IFRS Statement

Clarkson PLC
25 August 2005


                                  CLARKSON PLC

                            REGULATORY NEWS RELEASE
                                                                  25 August 2005



Restatement of 2004 Report and Accounts
following adoption of International Financial Reporting Standards (IFRS)

The purpose of this regulatory news release is to provide a detailed update on
the impact of the transition to International Financial Reporting Standards
(IFRS) on the previously published 2004 Annual Report and Accounts of Clarkson
PLC, in particular this requires the restatement of the transitional balance
sheet at 1 January 2004.



Overview of Impact



  • Underlying trading and cash flows unaffected.


  • Reported profit before tax and basic earnings per share slightly improved.



  • Net assets reduced due to revised accounting for defined benefit pension
    fund deficit (less related deferred tax), offset by writing back of proposed
    dividends.


  • No material changes from the effects mentioned in the 2004 Annual Report
    and Accounts.


                                                                                   2004                            2004
                                                                       IFRS (unaudited)                         UK GAAP
                                                                                                               Note (1)

Revenue - continuing operations                                                  £87.4m                          £87.4m

Profit before taxation                                                           £20.4m                          £20.2m

Taxation                                                                          £6.4m                           £6.5m

Profit after taxation                                                            £14.0m                          £13.7m

Earnings per share                                                           85.7 pence                      83.8 pence

Net assets                                                                       £28.1m                          £31.1m


(1) The UK GAAP numbers are as reported in the 2004 Annual Report and Accounts.





For further information please contact:

Rob Ward, Group Finance Director                        020 7334 0000



This announcement, together with other information on Clarkson PLC, may be found
at: www.clarksons.com


1. Introduction



The purpose of this statement is to provide a detailed update on the impact of
the transition to International Financial Reporting Standards (IFRS) on the 2004
published consolidated accounts of Clarkson PLC.



A brief commentary on the expected impact was included in the Finance Director's
Review contained in the Group's 2004 Annual Report and Accounts. Whilst this
statement provides greater detail on the transition to IFRS, the adjustments are
consistent with the previous commentary.



The information has been prepared by management using its best knowledge,
judgement and interpretation of the expected standards and accounting policies
that will be adopted when the Group prepares its first complete set of IFRS
accounts as at 31 December 2005. It is unaudited. It should be noted that only a
complete set of accounts comprising an income statement, a balance sheet, a cash
flow statement, a statement of recognised income and expense together with
comparative financial information and explanatory notes can provide a fair
presentation of the Group's financial position and operating performance.



This statement contains no information in respect of the Group's 2005
performance under IFRS.



Clarkson PLC intends to report its interim accounts, covering the six months to
30 June 2005, under IFRS, on Wednesday 31 August 2005.



Throughout this document the following abbreviations apply:



  • IFRS - International Financial Reporting Standard(s)
  • IAS - International Accounting Standard
  • FRS - Financial Reporting Standard
  • SSAP - Statement of Standard Accounting Practice
  • UK GAAP - UK Generally Accepted Accounting Practice, which comprise all
    the rules under SSAP and FRS which applied prior to the introduction of IFRS
    and IAS




2. Transition to International Financial Reporting Standards



Companies listed on regulated exchanges within the European Union are required
to adopt IFRS for accounting periods beginning after 31 December 2004. The
adoption of IFRS will, therefore, first apply to the Group's accounts with
effect from 1 January 2005. Comparative figures are required and consequently,
for Clarkson PLC, the transition date is 1 January 2004, as determined in
accordance with IFRS 1 'First-time Adoption of International Accounting
Standards'.



The European Union has not yet adopted all of the IFRS (including amendments to
IAS 19 'Employee Benefits' and IAS 39 'Financial Instruments: Recognition and
Measurement') consequently on adoption of these standards there may be further
changes to the figures provided in this document.  Further IFRS may be
introduced between now and the finalisation of the 2005 Report and Accounts.



During 2004/05 the Group undertook a project, overseen by the Audit Committee,
to manage the transition to IFRS. This involved an analysis of each standard to
identify the differences between the Group's accounting policies under UK GAAP
and those to be adopted under IFRS. The additional data required to restate the
Group's results and its financial position in accordance with IFRS with effect
from the transition date has been collected and the ongoing reporting and
consolidation systems are being modified to meet IFRS requirements.



The differences between UK GAAP and IFRS that have been identified as having the
most significant effect on the Group's reported results are those arising from:



  • The implementation of IAS 19 'Employee Benefits'
  • The treatment of proposed dividends



These, along with some of the more minor changes, are discussed below:



  • Section 3 - Group Income Statement
  • Section 4 - Group Balance Sheet
  • Section 5 - Group Cash Flow Statement
  • Section 6 - Statement of Recognised Income and Expense
  • Section 7 - Reconciliation of Equity
  • Section 8 - Segmental Analysis
  • Section 9 - Earnings Per Share



The exemptions adopted by Clarkson PLC in the transition to IFRS, as permitted
by IFRS 1, are explained in Section 10 and the Accounting Policies to be adopted
by the Group under IFRS in Section 11.




3. Group Income Statement


                                               UK GAAP        Adjustment             IFRS              Notes
                                                  2004              2004             2004        (see below)
                                                    £m                £m               £m

Revenue - continuing operations                   87.4                 -             87.4

Trading profit                                    17.5                 -             17.5           3.2, 3.3
Amortisation of goodwill                         (0.1)               0.1                -                3.4
Operating profit                                  17.4               0.1             17.5

Finance income (revenue)                           2.1               5.2              7.3                3.3
Finance costs                                    (0.1)             (4.9)            (5.0)                3.3
Share of profit from associates and                0.8             (0.2)              0.6                3.6
joint ventures
Profit before taxation                            20.2               0.2             20.4

Taxation                                         (6.5)               0.1            (6.4)      3.2, 3.3, 3.6
Profit after taxation                             13.7               0.3             14.0                3.5


Profit attributable to
Equity holders of the parent                      13.4              0.3              13.7
Minority interest                                  0.3                -               0.3
                                                  13.7              0.3              14.0


Earnings per share                          83.8 pence                         85.7 pence

 - basic and diluted



3.1 Format of the Income Statement



The proforma IFRS income statement is based on a current interpretation of IFRS.
It is subject to modification as standard practice amongst UK listed entities
evolves.



3.2 Foreign exchange gains or losses on foreign currency ledgers.



Under UK GAAP the monetary assets and liabilities held in foreign currency
ledgers were considered to be separate foreign currency branches.  The trading
results of foreign currency branches were translated at average rates, or at
contracted rates if the trading results were covered by forward exchange
contracts, with any exchange differences arising taken directly to reserves.



Under IAS 21 'The Effect of Changes in Foreign Exchange Rates', the trading
results of foreign currency ledgers are translated at the rate of exchange
prevailing on the date of the transaction.  Monetary assets and liabilities held
in foreign currency ledgers are translated at the rate prevailing at the balance
sheet date.  Differences are recognised in the income statement in the period in
which they arise.



Consequently a foreign exchange loss of £0.9m before taxation relief of £0.3m
(equating to £0.6m net) has been included in the income statement in respect of
such ledgers.




3.3 Pension costs



Under SSAP 24 'Accounting for Pension Costs' contributions to the defined
benefit pension scheme were charged to the profit and loss account in accordance
with the recommendations of a qualified actuary.



Under IFRS pension contributions are charged in accordance with IAS 19 'Employee
Benefits'.  IAS 19 accounting is very similar to a full implementation of FRS 17
'Retirement Benefits'.  Information on FRS 17 was provided in note 32 of the
2004 Annual Report and Accounts.



Implementation of IAS 19 requires the removal of the SSAP24 charge relating to
the defined benefit scheme of £2.5m (included in administrative expenses) and
replacing it with the IFRS pension charge of £1.3m.  This charge is split
between a current service cost of £1.6m (included in administrative expenses),
expected return on plan assets of £5.2m (included in finance income) and
interest cost of £4.9m (included in finance costs).  An adjustment of £0.4m
related to the tax affect of this adjustment.



3.4 Goodwill amortisation



Under UK GAAP, goodwill arising on acquisitions subsequent to 1 January 1998 was
capitalised and amortised over a period of up to 20 years.  Under IFRS, goodwill
is held at its carrying value (the UK GAAP net book value as at 31 December
2003) and subjected to annual impairment testing.  The goodwill amortisation
charge of £0.1m for 2004 under UK GAAP has been reversed for IFRS purposes.



3.5 Dividends



Under UK GAAP, any dividends paid or proposed in respect of a year are
recognised in the income statement.  Under IFRS, dividends are recognised as
distributions from equity when declared.  Dividends of £4.0m, paid and proposed
in 2004, have been excluded from the income statement under IFRS.



3.6 Share of profits of associates and joint ventures



Under UK GAAP, the share of profits is shown before tax of £0.2m which is
included in the taxation charge.  Under IFRS, the share of profits is reported
after tax with no amount in the taxation charge.


4. Group Balance Sheet



Non-current Assets
                                               UK GAAP        Adjustment             IFRS              Notes
                                                  2004              2004             2004        (see below)
                                                    £m                £m               £m

Property, plant and equipment                      6.6             (0.4)              6.2                4.1
Goodwill                                           5.5               0.1              5.6                4.2
Investments in associates and joint                0.8                 -              0.8
ventures
Trade and other receivables                        0.3               0.4              0.7                4.1
Financial assets                                   0.7                 -              0.7
Deferred tax assets                                  -               3.1              3.1                4.3

                                                  13.9               3.2             17.1

Current Assets
Trade and other receivables                     17.7            (0.7)             17.0                4.3
Cash and cash equivalents                       44.1                -             44.1

                                                61.8            (0.7)             61.1

Current Liabilities
Interest bearing loans                           (1.5)                -             (1.5)

and borrowings
Trade payables                                   (4.2)                -             (4.2)
Other payables                                  (30.3)                -            (30.3)
Income tax payable                               (4.7)                -             (4.7)
Deferred taxation                                    -            (0.2)             (0.2)                4.3
Proposed dividends                               (2.6)              2.6                 -                4.4

                                                (43.3)              2.4            (40.9)


Net Current Assets                                     18.5                 1.7                20.2

                                                       32.4                 4.9                37.3


Non-current Liabilities
Interest bearing loans                         (0.3)                -            (0.3)

and borrowings
Trade payables                                 (0.1)                -            (0.1)
Provisions                                     (0.9)                -            (0.9)
Employee benefits                                  -            (7.9)            (7.9)                4.5

                                               (1.3)            (7.9)            (9.2)

Net Assets                                             31.1               (3.0)                28.1



Capital and Reserves
Share capital                                      4.1                -              4.1
Share premium                                      4.5                -              4.5
ESOP reserves                                    (0.4)                -            (0.4)
Capital redemption reserve                         2.0                -              2.0
Profit and loss                                   19.7            (2.6)             17.1                4.6
Other reserves                                       -            (0.4)            (0.4)                4.6

                                                  29.9            (3.0)             26.9

        Minority Interests                         1.2                -              1.2


Total Equity                                           31.1               (3.0)                28.1


4.1 Lease premium



Under UK GAAP a lease premium amounting to £0.4m was capitalised as part of
leasehold improvements.  Under IAS 17 'Leases' this premium is now classified as
a prepayment and will continue to be amortised over the lease term.



4.2 Goodwill amortisation



Under UK GAAP, goodwill arising on acquisitions subsequent to 1 January 1998 was
capitalised and amortised over a period of up to 20 years.  Under IFRS, goodwill
is held at its carrying value (the UK GAAP net book value as at 31 December
2003) and subjected to annual impairment testing.  Hence the goodwill
amortisation charge of £0.1m has been reversed, leading to an equivalent
increase in the goodwill value on the balance sheet at the end of 2004 under
IFRS.



4.3 Deferred tax



IFRS changes the focus of deferred tax from the income statement to the balance
sheet and to the differences between the book value and tax base of assets and
liabilities.  Under IFRS, deferred tax is provided on all temporary differences.
  Deferred tax assets are only recognised to the extent that they may be
regarded as recoverable.  The Group has recognised a net increase in deferred
tax assets of £2.4m relating to the pension fund deficit (see 4.5 below).
Furthermore an adjustment of £0.7m of deferred tax previously recorded in trade
and other receivables under UK GAAP is now shown as a non-current asset.



Under IFRS, a temporary difference arises on unremitted distributable earnings
of overseas subsidiaries if it is probable that these funds will be remitted in
the foreseeable future.  As a result, the deferred tax liability has increased
by £0.2m.



4.4 Dividends



Under UK GAAP, any dividend proposed in respect of a year is recognised in the
income statement and provided for in the closing balance sheet.  Under IFRS, a
declared dividend does not constitute an adjusting post balance sheet event.
Hence, the provision for the final dividend of £2.6m at the end of 2004 under UK
GAAP has been reversed under IFRS.



4.5 Employee benefits



As indicated in 3.3 above, employee benefit obligations are recorded in
accordance with IAS 19.  This has resulted in incorporating a £7.9m net deficit
as at 31 December 2004 onto the balance sheet.  Subsequent to the year end the
company made a contribution of £10.0m into the scheme.




4.6 Reserves



The profit and loss account is adjusted to:

  • add back the goodwill previously written off under UK GAAP of £0.1m
  • add back the final proposed dividend for 2004 £2.6m
  • incorporate the pension fund deficit of £7.9m and related deferred tax
    asset £2.4m.
  • transfer foreign exchange losses to a translation reserve £0.4m relating
    to differences arising on the consolidation of foreign operations.
  • incorporate an additional deferred tax charge of £0.2m on unremitted
    overseas dividends.



As noted in 10.3 under the IFRS 1 exemptions, the cumulative translation
differences have been set to zero at the transition date. The closing balance of
£0.4m represents the amount arising in 2004.




5. Group Cash Flow Statement



Under IAS 7 'Cash Flow Statements' the company is required to analyse the
movements in cash and cash equivalents.  Under UK GAAP, the company presented
information on the movement in cash balances, without taking into account
deposits.  Underlying cash flows are unaffected by this change in presentation.


                                               UK GAAP        Adjustment             IFRS              Notes
                                                  2004              2004             2004        (see below)
                                                    £m                £m               £m

Cash flows from                                   19.6                 -             19.6                5.1

operating activities
Cash flows from                                  (2.6)                 -            (2.6)                5.2

investing activities
Cash flows from                                  (4.0)                 -            (4.0)                5.3

financing activities
Increase in cash                                  13.0                 -             13.0                5.4

and cash equivalents



5.1 Taxation paid of £4.7m under UK GAAP was shown separately on the face of the
cash flow statement and is deducted from the £24.3m previously shown as net cash
inflow from operating activities.  These are now shown combined as cash flows
from operating activities.



5.2 Under UK GAAP investing activities were shown separately as:

  • dividends from associates of £0.2m
  • plus returns on investments and servicing of finance of £2.0m
  • less capital expenditure and financial investment of £1.5m
  • less acquisitions and disposals of £3.3m



5.3 Under UK GAAP financing activities were shown as:

  • equity dividends paid of £3.1m
  • financing of £0.9m



5.4 UK GAAP specifically excluded monies held on deposit from the face of the
cash flow statement and any movements between short-term cash holdings and such
deposits were shown in 'Management of Liquid Resources' as £7.4m.  Under IAS 7,
deposits are considered to be cash equivalents and are included on the
statement.




6. Statement of Recognised Income and Expense (SORIE)



Under IAS 1 'Presentation of Financial Statements' the company is required to
produce a Statement of Changes in Equity (SOCIE).  However, because the Group is
using the amendment to IAS 19 to record the actuarial gains and losses on the
employee benefit obligation, this statement of changes in equity should be shown
as a SORIE with other changes in equity being shown in the accounts.  The SORIE
replaces the UK GAAP equivalent of the statement of total recognised gains and
losses.


                                               UK GAAP        Adjustment             IFRS              Notes
                                                  2004              2004             2004        (see below)
                                                    £m                £m               £m

Net actuarial gains / losses on                      -               2.6              2.6                6.2
employee benefit obligation
Foreign exchange differences                     (1.0)               0.6            (0.4)                6.3
Recognised directly in equity                    (1.0)               3.2              2.2

Profit for the period                             13.7               0.3             14.0                6.1

Total recognised income and expense               12.7               3.5             16.2


Attributable to
Equity holders of the parent                      12.4              3.5              15.9
Minority interests                                 0.3                -               0.3
                                                  12.7              3.5              16.2



6.1 The profit adjustment comprises:

  • A net after tax foreign exchange loss of £0.6m - see 3.2 above
  • A net after tax employee benefit adjustment under IAS 19 of £0.8m - see
    3.3 above
  • A goodwill write back of £0.1m - see 3.4 above



6.2 Represents the net actuarial gain on the employee benefit obligations in
2004 of £2.6m.



6.3 The foreign exchange differences are now split between those shown through
the income statement of £0.6m (see 3.2 above) and the £0.4m still shown through
the SORIE (see 4.6 above).




7. Reconciliation of Equity by Component of Equity



7.1 As at 1 January 2004


                                              UK GAAP       Adjustment             IFRS              Notes
                                           01.01.2004       01.01.2004       01.01.2004        (see below)
                                                   £m               £m               £m

Share capital                                     4.0                -              4.0
Share premium                                     4.1                -              4.1
Capital redemption reserve                        2.0                -              2.0
ESOP reserve                                    (0.5)                -            (0.5)
Profit and loss                                  11.3            (7.4)              3.9              7.1.1
                                                 20.9            (7.4)             13.5
Minority interests                                0.9                -              0.9


Total Equity                                           21.8               (7.4)                14.4



7.1.1 The profit and loss account is adjusted to:

  • add back the final proposed dividend for 2003 of £1.7m
  • incorporate the employee benefit deficit of £12.7m and related deferred
    tax balance of £3.8m.
  • incorporate an additional deferred tax charge of £0.2m on unremitted
    overseas dividends.



7.2 As at 31 December 2004


                                              UK GAAP       Adjustment             IFRS              Notes
                                           31.12.2004       31.12.2004       31.12.2004        (see below)
                                                   £m               £m               £m

Share capital                                     4.1                -              4.1
Share premium                                     4.5                -              4.5
Capital redemption reserve                        2.0                -              2.0
ESOP reserve                                    (0.4)                -            (0.4)
Profit and loss                                  19.7            (2.6)             17.1              7.2.1
Translation reserve                                 -            (0.4)            (0.4)              7.2.1
                                                 29.9            (3.0)             26.9
Minority interests                                1.2                -              1.2


Total Equity                                           31.1               (3.0)                28.1



7.2.1 The profit and loss account is adjusted to:

  • add back the goodwill previously written off under UK GAAP of £0.1m
  • add back the final proposed dividend for 2004 £2.6m
  • incorporate the employee benefit deficit of £7.9m and related deferred tax
    asset £2.4m.
  • transfer foreign exchange losses to a translation reserve £0.4m
  • incorporate the additional deferred tax charge of £0.2m on unremitted
    overseas dividends.




8. Segmental Analysis



Under IFRS, segmental analysis is presented according to primary segments and
secondary segments.  The Group's primary segmental analysis will be based on the
two classes of business it provides: shipping services and shipping logistics.
The secondary analysis will be presented according to geographic markets
comprising UK, Americas and the Rest of the World.  This is consistent with the
way the Group manages itself and with the format of the Group's internal
financial reporting.



8.1 Segment revenue

                                                UK GAAP        Adjustment             IFRS              Notes
                                                   2004              2004             2004        (see below)
                                                     £m                £m               £m

Shipping services                                  82.4                 -             82.4
Shipping logistics                                  5.0                 -              5.0
                                                   87.4                 -             87.4


UK                                                 67.7                -              67.7
Americas                                            2.0                -               2.0
Rest of World                                      17.7                -              17.7
                                                   87.4                -              87.4



There are no adjustments between UK GAAP and IFRS.



8.2 Segment result

                                                UK GAAP        Adjustment             IFRS              Notes
                                                   2004              2004             2004        (see below)
                                                     £m                £m               £m

Shipping services                                  22.2               0.5             22.7       8.2.1, 8.2.4
Shipping logistics                                (2.0)             (0.3)            (2.3)              8.2.2

                                                   20.2               0.2             20.4


UK                                                13.8               0.3             14.1       8.2.3, 8.2.4
Americas                                           0.4                 -              0.4
Rest of World                                      6.0             (0.1)              5.9              8.2.4

                                                  20.2               0.2             20.4



8.2.1 The services result adjustment comprises:

  • A foreign exchange loss of £0.6m
  • A net employee benefit gain under IAS 19 of £1.2m - see 3.3 above
  • A goodwill write back of £0.1m - see 3.4 above



8.2.2 The logistics result adjustment comprises a £0.3m foreign exchange loss.



8.2.3 The UK result adjustment comprises:

  • A foreign exchange loss of £0.9m - see 3.2 above
  • A net employee benefit gain under IAS 19 of £1.2m - see 3.3 above
  • A goodwill write back of £0.1m - see 3.4 above



8.2.4 Adjustments to deduct the tax relating to the share of profits of
associates and joint ventures amount to £0.1m (UK shipping services), £0.1m
(Rest of World shipping services) - see 3.6 above.



8.3 Segment net assets


                                                UK GAAP        Adjustment             IFRS              Notes
                                                   2004              2004             2004        (see below)
                                                     £m                £m               £m

Shipping services                                  30.7             (3.0)             27.7              8.3.1
Shipping logistics                                  0.4                 -              0.4

                                                   31.1             (3.0)             28.1


UK                                                23.4             (3.0)             20.4              8.3.1
Americas                                           0.1                 -              0.1
Rest of World                                      7.6                 -              7.6

                                                  31.1             (3.0)             28.1



8.3.1 The services and UK net assets adjustment comprises:

  • Goodwill of £0.1m added back - see 4.2 above
  • Proposed dividends of £2.6m added back - see 4.4 above
  • Less after-tax employee benefit deficit of £5.5m - see 4.3 and 4.5 above
  • Increase in deferred tax liability of £0.2m - see 4.3 above




9. Earnings Per Share - Basic and Diluted


                                                             Earnings               EPS
As at 31 December 2004                                             £m   Pence per share

Attributable to shareholders under UK GAAP                       13.4              83.8
Goodwill adjustment                                               0.1               0.6
Employee benefit adjustment (net)                                 0.8               5.0
Foreign exchange differences                                    (0.6)             (3.7)
Attributable to shareholders under IFRS                          13.7              85.7




10. IFRS 1 Exemptions



Clarkson PLC has taken the following exemptions, as permitted by IFRS 1, in the
transition to IFRS.



10.1 Business combinations



The accounting for acquisitions that occurred prior to the transition date of 1
January 2004 has not been restated.



10.2 Employee benefits



All cumulative actuarial gains and losses have been recognised in equity at the
transition date. Under IAS 19 the Group intends to early adopt an amendment
permitting the full recognition of actuarial gains and losses on an annual basis
via the statement of recognised income and expense.



10.3 Cumulative translation differences



Cumulative translation differences have been reset to zero at the transition
date.



10.4 Tangible fixed assets



The Group has chosen not to restate property, plant and equipment to fair value
at the date of transition. These are carried at historic cost which has been
taken as the effective cost for IFRS purposes.



10.5 Financial instruments



The Group has taken the exemption available in IFRS 1 not to restate
comparatives for IAS 32 'Financial Instruments: Disclosure and Presentation' and
IAS 39 'Financial Instruments: Recognition and Measurement'.  Consequently,
information provided in this restatement, and the information that will
ultimately be presented as comparatives to the 2005 financial statements, will
be presented in accordance with UK GAAP.



IAS 32 and IAS 39, which primarily relate to the accounting treatment and
disclosure of financial instruments, will be implemented with effect from 1
January 2005.  As indicated in the Finance Director's Review in the 2004 Annual
Report, the Group uses forward contracts to hedge transaction exposures.  Under
UK GAAP, the Group applied hedge accounting principles supplemented by the
disclosures required by FRS 13 'Financial Instruments'.



Under IFRS, the Group expects to continue this approach to hedging currency
exposures.  Hedging relationships will be formally documented and it is believed
that hedge accounting will continue to be allowable under IAS 39, subject to
meeting hedge effectiveness testing.



As at 31 December 2004, the fair value of forward foreign exchange contracts was
an asset of £0.1m against a book value of nil.  The fair value will be
incorporated on the balance sheet.  The future impact is unpredictable, but it
is considered that it is unlikely to be material to an understanding of the
Group's results.




11. Significant Accounting Policies



11.1 Basis of accounting



The financial statements will be prepared in accordance with IFRS for the first
time with effect from 1 January 2005.  They will be prepared on the historical
cost basis, except for the derivative financial instruments and
available-for-sale financial assets that have been measured at fair value.  The
principal accounting policies expected to be adopted in the preparation of the
2005 Group accounts under IFRS are set out below.



11.2 Basis of consolidation



The consolidated accounts incorporate the accounts of Clarkson PLC and all its
subsidiary undertakings made up to 31 December each year.



Investments in associates and joint ventures are accounted for under the equity
method of accounting.  Investments are carried in the balance sheet at cost plus
post acquisition changes in the Group's share in the net assets of associates
and joint ventures, less any impairment in value.  The income statement reflects
the share of the results of the operations of associates and joint ventures.



The interest of minority shareholders is stated at the minority's proportion of
the value of the assets and liabilities recognised.



The results of companies acquired or disposed of during the year are included in
the group from the effective date of acquisition or up to the effective date of
disposal, as appropriate.



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



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



11.3 Goodwill



Goodwill arising on consolidation represents the excess of the cost of
acquisition over the Group's interest in the fair value of the identifiable
assets and liabilities at the date of acquisition.



Goodwill is recognised as an asset and reviewed for impairment at least
annually. Any impairment is recognised immediately through the income statement
and is not subsequently reversed.



On disposal the attributable amount of goodwill will be included in the
determination of the profit or loss on disposal.



Goodwill arising on acquisitions prior to the date of transition to IFRS 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
1998 has not been reinstated and will not be included in determining any
subsequent profit or loss on disposal.



11.4 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.



Rendering of services



Revenue is recognised on brokerage and commission earnings from shipping related
activities invoiced during the year, hire charter earnings, shipowning and other
income arising from shipping research and consultancy.  Invoices are raised when
all material subjects are lifted or in the case of futures contracts, on the
settlement date.



Sale of goods



Revenue is recognised when products are delivered.



Interest



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



Dividends



Dividend income from investments is recognised when the shareholders' legal
rights to receive payment have been established.



11.5 Leasing



Leases are classified as finance leases whenever the terms of the lease
substantially transfer all the risks and rewards of ownership to the lessee. All
other leases are classified as operating leases.



Rentals payable under operating leases are expensed on a straight-line basis
over the term of the relevant lease.



Payments made on entering into an operating lease are also spread on a
straight-line basis over the lease term.



11.6 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 net profit or loss for the
period, except for exchange differences arising on non-monetary assets and
liabilities where the changes in fair value are recognised directly in equity,
subject to meeting the requirements under IAS 21 'The Effect of Changes in
Foreign Exchange Rates'.



In order to hedge its exposure to certain foreign exchange risks, the Group
enters into forward contracts (see 11.11 below for details of the Group's
accounting policies in respect of such derivative financial instruments).



On consolidation, the assets and liabilities of the Group's overseas operations
are translated at exchange rates prevailing on the balance sheet date. Income
and expense items are translated at the average exchange rates for the period
unless exchange rates fluctuate significantly. Exchange differences arising, if
any, are classified as equity and transferred to the Group's translation
reserve. Such translation differences are recognised as income or expense in the
period in which the operation is disposed of.



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.



11.7 Retirement benefit costs



Payments to defined contribution retirement schemes are charged as an expense as
they fall due.



For the defined benefit retirement scheme, the cost of providing benefits is
determined using the Projected Unit Credit Method, with full actuarial
valuations being carried out on a triennial basis, and updated at each balance
sheet date. Actuarial gains and losses are recognised in full in the period in
which they occur. They are recognised outside the income statement and are
presented in the statement of recognised income and expense.



Past service costs are recognised immediately to the extent that the benefits
are already vested. Otherwise, they are amortised on a straight-line basis over
the period until the benefits become vested.



The retirement benefit obligation recognised in the balance sheet represents the
present value of the defined benefit obligation as adjusted for unrecognised
past service costs, and as reduced by the fair value of scheme assets. Any net
asset resulting from this calculation is limited to the past service cost plus
the present value of available refunds and reductions in future contributions to
the plan.



11.8 Taxation



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



Deferred tax is the tax expected to be payable or recoverable on differences
between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable
profit, and is accounted for using the balance sheet liability method. Deferred
tax liabilities are generally recognised for all taxable temporary differences
and deferred tax assets are recognised to the extent that it is probable that
taxable profits will be available against which deductible temporary differences
can be utilised. Such assets and liabilities are not recognised if the temporary
difference arises from goodwill or from the initial recognition (other than in a
business combination) of other assets and liabilities in a transaction that
affects neither the tax profit not the accounting profit.



Deferred tax liabilities are recognised for taxable temporary differences
arising on investments in subsidiaries and associates, and interests in joint
ventures, except where the Group is able to control the reversal of the
temporary difference and it is probable that the temporary difference will not
reverse in the foreseeable future.



The carrying value of deferred tax assets is reviewed at each balance sheet date
and reduced to the extent that it is no longer probable that sufficient taxable
profits will be available to allow all or part of the deferred tax asset to be
recovered.



Deferred tax is calculated at the tax rates that are expected to apply in the
period when the liability is settled or the asset is realised. Deferred tax is
charged or credited in the income statement, except when it relates to items
charged or credited directly to equity, in which case the deferred tax is also
dealt with in equity.



11.9 Property, plant and equipment



Land and buildings held for use in the production or supply of goods or
services, or for administrative purposes, are stated in the balance sheet at
their historic cost and tested annually for impairment.



Fixtures, plant and equipment 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:



Fleet interests                      -       over the remaining working life
                                             to residual scrap value

Freehold properties                  -       60 years

Leasehold improvements               -       over the period of the lease

Office furniture and equipment       -       4-10 years

Motor vehicles                       -       4 years



Estimates of useful lives and residual scrap values (with the exception of fleet
interests, these are assumed to be zero) are assessed annually.




11.10 Impairment of tangible assets and goodwill



At each balance sheet date, the Group reviews the carrying amounts of its
tangible assets and goodwill on acquisition to determine whether there is any
indication that those assets have suffered an impairment loss.  If any such
indication exists, the recoverable amount of the asset is estimated in order to
determine the extent of the impairment loss (if any).  Where the asset does not
generate cash flows that are independent from other assets, the Group estimates
the recoverable amount of the cash-generating unit to which the asset belongs.



The recoverable amount is the higher of the fair value less the costs to sell
and the value in use. In assessing the 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 for which the estimates of future cash flows have not been
adjusted.



If the recoverable amount of an asset is estimated to be less than its carrying
amount, the carrying amount of the asset is reduced to its recoverable amount.
An impairment loss is recognised as an expense immediately.



For tangible assets, where an impairment loss subsequently reverses, the
carrying amount of the asset is increased to the revised estimate of its
recoverable amount, but so that the increased carrying amount does not exceed
the carrying amount that would have been determined had no impairment loss been
recognised for the asset in prior years. A reversal of an impairment loss is
recognised as income immediately.



11.11 Derivative financial instruments and hedging



The group has adopted the following accounting policy with effect from 1 January
2005 in accordance with IAS 39 'Financial Instruments: Measurement and
Recognition'.



The group's activities expose it primarily to the financial risks of changes in
foreign currency exchange rates. The group uses foreign exchange contracts to
hedge these exposures. The Group does not use derivative financial instruments
for speculative purposes.



Changes in the fair value of derivative financial instruments that are
designated and are effective as a cash flow hedge are recognised directly in
equity and the ineffective portion is recognised immediately in the income
statement. If the cash flow hedge of a firm commitment or forecasted transaction
results in the recognition of an asset or a liability, then, at the time the
asset or liability is recognised, the associated gains or losses on the
derivative that had previously been recognised in equity are included in the
initial measurement of the asset or liability. For hedges that do not result in
the recognition of an asset or a liability, amounts deferred in equity are
recognised in the income statement in the same period in which the hedged item
affects net profit or loss. For an effective hedge of an exposure to changes in
fair value, the hedged item is adjusted for changes in fair value attributable
to the risk being hedged with the corresponding entry in the income statement.
Gains or losses from re-measuring the derivative are also recognised in the
income statement. If the hedge is effective these entries will offset.



Changes in the fair value of derivative financial instruments that do not
qualify for hedge accounting are recognised in the income statement as they
arise.



Hedge accounting is discontinued when the hedging instrument expires or is sold,
terminated, or exercised, or no longer qualifies for hedge accounting. At that
time, any cumulative gain or loss on the hedging instrument recognised in equity
is retained in equity until the forecasted transaction occurs. If a hedged
transaction is no longer expected to occur, the net cumulative gain or loss
recognised in equity is transferred to net profit or loss for the period.
Derivatives embedded in other financial instruments or other host contracts are
treated as derivatives when their risks and characteristics are not closely
related to those host contracts.



The following accounting policy applied for the year ended 31 December 2004



The group used spot and forward foreign currency contracts to reduce exposure to
variations in the US dollar exchange rate.  The group considers these foreign
currency contracts qualify for hedge accounting and gains or losses on these
instruments are only recognised when the transaction occurs.



11.12 Investments



The group has adopted the following accounting policy with effect from 1 January
2005 in accordance with IAS 39 'Financial Instruments: Measurement and
Recognition'.



All investments are initially recognised at the fair value of the consideration
given and including acquisition charges associated with the investment.



After initial recognition, investments, which are classified as
available-for-sale, are measured at fair value.  Gains or losses on
available-for-sale investments are recognised as a separate component of equity
until the investment is sold, at which time the cumulative gain or loss
previously reported in equity is included in the income statement.



The following accounting policy applied for the year ended 31 December 2004



All the group's investments are for the long term and are treated as fixed
assets.  Investments are included in these accounts at cost, less any provision
for permanent diminution in value.



11.13 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.



11.14 Segmental analysis



The Group's primary segmental analysis is based on the two classes of business
it provides: shipping services and shipping logistics. The secondary analysis
will be presented according to geographic markets comprising UK, Americas and
the Rest of the World. This is consistent with the way the Group manages itself
and with the format of the Group's internal financial reporting.


                      This information is provided by RNS
            The company news service from the London Stock Exchange