other comprehensive income:

  Actuarial gain on employee benefit schemes – net of tax

Total comprehensive loss for the year 

Transactions with owners:

  Gain on ESOP shares

  Share-based payments

  Tax on other employee benefits

  Dividend paid

Balance at 31 December 2013

Balance at 1 January 2012

Profit for the year 

Other comprehensive income:

  Actuarial loss on employee benefit schemes – net of tax

Total comprehensive income for the year 

Transactions with owners:

  Share-based payments

  Dividend paid

Balance at 31 December 2012

*Restated. Refer to note 2.

22

24

9

Notes

22

24

9

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Retained 
earnings  
£m

56.7

(5.7)

4.5

(1.2)

0.2

–

0.8

(9.6)

(8.6)

46.9

 Total  
equity  
£m

93.8

(5.7)

4.5

(1.2)

0.2

0.1

0.8

(9.6)

(8.5)

84.1

–

–

–

–

–

–

–

–

4.7

–

–

–

–

0.1

–

–

0.1

32.5

Company * 
Attributable to equity holders of the parent

Share  
capital  
£m

4.7

Other  
reserves 
£m

31.8

–

–

–

–

–

–

4.7

–

–

–

0.6

–

0.6

32.4

Retained 
earnings 
£m

33.6

36.0

(3.5)

32.5

–

(9.4)

(9.4)

56.7

 Total  
equity  
£m

70.1

36.0

(3.5)

32.5

0.6

(9.4)

(8.8)

93.8

Annual Report 2013  Clarkson PLC  63

 
 
 
 
Consolidated and parent company cash flow statements
for the year ended 31 December

Notes

2013  
£m

Group

2012*
£m

Company

2012*
£m

2013  
£m

22.0

22.9

(7.7)

35.3

3

3, 10

21

12

16

3

3

3

20

10

15

12, 16

12

9

18

0.3

2.2

1.0

(0.2)

0.5

–

(2.2)

(0.7)

0.1

0.5

(7.2)

8.5

2.5

0.2

27.5

(4.7)

22.8

0.5

(1.6)

0.1

0.4

–

(6.6)

3.2

0.2

(3.8)

–

(9.6)

–

(9.6)

9.4

89.4

(1.9)

96.9

0.5

2.3

1.4

–

0.5

–

(2.1)

(1.2)

0.1

0.3

4.8

(21.5)

(2.0)

–

6.0

(10.4)

(4.4)

0.5

(2.0)

–

0.1

(25.2)

(0.4)

–

0.7

(26.3)

(0.1)

(9.4)

(1.1)

(10.6)

(41.3)

132.9

(2.2)

89.4

–

0.6

0.6

–

–

–

(2.2)

(10.3)

–

0.5

11.5

3.7

3.8

0.2

0.7

0.8

1.5

0.3

–

–

–

(12.1)

(0.6)

–

10.0

(2.4)

–

(9.6)

–

(9.6)

(10.5)

11.1

–

0.6

–

0.7

0.9

–

–

0.5

(2.1)

(39.7)

–

0.3

(0.2)

(4.4)

(23.2)

0.2

(31.7)

2.1

(29.6)

0.2

(0.1)

–

–

(13.1)

(0.2)

–

39.5

26.3

–

(9.4)

(1.1)

(10.5)

(13.8)

24.9

–

11.1

Cash flows from operating activities 

Profit/(loss) before taxation 

Adjustments for:

  Foreign exchange differences

  Depreciation of property, plant and equipment

  Share-based payment expense

  Gain on sale of property, plant and equipment

  Amortisation of intangibles

  Loss on disposal of subsidiaries 

 Difference between pension contributions paid and  
  amount recognised in the income statement

  Finance revenue

  Finance costs

  Other finance costs – pensions

(Increase)/decrease in trade and other receivables 

Increase/(decrease) in bonus accrual 

Increase/(decrease) in trade and other payables 

Increase in provisions 

Cash generated/(utilised) from operations 

Income tax (paid)/received

Net cash flow from operating activities 

Cash flows from investing activities 

Interest received 

Purchase of property, plant and equipment 

Proceeds from sale of investments

Proceeds from sale of property, plant and equipment

Transfer to current investments

Acquisition of subsidiaries, including deferred consideration

Cash acquired on acquisitions

Dividends received from investments

Net cash flow from investing activities 

Cash flows from financing activities 

Interest paid 

Dividend paid

ESOP shares acquired

Net cash flow from financing activities

Net increase/(decrease) in cash and cash equivalents 

Cash and cash equivalents at 1 January

Net foreign exchange differences

Cash and cash equivalents at 31 December

*Restated. Refer to note 2.

64  Clarkson PLC  Annual Report 2013 

 
 
 
 
 
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Notes to the financial statements

1 Corporate information 
The group and parent company financial statements of 
Clarkson PLC for the year ended 31 December 2013 were 
authorised for issue in accordance with a resolution of the 
directors on 7 March 2014. Clarkson PLC is a Public Limited 
Company, listed on the London Stock Exchange, registered 
in England and Wales and domiciled in the UK.

The term ‘company’ refers to Clarkson PLC and ‘group’ refers 
to the company, its consolidated subsidiaries and the relevant 
assets and liabilities of the share purchase trusts.

Copies of the annual report will be circulated to all shareholders 
and will also be available from the registered office of the 
company at St. Magnus House, 3 Lower Thames Street, 
London EC3R 6HE.

2 Statement of accounting policies

2.1 Basis of preparation
The accounting policies which follow set out those policies 
which apply in preparing the financial statements for the year 
ended 31 December 2013.

The financial statements are presented in pounds sterling and 
all values are rounded to the nearest one hundred thousand 
pounds sterling (£0.1m) except when otherwise indicated.

The consolidated income statement is shown in columnar format 
to assist with understanding the group’s results by presenting 
profit for the period before exceptional items and acquisition 
costs. Items which are non-recurring in nature and considered to 
be material in size are shown as ‘exceptional items’. The column 
‘acquisition costs’ includes the amortisation of intangible assets 
and the expensing of the cash and share-based elements of 
consideration linked to ongoing employment obligations on 
previous acquisitions. These notes form an integral part of the 
financial statements on pages 60 to 64.

Statement of compliance
The financial statements of Clarkson PLC have been prepared 
in accordance with International Financial Reporting Standards 
(IFRSs) as adopted by the European Union, IFRIC Interpretations 
and the Companies Act 2006 applicable to companies reporting 
under IFRSs.

The consolidated financial statements have been prepared on 
the going concern basis, under the historical cost convention, 
as modified by financial assets and financial liabilities (including 
derivative instruments) at fair value through profit or loss.

The company has elected to take the exemption under 
section 408 of the Companies Act 2006 not to present the 
parent company income statement, or the parent company 
statement of comprehensive income.

The accounting policies set out below have been applied 
consistently to all periods presented in these group and 
company financial statements. 

Basis of consolidation
The group’s consolidated financial statements incorporate the 
results and net assets of Clarkson PLC and all its subsidiary 
undertakings made up to 31 December each year. 

Subsidiaries are all entities over which the group has control. 
The group controls an entity when the group is exposed to, or 
has rights to, variable returns from its involvement with the entity 
and has the ability to affect those returns through its power over 
the entity. Subsidiaries are fully consolidated from the date on 
which control is transferred to the group. They are 
deconsolidated from the date that control ceases.

Where necessary, adjustments are made to the financial 
statements of subsidiaries to bring the accounting policies 
used into line with those used by the group. 

All inter-group transactions, balances, income and expenses 
are eliminated on consolidation, however for the purposes 
of segmental reporting, internal arm’s-length recharges are 
included within the appropriate segments.

2.2 Changes in accounting policy 
and disclosures
New and amended standards adopted by the group
The group has adopted the following new and amended 
standards as of 1 January 2013:

• IAS 1, ‘Financial statement presentation’ (revised) – 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’.

• IAS 19, ‘Employee benefits’ (revised) – was applied for the year 

ended 31 December 2013. The impact on the group was 
to replace interest cost and expected return on plan assets 
with a net interest amount that is calculated by applying the 
discount rate to the net defined benefit liability. Retrospective 
implementation has resulted in a net reduction of the profit after 
taxation for the year ended 31 December 2012 of £0.3m. 
There was no effect on the net assets of the group.

There were no other new IFRSs or IFRIC interpretations that had 
to be implemented during the year that significantly affect these 
financial statements. 

New standards, amendments and interpretations 
issued but not effective for the financial year beginning 
1 January 2013 and not early adopted
As at the date of authorisation of these financial statements, 
the following standards and interpretations were in issue but 
not yet effective (and in some cases had not yet been adopted 
by the EU). The group has not applied these standards and 
interpretations in the preparation of these financial statements.

IFRS 9 ‘Financial instruments’ − classification and measurement

IFRS 10 ‘Consolidated Financial Statements’ 

Amendment to IAS 36 ‘Impairment of assets’ on recoverable 
amount disclosures

Amendments to IFRS 10, 11 and 12 on transition guidance

Annual improvements 2012, 2013

Annual Report 2013  Clarkson PLC  65

 
 
2.4 Property, plant and equipment
Land held for use in the production or supply of goods or 
services, or for administrative purposes, is stated on the 
balance sheet at its historic cost. 

Freehold and long leasehold properties, leasehold 
improvements, office furniture and equipment and motor 
vehicles are recorded at cost less accumulated depreciation 
and any recognised impairment loss. Cost includes the original 
purchase price of the asset.

Land is not depreciated. Depreciation on other assets is charged 
on a straight-line basis over the estimated useful life (after allowing 
for estimated residual value based on current prices) of the asset, 
and is charged from the time an asset becomes available for its 
intended use. Estimated useful lives are as follows: 

Freehold and long leasehold  
  properties
Leasehold improvements
Office furniture and equipment
Motor vehicles

60 years
Over the period of the lease
4–10 years
4 years

Estimates of useful lives and residual scrap values are 
assessed annually. 

At each balance sheet date, the group reviews the carrying 
amounts of its property, plant and equipment to determine 
whether there is any indication that those assets have suffered 
an impairment loss. 

2.5 Investment properties 
Land and buildings held for long-term investment and to earn 
rental income are classified as investment properties. Investment 
properties are stated at cost less accumulated depreciation and 
any recognised impairment loss. 

Depreciation is charged on a straight-line basis over the 
estimated useful life of the asset, and is charged from the time 
an asset becomes available for its intended use. Estimated useful 
lives are as follows: 

Investment properties 

60 years 

2 Statement of accounting policies 
continued

The impact on the group’s financial statements of the future 
adoption of these and other new standards and interpretations 
is still under review, but the group does not expect any of these 
changes to have a material effect on the results or net assets 
of the group.

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

2.3 Accounting judgements and estimates
The preparation of the group’s financial statements requires 
management to make judgements, estimates and assumptions 
that affect the reported amounts of revenues, expenses, assets 
and liabilities, and the disclosure of contingent liabilities, at the 
reporting date. However, uncertainty about these assumptions 
and estimates could result in outcomes that could require a 
material adjustment to the carrying amount of the asset or liability 
affected in the future. 

Trade receivables
The provision for impairment of receivables represents 
management’s best estimate at the balance sheet date. 
A number of judgements are made in the calculation of the 
impairment, primarily the age of the invoice, the underlying 
transaction and the debtor’s financial position.

Impairment of non-financial assets
The group assesses whether there are any indicators of 
impairment for all non-financial assets at each reporting date. 
Goodwill is tested for impairment annually and at other times 
when such indicators exist. Other non-financial assets are 
tested for impairment when there are indicators that the 
carrying amounts may not be recoverable. When value-in-use 
calculations are undertaken, management must estimate the 
expected future cash flows from the asset or cash-generating 
unit and choose a suitable discount rate in order to calculate 
the present value of those cash flows. Further details are given 
in note 13.

Share-based payments
The group measures the cost of equity-settled transactions 
with employees by reference to the fair value of the equity 
instruments at the date at which they are granted. Estimating 
fair value requires determining the most appropriate valuation 
model for a grant of equity instruments, which is dependent 
on the terms and conditions of the grant. This also requires 
determining the most appropriate inputs to the valuation model 
including the expected life of the option, volatility and dividend 
yield and making assumptions about them. 

Pensions
The cost of defined benefit pension plans is determined 
using actuarial valuations. Actuarial valuations involve making 
assumptions about discount rates, expected rates of return 
on assets, future salary increases, mortality rates and future 
pension increases. Due to the long-term nature of these 
plans, such estimates are subject to significant uncertainty. 
Further details are given in note 22.

66  Clarkson PLC  Annual Report 2013 

Notes to the financial statements 
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2.6 Business combinations and goodwill 
Business combinations are accounted for using the 
purchase method. 

Goodwill is initially measured at cost being the excess of the 
cost of the business combination over the group’s share in the 
net fair value of the acquiree’s identifiable assets, liabilities and 
contingent liabilities.

All transaction costs related to business combinations are 
expensed in the income statement. 

After initial recognition, goodwill is measured at cost less 
any accumulated impairment losses. For the purpose of 
impairment testing, goodwill acquired in a business combination 
is, from the acquisition date, allocated to each of the group’s 
cash-generating units that are expected to benefit from the 
synergies of the combination. 

Goodwill arising on acquisitions prior to the date of transition 
to IFRSs has been retained at the previous UK GAAP amount 
subject to being tested for impairment at that date. Goodwill 
written off to reserves under UK GAAP prior to transition has 
not been reinstated and will not be included in determining any 
subsequent profit or loss on disposal. 

2.7 Intangible assets 
Intangible assets acquired separately are measured on initial 
recognition at cost. The cost of intangible assets acquired 
in a business combination is the fair value as at the date of 
acquisition. Following initial recognition, intangible assets are 
carried at cost less any accumulated amortisation and any 
accumulated impairment losses.

Intangible assets with finite lives are amortised over the useful 
life and assessed for impairment whenever there is an indication 
that the intangible asset may be impaired. The amortisation 
period and the amortisation method for an intangible asset with 
a finite useful life are reviewed at least at each financial year-end. 
Changes in the expected useful life or the expected pattern 
of consumption of future economic benefits embodied in the 
asset are accounted for by changing the amortisation period 
or method, as appropriate, and are treated as changes in 
accounting estimates. The amortisation expense on intangible 
assets with finite lives is recognised in profit or loss in the expense 
category consistent with the function of the intangible asset.

Non-contractual commercial relationships
Amortisation is calculated using the straight-line method to 
allocate the cost over the estimated useful life of five years.

Forward order book on acquisitions
Amortisation is calculated based on expected future cash flows 
estimated to be three years.

2.8 Impairment of non-financial assets 
The group assesses at each reporting date whether there is an 
indication that an asset may be impaired. If any such indication 
exists, or when annual impairment testing for an asset is 
required, the group estimates the asset’s recoverable amount. 
An asset’s recoverable amount is the higher of an asset’s or 
cash-generating unit’s fair value less costs to sell and its 
value-in-use and is determined for an individual asset, unless 
the asset does not generate cash inflows that are largely 
independent of those from other assets or groups of assets. 
Where the carrying amount of an asset exceeds its recoverable 
amount, the asset is considered impaired and is written down to 
its recoverable amount. In assessing value-in-use, the estimated 
future cash flows are discounted to their present value using a 
pre-tax discount rate that reflects current market assessments 
of the time value of money and the risks specific to the asset. 
In determining fair value less costs to sell, an appropriate 
valuation model is used. These calculations are corroborated 
by valuation multiples, or other available fair value indicators.

Impairment losses of continuing operations are recognised in 
profit or loss in those expense categories consistent with the 
function of the impaired asset.

For assets excluding goodwill, an assessment is made at 
each reporting date as to whether there is any indication that 
previously recognised impairment losses may no longer exist or 
may have decreased. If such indication exists, the group makes 
an estimate of recoverable amount. A previously recognised 
impairment loss is reversed only if there has been a change in 
the estimates used to determine the asset’s recoverable amount 
since the last impairment loss was recognised. If that is the case 
the carrying amount of the asset is increased to its recoverable 
amount. That increased amount cannot exceed the carrying 
amount that would have been determined, net of depreciation, 
had no impairment loss been recognised for the asset in 
prior years. 

The following criteria are also applied in assessing impairment 
of specific assets:

Goodwill
The group assesses whether there are any indicators that 
goodwill is impaired at each reporting date. Goodwill is tested 
for impairment annually.

Impairment is determined for goodwill by assessing the 
recoverable amount of the cash-generating units to which the 
goodwill relates. Where the recoverable amount of the cash-
generating units is less than their carrying amount an impairment 
loss is recognised. Impairment losses relating to goodwill cannot 
be reversed in future periods. The group performs its annual 
impairment test of goodwill as at 31 December.

2.9 The parent company’s investments 
in subsidiaries
In its separate financial statements the parent company 
recognises its investments in subsidiaries at cost less provision 
for impairment. Income is recognised from these investments 
in relation to distributions received.

Annual Report 2013  Clarkson PLC  67

 
 
2 Statement of accounting policies 
continued

2.10 Investments and other financial assets
Classification
Financial assets within the scope of IAS 39 are classified as 
financial assets at fair value through profit or loss, loans and 
receivables, held-to-maturity investments, or available-for-sale 
financial assets, as appropriate. When financial assets are 
recognised initially, they are measured at fair value, plus, in 
the case of investments not at fair value through profit or loss, 
directly attributable transaction costs.

The group determines the classification of its financial assets 
on initial recognition and, where allowed and appropriate, 
re-evaluates this designation at each financial year-end.

Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss includes 
financial assets held for trading and financial assets designated 
upon initial recognition as at fair value through profit or loss.

Financial assets are classified as held for trading if they are 
acquired for the purpose of selling in the near term. Gains 
or losses on investments held for trading are recognised in 
profit or loss.

Loans and receivables
Loans and receivables are non-derivative financial assets with 
fixed or determinable payments that are not quoted in an active 
market. After initial measurement loans and receivables are 
carried at amortised cost using the effective interest method less 
any allowance for impairment. Gains and losses are recognised 
in profit or loss when the loans and receivables are derecognised 
or impaired, as well as through the amortisation process.

Available-for-sale financial investments
Available-for-sale financial assets are those non-derivative 
financial assets that are designated as available-for-sale or 
are not classified in any of the two preceding categories 
or held-to-maturity investments. After initial measurement, 
available-for-sale financial assets are measured at fair value 
with unrealised gains or losses recognised directly in equity 
until the investment is derecognised or determined to be 
impaired at which time the cumulative gain or loss previously 
recorded in equity is recognised in profit or loss.

Recognition and measurement

Fair value 
The fair value of investments that are actively traded in organised 
financial markets is determined by reference to quoted market 
bid prices at the close of business on the balance sheet date. 
For investments where there is no active market, fair value is 
determined using valuation techniques, unless these are not 
reliable in which case the investments are shown at cost. Such 
valuation techniques include using recent arm’s-length market 
transactions; reference to the current market value of another 
instrument which is substantially the same; discounted cash flow 
analysis or other valuation models.

Amortised cost
Loans and receivables are measured at amortised cost. This is 
computed using the effective interest method less any allowance 
for impairment. The calculation takes into account any premium 
or discount on acquisition and includes transaction costs and 
fees that are an integral part of the effective interest rate.

Trade and other receivables
Trade and other receivables are recognised initially at fair value 
and subsequently measured at amortised cost using the 
effective interest method less provision for impairment.

Foreign exchange contracts are accounted for in accordance 
with note 2.14.

2.11 Impairment of financial assets
The group assesses at each balance sheet date whether a 
financial asset or group of financial assets is impaired.

Assets carried at amortised cost
If there is objective evidence that an impairment loss on assets 
carried at amortised cost has been incurred, the amount of the 
loss is measured as the difference between the asset’s carrying 
amount and the present value of estimated future cash flows 
(excluding future expected credit losses that have not been 
incurred) discounted at the financial asset’s original effective 
interest rate (i.e. the effective interest rate computed at initial 
recognition). The carrying amount of the asset is reduced 
through use of an allowance account. The amount of the loss 
is recognised in profit or loss.

If, in a subsequent period, the amount of the impairment loss 
decreases and the decrease can be related objectively to an 
event occurring after the impairment was recognised, the 
previously recognised impairment loss is reversed, to the 
extent that the carrying value of the asset does not exceed its 
amortised cost at the reversal date. Any subsequent reversal 
of an impairment loss is recognised in profit or loss.

In relation to trade receivables, a provision for impairment is 
made when there is objective evidence that the group will not 
be able to collect all of the amounts due under the original terms 
of the invoice. The carrying amount of the receivable is reduced 
through use of an allowance account. Impaired debts are 
derecognised when they are assessed as uncollectable.

Available-for-sale financial investments
If an available-for-sale asset is impaired, an amount comprising 
the difference between its cost (net of any principal payment 
and amortisation) and its current fair value, less any impairment 
loss previously recognised in profit or loss, is transferred from 
equity to profit or loss. Reversals in respect of equity instruments 
classified as available-for-sale are not recognised in profit or loss. 
Reversals of impairment losses on debt instruments are reversed 
through profit or loss, if the increase in fair value of the instrument 
can be objectively related to an event occurring after the 
impairment loss was recognised in profit or loss. 

68  Clarkson PLC  Annual Report 2013 

Notes to the financial statementsi

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2.12 Inventories
Inventories are stated at the lower of cost and net realisable 
value. Cost is determined using the first-in, first-out (FIFO) 
method. It excludes borrowing costs. Net realisable value is the 
estimated selling price in the ordinary course of business, less 
applicable variable selling expenses.

2.13 Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call 
deposits with an original maturity of between one day and 
three months. 

2.14 Derivative financial instruments and 
hedge accounting
The group uses various derivative financial instruments to reduce 
exposure to foreign exchange movements. These can include 
forward foreign exchange contracts and currency options. 
All derivative financial instruments are initially recognised on the 
balance sheet at their fair value adjusted for transaction costs.

The fair values of financial instrument derivatives are determined 
by reference to quoted prices in an active market. Where no 
such active market exists, the fair value is determined using 
appropriate valuation techniques from observable data, including 
discounted cash flow analysis and the Black-Scholes option 
pricing model.

The method of recognising the movements in the fair value of 
the derivative depends on whether the instrument has been 
designated as a hedging instrument and, if so, the cash flow 
being hedged. To qualify for hedge accounting, the terms of the 
hedge must be clearly documented at inception and there must 
be an expectation that the derivative will be highly effective in 
offsetting changes in the cash flow of the hedged risk. Hedge 
effectiveness is tested throughout the life of the hedge and if at 
any point it is concluded that the relationship can no longer be 
expected to remain highly effective in achieving its objective, the 
hedge relationship is terminated.

Gains and losses on financial instrument derivatives which qualify 
for hedge accounting are recognised according to the nature of 
the hedge relationship and the item being hedged.

Cash flow hedges: derivative financial instruments are classified 
as cash flow hedges when they hedge the group’s exposure 
to changes in cash flows attributable to a particular asset or 
liability or a highly probable forecast transaction. Gains or losses 
on designated cash flow hedges are recognised directly in 
equity, to the extent that they are determined to be effective. 
Any remaining portion of the gain or loss is recognised 
immediately in the income statement. On recognition of the 
hedged asset or liability, any gains or losses that had previously 
been recognised directly in equity are included in the initial 
measurement of the fair value of the asset or liability. When a 
hedging instrument expires or is sold, or when a hedge no longer 
meets the criteria for hedge accounting, any cumulative gain or 
loss in equity remains there and is recognised in the income 
statement when the forecast transaction is ultimately recognised. 
When a forecast transaction is no longer expected to occur, the 
cumulative gain or loss that was reported in equity is immediately 
transferred to the income statement.

Where financial instrument derivatives do not qualify for hedge 
accounting, changes in the fair market value are recognised 
immediately in the income statement.

2.15 Trade and other payables
Trade payables are obligations to pay for goods or services that 
have been acquired in the ordinary course of business from 
suppliers. Accounts payable are classified as current liabilities if 
payment is due within one year or less (or in the normal operating 
cycle of the business if longer). If not, they are presented as 
non-current liabilities.

Trade payables are recognised initially at fair value and 
subsequently measured at amortised cost using the effective 
interest method.

2.16 Interest-bearing loans and borrowings
All loans and borrowings are initially recognised at fair value less 
directly attributable transaction costs and have not been 
designated as ‘at fair value through profit and loss’.

After initial recognition, interest-bearing loans and borrowings are 
subsequently measured at amortised cost using the effective 
interest method.

2.17 Provisions
Provisions are recognised when the group has a present 
obligation (legal or constructive) as a result of a past event, 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. Where 
the group expects some or all of a provision to be reimbursed, 
for example under an insurance contract, the reimbursement is 
recognised as a separate asset but only when the reimbursement 
is virtually certain. The expense relating to any provision is 
presented in profit or loss net of any reimbursement. If the 
effect of the time value of money is material, provisions are 
discounted using a current pre-tax rate that reflects, where 
appropriate, the risks specific to the liability. Where discounting 
is used, the increase in the provision due to the passage of 
time is recognised as a finance cost.

2.18 Employee benefits
The group operates various post-employment schemes, including 
both defined contribution and defined benefit pension plans.

For defined contribution plans, the group pays contributions 
to publicly or privately administered pension insurance plans 
on a mandatory, contractual or voluntary basis. The group has 
no further payment obligations once the contributions have been 
paid. The contributions are recognised as employee benefit 
expense when they are due. Prepaid contributions are 
recognised as an asset to the extent that a cash refund 
or a reduction in the future payments is available.

Typically defined benefit plans define an amount of pension 
benefit that an employee will receive on retirement, usually 
dependent on one or more factors such as age, years of service 
and compensation.

Annual Report 2013  Clarkson PLC  69

 
 
2 Statement of accounting policies 
continued

The liability recognised in the balance sheet in respect of defined 
benefit pension plans is the present value of the defined benefit 
obligation at the end of the reporting period less the fair value of 
plan assets. The defined benefit obligation is calculated annually 
by independent actuaries using the projected unit credit method. 
The present value of the defined benefit obligation is determined 
by discounting the estimated future cash outflows using interest 
rates of high-quality corporate bonds that have terms to maturity 
approximating to the terms of the related pension obligation.

Actuarial gains and losses arising from experience adjustments 
and changes in actuarial assumptions are charged or credited 
to equity in other comprehensive income in the period in which 
they arise.

Past-service costs are recognised immediately in income.

2.19 Share-based payment transactions
Employees (including senior executives) of the group receive 
remuneration in the form of share-based payment transactions, 
whereby employees render services as consideration for equity 
instruments (equity-settled transactions).

Equity-settled transactions
The cost of equity-settled transactions with employees is 
measured by reference to the fair value at the date on which they 
are granted. The fair value of the element of these awards which 
have a Total Shareholder Return performance condition was 
valued using a stochastic model. All other elements of awards 
were valued using a Black-Scholes model.

The cost of equity-settled transactions is recognised, together 
with a corresponding increase in equity, over the period in which 
the performance and/or service conditions are fulfilled, ending 
on the date on which the relevant employees become fully 
entitled to the award (the vesting date). The cumulative expense 
recognised for equity-settled transactions at each reporting date 
until the vesting date reflects the extent to which the vesting 
period has expired and the group’s best estimate of the number 
of equity instruments that will ultimately vest. The profit or loss 
charge or credit for a period represents the movement in 
cumulative expense recognised as at the beginning and end 
of that period.

No expense is recognised for awards that do not ultimately vest, 
except for awards where vesting is conditional upon a market 
condition, which are treated as vesting irrespective of whether 
or not the market condition is satisfied, provided that all other 
performance and/or service conditions are satisfied.

The dilutive effect of outstanding options is reflected as additional 
share dilution in the computation of earnings per share (further 
details are given in note 8). 

2.20 Share capital 
Ordinary shares are recognised in equity as share capital 
at their nominal value. The difference between consideration 
received and the nominal value is recognised in the share 
premium account.

Company shares held in trust in connection with the group’s 
employee share schemes are deducted from consolidated 
shareholders’ equity. Purchases, sales and transfers of the 
company’s shares are disclosed as changes in consolidated 
shareholders’ equity. The assets and liabilities of the trusts 
are consolidated in full into the group’s consolidated 
financial statements.

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

Broking
Revenue consists of commission receivable from broking and 
is recognised by reference to the stage of completion. Stage 
of completion is measured by reference to the underlying 
commercial contract. 

Financial
Futures broking commissions are recognised when the 
services have been performed. Fees relating to our financial 
and investment services businesses are recognised as 
services are performed.

Support
Port service income is recognised on vessel load or discharge 
completion date and store rent on a time basis. Agency income 
is recognised when vessels arrive in port. Revenue from the 
sale of goods is recognised when the goods are physically 
despatched to the customer. Rental income arising from 
operating leases on properties is accounted for on a straight-line 
basis over the lease term.

Research
Revenue comprises fees, which are recognised as and when 
services are performed, and sales of shipping publications 
and other information, which is recognised when products 
are delivered. Subscriptions to periodicals and other information 
are recognised over the subscription period.

Finance income
Interest income is accrued on a time basis, by reference to the 
principal outstanding and at the effective interest rate applicable. 

2.22 Segment reporting 
Operating segments are reported in a manner consistent with 
the internal reporting provided to the chief operating decision-
maker. The group considers the executive members of the 
company’s board to be the chief operating decision-maker.

70  Clarkson PLC  Annual Report 2013 

Notes to the financial statementsi

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Deferred income tax assets are recognised for all deductible 
temporary differences, carry forward of unused tax credits and 
unused tax losses, to the extent that it is probable that taxable 
profit will be available against which the deductible temporary 
differences, and the carry forward of unused tax credits and 
unused tax losses can be utilised except:

• where the deferred income tax asset relating to the deductible 

temporary difference arises from the initial recognition of 
an asset or liability in a transaction that is not a business 
combination and, at the time of the transaction, affects neither 
the accounting profit nor taxable profit or loss; and

• in respect of deductible temporary differences associated 

with investments in subsidiaries, deferred income tax assets 
are recognised only to the extent that it is probable that the 
temporary differences will reverse in the foreseeable future and 
taxable profit will be available against which the temporary 
differences can be utilised.

The carrying amount of deferred income tax assets is reviewed 
at each balance sheet date and reduced to the extent that it is 
no longer probable that sufficient taxable profit will be available 
to allow all or part of the deferred income tax asset to be utilised. 
Unrecognised deferred income tax assets are reassessed at 
each balance sheet date and are recognised to the extent that 
it has become probable that future taxable profit will allow the 
deferred tax asset to be recovered.

Deferred income tax assets and liabilities are measured at the 
tax rates that are expected to apply to the year when the asset is 
realised or the liability is settled, based on tax rates (and tax laws) 
that have been enacted or substantively enacted at the balance 
sheet date.

Deferred income tax relating to items recognised directly 
in equity is recognised in equity and not in profit or loss.

Deferred income tax assets and deferred income tax liabilities 
are offset if a legally enforceable right exists to set off current 
tax assets against current income tax liabilities and the deferred 
income taxes relate to the same taxable entity and the same 
taxation authority.

2.25 Leases
Where the group is a lessee, operating lease payments are 
recognised as an expense in the income statement on a 
straight-line basis over the lease term. Lease incentive payments 
are amortised over the lease term.

2.26 Exceptional items
Exceptional items are significant items of a non-recurring nature 
and considered material in both size and nature. These are 
disclosed separately to enable a full understanding of the 
group’s financial performance.

2.23 Foreign currencies
Transactions in currencies other than pounds sterling are 
recorded at the rates of exchange prevailing on the date of the 
transaction. At each balance sheet date, monetary assets and 
liabilities that are denominated in foreign currencies are 
retranslated at the rates prevailing on the balance sheet date. 
Gains and losses arising on retranslation are included in the 
income statement.

Non-monetary items that are measured in terms of historical 
cost in a foreign currency are translated using the exchange 
rates as at the date of the initial transactions. Non-monetary 
items measured at fair value in a foreign currency are translated 
using the exchange rates as at the date when the fair value 
was determined.

On consolidation, the assets and liabilities of the group’s 
overseas operations are translated into pounds sterling at 
exchange rates prevailing on the balance sheet date. Income 
and expense items are translated at the average exchange 
rates for the period as an approximation of rates prevailing 
at the date of the transaction unless exchange rates fluctuate 
significantly. Exchange differences arising, if any, are classified 
as equity and transferred to the group’s currency translation 
reserve. Such translation differences are recognised as income 
or expense in the period in which an operation is disposed of. 
Cumulative translation differences have been set to zero at the 
date of transition to IFRSs.

Goodwill and fair value adjustments arising on the acquisition 
of a foreign entity are treated as assets and liabilities of the 
foreign entity and translated at the closing rate.

2.24 Taxation
Current income tax
Current income tax assets and liabilities for the current and prior 
periods are measured at the amount expected to be recovered 
from or paid to the taxation authorities. The tax rates and tax 
laws used to compute the amount are those that are enacted 
or substantively enacted by the balance sheet date. 

Current income tax relating to items recognised directly in 
equity is recognised in equity and not in profit or loss.

Deferred income tax
Deferred income tax is provided using the liability method on 
temporary differences at the balance sheet date between the 
tax bases of assets and liabilities and their carrying amounts for 
financial reporting purposes.

Deferred income tax liabilities are recognised for all taxable 
temporary differences, except:

• where the deferred income tax liability arises from the initial 

recognition of goodwill or of an asset or liability in a transaction 
that is not a business combination and, at the time of the 
transaction, affects neither the accounting profit nor taxable 
profit or loss; and

• in respect of taxable temporary differences associated with 

investments in subsidiaries, where the timing of the reversal of 
the temporary differences can be controlled and it is probable 
that the temporary differences will not reverse in the 
foreseeable future.

Annual Report 2013  Clarkson PLC  71

 
 
3 Revenues and expenses

Revenue

Rendering of services 

Rental income 

Sale of goods 

Finance revenue

Bank interest income 

Income from available-for-sale financial assets 

Finance costs 

Other interest

Other finance costs – pensions 

Net benefit charge

*Restated. Refer to note 2.

2013  
£m

2012*
£m

185.4

165.1

3.7

8.9

3.7

7.4

198.0

176.2

0.5

0.2

0.7

(0.1)

(0.1)

(0.5)

(0.5)

0.5

0.7

1.2

(0.1)

(0.1)

(0.3)

(0.3)

Operating profit 
Operating profit from continuing operations represents the results from operations before finance revenues and finance costs. This is 
stated after charging:

Depreciation 

Amortisation

Operating leases – land and buildings 

Net foreign exchange losses

2013  
£m

2.2

0.5

6.5

0.3

2012  
£m

2.3

0.5

6.1

0.5

72  Clarkson PLC  Annual Report 2013 

Notes to the financial statementsi

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Auditors’ remuneration 
Fees payable to the company’s auditor for the audit of the company’s accounts and consolidated 
financial statements

Fees payable to the company’s auditor and its associates for other services:

  The auditing of accounts of subsidiaries of the company

  Audit-related assurance services

  Taxation compliance services

  Taxation advisory services

  All other services

Employee compensation and benefits expense

Wages and salaries

Social security costs

Expense of share-based payments

Pension costs – defined contribution plans

2013  
£000

2012  
£000

101

201

40

45

117

82

586

82

232

48

50

136

66

614

2013  
£m

2012  
£m

112.6

12.7

1.0

3.0

98.7

9.7

1.4

3.0

129.3

112.8

The numbers above include remuneration and pension entitlements for each director. Details are included in the directors’ 
remuneration report in the directors’ emoluments and compensation table on page 47. 

The average monthly number of persons employed by the group during the year including executive directors is analysed below: 

Broking 

Financial 

Support

Research

2013 

761

59

94

75

989

2012 

724

69

75

71

939

Annual Report 2013  Clarkson PLC  73

 
 
4 Segmental information
The group considers the executive members of the company’s board to be the chief operating decision-maker. Management 
has determined the operating segments based on the information reviewed by the board.

Clarksons’ broking division represents services provided to shipowners and charterers in the transportation by sea of a wide range 
of cargoes. It also represents services provided to buyers and sellers/yards relating to sale and purchase transactions.

The financial division includes a futures broking operation which arranges principal-to-principal cash settled contracts for differences 
based upon standardised freight contracts and a financial and investment services division which provides advice to clients on the 
financial aspects of a range of shipping-related transactions. 

Support includes port and agency services representing ship agency services provided throughout the UK and property services 
regarding the provision of accommodation. 

Research services encompass the provision of shipping-related information and publications. 

All areas of the business work closely together to provide the best possible service to our clients. Occasionally revenue is shared 
between different segments to reflect relative contributions to a particular transaction. Internal arm’s-length recharges are included 
within the appropriate segments. 

Business segments 

Broking 

Financial

Support

Research

Less: property services revenue arising within the group, included under 
Support

Segment revenue/results 

Head office costs 

Operating profit before exceptional item and acquisition costs

Exceptional item

Acquisition costs

Operating profit after exceptional item and acquisition costs

Finance revenue 

Finance costs 

Other finance costs – pensions 

Profit before taxation 

Taxation 

Profit for the year

*Restated. Refer to note 2.

Business segments

Broking

Financial 

Support

Research

Segment assets/liabilities 

Unallocated assets/liabilities 

Revenue

2012  
£m

2013  
£m

160.3

145.7

11.6

19.7

9.7

5.3

19.2

9.2

201.3

179.4

(3.3)

198.0

(3.2)

176.2

2013  
£m

142.3

14.8

26.6

8.6

192.3

42.4

234.7

Assets

2012  
£m

133.2

13.0

18.7

7.9

172.8

40.5

213.3

Results

2012*
£m

25.2

(9.9)

4.2

2.8

22.3

(3.2)

19.1

4.5

(1.5)

22.1

1.2

(0.1)

(0.3)

22.9

(7.0)

15.9

Liabilities

2012  
£m

53.1

1.9

7.1

3.5

65.6

21.7

87.3

2013  
£m

27.5

(3.3)

3.1

3.0

30.3

(5.4)

24.9

(1.0)

(2.0)

21.9

0.7

(0.1)

(0.5)

22.0

(6.7)

15.3

2013  
£m

61.9

2.7

8.9

3.5

77.0

20.0

97.0

Unallocated assets predominantly relate to head office cash balances and tax assets. Unallocated liabilities include the pension 
scheme deficit and tax liabilities.

74  Clarkson PLC  Annual Report 2013 

Notes to the financial statementsi

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Business segments 

Non-current asset additions

Depreciation

Amortisation

Broking 

Financial 

Support

Property, 
plant and 
equipment 
2013  
£m

Intangible 
assets  
2013  
£m

Property,  
plant and 
equipment 
2012  
£m

Intangible 
assets  
2012  
£m

0.4

0.1

1.1

1.6

–

–

1.6

1.6

0.9

–

1.1

2.0

–

–

–

–

2013  
£m

0.6

0.1

1.5

2.2

2012  
£m

0.8

0.1

1.4

2.3

Geographical segments – by origin of invoice 

Europe, Middle East and Africa*

Americas 

Asia Pacific

Geographical segments – by location of assets 

Europe, Middle East and Africa*

Americas 

Asia Pacific

2013  
£m

0.5

–

–

0.5

2013  
£m

141.0

28.8

28.2

198.0

2012  
£m

0.5

–

–

0.5

Revenue

2012  
£m

131.5

20.4

24.3

176.2

Non-current assets**

2013  
£m

47.8

2.2

1.4

51.4

2012  
£m

46.8

2.2

1.5

50.5

*Includes revenue for the UK of £115.1m (2012: £111.6m) and non-current assets for the UK of £41.7m (2012: £36.6m).
**Non-current assets exclude deferred tax assets.

5 Exceptional items
2013
During the year, the decision was made to restructure the cost base of Clarkson Capital Markets, which included the closure of the 
Dubai operation. This has led to an exceptional charge of £1.0m.

2012
In November 2011, Clarksons announced that the Court of Appeal in London had decided to deny the claimant (Yuri Nikitin) leave 
to appeal in the cases between Mr Nikitin and H. Clarkson & Company Limited (HCL), previously highlighted in the contingencies note 
in Clarksons’ financial statements.

In March 2012, HCL reached a full and final settlement with Mr Nikitin and the corporate entities involved to conclude all outstanding 
matters between them. Under the terms of the settlement, which all parties have agreed will remain confidential, an amount 
of US$7m has been received by HCL which is disclosed as an exceptional item in this annual report.

6 Acquisition costs
Included in acquisition costs are cash and share-based payment charges of £1.3m (2012: £1.0m) and interest of £0.1m (2012: £0.1m) 
relating to acquisitions. These are contingent on employees remaining in service and are therefore spread over the service period.

Also included is £0.2m (2012: £nil) of legal and professional fees relating to the 2013 acquisition and £0.5m (2012: £0.5m) relating 
to amortisation of intangibles acquired as part of the 2011 acquisitions.

Annual Report 2013  Clarkson PLC  75

 
 
7 Taxation
Tax charged/(credited) in the consolidated income statement is as follows:

Current tax 

Tax on profits for the year 

Adjustments in respect of prior years

Deferred tax
Origination and reversal of temporary differences

Impact of change in tax rates

Total tax charge in the income statement

*Restated. Refer to note 2.

Tax relating to items charged/(credited) to equity is as follows:

Current tax

Employee benefits – on pension benefit liability

– other employee benefits

Other items in equity

Deferred tax
Employee benefits – on pension benefit liability

– other employee benefits

Foreign currency hedge

Total tax credit in the statement of changes in equity

*Restated. Refer to note 2.

2013  
£m

7.2

(0.2)

7.0

(0.7)

0.4

(0.3)

6.7

2012*
£m

 8.7 

 0.9 

9.6

(3.2)

0.6

(2.6)

7.0

2013  
£m

2012*
£m

(0.6)

(2.5)

(0.4)

(3.5)

2.0

(0.2)

0.5

2.3

(1.2)

(0.6)

–

–

(0.6)

(0.5)

0.3

0.5

0.3

(0.3)

Reconciliation of tax charge 
The tax charge in the income statement for the year is higher (2012: higher) than the average standard rate of corporation tax in the UK 
of 23.25% (2012: 24.5%). The differences are reconciled below: 

Profit before taxation

Profit at UK average standard rate of corporation tax of 23.25% (2012: 24.5%) 

Effects of: 

  Expenses not deductible for tax purposes 

  Non-taxable income 

  Higher tax rates on overseas earnings 

  Tax losses recognised 

  Adjustments relating to prior year

  Adjustments relating to changes in tax rates

  Other adjustments 

Total tax charge in the income statement 

*Restated. Refer to note 2.

2013  
£m

22.0

5.1

1.4

(0.1)

0.6

(0.4)

(0.1)

0.4

(0.2)

6.7

2012*
£m

22.9

5.6

1.5

(0.2)

0.3

(0.3)

(0.4)

0.6

(0.1)

7.0

The standard rate of corporation tax in the UK decreased from 24% to 23% with effect from 1 April 2013. Accordingly, the UK’s profits 
for this accounting period are taxed at an effective rate of 23.25%.

76  Clarkson PLC  Annual Report 2013 

Notes to the financial statements 
 
 
 
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Deferred tax
Deferred tax charged/(credited) in the consolidated income statement is as follows:

Employee benefits – on pension benefit liability

– other employee benefits

Tax losses recognised/(not recognised)

Other temporary differences

Deferred tax credit in the income statement

*Restated. Refer to note 2.

Deferred tax included in the balance sheet is as follows:

Deferred tax asset
Employee benefits – on pension benefit liability

– other employee benefits

Tax losses

Other temporary differences

Deferred tax liability
Unremitted earnings of overseas subsidiaries

Foreign currency contracts

Intangible assets recognised on acquisition

Other temporary differences

2013  
£m

(0.3)

(0.9)

0.9

–

(0.3)

2013 
£m

0.4

3.0

–

0.4

3.8

–

–

–

–

–

2012*
£m

–

0.1

(2.0)

(0.7)

(2.6)

Company

2012  
£m

2.2

2.5

–

0.4

5.1

–

–

–

–

–

2013 
£m

0.4

10.0

0.9

1.2

12.5

(1.1)

(0.8)

(0.1)

(0.5)

(2.5)

Group

2012  
£m

2.2

8.9

2.0

1.6

14.7

(1.2)

(0.3)

(0.2)

(0.5)

(2.2)

Included in the above are deferred tax assets of £3.6m (2012: £3.4m) and deferred tax liabilities of £0.6m (2012: £0.3m) which are due 
within one year.

All deferred tax movements arise from the origination and reversal of temporary differences. The group did not recognise a deferred 
tax asset of £0.5m (2012: £0.7m) in respect of unused tax losses, which have no expiry date.

During the year, as a result of the changes in the UK corporation tax rate to 21% from 1 April 2014 and to 20% from 1 April 2015, 
which were substantively enacted on 2 July 2013, the relevant deferred tax balances have been re-measured.

Annual Report 2013  Clarkson PLC  77

 
 
 
 
8 Earnings per share 
Basic earnings per share amounts are calculated by dividing net profit for the year attributable to ordinary equity holders of the parent 
by the weighted average number of ordinary shares in issue during the year. 

Diluted earnings per share amounts are calculated by dividing the net profit attributable to ordinary equity holders of the parent by the 
weighted average number of ordinary shares in issue during the year, plus the weighted average number of ordinary shares that would 
be issued on the conversion of all the dilutive potential ordinary shares into ordinary shares. 

The following reflects the income and share data used in the basic and diluted earnings per share computations: 

Profit for the year attributable to ordinary equity holders of the parent 

Weighted average number of ordinary shares (excluding share purchase  

trusts’ shares) for basic earnings per share

Dilutive effect of share options

Dilutive effect of performance share awards

Dilutive effect of acquisition-related shares

Weighted average number of ordinary shares (excluding share purchase  

trusts’ shares) adjusted for the effect of dilution

*Restated. Refer to note 2.

2013  
£m

15.3

2013 

2012*
£m

15.9

2012 

18,604,169 18,639,717
8,689

62,224

244,025

107,444

192,237

52,790

19,017,862 18,893,433

The share awards relating to directors, where the performance conditions have not yet been met at the balance sheet date, are not 
included in the above numbers. The weighted average number of these shares was 164,905 (2012: 187,892).

9 Dividends

Declared and paid during the year:

Final dividend for 2012 of 33p per share (2011: 32p per share)

Interim dividend for 2013 of 19p per share (2012: 18p per share)

Dividend paid
Proposed for approval at the AGM (not recognised as a liability at 31 December):

Final dividend for 2013 proposed of 37p per share (2012: 33p per share)

2013  
£m

2012  
£m

6.2

3.4

9.6

7.0

6.0

3.4

9.4

6.2

78  Clarkson PLC  Annual Report 2013 

Notes to the financial statements 
 
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10 Property, plant and equipment
31 December 2013

Original cost

At 1 January 2013

Additions 

Arising on acquisitions 

Disposals

Reclassifications

Foreign exchange differences

At 31 December 2013

Accumulated depreciation
At 1 January 2013

Charged during the year

Disposals

Reclassifications

Foreign exchange differences

At 31 December 2013

Net book value at 31 December 2013

31 December 2012

Original cost

At 1 January 2012

Additions 

Disposals

Foreign exchange differences

At 31 December 2012

Accumulated depreciation

At 1 January 2012

Charged during the year

Disposals

Foreign exchange differences

At 31 December 2012

Net book value at 31 December 2012

Freehold  
and long  
leasehold  
properties  
£m  

Leasehold  
improvements  
£m

Office  
furniture and 
equipment  
£m

Motor  
vehicles  
£m

3.7

–

1.2

(0.2)

–

–

4.7

1.0

0.1

–

–

–

1.1

3.6

1.5

0.2

–

(0.2)

0.3

–

1.8

0.8

0.2

(0.2)

0.3

–

1.1

0.7

17.5

1.0

0.1

(0.6)

–

(0.1)

17.9

13.4

1.7

(0.6)

–

(0.1)

14.4

3.5

1.0

0.4

–

(0.2)

–

–

1.2

0.5

0.2

(0.2)

–

–

0.5

0.7

Freehold  
and long  
leasehold  
properties  
£m

Leasehold  
improvements  
£m

Office  
furniture and 
equipment  
£m

Motor  
vehicles  
£m

3.8

–

–

(0.1)

3.7

1.0

0.1

–

(0.1)

1.0

2.7

1.2

0.4

–

(0.1)

1.5

0.7

0.2

–

(0.1)

0.8

0.7

16.6

1.4

(0.3)

(0.2)

17.5

12.0

1.8

(0.3)

(0.1)

13.4

4.1

1.0

0.2

(0.2)

–

1.0

0.5

0.2

(0.1)

(0.1)

0.5

0.5

Group

Total  
£m

23.7

1.6

1.3

(1.2)

0.3

(0.1)

25.6

15.7

2.2

(1.0)

0.3

(0.1)

17.1

8.5

Group

Total  
£m

22.6

2.0

(0.5)

(0.4)

23.7

14.2

2.3

(0.4)

(0.4)

15.7

8.0

Annual Report 2013  Clarkson PLC  79

 
 
 
 
10 Property, plant and equipment continued
31 December 2013

Original cost
At 1 January and 31 December 2013

Accumulated depreciation

At 1 January 2013

Charged during the year

At 31 December 2013

Net book value at 31 December 2013

31 December 2012

Original cost

At 1 January 2012

Additions

At 31 December 2012

Accumulated depreciation

At 1 January 2012

Charged during the year

At 31 December 2012

Net book value at 31 December 2012

Freehold  
and long  
leasehold  
properties  
£m

Leasehold  
improvements  
£m

Office  
furniture and 
equipment  
£m

1.9

0.3

–

0.3

1.6

0.5

0.4

–

0.4

0.1

6.9

5.2

0.6

5.8

1.1

Freehold  
and long  
leasehold  
properties  
£m

Leasehold  
improvements  
£m

Office  
furniture and 
equipment  
£m

1.9

–

1.9

0.2

0.1

0.3

1.6

0.5

–

0.5

0.4

–

0.4

0.1

6.8

0.1

6.9

4.6

0.6

5.2

1.7

Company

Total  
£m

9.3

5.9

0.6

6.5

2.8

Company

Total  
£m

9.2

0.1

9.3

5.2

0.7

5.9

3.4

80  Clarkson PLC  Annual Report 2013 

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11 Investment property 
31 December 2013

Cost 
At 1 January and 31 December 2013

Accumulated depreciation 
At 1 January and 31 December 2013

Net book value at 31 December 2013

Group and  
company  
£m

0.6

0.2

0.4

The fair value of the investment property at 31 December 2013 was £0.6m (2012: £0.5m). This valuation was carried out by an 
independent valuer, a member of the Royal Institute of Chartered Surveyors.

31 December 2012

Cost 

At 1 January and 31 December 2012

Accumulated depreciation 

At 1 January and 31 December 2012

Net book value at 31 December 2012

12 Intangible assets 
31 December 2013

Cost
At 1 January 2013

Additions

Reclassifications

Foreign exchange differences

At 31 December 2013

Accumulated amortisation and impairment
At 1 January 2013

Reclassifications 

Charged during the year

Foreign exchange differences

At 31 December 2013

Net book value at 31 December 2013

31 December 2012

Cost

At 1 January 2012

Foreign exchange differences

At 31 December 2012

Accumulated amortisation and impairment

At 1 January 2012

Charged during the year

At 31 December 2012

Net book value at 31 December 2012

Group and  
company  
£m

0.6

0.2

0.4

Group

Total  
£m

59.5

1.6

(0.3)

(0.8)

60.0

19.7

(0.3)

0.5

(0.1)

19.8

40.2

Group

Total  
£m

59.5

–

59.5

19.2

0.5

19.7

39.8

Intangibles 
£m

Goodwill  
£m

8.0

–

–

(0.2)

7.8

7.3

–

0.5

(0.1)

7.7

0.1

51.5

1.6

(0.3)

(0.6)

52.2

12.4

(0.3)

–

–

12.1

40.1

Intangibles 
£m

Goodwill  
£m

7.9

0.1

8.0

6.8

0.5

7.3

0.7

51.6

(0.1)

51.5

12.4

–

12.4

39.1

Annual Report 2013  Clarkson PLC  81

 
 
Notes to the financial statements

12 Intangible assets continued
Acquisitions
2013
On 31 October 2013, the group acquired 100% of the share capital of Gibb Tools Limited (GTL), via its port and agency business, 
Clarkson Port Services Limited (CPS). GTL is based in Aberdeen and is a leading specialist tool supplier to the industrial maritime 
and offshore sectors, focusing on the supply of engineering tools to the North Sea Oil industry.

The acquisition complements the group’s strategy for its established port and agency business. It not only provides a step change 
in CPS’s client offer, complementing its existing port and agency and supply services with GTL’s leading tool supply offer, but also 
significantly increases CPS’s capability to tender for larger offshore and renewable contracts.

The goodwill of £1.6m is attributable to the acquired team and the synergies that will arise as a part of the acquisition. None of the 
goodwill recognised is expected to be deductible for income tax purposes.

Consideration is payable in cash totalling £7.4m. On the acquisition date, £6.2m was paid, the remaining £1.2m is payable in 2014. 
In addition, a further £3.0m will be payable in cash to key employees contingent on them remaining in employment for two years. 
An additional cash sum up to £1.8m will also be payable in two years subject to the same service conditions and GTL achieving 
certain earnings targets over the two years. For both of the above, the cost will be charged to the consolidated income statement 
over the service period.

Acquisition-related costs of £0.2m have been charged to administration expenses in the consolidated income statement for the year 
ended 31 December 2013.

The following table summarises the consideration paid, the fair value of the assets acquired and the liabilities assumed relating to the 
acquisition of Gibb Tools Limited:

Recognised amounts of identifiable assets acquired and liabilities assumed:

Property, plant and equipment*

Inventories

Trade and other receivables

Cash and cash equivalents

Total assets
Trade and other payables

Income tax payable

Total liabilities

Total identifiable net assets
Goodwill

Total consideration payable in cash

*£0.3m fair value adjustment made on acquisition.

£m

1.3

0.8

2.2

3.2

7.5

1.2

0.5

1.7

5.8

1.6

7.4

The revenue included in the consolidated income statement since 31 October 2013 contributed by GTL was £1.4m. GTL contributed 
profit of £0.2m over the same period.

Had GTL been consolidated from 1 January 2013, the consolidated income statement would show revenue of £206.8m and profit, 
before exceptional items and acquisition costs, of £26.5m. This information is not necessarily indicative of the 2013 results of the 
combined group had the purchases actually been made at the beginning of the period presented, or indicative of the future 
consolidated performance given the nature of the business acquired.

82  Clarkson PLC  Annual Report 2013 

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13 Impairment testing of goodwill
Goodwill is allocated to the group’s cash-generating units (CGUs) identified according to operating segment.

Goodwill acquired through business combinations has been allocated to the attributable CGUs for impairment testing as follows:

• Dry bulk chartering

• Container chartering

• Specialised products chartering

• Gas chartering

• Sale and purchase broking

• Investment services

• Port and agency services

• Research services

The carrying amount of goodwill allocated to each CGU is as follows:

Dry bulk chartering

Container chartering

Specialised products chartering

Gas chartering

Sale and purchase broking

Investment services

Port and agency services

Research services

2013  
£m

12.0

1.8

12.2

2.7

5.2

0.2

2.7

3.3

2012  
£m

12.0

–

12.2

2.7

7.6

0.2

1.1

3.3

40.1

39.1

During the year, £1.8m of goodwill was reallocated from sale and purchase broking to container chartering. 

The movement in the aggregate carrying value is analysed in more detail in note 12.

Goodwill is allocated to CGUs which are tested for impairment at least annually. The goodwill arising in each CGU is similar in nature 
and thus the testing for impairment uses the same approach. 

The recoverable amounts of the CGUs are assessed using a value-in-use model. Value-in-use is calculated as the net present value 
of the projected risk-adjusted cash flows of the CGU to which the goodwill is allocated. The groups of CGUs for which the carrying 
amount of goodwill is deemed significant are dry bulk chartering, specialised products chartering and sale and purchase broking. 
The key assumptions used for value-in-use calculations are as follows:

• the pre-tax discount rate used is based on the group’s weighted average cost of capital and adjusted for risks within each CGU. As 
all CGUs have operations that are global in nature and similar risk profiles, the same pre-tax discount rate was applied to each unit. 
The group pre-tax discount rate is 13% (2012: 13%);

• the cash flow predictions are based on financial budgets and strategic plans approved by the board extrapolated over a five year 

period. These are based on both past performance and expectations for future market development;

• key drivers in the plans are revenue growth, margin and operating profit percentage and include conservative annual growth rates 

of between 0% and 5% (2012: 0% and 5%); and

• cash flows beyond this five year period are calculated applying a multiple which does not exceed the amount if calculated using the 
long-term average growth rate for businesses operating in the same segment as the CGUs. A change in this rate to 0% would not 
result in impairment.

The results of the directors’ review of goodwill including sensitivity analyses for reasonable changes in assumptions still indicate 
remaining headroom.

Annual Report 2013  Clarkson PLC  83

 
 
14 Trade and other receivables

Non-current
Other receivables

Prepayments and accrued income

Current
Trade receivables

Foreign currency contracts

Other receivables

Prepayments and accrued income

Owed by group companies 

2013  
£m

0.4

0.1

0.5

Group

2012  
£m

0.3

0.1

0.4

33.2

23.6

4.3

3.2

4.5

–

1.5

4.0

4.1

–

45.2

33.2

Company

2012  
£m

–

0.1

0.1

–

–

–

–

24.7

24.7

2013  
£m

–

0.1

0.1

–

–

–

–

13.2

13.2

As at 31 December 2013, the company provided for £7.2m (2012: £0.7m) of related party receivables. Further details of related party 
receivables are included in note 28.

Trade receivables are non-interest bearing and are generally on terms payable within 90 days.

As at 31 December 2013, group trade receivables at nominal value of £9.7m (2012: £12.2m) were impaired and fully provided for. 
The amount of the provision equates to the total amount of impaired debt. The provision is based on experience and ongoing market 
information about the credit-worthiness of counterparties. The company has no trade receivables (2012: none). 

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

At 1 January

Provision release

Written off

New provision

Foreign exchange differences

At 31 December

The other classes within trade and other receivables do not include any impaired items.

As at 31 December, the ageing analysis of trade receivables is as follows:

Neither past due nor impaired

Past due not impaired > 90 days

The carrying amounts of the group’s trade receivables are denominated in the following currencies:

US dollar

Sterling

Other currencies

84  Clarkson PLC  Annual Report 2013 

2013  
£m

12.2

(6.2)

(1.4)

5.2

(0.1)

9.7

2013  
£m

30.0

3.2

33.2

2013  
£m

26.6

6.0

0.6

33.2

Group

2012  
£m

13.0

(7.2)

(0.6)

7.6

(0.6)

12.2

Group

2012  
£m

21.0

2.6

23.6

Group

2012  
£m

17.5

5.7

0.4

23.6

Notes to the financial statementsi

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15 Investments

Non-current
Available-for-sale financial assets

Current
Funds on deposit

2013  
£m

Group

2012  
£m

Company

2012  
£m

2013  
£m

1.8

1.9

0.2

0.2

25.2

25.2

25.2

13.1

Available-for-sale financial assets consist of investments in unlisted ordinary shares and are shown at cost. There are no reasonable 
pricing alternatives to be able to give a range of fair value to these assets.

The group held £25.2m in deposits with a maturity of 100 days at the year-end. These deposits are held with an A-rated 
financial institution.

16 Investments in subsidiaries 

Cost at 1 January

Recapitalisation of existing subsidiary

Disposal of subsidiary

Capital contribution (recharged to)/to subsidiary

Cost at 31 December

Company

2012  
£m

53.7

0.2

(0.5)

0.5

53.9

2013  
£m

53.9

0.6

–

(0.5)

54.0

2013
During the year the company subscribed for an additional £0.6m of share capital in Clarkson Investment Services Limited.

Also, the capital contribution in relation to the acquisition of the Boxton/Bridge group in 2011 was recharged during the year 
to a subsidiary.

2012
During the year the company subscribed for an additional £0.2m of share capital in Clarkson Investment Services Limited. 
The investment in Clarkson Fund Management Limited has been disposed of, following the company’s dissolution. 

The £0.5m capital contribution relates to the acquisition of the Boxton/Bridge group in 2011.

17 Inventories

Finished goods

18 Cash and cash equivalents

Cash at bank and in hand

Short-term deposits

Group

2012  
£m

–

Company

2012  
£m

11.1

–

11.1

2013  
£m

0.9

2013  
£m

0.6

–

0.6

2013  
£m

95.4

1.5

96.9

Group

2012  
£m

86.1

3.3

89.4

Cash at bank and in hand earns interest at floating rates based on daily bank deposit rates. Short-term deposits are made for varying 
periods between one day and three months, depending upon the immediate cash requirements of the group, and earn interest at the 
respective short-term deposit rates. The fair value of cash and cash equivalents is £96.9m (2012: £89.4m).

Annual Report 2013  Clarkson PLC  85

 
 
19 Trade and other payables

Current

Trade payables 

Other payables 

Owed to group companies

Other tax and social security 

Deferred consideration

Accruals and deferred income 

Non-current 
Other payables 

Deferred consideration

Terms and conditions of the financial liabilities:

• trade payables are non-interest bearing and are normally settled on demand; and

• other payables are non-interest bearing and are normally settled on demand. 

Further details of related party payables are included in note 28.

20 Provisions

Current
At 1 January

Utilised during the year

At 31 December

Non-current
At 1 January

Arising during the year

At 31 December

A provision is recognised for the dilapidation of various leasehold premises. 

21 Share-based payment plans

Expense arising from equity-settled share-based payment transactions

2013  
£m

9.5

1.3

–

4.5

2.5

67.7

85.5

1.0

0.3

1.3

Group

2012  
£m

Company

2012  
£m

2013  
£m

9.6

1.2

–

2.1

0.4

56.4

69.7

1.1

0.6

1.7

–

–

4.5

–

–

9.9

14.4

–

–

–

–

0.1

1.5

–

–

5.5

7.1

–

–

–

2013  
£m

Group

2012  
£m

Company

2012  
£m

2013  
£m

–

–

–

1.8

0.2

2.0

0.2

(0.2)

–

1.6

0.2

1.8

–

–

–

1.8

0.2

2.0

–

–

–

1.6

0.2

1.8

2013  
£m

1.0

Group

2012  
£m

1.4

Company

2012  
£m

0.9

2013  
£m

0.6

The share-based payment plans are described below. There have been no cancellations or modifications to any of the plans during 
2013 or 2012.

Share options
Long Term Incentive Plan (LTIP)
Details of the LTIP are included in the directors’ remuneration report on page 42. Awards made to the directors are given in the 
directors’ remuneration report on page 49. The fair value of the element of these awards, which have a TSR performance condition, 
was valued using a Stochastic model. All other elements of the awards were valued using a Black-Scholes model.

Sharesave scheme
The Save-As-You-Earn (SAYE) scheme is approved by HMRC and enables eligible employees to acquire options over ordinary shares 
of the company at a discount. The fair value of these awards was valued using the Black-Scholes model.

86  Clarkson PLC  Annual Report 2013 

Notes to the financial statementsOther options
These options were granted in 2007 to senior executives where the performance conditions have since been met. The fair value of the 
element of these awards, which have a TSR performance condition, was valued using a Stochastic model. All other elements of the 
awards were valued using a Black-Scholes model.

Movements in the year
The following table illustrates the number and weighted average exercise prices (WAEP) of, and movements in, share options during  
the year:

LTIP

2012 SAYE
2013 SAYE

Other options

LTIP

2012 SAYE

Other options

Outstanding
at 1 January
2013
385,668

132,955

WAEP
–

10.82

Granted  
in year
74,813

Lapsed  
in year
(48,900)

–

–

–

18,964

9.91

–

93,777

(48,900)

–

–

–

40,000

558,623

Outstanding  
at 1 January
2012
454,366

40,000

494,366

WAEP
–

Granted  
in year
90,090

Lapsed  
in year
(65,738)

Exercised 
in year
(93,050)

–

–

132,955

9.91

–

–

–

–

–

223,045

(65,738)

(93,050)

Exercised 
in year

Outstanding
at 31 December
2013

–

–
–

–
–

411,581

132,955
18,964

40,000
603,500

Outstanding
at 31 December
2012
385,668

132,955

40,000

558,623

WAEP

–

10.82
13.03

9.91

WAEP
–

10.82

9.91

Exercisable at 
31 December 
2013

197,779

–
–

40,000
237,779

Exercisable at 
31 December 
2012
144,570

–

40,000

184,570

WAEP

–

–
–

9.91

WAEP
–

–

9.91

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The contractual life of the outstanding options is between 4 and 10 years.

Other employee incentives
During the year, 189,915 shares (2012: 442,496 shares) at a weighted average price of £16.04 (2012: £13.44) were awarded to 
employees in settlement of 2012 (2011) cash bonuses. There was no expense in 2013 as a result of these awards.

The fair value of the above shares was determined based on the market price at the date of grant.

As part of a 2011 acquisition, US$2.7m (£1.7m) will be payable to key employees in the form of ordinary shares in Clarkson PLC. 
This is contingent on the employees remaining in employment for four years. The cost of these shares is being charged to the 
consolidated income statement over the service period. The 2013 charge in relation to these awards is £0.4m (2012: £0.4m). 

22 Employee benefits
The group’s two defined benefit pension schemes are in the UK and all financial information provided in this note relates to the sum 
of the two separate schemes.

Defined benefit pension schemes
The group operates two defined benefit pension schemes, being the Clarkson PLC scheme and the Plowrights scheme, which are 
funded by the payment of contributions to separately administered trust funds. The schemes’ assets are invested in a range of pooled 
pension investment funds managed by professional fund managers.

Defined benefit pension arrangements give rise to open ended commitments and liabilities for the sponsoring company. As a 
consequence the company closed its original defined benefit section of the Clarkson PLC scheme to new entrants on 31 March 2004. 
This section was closed to further accrual for all existing members as from 31 March 2006. The Plowrights scheme was closed to 
further accrual from 1 January 2006.

Every three years, a pension scheme must obtain from an actuary a report containing a valuation and a recommendation on rates 
of contribution. Triennial valuations for both schemes have been drafted based on the position as at 31 March 2013.

• The valuation of the Clarkson PLC scheme showed a pension deficit on the original scheme of £6.1m as at 31 March 2013. 

• The provisional valuation of the Plowrights scheme showed a pension deficit of £4.8m as at 31 March 2013. 

It has been provisionally agreed between Clarkson PLC and both sets of Trustees that there will be no additional funding 
requirements from those set out in the 2010 triennial valuations. These requirements were for the company to fund each deficit 
over a period of five years commencing 1 April 2010. The company made initial contributions of £1.0m into each scheme before 
the end of March 2011 and agreed to make regular monthly contributions to fund the deficits of the two schemes at a combined 
rate of £1.9m per annum thereafter. 

Annual Report 2013  Clarkson PLC  87

 
 
22 Employee benefits continued
Other pension arrangements
Overseas defined contribution arrangements have been determined in accordance with local practice and regulations.

The group also operates various other defined contribution pension arrangements. Where required the group also makes 
contributions into these schemes.

The group incurs no material expenses in the provision of post-retirement benefits other than pensions.

The following tables summarise amounts recognised in the consolidated and company balance sheet and the components of net 
benefit expense recognised in the consolidated income statement:

Recognised in the balance sheet

Fair value of schemes’ assets

Present value of funded defined benefit obligations

Minimum funding requirement in relation to the Plowrights scheme

Benefit liability recognised in the balance sheet

A deferred tax asset on the above recognised liability amounting to £0.4m (2012: £2.2m) is shown in note 7.

Recognised in the income statement

Expected return on schemes’ assets

Interest cost on benefit obligation and minimum funding requirement

Service cost

Net benefit charge recognised in other finance costs – pensions

*Restated. Refer to note 2.

Recognised in the statement of comprehensive income 

Actual return on schemes’ assets

Less: expected return on schemes’ assets

Actuarial gains on schemes’ assets

Actuarial losses on defined benefit obligations

Actuarial gains/(losses) recognised in the statement of comprehensive income

Tax (charge)/credit on actuarial gains/(losses)

Unrecognised asset in relation to the Plowrights scheme

Tax charge on unrecognised asset

Minimum funding requirement in relation to the Plowrights scheme

Tax charge on minimum funding requirement

Net actuarial gains/(losses) on employee benefit obligations

Group and company

2013  
£m

152.7

(153.6)

(0.9)

(0.9)

(1.8)

2012
£m

144.0

(152.1)

(8.1)

(1.3)

(9.4)

Group and company

2013  
£m

5.9

(6.3)

(0.1)

(0.5)

2012*
£m

6.2

(6.4)

(0.1)

(0.3)

Group and company

2013  
£m

14.4

(5.9)

8.5

(3.0)

5.5

(1.3)

–

–

0.4

(0.1)

4.5

2012*
£m

9.7

(6.2)

3.5

(10.4)

(6.9)

1.7

1.1

(0.3)

1.2

(0.3)

(3.5)

Cumulative amount of actuarial losses recognised in the statement of comprehensive income

(15.3)

(20.8)

*Restated. Refer to note 2.

88  Clarkson PLC  Annual Report 2013 

Notes to the financial statementsi

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Schemes’ assets
The assets of the schemes are made up as follows:

Equities

Government bonds

Corporate bonds

Property

Cash and other assets

Group and company

2013  
£m

70.5

54.2

19.1

5.3

3.6

% 

44.8

36.5

14.4

3.6

0.7

2012  
£m

64.5

52.6

20.8

5.1

1.0

% 

46.2

35.5

12.5

3.5

2.3

100.0

152.7

100.0

144.0

Changes in the fair value of schemes’ assets are as follows:

Group and company

At 1 January

Expected return on assets

Contributions

Service costs

Insurance income for insured pensioners

Benefits paid

Actuarial gains

At 31 December

2013  
£m

144.0

5.9

1.9

(0.1)

0.2

(7.7)

8.5

2012
£m

138.0

6.2

1.9

(0.1)

0.2

(5.7)

3.5

152.7

144.0

The group expects, based on the valuations and funding requirements including expenses, to contribute £1.9m to its defined benefit 
pension schemes in 2014 (2013: £1.9m).

Defined benefit obligations
Changes in the fair value of the defined benefit obligations are as follows:

At 1 January

Interest costs

Actuarial losses

Benefits paid

At 31 December

The principal valuation assumptions are as follows:

Rate of increase in pensions in payment

Price inflation (RPI)

Price inflation (CPI)

Discount rate for scheme liabilities

Group and company

2013  
£m

152.1

6.2

3.0

(7.7)

153.6

2012  
£m

141.0

6.4

10.4

(5.7)

152.1

2013  
%

Group and company

2012  
%

3.10 – 3.40

2.80 – 3.00

3.60

2.90

4.60

3.10

2.40

4.20

The mortality assumptions used to assess the defined benefit obligation at 31 December 2013 and 31 December 2012 are based 
on the ‘SAPS Light’ standard mortality tables published by the actuarial profession. These tables have been adjusted to allow for 
anticipated future improvements in life expectancy. Examples of the assumed future life expectancy are given in the table below:

Post-retirement life expectancy on retirement at age 65:

Pensioners retiring in the year 

– male

– female

Pensioners retiring in twenty years’ time  – male

– female

Group and company

2013  
Additional  
years

2012  
Additional  
years

24.3

25.5

26.0

27.4

23.7

24.7

25.1

26.2

Annual Report 2013  Clarkson PLC  89

 
 
 
 
 
 
 
 
 
 
 
22 Employee benefits continued
Historical comparative information

Fair value of schemes’ assets

Defined benefit obligations

Unrecognised asset

Minimum funding requirement

Benefit liability

Experience adjustments on schemes’ assets

Experience adjustments on schemes’ liabilities

*Restated. Refer to note 2.

2013  
£m

152.7

(153.6)

–

(0.9)

(1.8)

8.5

1.4

2012*
£m

144.0

(152.1)

–

(1.3)

(9.4)

3.4

–

2011  
£m

138.0

(141.0)

(1.1)

(2.5)

(6.6)

1.9

(0.3)

Group and company

2010  
£m

131.9

(132.7)

–

–

(0.8)

6.6

0.8

2009 
£m

121.6

(128.5)

–

–

(6.9)

5.5

(0.2)

Sensitivities
The table below provides information on the sensitivity of the defined benefit obligation to changes to the most significant actuarial 
assumptions. The table shows the impact of changes to each assumption in isolation although, in practice, changes to assumptions 
may occur at the same time and can either offset or compound the overall impact on the defined benefit obligation. These sensitivities 
have been calculated using the same methodology as used for the main calculations. The weighted average duration of the defined 
obligation is 16 years. 

Discount rate for scheme liabilities

Price inflation (RPI)

Change in 
assumption

+0.25%
-0.25%

+0.25%
-0.25%

Change in defined 
benefit obligation

-3.7%
+3.9%

+2.7%
-3.1%

An increase of one year in the assumed life expectancy for both males and females would increase the defined benefit obligation by 3.5%.

23 Share capital 

Ordinary shares of 25p each:

At 1 January and 31 December

There were no shares issued during the year.

24 Other reserves 
31 December 2013

2013  
Number

2012  
Number

2013  
£m

2012  
£m

Group and company

18,984,691 18,984,691

4.7

4.7

  At 1 January 2013

Total comprehensive income

Net ESOP shares acquired

Share-based payments

At 31 December 2013

Share  
premium  
£m

27.8

–

–

–

27.8

ESOP  
reserve  
£m

Employee  
benefits  
reserve 
£m

Capital 
redemption 
reserve  
£m

Hedging 
reserve  
£m

Currency 
translation 
reserve  
£m

(2.8)

–

(3.3)

–

(6.1)

2.6

–

–

1.0

3.6

2.0

–

–

–

2.0

1.1

2.3

–

–

3.4

6.8

(1.8)

–

–

5.0

Group

Total  
£m

37.5

0.5

(3.3)

1.0

35.7

90  Clarkson PLC  Annual Report 2013 

Notes to the financial statementsi

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At 1 January 2012

Total comprehensive income

Net ESOP shares acquired

Share-based payments

At 31 December 2012

31 December 2013

At 1 January 2013

Share-based payments

At 31 December 2013 

31 December 2012

At 1 January 2012

Share-based payments

At 31 December 2012 

Share  
premium  
£m

27.8

–

–

–

27.8

ESOP  
reserve  
£m

(2.0)

–

(0.8)

–

(2.8)

Employee  
benefits 
reserve  
£m

Capital 
redemption 
reserve  
£m

Hedging 
reserve  
£m

Currency 
translation 
reserve  
£m

2.0

–

–

0.6

2.6

2.0

–

–

–

2.0

(0.4)

1.5

–

–

1.1

8.1

(1.3)

–

–

6.8

Share  
premium  
£m

27.8

–

27.8

Employee  
benefits 
reserve  
£m

Capital  
redemption  
reserve  
£m

2.6

0.1

2.7

2.0

–

2.0

Share  
premium  
£m

27.8

–

27.8

Employee  
benefits 
reserve  
£m

Capital  
redemption  
reserve  
£m

2.0

0.6

2.6

2.0

–

2.0

Group

Total  
£m

37.5

0.2

(0.8)

0.6

37.5

Company

Total  
£m

32.4

0.1

32.5

Company

Total  
£m

31.8

0.6

32.4

Nature and purpose of other reserves 
ESOP reserve – group 
The ESOP reserve in the group represents 514,246 shares (2012: 340,502 shares) held by the share purchase trusts to meet 
obligations under various incentive schemes. The shares are stated at cost. The market value of these shares at 31 December 2013 
was £10.3m (2012: £4.1m). At 31 December 2013 none of these shares were under option (2012: none). During the year the share 
purchase trusts acquired 339,914 shares at a weighted average price of £17.65 (2012: 556,202 shares at £13.01).

Employee benefits reserve – group and company
The employee benefits reserve is used to record the value of equity-settled share-based payments provided to employees. 
Further details are included in note 21.

Capital redemption reserve – group and company 
The capital redemption reserve arose on previous share buy-backs by Clarkson PLC. 

Hedging reserve – group
The hedging reserve comprises the effective portion of the fair value of cash flow hedging instruments relating to hedged transactions 
that have not yet occurred.

Currency translation reserve – group 
The currency translation reserve represents the currency translation differences arising from the consolidation of foreign operations. 

25 Financial commitments and contingencies
Operating lease commitments
The group has entered into commercial leases in relation to land and buildings and other assets on the basis that it is not in the 
group’s best interests to purchase these assets. The leases have an average life of between one and seven years with renewal terms 
included in the contracts. Renewals are at the option of the specific entity that holds the lease. There are no restrictions placed upon 
the lessee by entering into these leases.

Annual Report 2013  Clarkson PLC  91

 
 
25 Financial commitments and contingencies continued
Future minimum rentals payable under non-cancellable operating leases as at 31 December are as follows:

Within one year

After one year but not more than five years

After five years

2013  
£m

6.6

7.9

0.6

15.1

Group

2012  
£m

6.5

13.0

1.4

20.9

Company

2012 
£m

4.3

8.6

–

12.9

2013  
£m

4.3

4.3

–

8.6

The group and company has sublet space in certain properties. The future minimum sublease payments expected to be received 
under non-cancellable sublease agreements as at 31 December 2013 is £7m (2012: £10.5m).

Contingencies
The group and company have given no financial commitments to suppliers (2012: none).

The group and company have given no guarantees (2012: none).

From time to time the group may be engaged in litigation in the ordinary course of business. The group carries professional indemnity 
insurance. There are currently no liabilities expected to have a material adverse financial impact on the group’s consolidated results 
or net assets.

26 Financial risk management objectives and policies
The group’s principal financial liabilities comprise trade payables and accruals. The company’s principal financial liabilities comprised 
loans from group companies and accruals. The main purpose of these financial liabilities is to finance the group’s operations. The 
group and company have various financial assets such as trade receivables, current asset investments and cash and short-term 
deposits, which arise directly from its operations.

The group and company have not entered into derivative transactions other than the forward currency contracts explained later 
in this section. It is, and has been throughout 2013 and 2012, the group’s policy that no trading in derivatives shall be undertaken 
for speculative purposes.

The main risks arising from the group and company’s financial instruments are credit risk, liquidity risk, foreign exchange risk, 
interest rate risk and investment risk. The board of directors reviews and agrees policies for managing each of these risks which 
are summarised below.

Credit risk
The group seeks to trade only with recognised, creditworthy third parties. Receivable balances are monitored on an ongoing basis 
and any potential bad debts identified at an early stage. The maximum exposure is the carrying amounts as disclosed in note 14. 
There are no significant concentrations of credit risk within the group and company.

With respect to credit risk arising from the other financial assets of the group, which include cash and cash equivalents, current 
investments and available-for-sale financial investments, the group’s exposure to credit risk arises from default of the counterparty, 
with a maximum exposure equal to the carrying amount of these instruments.

Liquidity risk
The group monitors its risk to a shortage of funds using projected cash flows from operations. 

The tables below summarise the maturity profile of the group’s financial liabilities at 31 December based on contractual 
undiscounted payments.

31 December 2013

Trade and other payables

Deferred consideration

Provisions

92  Clarkson PLC  Annual Report 2013 

On  
demand  
£m

10.8

–

–

10.8

Less than  
3 months  
£m

3 to 12  
months  
£m

–

1.2

–

1.2

–

1.3

–

1.3

1 to 5  
years  
£m

1.0

0.3

2.0

3.3

Group

Total  
£m

11.8

2.8

2.0

16.6

Notes to the financial statementsi

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31 December 2012

Trade and other payables

Deferred consideration

Provisions

On  
demand  
£m

10.8

–

–

10.8

Less than  
3 months  
£m

3 to 12  
months  
£m

–

–

–

–

–

0.4

–

0.4

1 to 5  
years  
£m

1.1

0.6

1.8

3.5

Group

Total  
£m

11.9

1.0

1.8

14.7

The company has undiscounted provisions totalling £2.0m (2012: £1.8m) which are payable in 1 to 5 years (2012: 1 to 5 years).

Foreign exchange risk
The group has transactional currency exposures. Such exposure arises from sales or purchases by an operating unit in currencies other 
than the unit’s functional currency. Approximately 75% of the group’s sales are denominated in currencies other than the functional 
currency of the operating unit making the sale, whilst approximately 95% of costs are denominated in the unit’s functional currency.

The group uses foreign currency contracts only to reduce exposure to variations in the US dollar exchange rate and to meet local 
currency expenditure in the ordinary course of business. 

The following table demonstrates the sensitivity to a reasonably possible change in the US dollar exchange rate, with all other variables 
held constant, of the group’s profit before taxation and equity (due to changes in the fair value of monetary assets and liabilities). 

2013

2012

Effect on  
profit  
before 
taxation  
£m

1.3

(1.1)

1.2

(1.1)

Group

Effect on  
equity  
£m

3.2

(2.9)

2.7

(2.4)

Strengthening/
(weakening) in 
US dollar rate

5%

(5%)

5%

(5%)

Derivative financial instruments
It is the group’s policy to cover or hedge a proportion of its transactional US dollar exposures with foreign currency contracts. 
Where these are designated and documented as hedging instruments in the context of IAS 39 and are demonstrated to be effective, 
mark-to-market gains and losses are recognised directly in equity (see note 24) and transferred to the income statement upon receipt 
of cash and conversion to sterling of the underlying item being hedged.

The fair value of foreign currency contracts at 31 December are as follows:

Foreign currency contracts

Assets
2013  
£m

4.3

Group

Assets
2012  
£m

1.5

At 31 December 2013 the group had US$80m outstanding forward contracts due for settlement in 2014 and 2015 (2012: US$60.0m 
for settlement in 2013 and 2014).

Interest rate risk
The group and company’s exposure to the risk of changes in market interest rates relates primarily to the group and company’s 
cash and short-term deposits and current investments. 

The following table demonstrates the sensitivity to a reasonably possible change in interest rates, with all other variables held constant, 
of the group and company’s profit before tax (through the impact on cash balances and current investments). We have considered 
movements in these interest rates over the last three years and have concluded that a 1% (100 basis points) increase is a reasonable 
benchmark. The effect on equity is the same as profit before taxation.

Annual Report 2013  Clarkson PLC  93

 
 
26 Financial risk management objectives and policies continued

2013
Sterling

US dollars

2012

Sterling

US dollars

Group

Company

Effect on  
profit  
before 
taxation  
£m

Effect on  
profit  
before 
taxation  
£m

Increase in  
basis points

100

100

100

100

0.6

0.4

0.6

0.5

0.3

–

0.2

–

Capital management
The group’s objectives when managing capital are to safeguard the group’s ability to continue as a going concern in order to provide 
returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. 
Total capital is calculated as equity as shown in the consolidated balance sheet.

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 31 December 2013 and 31 December 2012.

A number of the group’s trading companies are subject to regulation by the FCA in the UK and NFA and FINRA in the US. All such 
companies complied with their regulatory capital requirements throughout the year.

27 Financial instruments
Fair values
IFRS 13 requires disclosure of fair value measurements by level of the following fair value measurement hierarchy:

• quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1);

• inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) 

or indirectly (that is, derived from prices) (level 2); and

• inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (level 3).

The following table presents the group’s assets and liabilities that are measured at fair value at 31 December.

2013  
Level 2  
£m

Group

2012 
Level 2  
£m

4.3

1.5

Assets
Foreign currency contracts

The classification of financial assets and financial liabilities at 31 December are as follows:

Financial assets

Hedging  
instruments 
£m

Available 
for sale 
£m

Loans and 
receivables 
£m

Hedging 
instruments 
£m

Available 
for sale 
£m

Loans and 
receivables 
£m

2013

Total 
£m

3.6

27.0

33.2

4.3

96.9

6.1

3.6

25.2

33.2

–

96.9

–

Group

2012

Total 
£m

4.3

27.1

23.6

1.5

89.4

2.8

–

–

–

1.5

–

–

1.5

–

1.9

–

–

–

2.8

4.7

4.3

25.2

23.6

–

89.4

–

158.9

171.1

142.5

148.7

Other receivables

Investments

Trade receivables

Foreign currency contracts

Cash and cash equivalents

ESOP reserve

–

–

–

4.3

–

–

4.3

–

1.8

–

–

–

6.1

7.9

94  Clarkson PLC  Annual Report 2013 

Notes to the financial statements 
Available 
for sale 
£m

Loans and 
receivables 
£m

Owed by group companies

Investments

Cash and cash equivalents

Financial liabilities 

Trade payables

Other payables

Other tax and social security

Deferred consideration

Accruals

Provisions

Other payables

Owed to group companies

Accruals

Provisions

Available 
 for sale 
£m

Loans and 
receivables 
£m

–

0.2

–

0.2

13.2

25.2

0.6

39.0

2013

Total  
£m

13.2

25.4

0.6

39.2

Amortised 
cost 
£m

9.5

2.3

4.5

2.8

64.5

2.0

85.6

Amortised 
cost 
£m

–

4.5

9.9

2.0

16.4

–

0.2

–

0.2

2013

Total 
£m

9.5

2.3

4.5

2.8

64.5

2.0

85.6

2013

Total 
£m

–

4.5

9.9

2.0

16.4

28 Related party transactions
The group did not enter into any related party transactions. 

During the year the company entered into transactions, in the ordinary course of business, with related parties. 

Transactions with subsidiaries during the year were as follows: 

Management fees charged 

Interest received 

Dividends received

Provision for impairment of receivables

Balances with subsidiaries at 31 December were as follows: 

Amounts owed by related parties 

Amounts owed to related parties

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Company

2012

Total 
£m

24.7

13.3

11.1

49.1

Group

2012

Total 
£m

9.6

2.3

2.1

1.0

53.4

1.8

70.2

Company

2012

Total 
£m

0.1

1.5

5.5

1.8

8.9

Company

2012  
£m

0.9

0.1

39.5

(0.7)

Company

2012  
£m

24.7

(1.5)

24.7

13.1

11.1

48.9

Amortised  
cost 
£m

9.6

2.3

2.1

1.0

53.4

1.8

70.2

Amortised  
cost 
£m

0.1

1.5

5.5

1.8

8.9

2013  
£m

0.9

–

10.0

(7.2)

2013  
£m

13.2

(4.5)

Compensation of key management personnel (including directors) 
There were no key management personnel in the group and company apart from the Clarkson PLC directors. Details of their 
compensation can be found in the directors’ remuneration table on page 47. Share-based payments relating to the Clarkson PLC 
directors during the year amounted to £0.6m (2012: £0.9m). 

Annual Report 2013  Clarkson PLC  95

 
 
29 Subsidiaries 
Principal subsidiaries 
Country of incorporation and operation

UK 

Australia

China

France

Germany

Greece 

India

Italy 

Morocco

The Netherlands 

Norway

Singapore 

South Africa

Sweden

Switzerland

Company

H Clarkson & Company Limited 

Clarkson Port Services Limited*

Clarkson Financial Services Limited

Clarkson Investment Services Limited

Clarkson Legal Services Limited

Clarkson Overseas Shipbroking Limited

Clarkson Property Holdings Limited

Clarkson Research Holdings Limited

Clarkson Research Services Limited

Clarkson Securities Limited

Clarkson Shipbroking Group Limited

Clarkson Shipping Investments Limited

Clarkson Valuations Limited

EnShip Limited*

Gibb Tools Limited*

LNG Shipping Solutions Limited

Clarkson Australia Pty Limited

Clarkson Asia Limited*

Clarkson Shipbroking (Shanghai) Co Limited*

Clarkson Paris SAS*

Clarkson (Deutschland) GmbH*

Clarkson (Hellas) Limited 

Clarkson Shipping Services India Private Limited*

Clarkson Italia Srl* 

Clarkson Morocco SARL*

Clarkson Nederland BV*

Clarkson Norway AS*

Clarkson Asia Pte Limited 

Clarkson South Africa (Pty) Limited*

Clarkson Sweden AB*

Clarkson Shipbroking Switzerland SA*

United Arab Emirates 

Clarkson DMCC*

USA

Clarkson Capital Markets, LLC.*

Clarkson Commodities USA, LLC.*

Clarkson Shipping Services USA, LLC.* 

Clarkson USA Inc.*

*Not audited by PricewaterhouseCoopers LLP and associates. 
†Held by Clarkson PLC.

Percentage of equity shares

100

100
100†
100†

100

100
100†
100†

100
100†
100†
100†

100

100

100

100

100 

100

100
100†

100

100

100
100†

100

100

100

100

100

100

100

100

100

100

100

100

All the companies in this note are engaged in the provision of shipping and shipping-related services. 

The group also holds investments in other subsidiaries which are either not trading or not significant. In compliance with section 410 
of the Companies Act 2006, a complete list of subsidiaries will be annexed to the company’s next annual return, some of which do not 
require a statutory audit.

96  Clarkson PLC  Annual Report 2013 

Notes to the financial statements 
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Glossary

Aframax 

Ballast voyage 

Bareboat charter 

Bulk cargo 

Bunkers 

Cabotage 

Capesize 

Capesize 4tc

Cbm 

Cgt

A tanker size range defined by Clarksons as between 80-120,000 dwt. 

A voyage with no cargo on board to get a ship in position for the next loading port or docking. 
On voyage the ship is said to be in ballast. 

The hire or lease of a vessel from one company to another (the charterer), which in turn provides 
crew, bunkers, stores and pays all operating costs. 

Unpackaged cargoes such as coal, ore and grain. 

The ship’s fuel. 

 Transport of goods between two ports or places located in the same country, often restricted to 
domestic carriers. 

Bulk ship size range defined by Clarksons as 100,000 dwt or larger. 

An index derived from an average of four Capesize time charter rates, published by the Baltic 
Exchange.

Cubic metres. Used as a measurement of cargo capacity for ships such as gas carriers.

 Compensated gross tonnage. This unit of measurement was developed for measuring the level 
of shipbuilding output and is calculated by applying a conversion factor, which reflects the 
amount of work required to build a ship, to a vessel’s gross registered tonnage.

Charterer 

Cargo owner or another person/company who hires a ship. 

Charter-party 

Transport contract between shipowner and shipper of goods. 

CIF 

ClarkSea index

 Cost, insurance and freight. Delivery of goods is the seller’s responsibility to the port of 
discharge. The freight is paid for by the supplier of goods. 

 A weighted average index of earnings for the main vessel types where the weighting is based 
on the number of vessels in each fleet sector.

Clean products 

Refined oil products such as naphtha. 

COA 

 Contract of Affreightment. An agreement to transport a defined amount of cargo at an agreed 
freight rate, with the shipowner choosing the ship. 

Combination carrier 

 Ship capable of carrying oil or dry bulk cargoes, thereby increasing the productivity of the vessel. 
Typically termed OBO or Ore/Oiler. 

Containership

A cargo ship specifically equipped with cell guides for the carriage of containerised cargo.

Crude oil 

Unrefined oil. 

Daily operating costs 

 The costs of a vessel’s technical operation, crewing, insurance and maintenance, but excluding 
costs of financing, referred to in the industry as opex.

Demurrage 

 Money paid to shipowner by charterer, shipper or receiver for failing to complete loading/
discharging within time allowed according to charter-party. 

Dirty products 

Less refined oil products such as fuel oil. 

Dry (market) 

Generic term for the bulk market. 

Dry cargo carrier 

A ship carrying general cargoes or sometimes bulk cargo. 

Dry docking 

 To put a vessel into a dry dock for inspection, repair and maintenance. Normally done on a 
regular basis. 

Dwt 

E&P

FFA 

 Deadweight ton. A measure expressed in metric tons (1,000 kg) or long tons (1,016 kg) of a ship’s 
carrying capacity, including bunker oil, fresh water, crew and provisions. This is the most 
important commercial measure of the capacity. 

Exploration and Production.

 A Forward Freight Agreement is a cash contract for differences requiring no physical delivery 
based on freight rates on standardised trade routes. 

Annual Report 2013  Clarkson PLC  97

 
 
Glossary

FOB 

FOB (estimate) 

FOSVA 

Freight rate 

 Free on Board. Cost of the delivery of goods is the seller’s responsibility only up to the port 
of loading. The freight is paid for by the buyer of the goods. 

 Forward Order Book represents estimated commissions collectable over the duration of the 
contract as principal payments fall due. The forward order book is not discounted.

 Forward Ship Value Agreement. An FFA based product designed specifically for the sale and 
purchase market. 

 The agreed charge for the carriage of cargo expressed per ton(ne) of cargo (also Worldscale 
in the tanker market) or as a lump sum. 

Handysize/Handymax 

 Bulk ship size ranges of ships defined by Clarksons as 10-40,000 dwt and 40-  65,000 dwt. 

IMO 

ISM code 

LGC

LNG 

LPG 

MGC

MLP

MOA 

MR

OBO 

International Maritime Organisation: a United Nations agency devoted to shipping. 

 International Safety Management code for the safe operation of ships and for pollution prevention 
as adopted by the IMO. 

Large Gas Carrier. Vessel defined by Clarksons as 40-60,000 cbm. 

Liquefied Natural Gas. 

Liquefied Petroleum Gas. 

Mid-sized Gas Carrier. Vessel defined by Clarksons as 20-40,000 cbm. 

Master Limited Partnership is a limited partnership that is publicly traded on a securities exchange.

Memorandum of Agreement. 

Medium Range. A product tanker sized between 40-60,000 dwt.

Oil, Bulk, Ore carrier (see combination carrier). 

Oil tanker 

Tanker carrying crude oil or refined oil products. 

OSV 

OTC

Panamax 

Offshore Support Vessels. Ships engaged in providing support to offshore oil platforms.

Over the counter. Directly between two parties, without any supervision of an exchange.

 Bulk ship size range defined by Clarksons as 65-100,000 dwt. Strictly speaking the largest ship 
capable of navigating in the Panama Canal. 

Parcel tanker 

Tanker equipped to carry several types of cargo simultaneously. 

Product tanker 

Tanker that carries refined oil products. 

Reefer 

Ro-Ro 

Semi-ref

Shipbroker 

Shuttle tanker 

Spot business 

Spot market 

Suezmax 

Supramax 

TEU 

A vessel capable of handling refrigerated cargoes such as meat, fish and fruit. 

 An abbreviation for roll-on roll-off, describing vessels where vehicles drive onto and off 
of the vessels. 

Semi-refrigerated gas carriers. Ships which employ a combination of refrigeration 
and pressurisation to maintain the transported gas in liquid form.

 A person/company who on behalf of shipowner/shipper negotiates a deal for the transportation 
of cargo at an agreed price. Shipbrokers also act on behalf of shipping companies in negotiating 
the purchasing and selling of ships, both secondhand tonnage and newbuilding contracts. 

Tanker carrying oil from offshore fields to terminals. 

Broker commission negotiated and invoiced within the same business year. 

 Short-term contracts for voyage, trip or short-term time charters, normally no longer than three 
months in duration. 

A tanker size range defined by Clarksons as 120-200,000 dwt. 

A modern class of Handymax dry bulk carrier defined by Clarksons as 50-65,000 dwt.

 Twenty foot Equivalent Units. The unit of measurement of a standard twenty foot long container. 

98  Clarkson PLC  Annual Report 2013 

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Time charter 

 An arrangement whereby a shipowner places a crewed ship at a charterer’s disposal for 
a certain period. Freight is customarily paid periodically in advance. The charterer also pays 
for bunker, port and canal charges.

Time Charter Equivalent (TCE)

 Gross freight income less voyage costs (bunker, port and canal charges), usually expressed 
in US$ per day. 

Ton/Tonne 

Imperial/Metric ton of 2,240 lbs/1,000 kilos (2,204 lbs). 

ULCC 

VLCC 

VLGC 

Voyage charter 

Voyage costs 

Wet (market) 

Worldscale (WS) 

Ultra Large Crude Carrier. Tanker of more than 320,000 dwt. 

Very Large Crude Carrier. Tanker between 200-320,000 dwt. 

Very Large Gas Carrier. Vessel defined by Clarksons as more than 60,000 cbm. 

 The transportation of cargo from port(s) of loading to port(s) of discharge. Payment is normally 
per ton(ne) of cargo, and the shipowner pays for bunker, port and canal charges. 

Costs directly related to a specific voyage (e.g. bunker, port and canal charges). 

Generic term for the tanker market. 

 An international index of freight for tankers. Worldscale is a schedule of freight rates for 
a standard ship in US dollars per tonne of oil for an array of oil routes. The rates listed in the 
table are designated as Worldscale Flat or WS100 and are revised annually.

Annual Report 2013  Clarkson PLC  99

 
 
Five year financial summary

Income statement

Revenue 

Cost of sales

Trading profit

Administrative expenses 

Operating profit

Profit before taxation 

Taxation 

Profit for the year 

* Before exceptional item and acquisition costs. 
†Restated. Refer to note 2.

Cash flow

Net cash inflow/(outflow) from operating activities

Balance sheet

Non-current assets

Inventories

Trade and other receivables (including income tax receivable)

Current asset investments

Cash and cash equivalents

Current liabilities

Non-current liabilities

Net assets

Statistics

Earnings per share – basic

Dividend per share 

* Before exceptional item and acquisition costs.

2013*
£m

198.0

(6.2)

191.8

(166.9)

24.9

25.1

(6.9)

18.2

2012*†
£m

176.2

(6.3)

169.9

(150.8)

19.1

20.0

(6.0)

14.0

2011*
£m

194.6

(3.4)

191.2

(161.0)

30.2

32.2

(9.5)

22.7

2010
£m

202.6

(8.0)

194.6

(160.1)

34.5

32.4

(8.9)

23.5

2009
£m

176.7

(8.3)

168.4

(145.8)

22.6

22.5

(5.6)

16.9

2013  
£m

22.8

2012  
£m

(4.4)

2011  
£m

7.2

2010  
£m

42.3

2009  
£m

(18.0)

2013  
£m

63.9

0.9

47.8

25.2

96.9

(89.4)

(7.6)

137.7

2012  
£m

65.2

–

33.5

25.2

89.4

(72.2)

(15.1)

126.0

2011  
£m

63.5

–

38.1

–

132.9

(99.9)

(11.3)

123.3

2010  
£m

56.1

–

28.9

11.4

176.3

(149.9)

(6.4)

116.4

2009  
£m

74.8

–

30.6

–

143.2

(90.5)

(61.3)

96.8

2013

98.0p*

56p

2012

2011

2010

74.8p*

121.5p*

125.4p

51p

50p

47p

2009

90.0p

43p

100  Clarkson PLC  Annual Report 2013 

Principal trading offices

United Kingdom
London
Registered office  
Clarkson PLC 
St. Magnus House 
3 Lower Thames Street 
London 
EC3R 6HE 
United Kingdom

Registered number: 1190238

Contact: Andi Case 
Tel: +44 20 7334 0000 
www.clarksons.com

Ipswich
Maritime House 
19a St. Helens Street 
Ipswich 
IP4 1HE 
United Kingdom

Contact: David Rumsey 
Tel: +44 1473 297 300

Ledbury
15 The Homend 
Ledbury  
Herefordshire 
HR8 1BN 
United Kingdom

Contact: Shaun Sturge 
Tel: +44 1531 634 561

Aberdeen
56–58 Bon Accord Street 
Aberdeen 
Aberdeenshire 
AB11 6EL 
United Kingdom

Contact: Kathy Gay 
Tel: +44 1224 576 900

70 St Clement Street 
Aberdeen 
Aberdeenshire 
AB11 5BD 
United Kingdom

Contact: James Braid 
Tel: +44 1224 211 500

271 King Street 
Aberdeen 
Aberdeenshire 
AB24 5AN 
United Kingdom

Contact: Iain Clark 
Tel: +44 1224 620 940

Australia
Brisbane
PO Box 2592 
Wellington Point 
Brisbane 
QLD 4160 
Australia

Contact: Felix McKeown 
Tel: +61 7 3822 4660

Melbourne
Level 12 
636 St Kilda Road 
Melbourne 
VIC 3004 
Australia

Contact: Murray Swan 
Tel: +61 3 9867 6800

Perth
Level 10 
16 St Georges Terrace 
Perth 
WA 6000 
Australia

Contact: Mark Rowland 
Tel: +61 8 6210 8700 

China
Hong Kong
3209-3214 Sun Hung 
Kai Centre 
30 Harbour Road 
Wanchai 
Hong Kong

Contact: Martin Rowe 
Tel: +852 2866 3111

Shanghai
Room 1303–1304 
Standard Chartered Tower 
201 Century Avenue 
Shanghai 
China 200120

Contact: Cheng Yu Wang 
Tel: +86 21 6103 0100

Germany
Johannisbollwerk 20, 5. fl 
Hamburg 
20459 
Germany

Contact: Jan Aldag 
Tel: +49 40 3197 66 110

Greece
62 Kiffissias Avenue 
15125 Marousi 
Greece

Contact: 
Savvas Athanassiades 
Tel: +30 210 458 6700

India
507–508 The Address 
1 Golf Course Road 
Sector 56 
Gurgaon 
122011 Haryana 
India

Contact: Amit Mehta 
Tel: +91 124 281 3000

Italy
Piazza Rossetti 3A/13 
16129 Genoa 
Italy

Contact: Massimo Dentice 
Tel: +39 0 10 55401

Morocco
219 Boulevard Zerktouni 
Residence El Bardai 
20100 Casablanca 
Morocco 

Contact: Mouad Lambarki 
Te: +212 675 080221

The Netherlands
De Lairessestraat 107–2 
Amsterdam 
1071–NX 
The Netherlands

Contact: Alex Graham 
Tel: +31 20 205 5844

Norway
Godthaab  
Strandveien 50 
N–1366 Lysaker 
Norway

Contact:  
Jakob Tolstrup-Møller 
Tel: +47 67 10 2300

Singapore
8 Shenton Way  
# 23–01 AXA Tower 
Singapore 068811

Contact: Giles Lane 
Tel: +65 6339 0036

South Africa
PO Box 5890 
Rivonia 
Johannesburg 2128 
South Africa

Contact: Simon Lester 
Tel: +27 11 803 0008

Sweden
Uppsala Castle 
Uppsala 
Sweden 75237

Contact: Torbjorn Helmfrid 
Tel: +46 18 502 075

Switzerland
Rue de la Fontaine 1 
1204 
Geneva 
Switzerland

Contact: David Collins 
Tel: +41 22 308 9900

United Arab Emirates
Office 2604 
Reef Tower 
Jumeirah Lakes Towers 
Sheikh Zayed Road 
Dubai 
UAE 
PO Box 102929

Contact: Esam Balla 
Tel: +971 4 450 9400

USA
Houston
1333 West Loop South 
Suite 1525 
Houston 
Texas 77027 
USA

Contact: Roger Horton 
Tel: +1 713 235 7400

New York
597 Fifth Avenue 
8th Floor 
New York 
NY 10017 
USA

Contact: Peter Greca 
Tel: +1 212 314 0900

This annual report is printed on LumiSilk. 
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 and 
both are FSC® certified. If you have finished  
reading this report and no longer wish to retain 
it, please pass it on to other interested readers 
or dispose of it in your recycled paper waste. 

Thank you.

This report is available at:  
www.clarksons.com

Clarkson PLC 
St. Magnus House 
3 Lower Thames Street 
London EC3R 6HE 
+44 (0) 20 7334 0000

www.clarksons.com

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