Gulf Marine Services PLC

Annual Report 2024

Forward and Upward

Focused on Resilience

and Agility to Deliver

Shareholder Value

Who we are

GMS operates a versatile fleet of highly

versatile self-propelled lift boats, across

international markets. Our vessels

provide a stable platform for delivering

a wide range of safe and efficient

services, primarily in the offshore oil,

gas and renewable energy sectors.

Our vessels’ versatility meets the demands of our

clients, to provide cost-effective solutions, while

minimising their environmental footprint.

Our Vision

To be the best

SESV operator

in the world.

Strategic Report

Non-Financial and Sustainability

Information Statement

Highlights

– 2024 Financial Highlights

– 2024 Operational Highlights

– 2025 Strategic Progress and Outlook

Chairman’s Review

At a Glance

Why Invest

Our Fleet

Long-term Value Creation

Market Analysis

Business Model

Strategic Objectives

KPIs

Financial Review

Long-term Viability Statement

Risk Management

ESG

Section 172 statement

Governance

Chairman’s Introduction to Governance

Board of Directors

Report of the Board

Audit and Risk Committee Report

Nomination Committee Report

Remuneration Committee Report

– Directors’ Remuneration Policy Report

– Annual Report on Remuneration

Directors’ Report

Statement of Directors’ Responsibilities

Financial Statements

Independent Auditor’s Report

Group Consolidated Financial Statements

Company Financial Statements

138

Glossary

149

Other Definitions

151

Corporate Information

153

For more information about

us see our website

gmsplc.com

For more investor information

see our website

gmsplc.com/Investor-Contacts.

aspx

Gulf Marine Services PLC Annual Report 2024

Our vessels’ versatility

meets the demands of

our clients, to provide

cost-effective solutions.

Reporting requirement and policies and

standards which govern our approach:

Information necessary to understand

our business and its impact, policy due

diligence and outcomes:

Environmental matters

Greenhouse Gas (GHG) Emissions Policy

Climate change strategy

Carbon emission reporting

Taskforce on Climate-related Financial

Disclosures (TCFD)

Carbon emission reporting, page 42

ESG, page 34

Carbon emission reporting, page 42

TCFD, page 32

Employees

Anti-Bribery and Corruption Policy

Social Responsibility Policy

Whistleblowing Policy

Health and safety standards

Diversity and equal opportunities

Employee engagement and welfare

Ethical practices, page 45

Ethical practices, page 45 and Audit and

Risk Committee report, page 65

Health and safety, page 47

Diversity, page 44, Directors’ Report, page 84

Employee engagement and welfare, page 45

Human rights

Disability Policy

Anti-Slavery Policy

Code of Conduct Policy

Employees and policies, Directors’

Report, page 86

Ethical practices, page 45

Ethical practices, page 45,

Risk management, page 24

Principal risks and impact on

business activity

Risk management, pages 24 to 30

Remuneration Policy Remuneration Policy, page 70

Description of the business model Business model, page 14

Key Performance Indicators (KPIs) KPIs, page 18

Non-financial and sustainability

information statement

The Group has complied with the requirements

of section 414C7B of the Companies Act

2006 by including certain non-financial

information and sustainability information with

the strategic report. We have included the

TCFD statements in our annual report, which

requires premium listed companies like GMS

to adopt LR 9.8.6(8)R.

* Further details on policies and procedures

are available on our corporate website:

www.gmsplc.com

The table below sets out where relevant information can be found within this report*:

Gulf Marine Services PLC Annual Report 2024

Strategic Report Governance Financial Statements

Revenue

US$ 167.5m

(2023: US$ 151.6m)

Adjusted EBITDA*

US$ 100.4m

(2023: US$ 87.5m)

Adjusted EBITDA margin*

60%

(2023: 58%).

Net profit for the year

US$ 38.3m

(2023: US$ 42.1m)

Net bank debt*

US$ 201.2m

(2023: US$ 267.3m)

Underlying G&A expenses as

percentage of revenue*

6.8%

(20 2 3: 7.1%)

Highlights

2024 Financial Highlights

• Adjusted EBITDA* increased by 15% to

US$ 100.4 million (2023: US$ 87.5 million)

driven by an increase in revenue. Adjusted

EBITDA margin* also increased to 60%

(2023: 58%).

• Group concluded the refinancing of

US$ 300.0 million loan facility (US$ 250.0

million term loan amortised over five years

and US$ 50.0 million working capital facility),

denominated in United Arab Emirates

Dirhams (AED).

• Finance expenses drops by 25% to US$ 23.5

million (2023: US$ 31.4 million), driven by

the lower level of gross debt, the cessation

of 250 basis points (bps) PIK interest and

a reduction of the margin rate by 90 bps

when the Group’s net leverage ratio dropped

below 4:1 as of March 2023, and a further

reduction in the margin by 10 bps when the

net leverage ratio passed below 3:1 as of

March 2024. Additional reduction in margin

rate is expected due to successful refinancing

at better terms.

• Impact of changes in the fair value of the

derivative decreased to US$ 5.3 million

(2023: US$ 11.1 million), due to lower number

of outstanding warrants offset by an increase

in share price of the Company.

• Net reversal of impairment of US$ 9.2 million

(2023:US$ 33.4 million) reflecting continuous

improvement in market conditions.

* Refer to Glossary and Other Definitions

Net leverage*

2.0x

(2023: 3.05x)

Basic EPS (cents per share)

3.61

(2023: 4.07)

Diluted EPS (cents per share)

3.39

(2023: 3.92)

02 Gulf Marine Services PLC Annual Report 2024

Overview of the Year

2024 Operational

Highlights

• New charters and extensions secured during

the year totalled 23.8 years (2023: 8.4 years).

• Average day rates* increased to

US$ 33.1k (2023: US$ 30.3k) with

improvements across all vessel classes.

• Lost Time Injury Rate* (LTIR) remaining at zero

for 2024, while Total Recordable Injury Rate*

(TRIR) further reduced to zero (2023: 0.18).

Consistent low operational downtime

1.0%

(2023: 0.8%)

Strong operational efficiency

maintained

92%

Average fleet utilisation*

(2023: 94%)

2025 Strategic Progress

and Outlook

• Adjusted EBITDA guidance is set at US$ 100

million to US$ 108 million for 2025. We are in

the process of assessing the 2026 adjusted

EBITDA guidance.

• Anticipate continued improvement on day rates

as our vessel demand outstrips supply on the

back of a strong pipeline of opportunities.

Target utilisation

96%

Average secured day rates higher

than 2024 actual levels

+6%

Strategic Report

03Gulf Marine Services PLC Annual Report 2024

Governance Financial Statements

Focus on resilience

and agility to deliver

shareholder value

As we continue to navigate the dynamic landscape of

our industry, our goal remains on ensuring sustainable

resilience and on delivering long-term value to

shareholders. The successful refinancing at improved

terms this year reaffirms our ability to deliver on our

commitments and highlights the progress GMS has

achieved over recent years. Our focus continues to be on

further reducing the debt as well as providing a balanced

capital allocation, maximising business opportunities,

and growing shareholder value.

Group Performance

The Group continued to improve its financial

performance, driven by sustained high

utilisation and increased average day rates

across the fleet which rose to US$ 33.1k, up

from previous year's US$ 30.3k. The growth in

revenue resulted in improved adjusted EBITDA

of US$ 100.4 million (2023: US$ 87.5 million).

This is in line with the revised guidance of US$

98.0 million to US$ 100.0 million. This was

achieved by our operational performance in

optimising financial results.

Capital Structure and

Liquidity

As part of our strategic focus on resilience and

agility, we reduced the net leverage ratio to

2.0x as of 31 December 2024 (31 December

2023: 3.05x). This improvement was driven by a

reduction in net bank debt to US$ 201.2 million

(31 December 2023: US$ 267.3 million) and

improved EBITDA performance for the year.

In December 2024, the Group concluded the

refinancing of a US$ 300.0 million loan facility,

comprising of a US$ 250.0 million term loan

amortised over five years and a US$ 50.0 million

working capital facility, denominated in United

Arab Emirates Dirhams (AED). The refinancing

was secured at more favourable interest rates,

reducing financing costs and enhancing the

Group’s flexibility in capital allocation. This is

testimony to the confidence our lenders have

in our strategy and outlook and underscores

our financial resilience, allowing us to effectively

manage key risks, as outlined in the risk matrix,

while advancing our deleveraging efforts and

pursuing growth opportunities.

Our future dividend policy allocating 20%-30%

of the annual adjusted net profit for distributions

to shareholders, through a dividend and/or

potential share buybacks, provided other plans

permit and that loan covenants are fully met,

was announced during the year. Key to the

sustainability of the business is maintaining

financial stability. The combination of

accelerated debt reduction and EBITDA growth

will expedite our commitment to implementing

our shareholder rewards program.

We have substantially increased our investor

relations program leading to improved share

liquidity over recent years and broadening our

global shareholder network.

Business Development

The Group secured 7 new contracts and

extended 5 existing ones, totalling 23.8 years

in aggregate. This is an improvement on 2023

where 4 new contracts and extended 4 existing

ones, totalling 8.4 years in aggregate. We also

secured a new contract for an additional vessel

in Europe, further strengthening its presence

in the offshore wind sector. As a result of these

contract wins and extensions, the Group

achieved a backlog of US$ 570 million on

1 April 2025. This backlog sets the path

towards generating future value for the

shareholders. On top of our owned fleet of

13 vessels in the Middle East and Europe,

we are also currently operating an additional

leased vessel in the Middle East.

Governance

As a Board, following the successful

deleveraging and restructuring of the Group over

past years, we continue to focus on growing

shareholder value by delivering medium and

long-term sustainable growth of the business

as well as maintaining our commitment towards

stakeholder interests.

Our Audit and Risk Committee, led by Jyrki

Koskelo, has focussed on the proactive

mitigation and management of internal and

external risks as well as public reporting and

internal audit, ensuring full accountability and

transparency. Within the Group, we continue

to regularly review our policies and procedures

on transparent and ethical business practices,

including a Code of Conduct review for

employees and stakeholders. This includes a

regular review of our ESG (Environmental, Social,

and Governance) policies including sustainability

practices and community engagement.

Our Remuneration Committee, led by Lord

Anthony St John, oversees remuneration across

the Group, aligned with our strategic objectives

and operational requirements. Lord St John also

ensures strong independent representation and

balance within the Board in his roles of Senior

Independent Director and non-executive Director

for Workforce Engagement.

In September 2024, Mr. Hassan Heikal, a

non-independent non-executive Director of the

Company, stepped down from the Board. On

behalf of the Board, I would like to thank him for

the input and guidance he provided to the Board

and the Group.

Safety Standards and

Operational Excellence

We are very focussed on strict adherence to

maintaining safety and regular maintenance

of our fleet and crew as well as the well-being

of everyone at GMS. This includes those with

whom we work, and others who are impacted

by our activities, ensuring that we uphold the

highest standards.

I am pleased to report that the Group has

achieved a Lost Time Injury Rate (LTIR) of zero

for both 2023 and 2024, with no cases requiring

medical treatment or restricted work duties.

Total Recordable Injury Rate (TRIR) reduced

from 0.18 in 2023 to zero in 2024. These

metrics are significantly better than the

industry average.

04 Gulf Marine Services PLC Annual Report 2024

Chairman’s Review

We remain committed to continuous

improvement in our systems and processes

and will proactively engage our employees

to ensure our offshore operations uphold the

highest safety standards, consistent with the

expectations of our stakeholders.

We continue to maintain strong operational

efficiency, with a utilisation rate of 92%

(2023: 94%), reflecting our commitment to

optimising fleet performance and maximising

asset utilisation. Additionally, we have

maintained a low operational downtime of

1.0% (2023: 0.8%), demonstrating our focus

on minimising disruptions and ensuring

consistent service delivery.

Task Force on Climate-

Related Financial

Disclosures

We fully comply with LR 9.8.6(8)R requirements

by ensuring that our climate-related financial

disclosures are closely aligned with the

recommendations of the Task Force on

Climate-Related Financial Disclosures (TCFD)

proactively monitoring the impact of climate

change to our business.

We conduct comprehensive climate scenario

analyses to evaluate potential transition and

physical risks to our operations over the short,

medium and long term. This enables us to

better understand and prepare for impacts

of climate change, ensuring that these

considerations are deeply embedded within our

enterprise risk assessment framework.

As part of our commitment to robust

governance, we hold annual risk management

workshops attended by the myself and other

Directors, where climate-related risks and

mitigation strategies are a key focus. These

findings can be found in our TCFD report, which

is included on page 32 of this report.

Outlook

While offshore services sector continues

a positive trajectory, and adaptability to

potential future cycle changes remains

essential. With a strong focus on

operational excellence and safety, we aim

to be well-positioned to navigate cyclical

shifts and seize future opportunities. Our

priority is to strengthen resilience and

agility by improving our balance sheet and

fulfilling our commitment to delivering long-

term value to shareholders.

With 96% secured utilisation and

improved day rates for 2025, we look

forward to another year of strong financial

performance with our adjusted EBITDA

guidance for 2025 of between US$ 100.0

million and US$ 108.0 million.

We thank our shareholders for their

ongoing support.

Mansour Al Alami

Executive Chairman

8 April 2025

The Group

continued to

improve its financial

performance,

driven by sustained

high utilisation and

increased average

day rates across

the fleet.

Strategic Report

05Gulf Marine Services PLC Annual Report 2024

Governance Financial Statements

Providing offshore solutions

across international markets

Established in 1977, GMS

is a leading provider

and operator of 13 self-

propelled, self-elevating

support vessels.

For over four decades we have served blue

chip clients in Arabian Peninsula and Western

Europe. Our vessels provide a stable platform

for delivering a wide range of safe and efficient

services, primarily in the offshore oil, gas

and renewable energy sectors. Our vessels'

versatility meets the demand of our clients,

to provide cost-effective solutions, while

minimising their environmental footprint.

GMS prides itself on operating its vessels to the

highest standards. Managing Health and Safety

risks are integral to our business and we pride

ourselves on the strength of our safety record.

In support of the global fight against climate

change, GMS aims to progressively reduce its

carbon footprint and waste, alongside that of

its clients.

Our Services

Platform Maintenance

Renewables

Oil & Gas

GMS by

numbers

Number of employees

in 2024

727

Number of vessels

Lost time injury rate

None

Europe

11%

UAE

27%

Qatar

37%

Saudi Arabia

25%

Geographic

Exposure

Read more about our Market analysis on page 12

06 Gulf Marine Services PLC Annual Report 2024

At a Glance

Why invest

Proven Turnaround

Successfully transformed the

business over the past four years.

Established Brand Equity

The strength of the GMS brand,

recognised for reliability and

operational excellence, fostering

long-term client relationships.

Shareholder Returns

Dividend policy (20%-30% of

net profit) underscores our

commitment to investors.

Strong demand for our

vessels continues to

drive solid results.

Stronger Financials

Net leverage ratio reduced to 2.0x,

enhancing financial stability.

Strong Cash Generation

A profitable business with

consistent cash flow.

Improved Share Liquidity

Increased trading activity

strengthens market position and

investor appeal.

Earnings Visibility

Secured backlog of US$ 570

million (as at 01 April 2025),

ensuring revenue stability.

Compelling Valuation

Discounted share price presents

significant upside potential.

Agility & Adaptability

Positioned for resilience in a

dynamic market.

Strategic Growth

Potential

Exploring opportunities to

enhance ROIC and maximise

shareholder value.

Strategic Report Governance Financial Statements

Gulf Marine Services PLC Annual Report 2024 07

Our Fleet of Highly

Versatile Vessels

Self-propelled, self-elevating vessels

are a mobile unit that can raise its

hull above the water to provide a

stable platform for construction and

maintenance work.

Used in support of various offshore energy exploration and

production or offshore construction and maintenance activities.

GMS prides itself on operating its vessels to the highest standards.

Managing Health and Safety risks are integral to our business and

we pride ourselves on the strength of our safety record. In support

of the global fight against climate change, GMS aims to progressively

reduce its carbon footprint and waste, alongside that of its clients,

through the provision of its services.

For more information about

our fleet see our website

gmsplc.com

Remove/decommission

topside modules

Wind farm

maintenance

and repair

Wind farm

installation

Accommodation

Construction

and installation

support

Diving

support

Maintenance

support

08 Gulf Marine Services PLC Annual Report 2024

Our Fleet

6 Units

Max Water Depth

45m

Deck Area

600m² – 800m²

Main Crane

36/75 Tonne

GMS Kamikaze | GMS Kikuyu

GMS Kudeta | GMS Kawawa

GMS Keloa | Pepper

3 Units

Max Water Depth

55m

Deck Area

850m²

Main Crane

150 Tonne

Harsh weather capable &

Dynamic Positioning (DP2)

GMS Shamal | GMS Scirocco

GMS Sharqi

4 Units

Max Water Depth

70-80m

Deck Area

1000m²

Main Crane

300/400 Tonne

Harsh weather capable &

Dynamic Positioning (DP2)

GMS Endurance | GMS Endeavour

GMS Enterprise | GMS Evolution

Small Class

(K Class)

Mid-size Class

(S Class)

Large Class

(E Class)

Strategic Report Governance Financial Statements

Gulf Marine Services PLC Annual Report 2024 09

Management’s primary

aim is to enhance

shareholder value by

swiftly and efficiently

deleveraging the

Group. The following

strategic priorities are

entirely geared towards

accomplishing this key

objective.

Financial

Management

The Company is committed to deleveraging

and shifting value from lenders to shareholders.

In line with this, GMS has approved a dividend

policy dedicating 20%-30% of annual adjusted

net profit towards distributions to shareholders,

through a dividend and/or potential share

buybacks, provided all bank covenants are

met and other plans permit.

Agility

GMS aims to adapt to market conditions by

securing new contracts and maintaining high

vessel utilisation rates. The Company has also

announced a new bank facility to support its

growth objectives.

20192018 2020 2021

5.79

8.06

7.59

6.91

We are continuing to

build on our track record

of reducing debt

10 Gulf Marine Services PLC Annual Report 2024

Long-term Value Creation

2024

Client Relationship

Management

GMS maintains strong relationships with clients

through continuous communication and a

history of providing safe and reliable services.

Operational

Excellence

The Company emphasises maintaining high

standards of operational excellence, including

safety and reliability, to meet client expectations

and regulatory requirements.

2022 2023

2.0

Our net leverage

ratio continues to

decrease

3.05

4.42

Strategic Report Governance Financial Statements

11Gulf Marine Services PLC Annual Report 2024

Global demand and

emerging economies

Global energy demand

remains a key driver of

investment in the oil &

gas sector, supporting

hydrocarbon exploration

and production, and in

turn, demand for supply

chain services such as

Self-Elevating Support

Vessels (SESVs).

This demand is projected to continue to

increase which is primarily driven by growth in

emerging economies. As a result, global oil &

gas production is expected to increase over the

coming decade with growing offshore supply

arising from developments in Latin America and

the Arabian Peninsula Region.

GMS operates in the Arabian Peninsula

Region and in North-West Europe, which

continue to present opportunities for SESVs

across oil & gas and offshore wind markets.

We also monitor developments in other regions

of the world.

Arabian Peninsula

Region

The SESV market in the Arabian Peninsula

Region continues to show strength. This

sustained demand has led exploration &

production companies to secure vessel

capacity well in advance and for longer periods.

While additional supply is expected to enter

the market, there remains a strong preference

for modern, high-capability assets, which may

result in displacement of older capacity.

The Arabian Peninsula Region contributed

89% (2023: 91%) of the total GMS revenue

for 2024. During the year, the Group secured

six new contracts and extensions to five

current contracts in the Arabian Peninsula

Region with a total duration of 22.8 years. This

suggests strengthening of demand for GMS

vessels where clients are securing our vessels

for longer periods well in advance. As of 31

December 2024, GMS operates four vessels

in Qatar, three vessels in KSA and five vessels

in the UAE.

North-West Europe

SESVs demand in North-West Europe is

supported by ongoing Offshore Wind Farm

construction and the expansion of operations

and maintenance activities. Key markets

such as the UK, Germany, the Netherlands,

and Denmark continue to present growth

opportunities, particularly in offshore

renewable energy.

The North-West Europe region contributed

11% (2023: 9%) of the total GMS revenue for

2024. GMS currently has one vessel working

in Europe, engaged in ongoing maintenance

and operation of wind farms. The vessel is

engaged on a long-term contract with options

extending up to 2029. Further, GMS has

secured a new contract for an additional vessel

in Europe. The contract will start in 2026,

further strengthening the Group’s presence

in the offshore wind farm sector.

Demand is projected

to continue to increase

driven primarily by

growth in emerging

economies and the

expansion of Offshore

Wind Farm construction

and maintenance

activities in North-West

Europe.

12 Gulf Marine Services PLC Annual Report 2024

Market Analysis

Europe

11%

UAE

25%

Qatar

37%

Saudi Arabia

27%

Revenue by Geographic Segment in 2024

Strategic Report

13Gulf Marine Services PLC Annual Report 2024

Governance Financial Statements

Providing practical and

cost-effective solutions

Operates a Fleet of Self-propelled SESVs

GMS owns and operates a fleet of SESVs, which currently

caters clients in the oil, gas, and renewable energy sectors

in both the Arabian Peninsula region and North-West Europe.

These SESVs, with an average age of 14 years, are well-positioned

within the market to provide efficient and safe offshore support

solutions to our clients.

Delivering Operational Excellence

GMS is committed to operational excellence, offering a full suite

of services designed to enhance operational efficiency, minimise

time and optimise resource allocation. We are dedicated to

maintaining the highest safety standards, ensuring the well-being

of all stakeholders and minimising our environmental impact.

Supporting Economic Growth

GMS is committed to supporting local economies.

To meet the In-Country Value (ICV) requirements of some of

our clients based in Arabian Peninsula, we collaborate closely

with local suppliers to maximise local spending, boost economic

growth and create opportunities. We also encourage our partners

to prioritise local spending within their own supply chains,

whenever possible.

Leveraging Metrics to Achieve High Performance

GMS prioritises productivity by ensuring clear, aligned, and

regularly reported metrics across the Group. To further incentivise

performance, the annual Short-Term Incentive Plan includes

a scorecard that evaluates employee productivity.

Elevating Health, Environment

and Quality Standards

At GMS, safety is paramount. Our robust Health,

Safety, Environment and Quality (HSEQ) framework

and strong safety culture drive proactive risk

management, resulting in a safe and healthy workplace

for our people and a minimal environmental impact.

Optimising Cost and Efficiency

GMS understands the critical need for cost-effective

and efficient solutions in our clients’ operations.

To address these demands, GMS maintains a fleet

of 13 SESVs with an average age of 14 years.

These vessels are designed to deliver reliable

and cost-effective service while meeting stringent

operational requirements.

Our Diverse Workforce, Our Strength

Our people are our greatest asset. We empower

our diverse, globally experienced workforce to

reach their full potential, driving innovation and

propelling our organisation forward.

Securing Our Future Through

Strategic Flexibility

Our flexible approach allows us to cater to a diverse

range of clients across various industries and locations.

Our global reach and adaptable fleet provide the

flexibility to respond effectively to changing market

demands. This adaptability positions GMS as a resilient

player in the face of volatile market conditions.

Our Resources Our Operations

We offer practical, cost-effective solutions to the complex challenges faced

by our customers engaged in the offshore oil, gas and renewable energy

sectors. Our fleet of self-propelled Self-Elevating Support Vessels (SESVs)

are capable to meet the unique challenges of marine environments.

14 Gulf Marine Services PLC Annual Report 2024

Business Model

OutputsWhat we Deliver

Share price as

of 31 December

15.1p

(2023: 14.5p)

Book value per share as

of 31 December

36.13p

(2023: 32.23p)

New contracts and extensions

(2023: 8)

Retention of employees

88%

(2023: 88%)

Net leverage

2.0x

(2023: 3.05x)

Shareholders

Driving sustainable growth by optimising asset

utilisation, improving charter rates, streamlining

operations, and strengthening our financial

position through continuous deleveraging.

We are committed to identifying and capitalising

on new market opportunities.

Customers

GMS is committed to delivering exceptional

services that prioritise safety, reliability, and cost-

effectiveness, ultimately enhancing operational

efficiency. By complying to stringent safety standards,

we consistently provide top-tier services that surpass

industry expectations.

People

Our team is at the core of our operations.

We foster a positive and open work environment

that prioritises both performance and well-being.

This engaged workforce is essential to continuous

improvement and success.

Suppliers

Prioritise long-term collaboration with local

suppliers to drive innovation, reduce costs and

strengthen our supply chain.

Strategic Report Governance Financial Statements

15Gulf Marine Services PLC Annual Report 2024

Revenue

Growth

Improve charter day rates driven by favourable supply/demand

dynamics in our core markets.

Utilisation slightly decreased by two percentage points

to 92% from the 2023 figure of 94%. These rates are at the

highest levels since 2014.

Growth trend on the average day rates across the fleet

is maintained at 9% since 2023.

New contracts and extensions secured during the year

totalled 23.8 years (2023: 8.4 years).

Focus on local content requirements demanded by our clients

across the Arabian Peninsula region to maximise the chances

of securing new contracts.

Maintaining strong relationships with our core customers to win

and secure contracts that add significantly to our backlog.

Renegotiate contractual terms, when existing contracts come

to an end with the precursor to day rate improvement and

longer-term contracts.

Continue to explore new opportunities for potential expansion.

Maximise utilisation through best-in-class operations.

Continuously enhance operating capability while offering

improved offshore support solutions, to anticipate client needs.

Identify and capitalise on new market opportunities.

Cost

Optimisation

Deliver safe, efficient and cost-effective operations.

Total Recordable Injury Rate (TRIR) further decreased to zero

from already below industry average rate of 0.18 in 2023.

Suitable capital expenditure to maintaining the fleet to a level

that ensures safe operations and meets client requirements.

The adjusted EBITDA has improved to US$ 100.4 million

(2023: US$ 87.5 million), through the combination of

improving the average day rates and cost control measures.

Ensure key safety KPIs are monitored frequently to allow safe and

reliable operation of fleet.

Managing inflationary pressures through negotiating better terms

with current key suppliers.

Focus on maximising cash generation with a continued emphasis

on reducing our leverage.

Identify cost savings opportunities and negotiate better prices.

Invest in employee training and development to enhance skills

and improve productivity.

Working

Capital

Efficiency

Improved cash management by reducing the debtor days

whilst improving credit terms with our key suppliers.

The effective working capital management resulted to a reduction

in the trade debtors to US$ 25.6 million (2023: US$ 30.6 million).

Reduced leverage levels from 3.05x at the end of 2023 to 2.0x

at the end of 2024, through improved financial performance.

Adjusted EBITDA increased to US$ 100.4 million in 2024

(from US$ 87.5 million in 2023), and net bank debt decreased

significantly by US$ 66.1 million, falling from US$ 267.3 million in

2023 to US$ 201.2 million in 2024.

Refinancing of debt facility was completed before the end of

2024, extending the payment of term loan by five years up to

December 2029 (originally scheduled to be paid by June 2025).

Closely monitor the ageing of receivables to ensure sufficient

liquidity to meet our operational and banking requirements.

Make additional prepayments towards the bank loans to continue

to deleverage, thus reducing the finance cost.

Distribute dividends to the shareholders, provided other plans

permit and that loan covenants are fully met.

Maximise cash flows from operations while optimising capital

expenditure to further deleverage and save on financing costs.

People

Placement

and Controls

Maintain a robust internal control manual and an efficient and

effective control environment.

The Group has to comply with International Maritime

Organisation (IMO) regulations and undertook Internal

Audits Marine training in ISM, ISPS, and MLC to fulfil IMO

compliance. As such, all offshore staff have continued

to comply with the training requirements to fulfil our

accreditation.

Internal auditors (Baker Tilly) performed audits of

Procurement and Business Development functions during

the year. The ARC Committee has reported to the Board the

identified control weaknesses, that were assessed as not

representing significant risks.

Maintaining an internal control environment to appropriately

mitigate the operating risks inherent in the sector, whilst

allowing the Group to achieve its strategic objectives and

deliver value to shareholders.

Progress of the internal audit will be monitored, and necessary

controls implemented, to ensure a robust control environment.

Monitoring the implementation of controls with close exception

reporting.

Attract and retain talented people with the right skill set,

experience and potentials.

Train our staff with better skills to deliver quality performance.

Sustainable Value for

Shareholders

Management's primary

aim is to enhance

shareholder value by

swiftly and efficiently

de-leveraging the

Group. The following

strategic priorities are

entirely geared towards

accomplishing this key

objective.

Strategic Priority

16 Gulf Marine Services PLC Annual Report 2024

Strategic Objectives

Revenue

Growth

Improve charter day rates driven by favourable supply/demand

dynamics in our core markets.

Utilisation slightly decreased by two percentage points

to 92% from the 2023 figure of 94%. These rates are at the

highest levels since 2014.

Growth trend on the average day rates across the fleet

is maintained at 9% since 2023.

New contracts and extensions secured during the year

totalled 23.8 years (2023: 8.4 years).

Focus on local content requirements demanded by our clients

across the Arabian Peninsula region to maximise the chances

of securing new contracts.

Maintaining strong relationships with our core customers to win

and secure contracts that add significantly to our backlog.

Renegotiate contractual terms, when existing contracts come

to an end with the precursor to day rate improvement and

longer-term contracts.

Continue to explore new opportunities for potential expansion.

Maximise utilisation through best-in-class operations.

Continuously enhance operating capability while offering

improved offshore support solutions, to anticipate client needs.

Identify and capitalise on new market opportunities.

Cost

Optimisation

Deliver safe, efficient and cost-effective operations.

Total Recordable Injury Rate (TRIR) further decreased to zero

from already below industry average rate of 0.18 in 2023.

Suitable capital expenditure to maintaining the fleet to a level

that ensures safe operations and meets client requirements.

The adjusted EBITDA has improved to US$ 100.4 million

(2023: US$ 87.5 million), through the combination of

improving the average day rates and cost control measures.

Ensure key safety KPIs are monitored frequently to allow safe and

reliable operation of fleet.

Managing inflationary pressures through negotiating better terms

with current key suppliers.

Focus on maximising cash generation with a continued emphasis

on reducing our leverage.

Identify cost savings opportunities and negotiate better prices.

Invest in employee training and development to enhance skills

and improve productivity.

Working

Capital

Efficiency

Improved cash management by reducing the debtor days

whilst improving credit terms with our key suppliers.

The effective working capital management resulted to a reduction

in the trade debtors to US$ 25.6 million (2023: US$ 30.6 million).

Reduced leverage levels from 3.05x at the end of 2023 to 2.0x

at the end of 2024, through improved financial performance.

Adjusted EBITDA increased to US$ 100.4 million in 2024

(from US$ 87.5 million in 2023), and net bank debt decreased

significantly by US$ 66.1 million, falling from US$ 267.3 million in

2023 to US$ 201.2 million in 2024.

Refinancing of debt facility was completed before the end of

2024, extending the payment of term loan by five years up to

December 2029 (originally scheduled to be paid by June 2025).

Closely monitor the ageing of receivables to ensure sufficient

liquidity to meet our operational and banking requirements.

Make additional prepayments towards the bank loans to continue

to deleverage, thus reducing the finance cost.

Distribute dividends to the shareholders, provided other plans

permit and that loan covenants are fully met.

Maximise cash flows from operations while optimising capital

expenditure to further deleverage and save on financing costs.

People

Placement

and Controls

Maintain a robust internal control manual and an efficient and

effective control environment.

The Group has to comply with International Maritime

Organisation (IMO) regulations and undertook Internal

Audits Marine training in ISM, ISPS, and MLC to fulfil IMO

compliance. As such, all offshore staff have continued

to comply with the training requirements to fulfil our

accreditation.

Internal auditors (Baker Tilly) performed audits of

Procurement and Business Development functions during

the year. The ARC Committee has reported to the Board the

identified control weaknesses, that were assessed as not

representing significant risks.

Maintaining an internal control environment to appropriately

mitigate the operating risks inherent in the sector, whilst

allowing the Group to achieve its strategic objectives and

deliver value to shareholders.

Progress of the internal audit will be monitored, and necessary

controls implemented, to ensure a robust control environment.

Monitoring the implementation of controls with close exception

reporting.

Attract and retain talented people with the right skill set,

experience and potentials.

Train our staff with better skills to deliver quality performance.

2024 Progress

Future Priorities

Strategic Report Governance Financial Statements

17Gulf Marine Services PLC Annual Report 2024

Key Performance Indicators (KPIs) are crucial for

evaluating the Group’s performance against our

strategic objectives. These KPIs, encompassing both

financial and operational measures, directly support

the four pillars of our strategic framework. Refer to

the Glossary for the definition of each Alternative

Performance Measure (APM).

Key

Revenue Growth

Cost Optimisation

Working Capital Efficiency

People Placement and Controls

KPI Description 2024 Performance

Revenue and utilisation

Revenue reflects the amounts earned from

providing services to clients during the year. It is

driven by charter day rates and utilisation levels.

Utilisation is the percentage of days that our fleet

of SESV vessels are chartered on a day rate out

of total calendar days.

The Group achieved a 10% revenue increase.

This growth was driven by higher average day

rates, which offset the impact of lower average

fleet utilisation.

Average day rates across the fleet increased

by 9% to US$ 33.1k (2023: US$ 30.3k), while

average utilisation slightly decreased by two

percentage points to 92% (2023: 94%).

Adjusted EBITDA and Adjusted EBITDA margin

Adjusted EBITDA excludes exceptional items and

fleet impairment adjustments. It is a key measure

of the Group’s underlying performance that

management is more directly able to influence.

Adjusted EBITDA margin demonstrates the

Group’s ability to convert revenue into cash.

The growth in revenue translated into an

improved Adjusted EBITDA of US$ 100.4 million.

This is in line with our revised guidance of

US$ 98 million to US$ 100 million.

The adjusted EBITDA margin has also increased

to 60% (2023: 58%).

Adjusted profit and Adjusted DLPS/DEPS

Adjusted profit or loss measures the core net

profitability of the business, after removing the

impact of exceptional items and fleet impairment

adjustments.

Adjusted DEPS or DLPS, means fully diluted

earnings or loss per share, which measures the

level of net profit/loss, including adjusting items,

per ordinary share outstanding.

Adjusted profit was US$ 32.2 million (2023:

US$ 9.8 million). The increase reflects higher

revenue by US$ 15.9 million, lower finance

expense by US$ 7.9 million and lower impact

of changes in fair value of derivative by

US$ 5.7 million.

Net bank debt to Adjusted EBITDA

Net debt to Adjusted EBITDA is the ratio of net

debt at year end to earnings before interest,

tax, depreciation and amortisation, excluding

adjusting items (see Glossary for details), as

reported under the terms of our bank facility

agreement.

Maintaining this covenant below levels set out

in the Group’s bank facilities is necessary to

prevent an Event of Default and avoid paying

higher interest.

In December 2024, the Group completed the

refinancing of US$ 300.0 million loan facility

(US$ 250.0 million term loan amortised over

five years and US$ 50.0 million working capital

facility), denominated in United Arab Emirates

Dirhams (AED).

As a result of our commitment to deleveraging,

the net leverage ratio at 31 December 2024 was

reduced to 2.0 times (2023: 3.05 times), driven

by a reduction in the net debt to US$ 201.2

million (2023: US$ 267.3 million) coupled by

improved EBITDA for the year.

92%

94%

88%

84%

81%

60%

58%

54%

56%

49%

2.0

3.1

4.4

5.8

8.0

2024

2023

2022

2021

2020

US$ 167m

US$ 152m

US$ 133m

US$ 115m

US$ 102m

2024

2023

2022

2021

2020

US$ 100m

US$ 88m

US$ 72m

US$ 64m

US$ 50m

2024

2023

2022

2021

2020

US$ 32m

US$ 10m

US$ 18m

ADEPS US$ 0.03

ADEPS US$ 0.01

ADEPS US$ 0.02

ADEPS US$ 0.03

ADLPS US$ (0.04m)US$ (15m]

2024

2023

2022

2021

2020

% – SESV utilisation Bars – Revenue

Numbers – Adjusted DLPS/DEPS

Bars – Adjusted profit/loss

% – Adjusted EBITDA

Margin Bars – Adjusted EBITDA

18 Gulf Marine Services PLC Annual Report 2024

KPIs

0.3

0.2

0.1

2020 2021 2022 2023 2024

KPI Description 2024 Performance

Backlog

Backlog shows the total order book of contracts

(comprising firm and option periods) at the

relevant date. This is a leading indicator of future

revenue and utilisation levels.

Backlog increased during the year due to new

contracts and extensions, despite some existing

contracts being completed.

Average FTE retention (Onshore and Offshore)

Employee retention is calculated as the

percentage of staff who continued their

employment during the year, with retirements and

redundancies excluded from the calculation.

Average FTEs (Full Time Equivalent employees)

throughout the year offers insight into the

Group’s capacity, operational scale, and

manpower cost base.

The Group staff retention remains unchanged

at 88% from the previous year.

Average onshore FTEs over the year have

increased to 69 from 59 reported in 2023.

While for offshore FTEs, the average number

throughout the year increased from 569 in 2023

to 620.

The total Group headcount increased from 660

at 31 December 2023 to 727 at 31 December

2024, which was driven by increased utilisation

of our vessels requiring an increase in recruitment

of offshore FTEs and onshore support staff.

TRIR and LTIR

Total Recordable Injury Rate (TRIR) provides a

measure of the frequency of recordable injuries

per 200,000 man hours.

Lost Time Injury Rate (LTIR) is a measure of the

frequency of injuries requiring employee absence

from work for a period of one or more days per

200,000 man hours.

Offshore man hours are calculated based

on a 12-hour working period per day.

The Group outperformed the industry average

with LTIR of zero, both in 2024 and 2023.

TRIR further improved to zero from 0.18 in 2023.

Underlying G&A as percentage of revenue

The underlying G&A to revenue expense ratio

compares revenue to the amount of expenses

incurred in onshore support operations.

The underlying G&A amounted to US$ 11.4

million, up from US$ 10.7 million in 2023.

However, underlying G&A as percentage of

revenue is maintained at 7% (2023: 7%).

US$ 570m

US$ 459m

US$ 342m

US$ 179m

US$ 199m

88%

84%

86%

92%

10%

2024

2023

2022

2021

2020

2024

2023

2022

2021

2020

689

628

567

534

496

2024

2023

2022

2021

2020

US$ 11m

US$ 10m

0.1 0.1

0 0 0

0.18

0.2

% – G&A to revenue

Bars – Underlying G&A

% – Employee Retention Bars – Average FTEs

The backlog figures shown above are as at 1st April

TRIR LTIR

Strategic Report Governance Financial Statements

19Gulf Marine Services PLC Annual Report 2024

Sustaining Growth

and Building Value

Revenue and Segmental

Profit/Loss

The Group’s revenue has grown steadily

since 2020. In 2024, the Group posted 10%

increase in revenue, reaching US$ 167.5 million

compared to the previous year's US$ 151.6

million. This growth was mainly due to increase

in average days rates, partially offset by a slight

decrease in fleet average utilisation.

Average utilisation slightly decreased by two

percentage points to 92% from 94% in 2023,

demonstrating strong operational efficiency.

Notably, E-class vessel utilisation improved

to 97% (2023: 91%), offsetting decreases in

S-class at 91% (2023: 95%) and K-Class at

90% (2023: 96%).

Average day rates across the fleet increased

by 9% to US$ 33.1k compared to the previous

year's US$ 30.3k, with improvements across all

vessel classes.

Qatar, the United Arab Emirates (UAE) and

Saudi Arabia remain the largest market,

representing 89% (2023: 91%) of total revenue.

The remaining 11% (2023: 9%) of revenue is

earned from the renewables market in Europe.

Cost of Sales, Reversal

of Impairment and

Administrative Expenses

Cost of sales as a percentage of revenue

decreased by three percentage points to 51%

compared to 54% reported in 2023.

As a result of continued improved market

conditions and reduced cost of capital, net

impairment reversal of US$ 9.2 million (2023:

US$ 33.4 million) was recognised based on

the impairment assessment to Group’s fleet.

Refer to Note 5 in the consolidated financial

statements for further details.

Underlying general & administrative expenses

(which excludes depreciation, amortisation

and other exceptional costs) as a percentage

of revenue is down to 6.8% (2023: 7.1%).

Reported general and administrative expenses

amounted to US$ 17.0 million, up from US$14.6

million in 2023, driven by increased staff costs

and other expenses.

Adjusted EBITDA

The growth in revenue translated into an

improved Adjusted EBITDA

of US$ 100.4

million (2023: US$ 87.5 million). This is in line

with our revised guidance of US$ 98 million

to US$ 100 million. The adjusted EBITDA

margin has also increased to 60% (2023: 58%).

Adjusted EBITDA is considered an appropriate

and comparable measure showing underlying

performance, that management are able to

influence. Please refer to Note 29 and Glossary

for further details.

Finance Expense and

Fair Value of Warrants

Finance expenses were 25% lower in 2024

(US$ 23.5 million down from US$ 31.4 million

in 2023), driven by the lower level of gross

debt, the cessation of 250 basis points (bps)

PIK interest and a reduction of the margin rate

by 90 bps when the Group’s net leverage ratio

dropped below 4:1 as of March 2023, and

a further reduction in the margin by 10 bps

when the net leverage ratio passed below 3:1

as of March 2024. An additional reduction in

margin rate is expected due to the successful

refinancing.

Further, the accounting driven impact of

changes in fair value of the derivative (the

warrants issued to the lenders) decreased to

US$ 5.3 million (2023: US$ 11.1 million), due to

lower number of outstanding warrants offset by

an increase in share price of the Company.

The Company expects the entire amount

of liability on derivative financial instruments

amounting to US$ 9.2 million will be reversed

(either in equity or profit or loss) in 2025, when

the warrants are either exercised or when they

expire on 30 June 2025.

Earnings

The Group posted a net profit of US$ 38.3

million (2023: US$ 42.1 million). The decrease in

net profit was mainly due to lower net reversal

of impairments and higher tax expenses. Such

impact was partially offset by higher revenue,

lower finance expense and accounting impact

of changes in fair value of derivatives as

explained above.

2024

US$m

2023

US$m

2022

US$m

Revenue 167.5 151.6 133.2

Gross profit 89.6 102.8 60.5

Adjusted EBITDA

100.4 87. 5 71.5

Net impairment reversal 9.2 33.4 7.8

Net profit for the year 38.3 42.1 25.4

1 Refer to Glossary and Other Definitions.

A reconciliation of this measure is provided

in Note 29.

20 Gulf Marine Services PLC Annual Report 2024

Financial Review

Capital Expenditure

The Group’s capital expenditure relating to

drydocking and improvements of the vessels

decreased to US$ 8.8 million (2023: US$ 11.3

million). GMS believes that the level of capital

expenditure is suitable and directed to

essential outlays.

Cash Flow and Liquidity

During the year, the Group delivered higher

operating cash flows of US$ 103.6 million

(2023: US$ 94.4 million). This increase is

primarily from higher revenues generated

during the year while improving the collections

from clients and overall working capital

management.

The net cash outflow from investing activities

decreased to US$ 8.8 million (2023: US$ 12.8

million), mainly due to lower capital expenditure.

The Group’s net cash outflow from financing

activities was US$ 63.5 million (2023: US$ 85.2

million), mainly comprising of net repayments to

the banks and certain transaction costs related

to refinancing amounting to US$ 39.9 million

(2023: US$ 54.2 million) and interest payment

of US$ 21.6 million (2023: US$ 27.4 million).

At 31 December 2024, the Group has cash

and cash equivalents of US$ 40.0 million,

which was utilised subsequent to reporting

period to fund the total prepayment of

US$ 40.3 million towards the new term loan.

Cash inflow from financing activities relates to

the net funds received on issuance of share

capital amounting to US$ 3.8 million due to

warrants being exercised.

The Group concluded the refinancing of

US$ 300.0 million loan facility (US$ 250.0

million term loan amortised over five years

and US$ 50.0 million working capital facility),

denominated in United Arab Emirates

Dirhams (AED).

Balance Sheet

Total non-current assets at 31 December

2024 decreased to US$ 608.3 million (2023:

US$ 621.0 million), mainly due to depreciation

charge of US$ 31.5 million (2023: US$ 31.3

million). The decrease is partially offset by the

capital expenditure of US$ 8.8 million (2023:

US$ 11.3 million) representing cost of planned

equipment upgrades and dry-docking of

vessels, as well as the net impairment reversal

of US$ 9.2 million (2023: US$ 33.4 million) on

some of the Group’s vessels.

Total current assets increased to US$ 74.8

million (2023: US$ 47.4 million) as a result of

higher cash and cash equivalents of US$ 40.0

million (2023: US$ 8.7 million) and prepayments,

advances and other receivables amount in

advances and other receivables amounting to

US$ 9.2 million (2023: US$ 8.1 million).

The Group was able to prepay US$ 40.3

million towards the new term loan subsequent

to the reporting period. Further, total trade

receivables decreased to US$ 25.6 million

(2023: US$ 30.6 million) due to improved

collections and additional charge of expected

credit losses to client which entered

administration during 2023.

Total liabilities decreased by US$ 37.6 million

to US$ 300.4 million (US$ 338.1 million),

mainly due to reduction in bank borrowings

amounting to US$ 39.9 million, and the

decrease in the derivative financial instruments

by US$ 5.1 million as a result of partial exercise

by the warrants holder offset by the increase

in the fair value of the remaining warrants. This

was offset by the higher income tax payable,

trade and other payables and lease liabilities

by US$ 7.1 million.

The Group is in a net current liability position as

of 31 December 2024, amounting to US$ 25.7

million (2023: US$ 52.1 million). Management

closely monitors the Group's liquidity position

including focus on the forecasted short-

term cash flows. This is to ensure that there

would be sufficient liquidity to meet the

Group’s current liabilities, in particular, the

current portion of the bank borrowings which

represents the principal repayments due over

the next 12 months. Loan prepayments are

being made after ensuring that forecasted cash

inflows are sufficient to meet the Group's short-

term obligations.

The increase in equity mainly reflects the net

profit achieved during the year. Further, share

capital and share premium increased by a total

of US$ 14.2 million due to issuance of shares

and release of warrants liability as they are

being exercised.

Net Bank Debt and

Borrowings

At the end of December 2024, the Group

completed the refinancing of US$ 300.0

million loan facility (US$ 250.0 million term loan

amortised over five years and US$ 50.0 million

working capital facility), denominated in United

Arab Emirates Dirhams (AED). The working

capital facility expires alongside the main debt

facility in December 2029. The refinancing was

secured at a more favourable interest margin as

compared to the previous debt facility.

Net bank debt

reduced to US$ 201.2 million

(2023: US$ 267.3 million). This was a result of

the management’s commitment to continue its

deleveraging journey.

Going Concern

The Group has a reasonable expectation of

its ability to continue as going concern for the

foreseeable future. With four consecutive years

of reported profit and a forecast of continued

positive operating cash flows, particularly in

light of the market outlook, the Group remains

well-positioned for sustained success.

The Group’s forecast indicates that its

refinanced debt facility, combined with high

utilisation at higher day rates and pipeline, will

provide sufficient liquidity for its requirements

for at least the next 12 months and accordingly,

the consolidated financial statements for the

Group have been prepared on the Going

Concern basis. For further details please refer

the Going Concern disclosure in Note 3 of the

consolidated financial statements.

Related Party

Transactions

During the year, there were related party

transactions for overhauling services of

US$ 0.4 million (2023: US$ 2.4 million),

catering services of US$ 0.1 million (2023:

US$ 0.6 million), and laboratory services of

US$ 15k (2023: US$ 18k) with affiliates of

MZI Holding Limited, the Group’s largest

shareholder (24.46%).

All related party transactions disclosed

herein have been conducted at arm's length

and entered into after a competitive bidding

process. This process ensures that the terms

and conditions of such transactions are fair,

reasonable, and comparable to those that

would be available in similar transactions with

unrelated third parties.

Further details can be found in the Directors

Report on page 85 and Note 23 of the

consolidated financial statements.

Adjusting Items

The Group presents adjusted results, in

addition to the statutory results, as the Directors

consider that they provide a useful indication

of performance. A reconciliation between the

adjusted non-GAAP and statutory results

is provided in Note 29 of the consolidated

financial statements with further information

provided in the Glossary.

Alex Aclimandos

Chief Financial Officer

8 April 2025

Strategic Report Governance Financial Statements

21Gulf Marine Services PLC Annual Report 2024

22 Gulf Marine Services PLC Annual Report 2024

How we assess our

prospects

In line with Provision 31 of the 2018 UK

Corporate Governance Code, the Directors

have carried out a comprehensive review of

the Group’s prospects. This process involves

regular evaluations of the key risks that could

impact the Group's future performance,

financial position, cash flows, liquidity, and

debt facilities. These assessments rely on

established risk management procedures

and involve analysing the Group's exposure to

significant risks and uncertainties.

The Group’s customers are principally involved

in the exploration for and production of oil and

gas and installation of wind farms. The Directors

closely monitors its customers’ operational

plans and related capital expenditure

programmes, particularly in the short term in

which projects will be in progress and for which

requirements for services from the Group will

be more certain.

Viability assessment

time horizon

The Group operates in dynamic sector,

where agility is key to navigating the changing

macroeconomic landscape and changing

demand and supply. Hence, the Directors have

concluded that a three-year timeframe is an

appropriate period for the viability assessment,

as this is the period over which the Directors

can realistically set the strategic plan for the

Group. The period was also selected with

reference to the current backlog and business

development pipeline, both of which offer

limited visibility beyond this point.

Taking these factors into consideration, the

Directors believe that a three-year forward-

looking period, commencing on the date the

annual accounts are approved by the Directors,

is the appropriate length of time to reasonably

assess the Group’s viability.

Consideration of

principal risks

The Group’s operations involve a range of risks.

The Directors conduct regular reviews of the

key risks affecting the business and evaluate

the controls and measures in place

to mitigate them. They also consider the

potential implications for the Group’s viability.

A detailed explanation of the risk assessment

process, principal risks, and the management

strategies can be found on pages 24 to 30 of

this Annual Report.

In December 2024, the Group completed the

refinancing of US$ 300.0 million loan facility

(US$ 250.0 million term loan amortised over

five years and US$ 50.0 million working capital

facility), denominated in United Arab Emirates

Dirhams (AED).

The working capital facility includes a cash

commitment of US$ 20.0 million (31 December

2023: US$ 20.0 million), but if no cash is drawn,

the full facility remains available for performance

bonds and guarantees. The working capital

facility expires alongside the main debt facility in

December 2029.

The refinancing was secured at a more

favourable interest margin. This will lower the

financing costs and provide the Group with

increased flexibility in capital allocation.

Sensitivity analysis

The Directors’ assessment included a review of

the potential financial impact and the financial

headroom that could be available in the event of

the most severe scenarios that could threaten

the viability of the Group. The assessment

took into consideration the financial position

of the Group and the potential mitigations that

management reasonably believes would be

available to the Group over this period.

To assess the Group’s viability, the Directors

have performed analysis considering the

following scenario:

• no work-to-win in 2025 and 2026;

• reduction in utilisation by eight, thirty-four and

seventeen percentage points for 2025, 2026

and 2027 respectively; and

• interest rate on EIBOR to remain at current

levels.

Based on the above scenario, the Group would

not be in breach of its current term loan facility.

The downside case is considered to be severe

but would still leave the Group in compliance

with the covenants under the Group’s banking

facility until its maturity.

In addition to the above downside sensitivity,

the Directors have also conducted a reverse

stress test, wherein EBITDA has been

significantly reduced to the extent of breaching

the debt covenant. This scenario assumes a

notable increase in operational downtime to

19% for 18 months from the reporting date,

which is in addition to the sensitivities applied

in the downside case above. The substantial

increase in operational downtime would lead to

a breach of the Debt Service Cover ratio.

With the successful refinancing, strong recent

performance of the Group, improved market

conditions, and increasing demand for GMS

vessels, the probability of the previously

mentioned breach scenario is minimal.

However, should circumstances differ from the

Group’s projections, the Directors are confident

that several effective mitigating actions can be

taken within the required timeframe to secure

debt repayment and sustain liquidity.

One potential action is to cold stack vessels

that are off hire for extended periods, which

would help minimise operating costs and has

already been considered in the downside

scenario. Additional strategies may include

reducing overhead costs, seeking relaxations

or waivers from covenant compliance, and

negotiating repayment rescheduling with

lenders.

Management is also aware of the broader

operating context and recognises the potential

impact of climate change on the Group’s

financial statements. Nonetheless, it is

expected that climate change will have limited

effect during the assessment period.

Conclusion

The Directors have a reasonable expectation

that the Group can sustain operations and

fulfil its obligations throughout the assessment

period, despite the principal risks and

uncertainties outlined on pages 25 to 29,

which may impact future performance. This

conclusion is primarily based on management’s

strategic focus on deleveraging its bank

obligations which continues to remain a

key priority. After thorough enquiries and

assessments of progress against forecasts,

projections, and the status of mitigating actions,

the Board is confident that the Group can

continue to operate and meet its commitments

as they arise, supporting this viability statement

through the viability period ending June 2028.

Long-term Viability Statement

Strategic Report Governance Financial Statements

23Gulf Marine Services PLC Annual Report 2024

Effective identification,

management and mitigation

of business risks

Our risk management framework provides

a comprehensive and integrated approach

to managing business risks. Encompassing

policies, culture, organisation, behaviours,

processes, and systems, the framework

ensures effective operations through systematic

risk management and clear reporting lines

that support continuous improvement of

internal controls.

The Board leads GMS’ risk management,

setting the culture and ensuring effective

oversight. ESG considerations are integrated

into their regular risk assessments.

The Audit and Risk Committee, responsible

for reviewing the Group’s internal control system

including risk management practices, has

confirmed its effectiveness for daily operations.

The Committee also oversees financial controls

and reporting, ensuring timely identification

and resolution of significant accounting

judgements and estimates. Having reviewed

prior year control deficiencies, the Committee is

satisfied with management’s improvements and

identified no significant weaknesses

during the year.

A comprehensive enterprise risk assessment

process is in place, starting with quarterly risk

reviews conducted by each department. This

process systematically identifies the Group’s

principal risks, analyses their likelihood and

financial impact, and rigorously evaluates

the strength of our mitigating controls. The

Executive team consolidates these findings into

a comprehensive risk heatmap, incorporating

emerging risks. The Audit and Risk Committee

reviews this profile at least quarterly, with a

formal annual review by the Board (see page 64

for details of the Board’s actions as part of their

review), ensuring continuous monitoring of our

risk landscape.

In today’s dynamic

environment, managing

risk isn’t just about

avoiding problems –

it’s also about seizing

opportunities. Our

comprehensive risk

management system, as

outlined below, provides

the critical foundation

for identifying, analysing,

and mitigating risks,

while also enabling us to

strategically pursue growth

opportunities and achieve

our strategic objectives.

Board of Directors

The Board has overall responsibility for providing strategic

direction and effective oversight for risk management.

Audit and Risk Committee

Responsibilities include identifying and assessing the Group’s

internal control and risk management systems as well as monitoring

the effectiveness of the Group’s internal audit function.

Senior Management

The Executive team implements and integrates with business

operations the risk management.

Internal Audit

There are clear reporting lines from

the internal audit function to the

Board, Audit and Risk Committee

and the Executive team.

Risk Framework

24 Gulf Marine Services PLC Annual Report 2024

Risk Management

Principal Risks

and Uncertainties

Uncertainty inherent in

offshore vessel operations

presents ongoing business

risks. Factors such as

weather, sea state, and

navigational hazards, many

of which are beyond our

control, can significantly

impact future results.

Risk Heat Map

Key

Utilisation

Inability to secure appropriate capital

structure (removed in 2024)

Arabian Peninsula region local content

requirements

Inability to deliver safe and reliable

operations

Liquidity and covenant compliance

People

Legal, economic and political conditions

Compliance and regulation

Cyber-crime – security

and integrity

Climate change

While we leverage advanced technology and

highly experienced crews, these inherent

uncertainties remain. Our commitment to strict

safety regulations aims to mitigate these risks,

but they cannot be entirely eliminated.

Therefore, adaptability and proactive planning

are crucial, as changing circumstances can

influence both operational outcomes and

investment value. The following section outlines

the principal risks (list is not exhaustive) facing

the Group over the next five years, along with

our corresponding mitigation strategies.

Impact

Likelihood

Strategic Report Governance Financial Statements

25Gulf Marine Services PLC Annual Report 2024

Key

Revenue Growth

Cost Optimisation

Working Capital Efficiency

People Placement and Controls

Utilisation

Risk Mitigating Factors and Actions

Utilisation levels may be reduced by the following

underlying causes:

• Business continues to be dependent on few

major customers.

• Cyclical nature of industry suggests that

current period of robust demand may give

way to decline, potentially exerting downward

pressure on charter rates and utilisation.

• More tonnage is anticipated to be available

in the market during 2025 to 2026.

• Risk of obsolescence of our K-Class vessels

due to large number of new builds currently

under construction.

• Increased standard specifications required

by customers may result in GMS having to

upgrade its fleet to remain compliant.

Strengthening Client Engagement

The Group maintains strong client relationships through consistent communication and a

demonstrated history of delivering secure and reliable services. GMS has formulated strategies

for fleet upgrades aligned with anticipated client needs in the future. These initiatives make GMS

stand out from its competition and encourage customers to commit to longer-term contracts

involving a greater utilisation of vessels through incentivisation.

Diversification Strategies Across Business Segments and Geographies

Actively monitoring the local competition and target new jurisdictions, clients and offerings.

We recently announced a new contract award for our second vessel in Europe.

Customisation Capabilities for Client Needs

The Group can modify or upgrade assets to satisfy client requirements. Further, GMS’ vessels

are adaptable to compete for a wider market share enabling the Group to maximise the utilisation

level and charter day rates.

Improve on financial flexibility

GMS continues its deleveraging efforts.

Arabian Peninsula region local content requirements

Risk Mitigating Factors and Actions

National Oil Companies (NOCs) in the Arabian

Peninsula region require bidders to submit

specific local content targets, which vary

by country, as a condition of their tender

processes. These requirements prioritise

suppliers committed to increasing local sourcing,

spending, and investment. Failure to meet these

local content requirements could prevent GMS

from securing new contracts or may lead us

to accept reduced profit margins on existing

contracts, ultimately impacting our operating

cash flow and net profitability.

Adherence to Local Content Regulations

GMS views local content as a catalyst for value creation, not merely a regulatory requirement.

Our experience with NOCs throughout the Arabian Peninsula informs our commitment to

maximising in-country impact.

By maintaining a robust local footprint and cultivating strategic local partnerships, we ensure

operational excellence and improve ICV scores. This strategic advantage unlocks exclusive

opportunities, strengthening our position as a partner of choice in the region.

We continue to explore opportunities to further improve our ICV scores in the respective

operating jurisdictions.

Inability to Secure an Appropriate Capital Structure – Removed during 2024

26 Gulf Marine Services PLC Annual Report 2024

Risk Management continued

Liquidity and covenant compliance

Risk Mitigating Factors and Actions

GMS is exposed to short-term liquidity

management risks due to mismatch between

cash inflows and outflows, delinquency or slow-

paying clients and unexpected expenses.

All bank covenants are closely monitored due to

the Group’s performance being very sensitive

to many internal and external factors such as

utilisation, operational downtime, interest rates

and other variables. Breach of covenant will

trigger an event of default that would give lenders

the right to accelerate loan repayments and

ultimately exercise security over the Group’s

assets.

Liquidity Management

The Group demonstrates financial discipline in its liquidity management by prioritising the timely

collection of customer receivables and securing payment terms with strategic suppliers. The level

of capital expenditure is suitable and directed to essential outlays, safeguarding the operational

integrity and reliability of the vessel fleet.

Covenant Compliance

The Board and Senior Management proactively monitor covenant compliance, regularly reviewing

the latest forecasts and implementing measures to prevent potential breaches. The Group

monitors its various covenants throughout the term of the loan.

Focus on Deleveraging

Management remains committed to early repayments of bank loan to reduce interest expenses,

improve our leverage position and ensure compliance with our loan covenant.

Inability to deliver safe and reliable operations

Risk Mitigating Factors and Actions

Geo-political events can jeopardise the safe

operation of vessels due to restricted crew travel

in certain countries and may further impact the

Group's assets.

A serious environmental or safety incident

involving our employees, visitors, or contractors

could severely impact both our commercial

interests and our reputation.

Inadequate preparation for critical situations,

including sudden equipment failure, the inability

to meet client requirements and unpredictable

weather events, could negatively impact the

business.

Insufficient insurance coverage may lead to

significant financial loss.

Safety Commitment and Operational Reliability

We are committed to the highest standards of safety and operational reliability. This commitment

is underpinned by our robust HSEQ management system and a deeply ingrained safety culture.

Management reinforces this commitment with rigorous safety practices and procedures.

Management continues to review and improve the current management systems and monitors

the performance of HSEQ.

Training and Compliance

Our employees undergo rigorous and continuous training on operational best practices.

Scheduled Maintenance

The Group adheres to regular maintenance schedules on its vessels to ensure compliance with

the highest safety standard.

Business Continuity Plan

The Group has implemented a business continuity management plan, which it regularly updates

to ensure the reliability of its operations, including the capability to transfer crew and source

spares from different regions to maintain safe operations.

Adequate insurance coverages are in place to critical assets and business operations to protect

GMS against unforeseen events, mitigating potential financial losses and ensuring business

continuity in the face of damage, theft or destruction.

Strategic Report Governance Financial Statements

27Gulf Marine Services PLC Annual Report 2024

Legal, Economic and Political Conditions

Risk Mitigating Factors and Actions

Political instability in the regions in which GMS

operates may adversely impact its operations.

As the majority of crew for certain key positions

come from Eastern Europe and Southeast Asia,

political instability may hamper the recruitment,

retention and deployment of personnel.

High interest rate and inflation will have an impact

on the Group’s liquidity and profitability.

Emergency Response Planning and Insurance

For all our major assets and areas of operation, the Group maintains emergency preparedness

plans. Our insurance coverage over the Group’s assets is regularly reviewed to ensure adequate

protection.

Workforce Management

We are actively working to increase workforce diversity through workforce planning and

demographic analysis. To support this effort, we have partnered with multiple recruitment

agencies to broaden our sourcing and diversify crew composition across various geographies.

Monitoring Interest Rates and Inflation

Management is continually monitoring the liquidity position from changes in interest rate and a

focus on cost reduction. The key aim of the Group is to deleverage through early repayments,

which will reduce the impact of high interest environment.

Under the new debt facility, GMS has to hedge part of the risk against unfavourable movements

in interest rate.

People

Risk Mitigating Factors and Actions

Attracting, retaining, recruiting and

developing a skilled workforce.

Losing skills or failing to attract new talent to

the business has the potential to undermine

performance.

Effective Communication, Training, and Engagement Initiatives

Management prioritises open communication and all non-executive Directors have met and

engaged with staff. To celebrate our collective achievements in 2024, we held an end-of-year

event where long-serving employees were recognised for their 10, 15, and 20 years of dedication.

As we grow and our experienced leaders transition, we are committed to developing the next

generation of leaders who will carry our mission forward.

Remuneration Policy

The Short-Term Incentive Plan (STIP) is based on a single Business Corporate Scorecard to

ensure all staff are aligned and incentivised around delivering a single set of common goals.

GMS has implemented certain adjustments in the compensation of offshore personnel to be

more competitive in the market.

Equal Opportunities

GMS maintains fair and transparent recruitment practices, with zero-tolerance for discrimination

and a commitment to equal opportunities for all employees.

We further invest in our people through various trainings and development programs, internal

promotions, and a strong focus on talent growth.

Resource Planning

The Group has identified all critical roles and implemented processes to ensure seamless

transitions in the event of personnel changes. To address immediate needs, the Group has also

utilised recruitment specialists fill key positions.

Key

Revenue Growth

Cost Optimisation

Working Capital Efficiency

People Placement and Controls

Gulf Marine Services PLC Annual Report 2024

Risk Management continued

Cyber-crime – Security and Integrity

Risk Mitigating Factors and Actions

Phishing attempts result in inappropriate

transactions, data leakage and financial loss. The

Group is at risk of loss and reputational damage

through financial cyber-crime.

Cybersecurity Monitoring and Defence

GMS operates multi-layer cyber-security defences which are monitored for effectiveness to

ensure they remain up to date.

GMS engages with third party specialists to provide security services.

Climate Change

Risk Mitigating Factors and Actions

Climate change poses both transition and

physical risks to the Group.

The transition risks come from the

decarbonisation of the global economy. This

could result in changing investor sentiment

making new investors harder to find. It may bring

changing client preferences leading to reduced

demand for our services.

New legislation could require us to increase

reporting and possibly substitute our products

and vessels for greener alternatives. Physical

risks include rising temperatures, which could

further impact working hours, and rising sea

levels, which could affect where our vessels can

operate.

The physical risks also interact with Principal

Risk 4 – Our ability to deliver safe and reliable

operations.

Legal & Policy Monitoring

The Group carefully monitors legislative developments to ensure compliance with all relevant

laws both in the UK and the Arabian Peninsula. The TCFD disclosure in this report explains our

assessment and response to climate-related risks to be transparent with our stakeholders.

Physical Infrastructure

The Group monitors weather patterns to ensure conditions are suitable for our offshore

employees and vessels. Onshore buildings and offshore vessels are designed to withstand the

heat in the Arabian Peninsula region.

Environmental Impact

GMS aims to minimise its environmental impact by installing energy and water efficiency

measures. We also ensure our machinery and engines are regularly maintained so they operate

efficiently.

Long-term Planning

GMS has a proven track record in the renewables sector which provides versatility in our

business model. Our vessels are built to be as flexible as possible to maximise utilisation.

We are conscious that we may need to consider changing sea levels and environmental

legislation when replacing vessels that are being retired in the long term.

Compliance and Regulation

Risk Mitigating Factors and Actions

Failure to comply with anti-bribery and corruption

regulations could damage stakeholder

relationships and result in significant reputational

and financial harm.

GMS is operating in various jurisdictions, so it

is governed by a complex web of international

conventions, as well as federal and local laws,

regulations, and guidelines related to health,

safety, and environmental protection. Compliance

with these increasingly stringent requirements

is becoming more costly and complex. Failure

to identify and adhere to all applicable laws and

regulations across various jurisdictions could

result in regulatory investigations.

Failure to provide timely and accurate financial

reports and information to the market, as required

by regulators, or to comply with tax regulations

(including transfer pricing requirements) in the

countries where GMS operates, could result in

significant administrative and financial penalties

for the Group.

Code of Conduct

The Group has a Code of Conduct which includes anti-bribery and corruption policies, and

all employees are required to comply with this Code when conducting business on behalf of

the Group. It is mandatory for employees to undergo in-house training on anti-corruption. All

suppliers are pre-notified of anti-bribery and corruption policies and required to confirm their

compliance with these policies.

Regulations

A central database is maintained which documents all of GMS’ policies and procedures which

comply with laws and regulations within the countries in which GMS operates. A dedicated

Company Secretary is in place to help monitor compliance, in particular for UK legal and

corporate governance obligations.

External Review

The Internal Auditors help in evaluating internal controls, ensuring compliance with relevant laws,

regulations and internal policies, and offer recommendations for improving risk mitigation.

Engagement of Tax Consultants

The Group has engaged tax consultants in its operating geographies.

Qualified Resources

GMS has a dedicated team of qualified professionals managing the financial and regulatory

submissions and ensuring compliance.

Strategic Report Governance Financial Statements

29Gulf Marine Services PLC Annual Report 2024

Emerging Risks

GMS operates an emerging risk framework as

a tool for horizon scanning, with developments

reported to the Audit and Risk Committee on

a routine basis. Emerging risks are defined as

a systemic issue or business practice that has

either not previously been identified, has been

identified but dormant for an extended period

of time (five years); or has yet to arise to an area

of significant concern. There is typically a high

degree of uncertainty around the likelihood

of occurrence, severity and/or timescales.

Emerging risks are identified and/or monitored

through internal debate by management and

the Audit and Risk Committee, as well as

discussions with key stakeholders (see the

Group’s S172 statement), industry-specific

journals, and reviews of reporting published by

peer companies.

Examples of emerging risks include unexpected

changes in the demand for oil, technological

advancements, monitoring of suppliers’

performance, potential trade war among certain

major economies, changes to tax landscape

in regions GMS operates in and potential client

insolvencies.

30 Gulf Marine Services PLC Annual Report 2024

Risk Management continued

Strategic Report Governance Financial Statements

31Gulf Marine Services PLC Annual Report 2024

TFCD

Executive Statement

Climate change remains a principal risk for GMS,

driving us to plan and take decisive action. We

understand the scale of challenge and the necessity

of resilient, climate-adapted operations. In 2022, we

established ambitious net-zero targets and a robust

plan to achieve them. Since 2023, our focus has

been on tangible environmental impact reduction

and advancing our sustainability agenda. The COP28

outcomes and subsequent UAE regulations reinforce

our commitment and provide a platform to further

align with regional and global goals. Our 2024 results

demonstrate the impact of the strategies we’ve

implemented since 2019, showing the effectiveness

in limiting our contribution to climate change and

underscoring our dedication to long-term sustainability

for all stakeholders.

Mansour Al Alami

Executive Chairman

TCFD Compliance

Statement

GMS has complied with the requirements

of Listing Rule (LR) 6.6.6R(8) by including

climate-related financial disclosures

consistent with the Task Force on Climate-

related Financial Disclosures (TCFD)

recommendations and recommended

disclosures. The current regulations require

reporting on a ‘comply or explain’ basis.

Consistent with last year, we have complied

with all eleven of the recommendations in

2024. The Companies (Strategic Report)

(Climate-related Financial Disclosure)

Regulations 2022 require publicly quoted

and large private companies to integrate

climate disclosures into their annual reports.

We have complied with the eight reporting

disclosure requirements of Climate-related

Financial Disclosure (previously BEIS),

details of which can be found on page 33.

32 Gulf Marine Services PLC Annual Report 2024

ESG

Table 1. GMS compliance statement.

TCFD Recommendation Climate-related Financial Disclosures Compliance

Governance

a) Describe the Board’s oversight of climate-related risks

and opportunities.

Company in relation to assessing and managing climate-

related risks and opportunities.

Compliant

b) Describe management’s role in assessing and managing

climate-related risks and opportunities.

Compliant

Strategy

a) Describe the climate-related risks and opportunities the

Company has identified over the short, medium and long

term.

(d) A description of:

(i) The principal climate-related risks and opportunities arising

in connection with the operations of the Company and,

(ii) The time periods by reference to which those risks and

opportunities are assessed.

Compliant

b) Describe the impact of climate-related risks and

opportunities on the Company’s businesses, strategy and

financial planning.

(e) A description of the actual and potential impacts of the

principal climate-related risks and opportunities on the

business model and strategy of the Company.

Compliant

c) Describe the resilience of the Company’s strategy, taking

into consideration different climate-related scenarios,

including a 2°C or lower scenario.

(f) An analysis of the resilience of the business model and

strategy of the Company, taking into consideration different

climate-related scenarios.

Compliant

Risk Management

a) Describe the Company’s processes for identifying and

assessing climate-related risks.

(d) A description of how the Company identifies, assesses

and manages climate-related risks and opportunities.

Compliant

b) Describe the Company’s processes for managing

climate-related risks.

Compliant

c) Describe how processes for identifying, assessing,

and managing climate-related risks are integrated into the

Company’s overall risk management.

(e) A description of how processes for identifying, assessing,

and managing climate-related risks are integrated into the

overall risk management process in the Company.

Compliant

Metrics and Targets

a) Disclose the metrics used by the Company to assess

climate-related risks and opportunities in line with the

strategy and risk management process.

(d) The key performance indicators used to assess

progress against targets used to manage climate-related

risks and realise climate-related opportunities and

a description of the calculations on which those key

performance indicators are based.

Compliant

b) Disclose Scope 1, Scope 2, and, if appropriate, Scope 3

Greenhouse Gas (GHG) emissions and related risks.

Compliant

c) Describe the targets used to manage climate-related

risks and opportunities and performance against targets.

(e) A description of the targets used by the Company to

manage climate-related risks and to realise climate-related

opportunities and performance against those targets.

Compliant

Strategic Report Governance Financial Statements

33Gulf Marine Services PLC Annual Report 2024

Governance

Overview

Effective risk and opportunity management

is crucial for achieving the Group’s strategic

objectives. Our risk management system,

detailed in the general Risk Management

section, supports the identification, analysis,

evaluation, mitigation, and continuous

monitoring of risks. The Board, supported by

the Audit and Risk Committee, has overall

responsibility for risk management. Senior

Management implements the process,

including risk identification, management, and

mitigation, with oversight from internal audit.

Climate change considerations are integrated

into every stage of this process. Furthermore,

a dedicated climate risk register, providing

a detailed breakdown of related risks, is

maintained and regularly updated, which feeds

into the understanding of the principal risk.

We follow the TCFD recommendations to

assess and report on climate-related risks.

This year, we completed our fourth climate

scenario analysis. We presented the results at

our climate risk workshop, where we discussed

recent changes and developments and their

potential impact on risk levels.

Currently, we assess climate-related risks as

having a low likelihood and low impact on our

Group in the short term. We do not believe that

climate change will significantly impact demand

for our vessels, primarily due to forecasted

demand for oil and gas production in our core

market of the Arabian Peninsula region will

continue. We are actively pursuing growth in

the offshore renewables market, building on

our current support of a European project with

one vessel and the upcoming deployment of

another. While we develop this promising area,

our business currently focused on traditional

energy. However, we are prepared to shift more

of our fleet to offshore renewables should the

demand for oil and gas change. This transition

can be accomplished without significant capital

expenditure.

The Board’s Oversight

The Board has overall responsibility for ensuring

that risks are effectively managed, including the

oversight of climate-related risks. While climate

change is not a regular standing agenda item

at Board meetings during the year, it is

integrated into GMS’ regular risk assessment

procedures as a principal risk, ensuring

ongoing Board monitoring and oversight of

related goals and targets.

The Board addresses climate change-related

issues several times throughout the year,

including a formal annual review of the Group’s

risk profile.

In November 2024, the Board Chair along

with Senior Management, participated in a

climate risk workshop facilitated by an external

sustainability consultant. This session focused

on climate change risks and opportunities,

enabling adjustments to the risk assessment

and enhancing internal climate-related

expertise.

The Board receives quarterly reports from

the Head of Health, Safety, Environment &

Quality (HSEQ). In November 2024, the Head

of HSEQ provided the Board with an update on

the Group’s environmental strategy, including

options for improving the sustainability of

existing and future vessels. The Head of HSEQ

also presents progress on climate-related

targets annually, typically in the first meeting

following data availability. These regular

updates, combined with the annual climate

risk workshop, equip the Board with the

necessary information to integrate climate-

related considerations into business planning

and strategy, particularly regarding vessel

improvements and replacements.

Board Committees

Audit and Risk Committee

The Audit and Risk Committee, composed

of three non-executive directors (one serving

as Chair), meets at least three times annually,

typically during the financial reporting and

audit cycle. They also communicate with

key individuals in the Group’s governance

throughout the year as needed, including the

CEO, the lead external audit partner, and the

Internal Audit Partner.

The Committee assists the Board in financial

reporting and auditing processes. Since

climate change is a principal risk for the

business, the Committee’s responsibilities

include considering climate-related issues.

They are specifically tasked with reviewing the

effectiveness of the Group’s internal controls.

Remuneration Committee

The Remuneration Committee ensures that

the Company’s compensation policies align

with GMS’ long-term strategy, purpose, and

values. When determining Executive Director

remuneration, the Committee makes sure

that incentives for Senior Management do not

inadvertently encourage irresponsible behaviour

that could raise ESG risks. Currently, however,

Board remuneration is not tied to achieving our

climate strategy or targets.

The Head of HSEQ’s compensation is linked to

ESG performance, as this role is responsible

for monitoring the Group’s progress toward its

carbon reduction targets and net-zero strategy.

About the TCFD

As a business supporting offshore operations, we

understand our environmental impact and the potential

risks climate change presents. We are committed to

a sustainable future and continuously seek ways to

minimise our footprint. Since 2021, we have calculated

our Scope 3 value chain emissions. Using 2021 as a

baseline, we established an ambitious net-zero target

of 2050 in 2022, along with interim targets to track our

progress. Since 2023, we are making progress against

these targets, which are outlined in the Metrics and

Targets section of this report.

34 Gulf Marine Services PLC Annual Report 2024

ESG continued

Senior Management’s Role

The Senior Management team, consisting

of the Chief Financial Officer, Chief

Commercial Officer, Head of HSEQ, Director

of Operations, and Chief Shared Services

Officer, is responsible for identifying, assessing,

managing, and mitigating risks and evaluating

opportunities, including those related to climate

change and the transition to a low-carbon

economy. They report to the Board and the

Audit and Risk Committee twice a year.

Senior Management actively participates in

discussions and assessments of climate-related

risks. The external sustainability consultant who

supported in arranging climate risk workshop

has been working with the Senior Management

for the past three years, guiding on GMS’

climate related risks and opportunities, climate

scenario analysis and Group’s overall climate

agenda.

Further information on the reporting structure

and the responsibilities of the Board,

Committees and Senior Management can be

found in the main Governance section of this

Annual Report.

Strategy

GMS is committed to long-term sustainability

and success, which requires us to address

all relevant risks and adapt our business

strategy as needed. Recognising the increasing

visibility and importance of climate change

risks to our stakeholders, we have enhanced

our climate risk assessment process. We

maintain a separate climate risk register, which

provides details on the nineteen associated

climate-related risks, aligned with the TCFD

recommendations.

Climate Scenario Analysis

We conduct an annual climate scenario

analysis to fully understand the physical and

transitional risks of climate change. Physical

risks cover the physical impacts of climate

change, like rising average temperatures and

sea levels. Transition risks stem from the shift

to a lower carbon economy, and include things

like increased regulations, the adoption of lower

emissions technology, and evolving consumer

preferences.

Our climate scenario analysis uses possible

representative futures to model these potential

impacts, as well as the necessary changes

governments and businesses will need to make

to limit global warming and reach net zero. In

2024, we again performed this analysis on our

key sites and operations.

The Scenarios

Three warming pathways were modelled

using data from several established models,

including CORDEX (Coordinated Regional

Climate Downscaling Experiment), CLIMADA

(Community-driven Climate Adaptation) and

IAMs (Integrated Assessment Models). The

pathways represent a broad range of potential

futures to ensure that all risks are considered.

The climate scenarios used in the risk

assessment process make projections on

hypothetical futures and come with a degree

of uncertainty. While most of the information is

obtained from existing climate models – which

have a high degree of accuracy – there is still an

inherent level of uncertainty.

The results of the analysis should, therefore,

only be used as a guide for climate-related

risks and opportunities facing GMS. Ten

climate indicators were modelled for each site

and scenario, including precipitation, aridity,

temperature and water stress. Outlined below

are the three warming pathways.

<2°C by 2100: Aligned with the Paris

Agreement target of a maximum of 1.5°C

of warming above pre-industrial levels. This

scenario requires a coordinated effort across

both government and business to rapidly

reduce carbon emissions through policy and

operational changes – leading to high levels of

transitional risk but limited physical risks.

2-3°C by 2100: This scenario is envisaged as

the outcome of reactive rather than proactive

action from governments, with policies being

introduced on an ad hoc basis, with only the

most committed businesses taking serious

action. This scenario is associated with the

highest level of transitional risks due to the

uncoordinated approach, along with some

physical risks.

>3°C by 2100: This scenario will occur if limited

action is taken over the next few decades.

Although this limits transitional risks, particularly

in the short and medium term, it has the highest

degree of physical risk due to the increased

global temperature rise. Under this scenario,

climate tipping points are projected to be

breached, leading to irreversible damage to our

planet.

The Time Horizons

Climate change impact extends beyond our

traditional horizons of business planning.

With the UK and UAE both targeting net-zero

by 2050, and climate models often focusing

on temperature changes by 2100, we have

decided to use the following time horizons

for assessing our climate-related risks and

opportunities. This approach aligns with our

own net-zero strategy.

Table 2: Time horizons used for our climate scenario analysis.

Short term: Medium term: Long term:

2024-2028 2029-2038 2039-2053

Covers our short-term business planning. Covers our long-term planning for vessel

replacement. Also covers our interim net-zero

targets (see Table 8 below).

Covers our long-term net-zero targets.

Strategic Report Governance Financial Statements

35Gulf Marine Services PLC Annual Report 2024

Horizon Scanning

We are aware that during 2024, Regulation (EU)

2015/757 has been amended to introduce new

rules for monitoring greenhouse gas emissions

from offshore ships and the zero-rating of

sustainable fuels. It will come into effect from 1

January 2025, for vessels with a gross tonnage

(GT) between 400 and 5,000, expanding to

cover larger vessels in 2027. We are preparing

for its effect to the vessels such as GMS

Endeavour and later GMS Enterprise, although

it is currently unclear whether jack-up barges

are covered by the regulation. However, GMS

is being proactive in responding to this and

has already demonstrated a commitment to

sustainability by monitoring and reporting CO

emissions in its annual report. Therefore, we are

well-prepared to provide the figures and reports

this regulation will require.

Further, the UAE issued Federal Decree-law

No. (11) in August 2024, covering plans for

the reduction of climate change impact,

effective from May 2025. Due to our existing

carbon reporting and net-zero targets, GMS

is well-prepared for the potential requirements

of this law.

The Results

We assess the physical risks to GMS’

operations and vessels as currently low. The

infrastructure we own and use have been

designed for the extreme climate conditions

where we primarily operate. For example, our

office buildings in the Arabian Peninsula region

are already exposed to extended periods of

temperatures exceeding 40°C. Therefore, the

region’s infrastructure design and our working

schedules consider these extreme weather

conditions. Regarding transition risks, our

fleet’s flexibility and demonstrated capability to

support offshore renewables position us well for

any future energy scenario. Overall, we believe

our business model and strategy are resilient

across all potential future scenarios.

Our risk management process classifies risks

with an overall rating of Red, Amber or Green

based on a combination of the inherent risk

and the control rating. Across all timelines and

scenarios, no red ratings were assigned to

climate-related transition risks. The number of

risks rated significant increases over time, with

Tables 4-7 presenting the scenario and timeline

in which a significant rating is assigned. All

physical risks were assigned a green risk rating.

The steps we have taken to identify and

manage each climate-related issue have

been based on our existing risk management

framework to ensure a consistent and efficient

assessment and categorisation.

Each climate-related issue is classified using

our rating system. Our process ranks risks

initially by their likelihood, then, each issue is

ranked according to its impacts on GMS. An

inherent risk score is calculated based on the

multiplication of likelihood and impact, and then

control effectiveness is factored in, as per Table

3. Risks with an overall score greater than 9 are

deemed as material.

The findings of the updated climate scenario

analysis were presented to Senior Management

and the Board in November 2024.

Table 3: Risk Rating Criteria

Likelihood Factor Rating Impact Factor Rating Control Effectiveness Rating

Almost Certain 5 Major 5 Very Good 5

Likely 4 Significant 4 Good 4

Possible 3 Moderate 3 Satisfactory 3

Unlikely 2 Minor 2 Weak 2

Rare 1 Insignificant 1 Unsatisfactory 1

Inherent risks

Green – Inherent risk is equal to or lower than 9, regardless of the control rating.

Amber – Inherent risk is greater than 9, but Controls are either 4 or above. Qualifies as material.

Red – Inherent risk is greater than 9, and Controls are 3 or below. Qualifies as material.

It included a discussion of how the risks

were impacted by changes at GMS within

the broader macroeconomic landscape and

by updates to the underlying datasets. Each

risk was discussed to determine whether

the impact and likelihood ratings required

adjustment. It was decided that no updates

were needed to the 2023 ratings as there had

been no material changes. As it becomes

clearer what is required from Federal Decree-

law No. (11) and whether our EU-based vessels

are subject to Regulation (EU) 2015/757, we

will adjust our ratings accordingly, but for now,

GMS is well-prepared for these changes.

Gulf Marine Services PLC Annual Report 2024

ESG continued

Table 4. Policy & Legal risks with a description, the timeline and scenario where the risk is first rated Amber

and our response.

Risk Description Risk Assessment Our Response

Enhanced emissions

reporting obligations

As a premium listed company on

the London Stock Exchange, with

operations primarily in the Arabian

Peninsula region, GMS is subject

to UK and UAE climate change and

environmental reporting regulations.

Changes to policy and reporting

requirements are very likely to

occur in the short term, with the

UK committing to net zero by 2050

(Almost Certain). Only one of the

Group’s vessels is currently located

in Europe. A second vessel will

be relocated to Europe for a new

long-term contract. The potential

operational/financial impact of such

changes is considered Limited to

Moderate.

In the short term, fewer climate-

related policy obligations are

anticipated for operations in the

Arabian Peninsula region sites,

compared to the UK. However, in

August 2024, a new Federal Decree-

law in UAE was issued regarding the

reduction of climate change impacts

(effective from May 2025).

<2ºC

2-3oC

Medium term

2024 Risk rating –

Amber

The Group aims to mitigate this risk by carefully monitoring

legislative developments to minimise non-compliance

with all relevant laws in the UK and the Arabian Peninsula

region. Our Annual Report includes all the legally required

information.

There is potential for increased mandates and regulation of

our existing products and services. In the long term, this is

expected to be associated with the carbon emissions of our

vessels. More detail on this is provided under technology

risks below (See Table 7).

Due to our existing carbon reporting and net-zero targets, we

are well-prepared for the EU and UAE regulations announced

this year (see Horizon Scanning section above).

Financial impact: Increased operating expenditures.

There are costs associated with compliance, including

engaging external specialists, internal resources and

potential penalties if regulations are not followed. Non-

compliance could result in fines of a minimum of £2,500 and

a maximum of £50,000. These costs have been assessed

and factored into the budget, which is currently considered

negligible.

A central database is maintained to document our legally

required and regulated policies and procedures. We are

ISO 14001 (Environmental management systems) certified,

which provides a framework for managing the environmental

legislation that applies to our operations

Mandates on and

regulation of existing

products and

services

In the short term, this risk is only

Amber for the proactive scenario

but this increases to Amber across

all scenarios in the long term.

<2ºC

Short term

2024 Risk rating –

Amber

Due to the nature of our services, this risk aligns closely with

the above risk ‘Enhanced emissions reporting obligations’,

and therefore the response is the same. We closely monitor

upcoming legislation and are well-prepared for increased

carbon reporting requirements.

Increased pricing of

GHG emissions

This risk is categorised Amber from

the medium term for the proactive

and reactive scenarios, with

potential significant or major impact,

respectively.

<2ºC, 2-3ºC

Medium term

2024 Risk rating –

Amber

Carbon pricing is considered unlikely for our vessels in

the Arabian Peninsula region, where most of our fleet

are located. However, our EU-based vessels may be

impacted by the changes to Regulation (EU) 2015/757 (see

Horizon Scanning section above). We are well-prepared

for this risk as we have developed our net-zero strategy,

which will reduce our carbon emissions and minimise the

impact should a carbon tax be introduced. Changes in tax

legislation are closely monitored, and internal models can be

used to factor this into the business strategy.

Financial impact: Increased capital and operating

expenditures.

Based on our 2024 Scope 1 emissions, our net-zero targets

and current projections for global carbon prices per tCO

a carbon tax could have various financial impact ranges;

please see the table below. This is based on data from The

World Bank, the Network for Greening the Financial System,

the Intergovernmental Panel on Climate Change (IPCC),

Organisation for Economic Co-operation and Development

(OECD) and Reuters.

Scenario 2025 (£k) 2035 (£k) 2050 (£k)

Proactive £2,456 £3,156 £1,114

Reactive £640 £6,027 £2,066

Inactive £653 £719 £627

Transition Risks – Policy & Legal

Strategic Report Governance Financial Statements

37Gulf Marine Services PLC Annual Report 2024

Transition Risks – Reputation

GMS strives to being the best Self-Elevating Support Vessel (SESV)

operator in the world, and a key to that vision is to perceive GMS to

be acting responsibly and contributing to a sustainable future. We are

aware that a suitable response to the challenges of climate change is

increasingly important to our investors and shareholders. We believe that

through our TCFD reporting and net-zero strategy, we are demonstrating

our commitment to address this critical risk.

Table 5. Reputation risks with a description, the timeline and scenario where the risk is first rated Amber

and our response.

Risk Description Risk Assessment Our Response

Increased

stakeholder concern

In the short term, increased

stakeholder concern may be

seen, including from employees

who may start to take company

environmental action and

preparedness into account. This

could impact the Group’s revenue

and employee retention. This

concern would be greater in a

<2°C scenario, where there is

greater awareness and more action

required. It would be lower in a

2-3°C scenario, where action is

being taken sporadically.

<2ºC

Short term

Risk rating – Amber

The Group’s workforce requirement is concentrated in its

core market, the Arabian Peninsula region, which is currently

reliant on and supportive of the oil and gas industry. It is

expected to remain so in the near future. GMS does not

anticipate struggling to retain suitably experienced and

qualified staff.

We are committed to acting responsibly towards the

environment, as demonstrated by our net-zero targets and

strategy. We have already allocated internal resources to

plan a net-zero strategy and regularly monitor current and

emerging regulations. These measures will help mitigate this

risk by showing that we are a proactive company regarding

climate change and environmental responsibility.

Financial impact: Reduced revenue, increased costs

to recruit if there is increased employee turnover.

Shifts in Consumer

Preferences

As climate change becomes

increasingly important and urgent,

it will impact investment decisions.

This could impact future access to

capital for businesses that do not

respond appropriately.

<2ºC

Medium term

Risk rating – Amber

There is increasing concern over fossil fuel use in the UK/EU,

although demand for oil and gas is predicted to grow. As a

result, new investors may become more challenging to find.

However, current shareholders are heavily invested in the

Group’s existing strategy and business model. Therefore, the

likelihood of a Significant impact is considered Unlikely in the

short term and in the most optimistic scenario (<2ºC), which

is not currently in line with the UAE’s approach.

Financial impact: Reduced ability to raise capital.

Stigmatisation of

sector

Increased climate concerns can

lead to the stigmatisation of certain

sectors and industries.

<2ºC

Short term

Risk rating – Amber

This risk would significantly impact the business if realised.

However, we do not expect to experience an impact on

demand for or production of oil and gas in the Arabian

Peninsula region within the short to medium term. The

Amber rating is first given in the short term for the <2ºC

scenario, which is not the current trajectory for the Arabian

Peninsula region.

Financial impact: Reduced revenue from decreased

demand for services.

Climate opportunities – for example, using our vessels for the

maintenance of offshore renewable projects offers versatility

and resilience to our business model.

Gulf Marine Services PLC Annual Report 2024

ESG continued

Transition Risks – Market

The global shift towards a net-zero economy will significantly transform

the products and services of industries worldwide. This transformation

presents both risks and opportunities for businesses. The primary risk

lies in the potential disruption to the supply and demand dynamics of our

services, as well as necessary adaptations within our supply chain.

Table 6. Market risks with a description, the timeline and scenario where the risk is first rated Amber and our

response

Risk Description Risk Assessment Our Response

Changing customer

behaviour

In a 2-3°C scenario, where urgent

action is being taken, it is Possible

that there could be changing

customer preferences resulting

in reduced demand for goods

and services. This could have a

Significant impact in the medium

term.

2-3ºC

Medium

Risk rating – Amber

The Group will continue to monitor any shift in consumer

demand across the regions in which it operates. However, oil

and gas have always been the mainstay of our business. It

is only considered possible for a Significant impact to be felt

in a <2ºC scenario, which is not currently considered in the

UAE. Globally, the Westwood Global Energy Group report

predicts an increase in the production for oil & gas until 2030,

including in the Group’s core markets. However, the Group is

aware that the UAE, along with many other governments, has

set a net-zero target and, in the long term, will need to make

substantial changes to meet these targets.

GMS has a proven track record in the renewables sector

and an ongoing presence in Europe for offshore wind

projects. This provides versatility in our business model, and

our vessels are suitable for use in this sector without major

additional capital expenditure. We are on a six-year contract

for one of our vessels on a renewables project in Europe

and recently secured a new long-term contract for another

renewables project in the region.

We are researching a business management system that can

support us in identifying potential areas for financial loss and

help us adapt if our strategy needs to change.

Financial impact: Reduced revenue.

Given the concentration of revenue in National Oil

Companies in the Arabian Peninsula region, the impact could

be Significant if materialised.

Increased cost of

raw materials

Climate policies could lead to

additional abrupt and unexpected

shifts in energy costs.

<2-3ºC

Medium term

Risk rating – Amber

This is considered a low risk as our clients pay for the fuel

costs, with only Minor financial impact for the Group in the

short term, rising to moderate in the reactive scenario over

the medium to long term. However, we are always working

to improve the efficiency of our vessels to meet our clients’

expectations, as they expect value for money in the services

they receive.

Financial impact: Increased operating costs for clients.

Strategic Report Governance Financial Statements

39Gulf Marine Services PLC Annual Report 2024

Transition Risks – Technology

Table 7. Technology risks with a description, the timeline and scenario where the risk is first rated Amber and our

response.

Risk Description Risk Assessment Our Response

Costs to transition

to lower emissions

technology

A requirement to transition to lower

emissions technology is Possible

in the medium term, under a

<2°C scenario, which could be

associated with additional costs

for GMS. The impact would be the

same in a 2-3°C scenario, but this is

considered Unlikely. The likelihood

of this risk will increase over time.

<2ºC

Short term

Risk rating – Amber

Existing vessels will likely need to be retired or will have fully

depreciated across their remaining useful life before we are

required to replace them with greener options. These routine

replacements are factored into our budget and strategy.

Therefore, we do not consider that vessel replacement costs

will significantly impact our business at this point. This risk is

higher in Europe, where we currently have one vessel and is

considered lower in the Group’s core market of the Arabian

Peninsula region.

In 2024, we have been researching alternative fuels and

efficiencies for our vessels. We are considering potential

efficiencies for our existing vessels.

Planning for net zero will help minimise these risks, as these

costs can be factored into our long-term business plan.

Financial impact: Increased capital expenditures.

Unsuccessful

investment in new

technology

This risk only moves to Amber in the

medium to long term as we are still

at least 10 years away from suitable

vessels being available.

2-3ºC

>3ºC

Medium term

2024 Risk rating –

Amber

GMS conducts ongoing research into potential future fuels

for its existing and replacement vessels. Additionally, we try

the new technology out in a single vessel first. This minimises

the risk of unsuccessful investment in new technology.

Financial impact: Increased capital expenditures

Physical Risks

Due to our existing controls, all identified

physical risks are currently rated as green

and therefore, the impact is considered low.

Although physical impacts are expected from

climate change, our offices and most vessels

are in the Arabian Peninsula region, which is

well-adapted to an extreme climate with high

temperatures, low precipitation, and high-water

stress. Infrastructure and labour regulations

have been designed to manage these risks.

The climate scenario analysis indicates a

likely increase in sandstorms due to rising

temperatures and declining precipitation. Our

vessels are prepared for sandstorms with

specialised filtration devices that reduce the risk

of sediment damaging the vessels’ engines.

Decreased precipitation will exacerbate water

stress in the region. Our vessels are equipped

with desalination equipment to mitigate water

stress, and we are also exploring innovative

solutions like extraction of water from the air.

Opportunities

GMS can capitalise on two significant

opportunities presented by the need to

address climate change. First is on operational

perspective – we can enhance our efficiency,

which will lower operating costs, strengthen

our resilience against evolving energy use and

carbon emission regulations, and showcase our

dedication to sustainability.

Second is on business strategy - we can

leverage our vessel capabilities within the

growing renewables sector. Building on our

established success in this area, we are

committed to maintaining a strong presence

in Europe to enable us to continue accepting

offshore wind farm contracts.

Engaging with Our Clients and

Supply Chain

To manage our climate-related risks and reduce

our carbon emissions, we need to engage

with our clients and supply chain. In 2023, we

began engaging with our top suppliers on their

carbon footprint. This involved asking whether

they already collected data on their Scope 1, 2

and 3 emissions, which feed into our Scope 3

emissions, and then starting to work with them

to reduce those emissions. Currently, 10 of our

top 30 suppliers have already published their

emissions on their websites or using the annual

Carbon Disclosure Project (CDP) disclosure

questionnaire.

During 2024, we have continued considering the

risks associated with our suppliers directly and

supply chain-associated risks in general. These

cover three key areas: food, fuel and vessel parts.

As part of our commitment to local sourcing and

due to the in-country value schemes endorsed

by our major clients, our top suppliers are mostly

located in the Arabian Peninsula region. They are

subject to similar transitional and physical risks

as the Group. As with GMS, they are already

prepared to cope with extreme conditions and

transitional risks are expected to be limited in the

short to medium term.

Risk Management

Our Risk Management Approach

GMS has an established enterprise risk

assessment process into which climate-related

risk management has been integrated (see the

main Risk Management section). Each year, our

climate scenarios are re-run, horizon scanning

performed, and the risks reassessed. Material

risks identified in our climate risk register are

integrated into the main risk register. This is in

response to the increasing importance placed

on climate change by the public, clients,

investors and employees.

The first step in the risk management process

is identifying and assessing risks, which is

conducted through reviews by individual

departments. Mitigating controls are then

determined. In the case of climate-related

risks, we have engaged with a third-party

consultant to ensure a thorough and informed

understanding of the potential risks and

opportunities guided by the TCFD framework.

The Senior Management team consolidates

identified risks into an overall heatmap for

principal risks. The Audit and Risk Committee

review the risk profile several times a year. The

Board discusses the Group’s risk register at its

principal meetings and formally reviews the risk

profile annually.

40 Gulf Marine Services PLC Annual Report 2024

ESG continued

The following steps were taken to assess

climate-related risks through climate scenario

analysis:

Step 1 – Identifying the risks:

External specialists used climate scenario

analysis in November 2024, for the fourth year

in a row, to assess 13 potential transitional

and six physical risks to the business over

three climate warming pathways and three

timelines. Physical risks are identified at site

level, and transition risks at Group level. These

were presented to Senior Management and

the Board at the climate risk workshop in

November 2024 for their input on the potential

size/scale of the risk/opportunity, which could

impact the business operations and strategy.

Step 2 – Assessing the risks:

These provisional risks were presented to

the relevant internal stakeholders, including

the Chief Financial Officer, at the Group and

site levels. Following our existing enterprise

risk assessment process and drawing on the

relevant expertise of Senior Management, each

provisional climate-related risk and opportunity

was allocated a likelihood and impact rating,

which were combined to provide the inherent

risk rating for each scenario and timeline.

Step 3 – Addressing the risks:

For each risk, the current mitigation measures

and the most appropriate approach for

managing residual risk is discussed annually

during the climate workshop. A score is given

to indicate how effective the controls are, which

is combined with the inherent risk rating to

provide a provisional overall risk rating of Red,

Amber or Green for each scenario and timeline.

There were no changes to this assessment

from last financial year’s ratings. Therefore,

there are still ten risks assigned an Amber

rating and, therefore, classified as material.

Risk management workshops are held at least

bi-annually between the Executive Chairman

and the Senior Management team, where

principal risks, including climate change, are

assessed for impact and likelihood.

In 2022, we developed our net-zero targets

and strategy. By reducing our emissions in

line with these targets through actions such

as improving the efficiency of our vessels and

reducing business travel, we will mitigate some

of the policy, legal, reputation, and technology

risks identified. The Science-Based Targets

initiative (SBTi), the accepted standard for

net-zero targets, defines net zero as emission

reductions of at least 90% across all scopes

before 2050, with only a very small number of

residual emissions (up to 10%) being neutralised

with carbon removals. Our net-zero targets and

progress against those targets demonstrate

to interested stakeholders that we are taking

climate change seriously. The resulting strategy

will allow us to plan for the transition to a

low-carbon economy, especially around our

business travel, vessels and fuel use.

Metrics & Targets

We acknowledge that we have a

responsibility to reduce our environmental

impact as far as possible, while delivering

sustainable business growth. In order to

support this commitment, we have been

measuring our Scope 1 and 2 emissions

since 2014 and our Scope 3 emissions since

2021. Financial year 2021 is our base year

for our emission reduction targets, as this is

the first year of our full emissions footprint.

Our near-term and net-zero targets were

approved by our Board in December 2022,

and the progress against each of them is

outlined in Table 8. Our ultimate net-zero

deadline of 2050 is in line with the national

targets of the UK, UAE and Qatar.

Scope 1 emissions result from the direct

combustion of gaseous and transportation fuels

during the reporting year. Scope 2 refers to the

emissions associated with purchased electricity

used in our offices. Scope 3 emissions are the

indirect emissions associated with operating

our business. Although we do not have direct

control over these emissions, we are taking

steps to work with our supply chain and

employees to develop an emission reduction

strategy.

Gulf Marine Services PLC Annual Report 2024

Strategic Report Financial StatementsGovernance

Table 8: 2024 progress against targets

Target Risk mitigation

2021

Baseline

Value 2024 Value

% Change

from

Baseline Comments

2025: Engage with

the top 10 suppliers

by spend on their

carbon emissions and

reporting.

By working with our

suppliers, we can reduce

our Scope 3 emissions and

mitigate risks associated

with emissions reporting

and pricing.

Zero suppliers

engaged.

We have not conducted further

engagement on this topic in

2024. However, we engaged

with our largest supplier in

2023 and know that ten of

our top 30 suppliers have

emissions data published,

either on their own websites,

reporting or through CDP.

10% Delayed

2030: Assess the

feasibility of replacing

one of our jack-up

barges with one able

to use a low-carbon

alternative fuel by

2030.

By thoroughly researching

future technology for our

vessels, we can mitigate

the risks from potential

unsuccessful investment in

new technology and also

understand and control the

costs to transition to lower

emissions technology.

No feasibility

assessment

undertaken.

Potential alternatives were

presented to the Board in

November 2024, along with

potential upgrades to existing

vessels.

50% On Track

2035: Absolute net zero

in Scope 3 emissions

from 1: purchased

goods and services,

4: upstream transport

and distribution, 5:

waste generated in

operations, 6: business

travel, 7: employee

commuting and 8:

upstream leased

assets.

By tracking and reducing

our carbon emissions,

we can mitigate the risk

of enhanced emissions

reporting obligations and

increased pricing of GHG

emissions.

18,355 tCO

e. 9,595* tCO

e. - 47.7%

Driven by

a large

decrease in

our purchased

goods and

services and

business travel

emissions.

On Track

A 4.2% annual reduction

is needed going forward.

2050: Absolute net-zero

in Scope 1 and Scope 3

(2: capital goods and 3:

fuel-related emissions).

By tracking and reducing

our carbon emissions,

we can mitigate the risk

of enhanced emissions

reporting obligations and

increased pricing of GHG

emissions.

57,9 87 t CO

e. 66,292* tCO

e. +14.3%

Due to

a 11.8%

increase in

fuel consumed

by our vessels

since baseline.

Off Track

We will continue to focus

on our 2030 target of

low-emission vessels to

tackle these emissions. A

10.4% annual reduction

is needed.

*Figures have been rounded to 0 decimal places, and therefore, slight differences may occur in the numbers presented here.

Between 2023 and 2024, there has been a

substantial decrease in Category 6 Business

Travel (55%) due to fewer nights spent in hotels

and fewer kilometres travelled. Additionally,

there was a 42% decrease in electricity

consumption at upstream leased assets

(Category 8).

Energy Usage and

Carbon Intensity

We use average carbon intensity data

(tCO

e/$m revenue) to assess our performance

and progress against the Paris Agreement

target. Our metrics use location-based Scope

2 emissions.

Our Scope 2 emissions account for 0.04% of

total emissions and are considered de-minimis.

Therefore, Scope 2 emissions have been

excluded from these net-zero targets. Each

year, we aim to improve the quality of our data

collection to ensure our reporting is increasingly

accurate. We acknowledge that sometimes,

this will increase the figures in some categories

and we will explain these in our reporting, as

required. We believe this transparency is an

important part of being a responsible business.

Carbon Emissions

In compliance with the UK government’s

Streamlined Energy and Carbon Reporting,

we have included our emission figures, energy

usage and intensity metrics for in 2024. GMS

provided relevant data to a third party who

used this to calculate our emissions. No formal

assurance was provided.

Our carbon emissions have been calculated

in line with the GHG Protocol Corporate Value

Chain (Scope 3) Reporting Standard and the

2019 UK Government environmental reporting

guidance. FY2021, FY2022, and FY2023 Scope

3 emissions have been restated to account

for updated DEFRA conversion factors. There

is no data for categories 9-15, as these are

not applicable to GMS. Category 8, upstream

leased assets, became applicable in 2023, as

we started leasing a small amount of shared

office space in Qatar and Saudi Arabia. The

large reduction in business travel emissions

since the baseline is due to the removal of

quarantine requirements for offshore staff due

to COVID-19, which significantly decreased the

number of hotel nights.

42 Gulf Marine Services PLC Annual Report 2024

ESG continued

Table 11: A breakdown of the waste types from our vessels and offices during the financial year 2024.

Metric 2024 2023 2022 2021

Total waste produced (tonnes) 9,278 6,676 4,572 7,5 6 6

% of waste recycled 69.9% 58.5% 1.0% 0.0%

Efficiency actions

We continually assess how to reduce energy

use and the associated carbon emissions. In

2024, we have been able to reduce hotel nights

and kilometres travelled for business purposes.

Waste

Waste management is important in minimising

our environmental footprint and will contribute

to our net-zero journey. Our waste strategy

is centred around four principles: Reduction,

Reuse & Recycle, Treatment and Disposal.

Our vessels are fitted with separate waste

bins for each type of recyclable material or

disposal method, which ensures that we have

detailed data on waste materials. Waste is then

emptied and brought to shore, where it can be

appropriately managed.

It is securely stored before the treatment

process to ensure our waste does not degrade,

spill or get stolen. Due to the nature of our

operations, we produce oil waste. Our oil

waste is not contaminated or mixed to ensure

it can be correctly treated and recycled. We

send regular reports to the local governing

bodies concerning the quality and quantity

of oil waste and its treatment methods. Table

11 summarises our waste produced and

the percentage sent for recycling. Although

we prioritise reducing the volumes of waste

produced on our vessels, our customer’s

crew make up around 75% of the people on

board, with our crew making up the remainder.

Therefore, we are unable to set formal waste

reduction targets as our influence on this is

limited.

Water

Water is the most important resource on the

planet. We know that our workers must always

have access to adequate, safe drinking water.

The water on our vessels is either sourced

from desalination or single-use plastic bottles.

Most water used on board is for drinking or

sanitation services. As our crew are working

under extreme temperatures, we do not feel

it is safe to set water reduction targets, as a

plentiful supply of water and electrolytes is

always needed to reduce the risk of heat stroke

or illness.

Table 9: 2021, 2022, 2023 and 2024 full carbon footprint and progress since our 2021 baseline.

Category 2024 2023 2022 2021

Progress from

2021 baseline

Scope 1 52,841 54,397 51,860 47,247 11.8%

Scope 2 (location-based) 27 26 28 31

12.9%

Total Scope 3 23,046 24,651 25,968 29,095

20.8%

1. Purchased Goods & Services 5,389 5,665 5,858 11,3 9 5

52.7%

2. Capital Goods 2,037 3,052 1,129 560

263.8%

3. Fuel-related Emissions 11,413 11,717 10,270 10,180

12.1%

4. Upstream Transportation and Distribution 1,562 318 5,646 377

314.3%

5. Waste Generated in Operations 1,417 1,271 667 654

116.7%

6. Business Travel 1,107 2,481 2,275 5,871

81.1%

7. Employee Commuting 115 136 124 57

101.8%

8. Upstream Leased Assets 6 11 – – –

Total All Scopes 75,914 79,074 77, 8 56 76,373

0.6%

Table 10: Our 2021-2024 energy usage and carbon intensity metrics.

Year 2024 2023 2022 2021

Progress from

2021 baseline

Scope 1 Energy Usage MWh 194,203 198,063 190,060 171,16 5 13.5%

Scope 2 Energy Usage MWh 64 63 67 72

11.8%

Scope 1 & 2 tCO

e/$m revenue 318.52 358.99 389.55 410.76 22.5%

Scope 1, 2 & 3 tCO

e/$m revenue 4 57. 3 6 521.60 584.50 663.54 31.1%

Strategic Report Governance Financial Statements

43Gulf Marine Services PLC Annual Report 2024

Social

Values

At the heart of our business are the core values

of Responsibility, Excellence and Collaborative

Relationships. These values guide every

decision we make, from ensuring the safety

and well-being of our team and partners to

upholding the highest ethical standards.

Responsibility

At GMS, the health, safety, and environmental

well-being of all individuals and communities

impacted by our operations are paramount.

Safety is integral to every aspect of our

business.

We prioritise the safety and well-being of our

employees, subcontractors, clients, partners,

and all other stakeholders. We believe that

responsible risk management and a genuine

care for people are essential for building long-

term, sustainable value.

As we pursue growth opportunities, our

commitment to safety and collective welfare

remains unwavering. We strive for excellence

while fulfilling our responsibilities to the people

we serve, the environments we protect, and the

communities that support our work.

Excellence

At GMS, excellence is our unwavering pursuit.

We are committed to continuous improvement

and innovation, constantly seeking new ways

to exceed client expectations. By learning from

past successes and exploring groundbreaking

ideas, we enhance our delivery capabilities and

forge stronger partnerships.

We set ambitious targets that demand superior

quality, exceptional value, and outstanding

outcomes. These challenging goals push

our organisation to new heights, ensuring we

consistently deliver positive impacts for our

clients and all stakeholders.

Integrity and transparency are the cornerstones

of our business. We operate with the utmost

rigor and ethical conduct, earning the trust

and preference of clients who value our

commitment to sustainable quality.

As we explore avenues for future growth,

we remain steadfast in our core priorities:

service excellence, stakeholder welfare, and

unparalleled delivery. These principles have

solidified GMS’s position within our sector,

and we are dedicated to upholding and

strengthening this foundation of trust for years

to come.

Collaborative Relationships

GMS believes in fostering strong, collaborative

relationships with all its stakeholders. We are

committed to continuous improvement and

innovation, working closely with our clients to

understand their unique needs and develop

tailored solutions that exceed expectations.

We actively engage with our partners, suppliers,

and employees to build trust and foster a

collaborative environment. By leveraging

the collective expertise and insights of all

stakeholders, we can identify and implement

innovative approaches that deliver exceptional

value and achieve shared success.

We prioritise open communication,

transparency, and mutual respect in all our

interactions. We strive to build long-term

partnerships based on trust, integrity, and a

shared commitment to achieving excellence.

Our success depends on the strength of our

relationships with all stakeholders. By working

together collaboratively, we can achieve our

shared goals and create a sustainable future for

GMS and our partners.

GMS Organisation Structure

Our organisational structure is pivotal to

our success. We have cultivated a robust

framework that empowers our teams, fosters

collaboration, and positions us for sustained

excellence.

Our foundation rests on a network of

Core functions – Operations, Marine and

Engineering, Maintenance, and Project Delivery

– that directly drive our technical capabilities

and performance. These Core functions

are supported by a robust set of enabling

services, including Health, Safety, Environment

and Quality (HSEQ), Business Development,

Procurement, Finance, Human Resources and

other essential expert functions.

This structure strikes the ideal balance between

focused client delivery and efficient business

operations. Core teams are empowered to

deliver exceptional service, while enabling

functions provide the necessary support and

streamline operations across the organisation.

Seasoned leadership guides our strategic

direction, fostering seamless collaboration

across all departments. This enables us to

mobilise the right talent and resources to

capitalise on new opportunities and adapt

effectively to evolving market demands.

Our organisational structure is not merely a

framework; it is a dynamic platform for growth.

Built on a foundation of client-centric agility,

operational discipline, unified vision, and

rigorous governance, it empowers GMS to

achieve sustainable excellence in the years

to come.

Achievement

GMS achieved remarkable recognition in 2024

for its innovative human resources practices

and outstanding workplace culture. The

Company was honoured as a Gold Winner in

two prestigious categories at the Economic

Times HCA MENA 2024 Awards: ‘Excellence

in Cultivating a Culture of Trust and High

Performance’ and ‘Excellence in Change

Management’.

Further cementing its position as an industry

leader in people management, the Company

was shortlisted for the Future Workplace

Awards 2024 in the ‘Best HR Transformation

& Change Management Strategy’ category,

highlighting our ongoing commitment to

creating a progressive and dynamic workplace

environment that drives business success.

Turnover

GMS fosters a stable workforce with an

employee turnover rate maintained at 12%

since 2023. This stability can be attributed to

a comprehensive approach to talent retention,

including competitive compensation, attractive

retention bonuses, and ample opportunities for

career growth for high-performing employees.

Diversity

GMS thrives on a diverse and inclusive global

workforce. Our team comprises 727 talented

individuals from 36 countries, an increase

from 660 personnel representing 34 countries

in 2023. This rich diversity fuels innovation,

strengthens our understanding of diverse

markets, and fosters a truly global perspective

within our organisation. The information on

page 46 provides details of diversity of our

personnel.

GMS is an equal opportunity employer

with a zero-tolerance policy for any form of

discrimination, including gender, race, colour,

nationality, ethnic or racial origin, marital

status, religion, or disability. We are committed

to creating an inclusive environment where

all employees feel valued, respected, and

empowered to reach their full potential. For

more information on our Equal Opportunities

Policy, please visit the Governance section of

our website.

The number of offshore female personnel is

currently limited by cultural and legal factors.

In some countries in the Arabian Peninsula

region where GMS operates, local labour

laws stipulate that women cannot work in an

inappropriate environment and hazardous

jobs/industries and may not be required to

work at night. As a result, GMS may be unable

to employ women in certain offshore roles

due to these constraints. Furthermore, as

GMS does not fall under the scope of the UK

Government’s Equality Act 2010 regarding

gender pay gap disclosure, this information has

not been provided.

44 Gulf Marine Services PLC Annual Report 2024

ESG continued

Employee Engagement and Welfare

Our 2024 Employee Engagement Survey

achieved an 89% completion rate, with 636

employees participating across offshore and

onshore operations. Of the respondents, 94%

reported feeling informed about Company

performance, and 96% expressed pride in

working for GMS and would recommend it as

an employer.

The survey highlighted our workplace strengths:

96% of respondents confirmed our stance

against workplace harassment, 97% expressed

confidence in our safety-first culture, and 95%

felt empowered to express opinions without

fear. These results from our respondents reflect

our commitment to an inclusive, transparent,

and safety-conscious environment.

We enhanced employee welfare by extending

maternity leave to 90 days for our female

employees onshore, exceeding UAE labour law

requirements. Responding to feedback from

our 2023 survey that highlighted opportunities

for enhanced training and development,

we provided all onshore employees in 2024

with access to online training through a new

partnership. The 2024 survey results have

identified new areas for continued focus, with

respondents highlighting opportunities for

improvement in compensation structures,

career advancement pathways, and

streamlined supplier payments. We are actively

developing initiatives to address these areas.

Our successful engagement sessions between

onshore employees and members of the Board

in Abu Dhabi provided valuable opportunities

for direct interaction and feedback, further

strengthening our commitment to creating a

workplace where employees feel valued and

empowered.

Performance

To better align individual and company goals,

the Short-Term Incentive Plan (STIP) was

redesigned in 2019. All participants, including

Executive Directors, strive towards the same

transparent performance targets. GMS

emphasises a performance-based culture with

no guaranteed variable pay awards.

The 2024 STIP measures for employees

are outlined on page 79. This approach

encourages a shared focus on achieving Group

objectives and aligns with the interests of our

shareholders.

Succession Planning

GMS believes in fostering a growth-oriented

environment where our employees can thrive.

To this end, we have established a structured

succession planning process that prioritises

internal candidates for key roles whenever

possible. This approach allows us to recognise

and reward high-performing employees,

develop a strong leadership pipeline and boost

employee morale and engagement.

While internal recruitment remains our primary

focus, we also recognise the need for external

hiring in specific situations, such as filling highly

specialised roles or during periods of rapid

growth. All recruitment activities are conducted

ethically and fairly, adhering to our core values.

In 2024, we successfully promoted 36

employees across various levels, demonstrating

our commitment to internal growth. This

represents a slight increase from 34 in 2023,

indicating a more stable and sustainable

approach to talent management.

By investing in the development of our internal

talent, we not only create opportunities for

individual growth but also contribute to the

overall success and long-term sustainability

of GMS.

Learning and Development

GMS ensures all employees maintain technical

and regulatory training required for their roles.

Seafarers maintain STCW qualifications to

operate vessels, meeting International Maritime

Organisation requirements. Crew members

complete additional training in offshore safety,

awareness, and emergency response for Oil &

Gas sector operations.

During 2024, GMS saw significant expansion

of its learning and development programs.

In response to employee feedback for more

learning opportunities, we have offered all

onshore employees access to online training

through a new partnership.

This initiative provides unlimited access to

courses across technical, business, and

leadership domains, enabling personalised

learning paths aligned with both individual

career aspirations and organisational needs.

There was also a specialised communication

workshop led by Board member Haifa Al

Mubarak, focusing on effective communication

strategies for key staff members.

GMS also invested in the development of

local talents in areas of HR, IT, Procurement,

Operations, HSEQ and Finance departments.

Each follows tailored development paths

combining structured learning with hands-on

experience.

Ethical Practices

As a UK-listed company, GMS adheres to the

highest standards of corporate governance

and complying with all applicable laws and

regulations. Our Code of Conduct serves as

the cornerstone of our ethical framework,

outlining the principles and values that guide

our business decisions and interactions. All

employees receive comprehensive training on

the Code of Conduct as part of their induction,

as our success depends on its application in

stakeholder dealings.

The Annual Compliance Awareness Campaign

includes online training and assessment of key

policies including Anti-Bribery and Corruption,

Code of Conduct, and Whistleblowing

procedures. All onshore employees and

offshore key personnel complete these

mandatory trainings.

Our independent whistleblowing service

operates 24/7 with professional call handlers,

providing:

• a voice for employees, contractors, suppliers

and stakeholders

• maintenance of an open culture

• demonstration of our commitment to

addressing malpractice

• Executive team oversight of business climate

• support for employees who speak up.

The Whistleblowing Policy includes a strict

non-retaliation commitment, supported by

regular training to ensure our ethical framework

remains robust and accessible.

Strategic Report Governance Financial Statements

45Gulf Marine Services PLC Annual Report 2024

Africa

Asia

Europe

MENA

Other

(US, Canada,

Venezuela,

New Zealand,

Dominica)

Africa

Asia

514

Europe

MENA

Other

(US, Canada,

Venezuela,

New Zealand,

Dominica)

Male

696

Female

Male

Female

Male

Female

Male

Female

People as at 31 December 2024

Offshore

652

(2023: 599)

Onshore

(2023: 61)

Nationalities

(2023: 34)

Voluntary turnover

12%

(2023: 12%)

Total number

of employees

727

(2023: 660)

Total number

of Directors

(2023: 6)

Total number of

Executive Team

(2023: 3)

Total number of Direct

Reports to Executive Team

(2023: 14))

Gulf Marine Services PLC Annual Report 2024

ESG continued

Health and Safety

The Group adheres to the highest international

standards of health and safety in operating its

vessels. Our Management Systems, which

oversee all activities and operations of the

Group, are voluntarily accredited to ISO 9001,

ISO 14001, and ISO 45001. Additionally,

all vessels operate in compliance with the

International Safety Management (ISM) Code,

meaning the International Management Code

for the Safe Operation of Ships and for Pollution

Prevention, which is a legal requirement.

Regular assessments of risks stemming

from operations and activities are conducted

to ensure the implementation of mitigation

procedures, which are then communicated

to all employees. Comprehensive training and

employee engagement initiatives ensure that all

employees are well-informed about operational

risks. Annual training programs are developed

and periodically reviewed to maintain efficacy.

In the previous years, GMS implemented a

remote healthcare system for all its offshore

workforce, providing access to onshore

Doctors and mental health support 24/7.

Additionally, GMS implemented a Group-

wide Marine Enterprise Resources Planning

System to modernise and digitalise its vessel

operations. The system integrates all aspects

of vessel management through one web-based

platform hosted on the cloud and accessed

onshore and offshore. Management now

has access to a centralised database used

to enhance efficiency and improve decision-

making.

In 2023, the Group implemented an online

platform that delivered comprehensive safety

awareness trainings directly to individuals

on board the vessels, ensuring quick

comprehension and immediate application.

With this system, crew that is off rotation do not

miss important and relevant safety updates that

pertains to the Group when they are back to

the vessel. This is achieved because the system

acts as a repository of safety information,

guaranteeing access to the latest safety

information any time and anywhere.

The Group is pleased to report that it has

successfully maintained a Lost Time Injury Rate

(LTIR) of 0 from 2023 to 2024, with no cases

requiring medical treatment or restricted work

duties. Consequently, the Total Recordable

Injury Rate (TRIR) declined from 0.18 in 2023 to

0 in 2024. These metrics are significantly below

the industry average. We remain committed

to continuous improvement in our systems

and processes and will proactively engage our

employees to ensure our offshore operations

uphold the highest safety standards, consistent

with the expectations of our customers and

stakeholders.

The information below is intended to provide an

overview of the Health and Safety performance

over the reporting period.

Number of work-related fatalities

(2023: 0)

Number of recordable

work-related injuries

(2023: 2)

Number of high-consequence

work-related injuries

(2023: 2)

Number of hours worked

2,497,312

(2023: 2,378,216)

Comprehensive

training and employee

engagement

initiatives ensure that

all employees are

well-informed about

operational risks.

Strategic Report Governance Financial Statements

47Gulf Marine Services PLC Annual Report 2024

48 Gulf Marine Services PLC Annual Report 2024

ESG continued

Performance Evaluation Framework for 2024

As approved by the Remuneration Committee, the following table outlines the key performance measures

and their respective weightings in determining the overall performance of the Group for 2024.

Measure Weighting Performance Range (From Zero to Full Pay-out)

EBITDA 25% Less than US$ 86m – Greater than US$ 99.0m

EBITDA margin 5% Less than 53% – Greater than 60%

Securing contract % of 2025 budget revenue 20% Less than 60% – Greater than 85%

Securing contract % of 2026 budget revenue 10% Less than 35% – Greater than 55%

Achieving leverage <2.48 20% After 31 December 2024 – On or before 31 December 2024

Complete Debt Refinancing 15% After 31 December 2024 – On or before 30 September 2024

Strategic partnership target 5% After 31 December 2024 – On or before 31 December 2024

Objective of development of the Company’s equity

story and investor relations plan** 10% To be assessed by the Remuneration Committee

Objective of development and implementation

of senior management talent development and

succession planning** 10% To be assessed by the Remuneration Committee

Total 120%

EBITDA* <US$ 86.0m US$ 86.0m–US$ 93.4m US$ 93.5m–US$ 99.0m

Score 0% 0.1–20%* 20.1–25%*

EBITDA Margin* <53% 53–56% 56 .1– 60.0%

Score 0% 0.1– 4.0%* 4.1– 5%*

Securing contracts % of 2025 budget

revenue* <60% 60–80% 80.1– 85%

Score 0% 0.1–16%* 16.1–20%*

Securing contracts % of 2026 budget

revenue* <35% 35–50% 50.1– 55%

Score 0% 0.1– 8%* 8.1–10%*

Achieving leverage < 2.48 After 31 December 2024

On or before

31 December 2024

Score 0% 20%*

Completion of debt refinancing After 31 December 2024

On or before

30 September 2024

On or before

31 December 2024

Score 0% 15% 10%*

Strategic Partnership target After 31 December 2024

On or before

31 December 2024

Score 0% 5%

* Zero to full pay-out is not linear as bands operate within the performance ranges shown.

** The annual bonus potential for Mansour Al Alami in 2024 was 120% of salary. The proportion above 100% of salary or otherwise determined by the Remuneration

Committee (in this case, 17.49% of salary), will be deferred into shares under the Deferred Bonus Plan.

Strategic Report Governance Financial Statements

49Gulf Marine Services PLC Annual Report 2024

The Directors of Gulf Marine Services PLC, both

individually and collectively, believe that they have

acted in a way that would most likely promote the

success of the Group, benefiting of its members

as a whole and its other stakeholders.

The key matters considered by the Board

include the following:

• safeguarding and promoting the interests

of the Group’s shareholders as a whole;

• the interests and safety of the Group’s

employees and other members of the

workforce in the Group’s Operations;

• the impact of the Group’s operations on

the community and the environment;

• the need to foster the Group’s business

relationships with lenders, suppliers,

customers and other stakeholders;

How GMS Engages with

Stakeholders

Stakeholder

Objectives

How did Engagement Support

Board Decision Making?

Shareholders

GMS shareholders are institutional investors and private

shareholders located across the world. We recognise

the importance of the activities and outcomes of

stewardship and regularly engage with investors on our

financial performance, strategy and business model

and our Environmental, Social and Governance (ESG)

performance.

The Executive Chairman holds regular meetings with

representatives of major shareholders and updates of

these meetings are provided at each of the main Board

meetings.

The GMS website has a dedicated section with a specific

email address for all shareholders to use, this is monitored

daily, all emails receive a response. Shareholders can

view the investor presentation that accompanies the full

and half-year results. Our Annual General Meeting (AGM)

provides another forum for our shareholder base to

engage.

GMS also has an active social media presence and posts

updates on major developments in the Group.

One of our non-executive Director was nominated by our

largest shareholder.

Refer to the Board Report on page 58 regarding protocols

to manage information shared with the Group’s non-

independent non-executive Directors.

Investors are focused on a broad

range of factors such as share

price, financial and operational

performance, strategic execution,

corporate risk management and

capital allocation, remuneration

for management and returns for

investors and the Group’s ESG

performance.

The Directors regularly received reports on the

Group’s major shareholders from the registrar

and the brokers. They also received reports

on management team’s engagements with

shareholders.

The Executive Chairman and other members of

management engaged with major shareholders

throughout the year and held meetings with

shareholders on over 69 occasions during 2024.

The Board continues to have input into the

Group’s communication with its shareholders.

There have been regular trading updates

including all major contract wins, and information

is posted on the Group’s website and social

media to maintain transparency to all current

shareholders in the business and other potential

investors.

• the desirability of the Group maintaining

a reputation for high standards of business

conduct;

• the likely consequences of any decision

in the long term;

• the need to act fairly between members

of the Group.

Stakeholder engagement and analysis are

integral to our risk management process. We

interact with these important groups through

various methods, including direct discussions,

surveys, and participation in community,

industry, and government events and forums.

These interactions provide valuable insights that

inform the Board’s deliberations.

The Board has always taken into account

its obligations under Section 172(1) of the

Companies Act 2006 (Section 172), including

during the year, and current reporting

requirements.

Key decisions have been specifically confirmed

at each main Board meeting to consider these

matters. This has been supplemented by the

roles of the individual Directors giving due

regard and consideration for each element of

the Section 172 requirements. The Board has

always maintained an approach to decision-

making that promotes the long-term success

of the business in line with the expectations

of Section 172. The disclosures set out here

summarise how GMS deals with the matters

set out in Section 172(1)(a) to (f). Cross-

references to other sections of the report for

more information are also included.

Benefiting our members

and shareholders

50 Gulf Marine Services PLC Annual Report 2024

Section 172 Statement

How GMS Engages with

Stakeholders

Stakeholder

Objectives

How did Engagement Support

Board Decision Making?

Clients

GMS works closely with its clients to deliver an industry-

leading offering. The Board is informed of all tender

activity at each Board meeting. Senior Management

engages regularly with clients via face-to-face meetings to

ensure GMS fully understands operational performance:

client service and safety are the key drivers of meetings.

Through this engagement, GMS learns about immediate

and ongoing tender requirements and future demand,

and changes to strategy and/or technical or operational

requirements. This informs critical business decisions

associated with fleet deployment, prioritising future

business development activity and resource and

local content investment (HR, Procurement and Local

Partnerships). It also helps with overhead sizing and

allocation and capital expenditure planning, while meeting

client needs.

Clients are mainly concerned with

ensuring value for money in the

services received. They also wish

to ensure that services meet their

specifications and are delivered

efficiently and safely.

The Board maintains good relationships with

key clients in the Arabian Peninsula region and

European markets and a high level of industry

knowledge. Engagement with clients was crucial

in providing the information the Board needed to

drive the Group’s long-term plans, which are key

to the long-term delivery of GMS’ strategy.

Engagement with our clients helped the Group to

make informed decisions on capital expenditure,

which remain suitable to keeping vessels in

class and equipment in good condition to meet

specific client requirements.

The Group’s focus continues to be on delivering a

sustainable capital structure by deleveraging the

balance sheet. Capital allocation and resources

are being reviewed. Refer to the Financial Review

for more details.

Lenders

GMS continued to have extensive interaction with its

previous and current lenders and respective teams. Capital

structure and financial performance are always kept under

consideration in any decision-making to ensure that the

Group stays within its covenants.

Lenders are primarily concerned

with ensuring that the capital value

of their loans are protected, and that

interest is paid. They also wish to

ensure that other material provisions

of the lending agreements are

complied with.

The increase in adjusted EBITDA meant that the

Group continued to successfully repay significant

amounts of principal as well as interest, and

this resulted in a reduction in leverage to 2.0

times (2023: 3.05 times). This was one of the

main priorities for the Board, which the Group

successfully delivered.

Refer to the Financial Review on pages

20 to 21 for further details.

Suppliers

GMS’ supply chain is fundamental to the ability to deliver

reliable operations. The Group has a strategy of long-term

partnerships with key suppliers based on regular and

transparent communication with suppliers through site

visits, calls and surveys. The Group continuously reviews

its existing supply chain which ensures continuity of

supply.

The Board received regular updates on this during

the year.

Suppliers are primarily focused on

fair and timely payment terms as

well as a collaborative approach and

open terms of business.

GMS works to maximise in-country

spending, which is a requirement

from National Oil Company (NOC)

clients.

The Board was given regular presentations and

updates on the Group’s procurement activities

including the development of key focus areas for

procurement in future. The Group continues to

investigate cost savings initiatives, and maximise

in-country value and renegotiate the terms of

major supply contracts to improve efficiency.

People

Our employees are our most important asset. They

want to work in an environment where they are safe and

respected, and have the opportunity to learn, reach their

potential and develop successful careers in a Company

they can be proud of. The quality of the workforce is

crucial to the success of GMS. We regularly communicate

with both on and offshore staff via weekly email updates,

meetings and video communication from the Executive

Chairman to all offshore staff.

Employees are concerned with job

security, opportunities for training,

a culture of fairness, inclusion and

communication, compensation and

benefits.

Lord Anthony St John of Bletso is our dedicated

workforce engagement non-executive Director.

Regular updates on Health and Safety and HR

activities and future plans are provided at main

Board meetings.

All non-executive Directors spend time in our

offices in Abu Dhabi and engage with staff, most

notably at the end of year celebration was held

in Abu Dhabi to celebrate the collective wins as

a team in 2024. During this event, long-service

employees were also recognised with awards for

10, 15 and 20 years of service. Non-executive

directors talked with different groups of

employees at this event soliciting their views and

recognising their contributions.

Refer to page 45 for more details on

engagement with our people.

Strategic Report Governance Financial Statements

51Gulf Marine Services PLC Annual Report 2024

In the Chairman’s Review commencing on page 4,

I noted our focus on delivering long-term shareholder

value as we navigate the dynamic landscape of our

industry. This has ranged from setting and keeping

under review Group strategy, to the substantial

repayment and successful refinancing of Group

debt. These decisions are made and progress

achieved within a governance framework intended to

allow business performance to be maximised with

appropriate controls and risk management to enable

this to be achieved over both the short and long terms.

This section of the Annual Report sets

out the governance backdrop to what has

been achieved and what is being planned

on an ongoing basis. This includes further

information on our focus on setting strategy

and monitoring its implementation, on our work

on risk management and internal controls, and

of course on our public reporting. It includes

reports by the Board and by each of our

Committees.

Our work in these areas follows from the

Board’s belief that business success is

achieved and sustained over the long-term

through good governance; that shareholder

value benefits from transparency of reporting

externally as well as internally; and that the

interests of all stakeholders can be properly

served by only ethical business practices.

We held two strategy meetings in 2024. The first of these was in May to review and

update strategy following our previous strategy meeting in September in the prior year.

The second was in November in advance of the 2025 Budget preparation and annual

reporting.

Each of these strategy meetings brought together the Board and Senior Management

in a productive forum to discuss longer-term plans for the business. This included

presentations and discussion on each key aspect of the Group’s operations, recent and

future industry developments and ongoing and future strategic plans. In each case, the

conclusions reached have helped inform our continual planning for the business with a

focus on shareholder value and stakeholder interests.

At these meetings, we benefitted from the diversity of the members of our Board,

in terms of background, skill sets, experience and geographic location. This diversity

ensures appropriate debate, challenge and encouragement for management in relation

to Group strategy. It also enables the input of ideas and assistance on a wide range of

matters from each of the Directors.

Of course, whilst the Board is responsible for setting strategy, it is the GMS employees

who handle its implementation. This includes both those crewing our vessels and

those onshore. In the past, arrangements have been made in order that Directors can

visit a vessel in-port. In 2024, an event was arranged, led by Anthony St John, our

non-executive Director for workforce engagement, for Directors individually to meet

and chat with onshore employees in an informal environment. Events such as this help

inform Directors of views directly from the workforce and we believe are also seen as

worthwhile by employee participants.

This has always been the approach taken by

this Board and will continue to be so as we look

further into the future for ongoing improvements

in the financial performance already achieved.

This governance review, including the reports

of the Board and its Audit and Risk, Nomination

and Remuneration Committees, summarise key

aspects of our work in these areas. Particular

aspects in relation to the past year are set

out below:

Gulf Marine Services PLC Annual Report 2024

Chairman’s Introduction to Governance

This Corporate Governance Review, including

the sections that follow, sets out how the

Group has applied the main principles

of governance contained in the 2018 UK

Corporate Governance Code (the Code). The

Board considers that the Group complied with

the relevant Code provisions that applied during

the year, except the provision with regard to

the combined role of Chairman and Chief

Executive. These roles are combined due to

the relatively small scale of the business and

the challenges in recruiting a CEO in the UAE

of the calibre appropriate to a UK listed

company. The Board believes this combined

role remains appropriate at this time, although

active succession planning and talent

development continue to enable the roles to

be split in the future.

As well as employees, other key stakeholders include the lenders under the new

financing facilities completed during the year. These facilities replaced the legacy

borrowing from before the restructuring of the Group, recognising the strength the

Group and its balance sheet now enjoy. I would like to thank the lenders under these

new facilities for working with us to enter into the Group’s ongoing financing into the

long-term enabling the future development of the Group and its financial performance.

Our other key stakeholders are, of course, our shareholders. I would like to welcome

those shareholders who joined our register during the year either through the purchase

of shares on the market or by receiving shares by way of dividend in specie from the

former holding of Seafox International Limited. I would also like to thank these new

shareholders as well as our existing shareholders for their ongoing support. We enjoy

excellent engagement with our shareholders and welcome this on an ongoing basis.

Our Audit and Risk Committee continued its focus on risk management and internal

controls as well as the Group’s public financial reporting. This included review and

discussion of key and emerging risks and plans for the Group’s IT systems. It also

included oversight of the preparation and audit of the Group’s interim and full year

results. I would like to thank Jyrki Koskelo as Committee chair, Alex Aclimandos as

Chief Financial Officer and KPMG as external auditors together with their teams for their

work, which has enabled the accurate publication of results on an ongoing basis. A

summary of the Committee’s work commences on page 63.

Our Remuneration Committee oversaw remuneration in the Group generally as well as

deciding the remuneration for the Executive Chairman and senior management. The

Committee has confirmed fair treatment for the workforce generally as well as reviewed

remuneration including salaries and annual bonuses at a senior level. It has also kept

under review the structure and timing of the next awards under the Company’s Long

Term Incentive Plan (LTIP), the renewal of which is to be proposed at the Company’s

upcoming AGM. I would like to thank Lord Anthony St John for his work as Chairman of

this committee and indeed as non-executive Director for workforce engagement. The

Committee’s work is summarised in its report which starts on page 68.

The Nomination Committee conducted and reviewed the Board structure and

membership. This followed on from the results of the performance review of the Board

summarised in the report of the Nomination Committee on page 66. The Committee

believes the current Board structure and membership provides the appropriate

Directors in the relevant positions with the necessary mix of skills and experience for

the Group’s ongoing strategy. In particular, in the context of the ongoing success of the

business, the Board believes that the combination of the roles of Chairman and Chief

Executive remains appropriate for the time being while the ongoing succession plans

and talent development within the business continue. These matters will remain under

review and be reported on further in due course. A summary of the Committee’s work

commences on page 66.

10.

The Board has maintained focus on avenues for the ongoing enhancement to

shareholder value. Following the successful ongoing deleveraging of the business,

these avenues include strategies for further development of the business and of

plans to initiate our future dividend policy through a dividend and /or potential share

buybacks, provided other plans permit and that loan covenants are fully met. Focus on

generating value for all shareholders alongside the interests of other stakeholders has

driven successes in the past year and will continue to do so in future.

We look forward to reporting on progress

next year and to reporting against the recent

updates to the UK Corporate Governance

Code which take effect in relation to the

Company in 2025.

Mansour Al Alami

Executive Chairman

8 April 2025

Strategic Report Governance Financial Statements

Gulf Marine Services PLC Annual Report 2024 53Gulf Marine Services PLC Annual Report 2024

Governance

Chairman’s Introduction to Governance continued

Governance Calendar for 2024

The overall calendar of meetings of the Board and its Committees for 2024 is shown below.

Governance Calendar for 2024

Further information Feb 7 Mar 26 Mar Jun Aug Sep Nov Dec

Board Page 58

Audit and Risk Committee Page 63

Nomination Committee Page 66

Remuneration Committee Page 68

Annual General Meeting Page 62

Directors also meet informally between main Board and Committee meetings to discuss performance and latest developments as these arise,

with additional formal meetings being arranged as and when appropriate.

Meeting Attendance by Directors in 2024

Director

Board Audit

and Risk

Committee

Remuneration

Committee

Nomination

Committee

27 Feb

7 Mar

26 Mar

5 Jun

3 Sep

12 Nov

16 Dec

26 Mar

5 Jun

19 Aug

12 Nov

27 Feb

26 Mar

5 Jun

30 Aug

12 Nov

26 Mar

5 Jun

12 Nov

Mansour Al Alami

Jyrki Koskelo

Lord Anthony St John of Bletso

Charbel El Khoury

Haifa Al Mubarak

Hassan Heikal

* Where apologies were sent by a director, this was due to unavoidable circumstances preventing them from attending. Their views of the subjects to be discussed

were obtained in advance and they received a debrief on the outcome of the meeting. This ensured that all Board and Committee members had an involvement and

contribution to proceedings, even where they were unable to attend particular meetings personally.

1 Resigned from the Board on 4 September 2024.

Key

Attended

Attended all or part of meeting as an invitee

Apologies*

Not on Board/Committee

Gulf Marine Services PLC Annual Report 2024

Strategic Report Governance Financial Statements

Gulf Marine Services PLC Annual Report 2024

Mansour Al Alami

Executive Chairman

Lord Anthony, St John of Bletso

Senior Independent non-executive Director

Charbel El Khoury

Non-executive Director

Jyrki Koskelo

Independent non-executive Director

Haifa Al Mubarak

Independent non-executive Director

Appointed to the Board

10 November 2020 as non-executive

Chairman and appointed Executive

Chairman 23 November 2020

Appointed to the Board

26 May 2021

Appointed Senior Independent non-

executive Director on 4 August 2023

(previously served on the Board as

independent non-executive Director from 26

May 2021)

Appointed to the Board

23 August 2021

Appointed to the Board

5 February 2021

Appointed to the Board

11 October 2023

N R

N N A

R A

Relevant Skills and Experience

Mansour Al Alami’s career spans over 40

years in the MENA region and includes

experience in the oil, gas and energy sector,

construction, IT, transportation, finance and

investment.

He served 15 years in various roles in ADCO,

now ADNOC Onshore (the leading onshore

producer within ADNOC Group), in the

areas of drilling and production for upstream

onshore operations, later becoming Head

of Control & Planning. Mansour also has

served in senior management positions

in other companies including Reda Pump

Libya, Al Bawardi Enterprises and EMDAD.

He sits on the boards and committees of

several Amman Stock Exchange-listed

companies.

He brings relevant experience to GMS

including extensive technical and

commercial experience covering multi-

national and multi-site operations in the

oil & gas sector. He has successfully led

businesses in the MENA region through

phases of operational transition and financial

restructuring and is using his industry

knowledge and leadership skills to work

with the Board to implement the Company’s

repositioning plan.

Mansour has a BSc in Chemical Engineering

from Newcastle Upon Tyne University, UK.

Relevant Skills and Experience

Anthony is a crossbench peer in the

House of Lords. He has served on many

Parliamentary Select Committees and

is Vice Chairman of both the All-Party

Parliamentary Africa Group and the All-Party

South Africa Group.

As a practising lawyer by training, with his

LLM in Maritime Law, he worked for Shell

(South Africa) and then as an oil analyst and

in specialist sales for several institutions

in the City of London. Through his

subsequent career he has held a number of

executive and advisory roles in high-growth

companies.

As well as his core business interests, his

expertise extends to disruptive technologies,

financial restructuring and corporate

governance.

Anthony has a BA and a BScoSc in

Psychology from Cape Town University, a

BProc in Law from the University of South

Africa, South Africa and an LLM from the

London School of Economics, UK.

Relevant Skills and Experience

Charbel El Khoury is Group CEO of Mazrui

International LLC (Mazrui International), a

UAE-based diversified investment company,

with significant reach in the energy,

industrial, real estate and trading sectors.

Charbel guides Mazrui International’s

growth strategy, taking the lead role in

its investments, operations, mergers and

acquisitions, project finance and joint

ventures. Mazrui International is affiliated

with MZI Holding Limited a significant

shareholder in GMS.

He started his career in prominent legal

practices in Lebanon and the UAE before

assuming the role of Chief Legal Officer

at Mazrui International, where he was

responsible for multiple jurisdictions and

industry sectors.

Charbel has a bachelor’s degree in

International Law and Legal Studies, and a

master’s degree in Private Law, both from

La Sagesse University, Lebanon. In 2021,

he also successfully completed the Harvard

Business School executive education

program at Harvard University, USA. He

holds an INSEAD Certificate in Corporate

Governance IDBP-C.

Relevant Skills and Experience

Jyrki Koskelo currently serves as a

Board member of Fibank (Bulgaria) and

as a member of the Supervisory Board

of Serengeti Energy (Sub-Saharan

Africa). Jyrki also currently holds senior

advisory positions for regional multilateral

development banks. He held various

senior positions (between 1987 to 2011)

within the Washington-based International

Finance Corporation (part of the World Bank

Group and the largest global development

institution focused on the private sector

in developing countries). Jyrki has also

previously been a Senior Advisor to the

Al Jaber Group, a Board member of the

African Banking Corporation, the African

Development Corporation and Africa

Agriculture and Trade Investment Fund

(Luxembourg).

He brings extensive additional business

advisory experience to the Board, having

had a distinguished career in public and

private finance, across multiple markets.

Jyrki has an MSc in Civil Engineering from

Technical University, Helsinki, Finland, and

an MBA in International Finance from MIT,

Sloan School of Management, Boston, USA.

Relevant Skills and Experience

Haifa Al Mubarak is the CEO and Founder

of Know How for Management Consulting

& Training LLC., an organisation that

specialises in delivering key learning

initiatives for blue-chip clients across the

region, helping them create a platform for

developing the managers and leaders of

tomorrow, through data-driven strategies

having assessed over 8,000 UAE nationals.

She brings over 40 years’ experience in the

oil & gas sector and other related industries,

having started her career at Abu Dhabi

Company for Offshore Oil Operations in

1980 before subsequently joining Abu Dhabi

Marine Operating Company.

Ms. Al Mubarak holds a BA in Psychology

from the University of Denver, USA, and is a

certified practitioner for NLP, Myers-Briggs

EQ-I2.0 and EQ 360, as well as being a

Psychometric Assessor.

Significant External Appointments

None.

Significant External Appointments

Anthony is currently Non-Executive

Chairman of Integrated Diagnostics

Holdings, and a Non-Executive Director of

Yellow Cake PLC and Strand Hanson Ltd.

He is also a Trustee of a number of charities,

with a strong focus on education and wildlife

conservation.

Significant External Appointments

Charbel holds a number of board positions

across international organisations in which

Mazrui International has invested including,

Depa PLC, Hilti Emirates, Carbon Holdings

and Gulf Refining Company NV.

Significant External Appointments

Jyrki is currently a Non-Executive Director of

First Investment Bank.

Significant External Appointments

Haifa is CEO and Founder of Know How for

Management, Consulting & Training LLC.

Board of Directors

56 Gulf Marine Services PLC Annual Report 2024

Mansour Al Alami

Executive Chairman

Lord Anthony, St John of Bletso

Senior Independent non-executive Director

Charbel El Khoury

Non-executive Director

Jyrki Koskelo

Independent non-executive Director

Haifa Al Mubarak

Independent non-executive Director

Appointed to the Board

10 November 2020 as non-executive

Chairman and appointed Executive

Chairman 23 November 2020

Appointed to the Board

26 May 2021

Appointed Senior Independent non-

executive Director on 4 August 2023

(previously served on the Board as

independent non-executive Director from 26

May 2021)

Appointed to the Board

23 August 2021

Appointed to the Board

5 February 2021

Appointed to the Board

11 October 2023

N R

N N A

R A

Relevant Skills and Experience

Mansour Al Alami’s career spans over 40

years in the MENA region and includes

experience in the oil, gas and energy sector,

construction, IT, transportation, finance and

investment.

He served 15 years in various roles in ADCO,

now ADNOC Onshore (the leading onshore

producer within ADNOC Group), in the

areas of drilling and production for upstream

onshore operations, later becoming Head

of Control & Planning. Mansour also has

served in senior management positions

in other companies including Reda Pump

Libya, Al Bawardi Enterprises and EMDAD.

He sits on the boards and committees of

several Amman Stock Exchange-listed

companies.

He brings relevant experience to GMS

including extensive technical and

commercial experience covering multi-

national and multi-site operations in the

oil & gas sector. He has successfully led

businesses in the MENA region through

phases of operational transition and financial

restructuring and is using his industry

knowledge and leadership skills to work

with the Board to implement the Company’s

repositioning plan.

Mansour has a BSc in Chemical Engineering

from Newcastle Upon Tyne University, UK.

Relevant Skills and Experience

Anthony is a crossbench peer in the

House of Lords. He has served on many

Parliamentary Select Committees and

is Vice Chairman of both the All-Party

Parliamentary Africa Group and the All-Party

South Africa Group.

As a practising lawyer by training, with his

LLM in Maritime Law, he worked for Shell

(South Africa) and then as an oil analyst and

in specialist sales for several institutions

in the City of London. Through his

subsequent career he has held a number of

executive and advisory roles in high-growth

companies.

As well as his core business interests, his

expertise extends to disruptive technologies,

financial restructuring and corporate

governance.

Anthony has a BA and a BScoSc in

Psychology from Cape Town University, a

BProc in Law from the University of South

Africa, South Africa and an LLM from the

London School of Economics, UK.

Relevant Skills and Experience

Charbel El Khoury is Group CEO of Mazrui

International LLC (Mazrui International), a

UAE-based diversified investment company,

with significant reach in the energy,

industrial, real estate and trading sectors.

Charbel guides Mazrui International’s

growth strategy, taking the lead role in

its investments, operations, mergers and

acquisitions, project finance and joint

ventures. Mazrui International is affiliated

with MZI Holding Limited a significant

shareholder in GMS.

He started his career in prominent legal

practices in Lebanon and the UAE before

assuming the role of Chief Legal Officer

at Mazrui International, where he was

responsible for multiple jurisdictions and

industry sectors.

Charbel has a bachelor’s degree in

International Law and Legal Studies, and a

master’s degree in Private Law, both from

La Sagesse University, Lebanon. In 2021,

he also successfully completed the Harvard

Business School executive education

program at Harvard University, USA. He

holds an INSEAD Certificate in Corporate

Governance IDBP-C.

Relevant Skills and Experience

Jyrki Koskelo currently serves as a

Board member of Fibank (Bulgaria) and

as a member of the Supervisory Board

of Serengeti Energy (Sub-Saharan

Africa). Jyrki also currently holds senior

advisory positions for regional multilateral

development banks. He held various

senior positions (between 1987 to 2011)

within the Washington-based International

Finance Corporation (part of the World Bank

Group and the largest global development

institution focused on the private sector

in developing countries). Jyrki has also

previously been a Senior Advisor to the

Al Jaber Group, a Board member of the

African Banking Corporation, the African

Development Corporation and Africa

Agriculture and Trade Investment Fund

(Luxembourg).

He brings extensive additional business

advisory experience to the Board, having

had a distinguished career in public and

private finance, across multiple markets.

Jyrki has an MSc in Civil Engineering from

Technical University, Helsinki, Finland, and

an MBA in International Finance from MIT,

Sloan School of Management, Boston, USA.

Relevant Skills and Experience

Haifa Al Mubarak is the CEO and Founder

of Know How for Management Consulting

& Training LLC., an organisation that

specialises in delivering key learning

initiatives for blue-chip clients across the

region, helping them create a platform for

developing the managers and leaders of

tomorrow, through data-driven strategies

having assessed over 8,000 UAE nationals.

She brings over 40 years’ experience in the

oil & gas sector and other related industries,

having started her career at Abu Dhabi

Company for Offshore Oil Operations in

1980 before subsequently joining Abu Dhabi

Marine Operating Company.

Ms. Al Mubarak holds a BA in Psychology

from the University of Denver, USA, and is a

certified practitioner for NLP, Myers-Briggs

EQ-I2.0 and EQ 360, as well as being a

Psychometric Assessor.

Significant External Appointments

None.

Significant External Appointments

Anthony is currently Non-Executive

Chairman of Integrated Diagnostics

Holdings, and a Non-Executive Director of

Yellow Cake PLC and Strand Hanson Ltd.

He is also a Trustee of a number of charities,

with a strong focus on education and wildlife

conservation.

Significant External Appointments

Charbel holds a number of board positions

across international organisations in which

Mazrui International has invested including,

Depa PLC, Hilti Emirates, Carbon Holdings

and Gulf Refining Company NV.

Significant External Appointments

Jyrki is currently a Non-Executive Director of

First Investment Bank.

Significant External Appointments

Haifa is CEO and Founder of Know How for

Management, Consulting & Training LLC.

Key

Audit Committee

Nomination Committee

Remuneration Committee

Chair

Strategic Report Governance Financial Statements

Gulf Marine Services PLC Annual Report 2024

Report of the Board

Dear Shareholders,

The primary role of our

Board is to provide

leadership to the Group,

to establish and monitor

the implementation of its

strategy and, together

with its Committees, to

oversee controls, risk

management, and senior

remuneration.

The Board aims to ensure that the Group has

the necessary human, financial, and other

resources to maximise value for shareholders

and other stakeholders over the long term.

We consider the Board’s role essential in

maintaining the sustainable and ongoing

growth the Group has achieved in recent

years. Alongside management, the Board

continues to develop the Group at both

business and corporate levels, ensuring the

interests of all shareholders and stakeholders

are effectively addressed.

Board Membership

The Board regularly reviews its composition,

and the qualifications, experience and balance

of skills of the current Directors to ensure the

right mix on the Board and its Committees,

and that these are operating effectively and

efficiently. The current Directors have a wide

and appropriate range of skills and experience.

They are from diverse backgrounds and based

in several different countries, in Europe and in

the MENA region. Their biographies can be

found on pages 56 to 57.

The Board recognises the importance of

diversity in the boardroom and throughout the

business. It recognises this in its aim to recruit

the best people who can add the most value to

the Board.

Non-executive Directors

and Independence

The non-executive Directors are a key source

of expertise and contribute to the effectiveness

of the Board. The non-executive Directors

provide balanced judgement and constructive

challenge as well as a broad range of skills

and experience to the Board as a whole. The

Board considers and reviews the independence

of each non-executive Director identified as

independent at least annually. In line with the

Code, in carrying out the review, circumstances

which are likely to impair or could appear to

impair the independence of non-executive

Directors are considered.

Consideration is also given to qualities such

as character, judgement, commitment and

performance on the Board and relevant

committees, and the ability to provide objective

challenge to management. Following a review

by the Board, the Board concluded that each

of non-executive Directors should be proposed

for reappointment at the Company’s upcoming

AGM.

Haifa Al Mubarak, Jyrki Koskelo and Anthony

St John are considered by the Board to be fully

independent. Charbel El Khoury is considered

to be a non-independent non-executive

Director given his nomination by one of the

Company’s major shareholders even though he

underwent a similar interview process as the

independent non-executive Directors. During

the year, our other non-independent Director,

Hassan Heikal stepped down from the Board

increasing the proportion of independent

directors to three-quarters of the Board

excluding the Chairman, in excess of the one-

half minimum recommended by the Code.

Our independent non-executive Directors

provide strong input to the Board to ensure it

is well balanced, in addition to my own role as

Executive Chairman. The Board believes this

to be ample independent representation for

the time being and will continue to keep the

membership of the Board under review. As a

group of Directors, including Charbel El Khoury,

our ongoing Board brings strong relationships

with key clients and banks, extensive

experience in other companies in the MENA

region, Europe and beyond and considerable

sector, technical, financial and operational

experience. In addition, the Board remains

wholly committed to promoting the long-term

sustainable success of the Group generating

value for shareholders taking account of the

interests of all stakeholders.

Division of

Responsibilities

The Executive Chairman encourages a culture

of openness and debate both within the

Board’s proceedings and when engaging with

management. Part of this is the provision of

management reporting and briefings to the

Board with operational management presenting

directly to the Board when appropriate.

As a Board, we operate in a collegiate manner

by ensuring that each of the Directors is able

to make an active contribution to the Board’s

decision-making and matters are fully debated

before a decision is reached. Whilst the roles

of Chairman and Chief Executive Officer are

currently held by one individual, which is not

consistent with one of the recommendations

of the Code, the Board is fully satisfied that

the debates within the Board along with its

predominance of independent non-executive

Directors ensure that there remains a division

between the responsibilities of the Board and

those of management.

Board of Directors

Responsible for the effective oversight of the Company and management of the Group.

Executive Management

Audit and Risk Committee

Monitors the integrity of the Group’s

financial statements, financial and regulatory

compliance, and the systems of internal

control and risk management. Reviews the

effectiveness of the internal and external

audit processes.

See pages 63 to 65 for the report

of the Audit and Risk Committee.

Remuneration Committee

Determines the reward strategy for

the Executive Chairman and Senior

Management to attract and retain

appropriate individuals and to align their

interests with those of shareholders.

See pages 68 to 69 for the report

of the Remuneration Committee.

Nomination Committee

Considers and recommends appointments

to the Board taking into account the

appropriate skills, knowledge and

experience to operate effectively and to

determine the Group’s strategy.

See pages 66 to 67 for the report

of the Nomination Committee.

58 Gulf Marine Services PLC Annual Report 2024

Roles and Responsibilities of Directors

Division of responsibilities

Summary of individual responsibilities

• The roles of Chairman and CEO are held by the same person,

as agreed by the Board. Whilst this is not in compliance with the

recommendation for the division of responsibilities under the Code,

the Board ensures enhanced oversight of the Executive Chairman

in his dual roles through the appointment of the strong independent

representation on the Board, led by the Senior Independent

Director who also serves as non-executive director for workforce

engagement.

• The Executive Chairman is responsible for the leadership and

effectiveness of the Board, chairing Board meetings, ensuring that

agendas are appropriate and is responsible for ensuring that all

Directors actively contribute to the determination of the Group’s

strategy.

• The Executive Chairman is also responsible for the day-to-day

management of the Group and implementing the Group’s strategy,

developing proposals for Board approval and ensuring that a regular

dialogue with shareholders is maintained.

• The separation of authority between the Board and management

is ensured by key decisions being referred to the Board and non-

executive Directors including the Senior Independent Directors

taking an active role in decision-making between, as well as at main

Board meetings.

• The Senior Independent Director acts as a sounding board

and confidante to the Executive Chairman and is available to

shareholders.

• The non-executive Directors are primarily responsible for

constructively challenging all recommendations presented to the

Board, where appropriate, based on their broad experience and

individual expertise.

Senior Independent Non-Executive Director

• Acting as a sounding board for the Executive Chairman.

• Available to shareholders (and contactable via the Company

Secretary) if they have concerns on matters that cannot be

addressed through normal channels.

• Ensuring a balanced understanding of major shareholder issues

and concerns.

• Meeting with the other non-executive Directors without the

Executive Chairman present, at least annually, in order to help

appraise the Executive Chairman’s performance.

• Serving as an intermediary for the other Directors and the

Executive Chairman if necessary.

• Provides an independent voice on the Board along with the other

independent non-executive Directors.

Executive Chairman – Board responsibilities*

• Providing strategic insight from wide-ranging business experience

and contacts built up over many years.

• Ensuring that the Board plays a full and constructive role in the

determination and development of the Group’s strategy.

• Agreeing subjects for particular consideration by the Board

during the year at Board meetings, ensuring that adequate time is

available to discuss all agenda items.

• Leading the Board in an ethical manner and promoting

effective relations between the non-executive Directors and

Senior Management.

• Building a well-balanced Board, considering Board composition

and Board succession planning.

• Overseeing the annual Board evaluation process and acting

on its results.

Company Secretary

• Secretary to the Board and each of its Committees.

• Assisting in the administration of the Board and its Committees

helping to ensure that Board papers are clear, timely and sufficient

to enable the Board to discharge its duties effectively.

• Providing advice to the Board and each of its Committees

regarding governance matters.

Executive Chairman – Management responsibilities*

• Representing the Group to its shareholders and other

stakeholders such as its clients and suppliers, and the general

industry.

• Leading the business and the rest of the management team and

ensuring effective implementation of the Board’s decisions.

• Driving the successful and efficient achievement of the Group’s

Key Performance Indicators KPIs and objectives.

• Leading the development of the Group’s strategy with input from

the rest of the Board.

• Working with the other Board members in agreeing subjects

for particular consideration by the Board during the year.

• Providing strong and coherent leadership of the Company and

effectively communicating the Company’s culture, values and

behaviours internally and externally.

* Non-executive Directors can meet independently of the Chairman to consider matters as appropriate. Any such matters can then be discussed with, and addressed

by, the Board as a whole. This process is working well in confirming that no significant issues are arising from the combination of the roles of Chairman and Chief

Executive.

Strategic Report Governance Financial Statements

Gulf Marine Services PLC Annual Report 2024

Report of the Board continued

Board Calendar for principal meetings in 2024

Main agenda items reviewed and discussed at each principal meeting

ESG matters, including health, safety

and the environment and climate

change considerations

Fleet performance and operational

matters

Competitive landscape, market and e

business development opportunities

Discussions regarding financing

arrangements

Consideration of provisions of Section

172 of the Companies Act 2006 for the

Directors of the Company

Review of reports from Board Committees as relevant

Legal and corporate

governance matters

Human resources

Investor relations and

feedback

Risk management and key

risks facing the Group

Finance, accounting

and taxation matters

Trading and forecast

updates

This is ensured through non-executive

Directors devoting adequate time to meet their

Board responsibilities both at and between

formal Board meetings, as well as providing

constructive challenge and strategic guidance

to both encourage and hold management to

account.

The combination of the roles of Chairman and

Chief Executive continues to be kept under

review in the context of ongoing succession

planning and the Board intends the roles will be

split once a stage is reached when the Board

considers it would be appropriate with an

appropriate successor in place.

The Board receives assistance from an

experienced UK-based Company Secretary,

who provides support to the Board and

Committee Charmen in enabling the

appropriate policies, processes, information,

time and resources to be provided for the

Board and Committees to function efficiently

and effectively.

How the Board Operates

The roles of the Board and

its Committees

The Board determines both the strategic

direction and governance structure for the

Group to help achieve its continued success

on an ongoing basis, in turn, to maximise

shareholder value. As well as strategy and

governance in general, the Board takes the lead

in overseeing areas such as financial policy,

annual budgeting, risk management and the

overall system of internal controls. A summary

of some of the Board’s key responsibilities is set

out in written matters reserved for the Board.

For certain responsibilities, the Board is

assisted by its Committees which carry out

specific tasks on its behalf, so that it can

operate efficiently and give the right level of

attention and consideration to relevant matters.

The composition and role of each Committee

is summarised on page 58 and their full

Terms of Reference are available on the

Company’s website.

60 Gulf Marine Services PLC Annual Report 2024

February

• Review and discussion of the 2022–2025

business plan

• Review of 2023 financial results and

2024 forecast including planned debt

repayment and expected cash flows

• Discussion on refinancing and update on

meetings with various financial institutions

• Evaluation of strategic considerations in

relation to the Group

• Status and plans for approval of annual

results

• Report of the Audit and Risk;

Remuneration and Nomination Committee

meetings

• Discussing directorate change and

shareholder update

• Review and approval of half-year results

and 2024 forecast

• Operational review of the Group

• Update on refinance, tax and key

accounting matters

• Review and discussion of regional markets

and business development

• Business continuity plans for the Group

• Report of the Remuneration Committee

meeting

September

March

• Further evaluation of strategic

considerations in relation to the Group

• Review and discussion of the Board

evaluation

• Status and agreement plans for approval

of annual results

• Report from the Audit and Risk;

Remuneration; and Nomination

Committee meetings

• Plans for the annual report and Annual

General Meeting (AGM)

• Discussions and plans for warrant

exercises

• Remuneration matters for non-executive

Directors

• Meetings with and presentations from

senior management

• Strategy discussions

• Review ESG including climate-related

matters

• Update on business development

• Update on employee engagement within

the Group including Board members

meeting with the employees

• Update on Information technology and

digitalisation project

• Review of Q3 2024 financial performance

and full year 2024 forecast

• Update on completion of formalities of

debt refinancing

• Review of Investor Relations activities and

analysts’ views of the Group

• Reports of the Audit and Risk,

Remuneration and Nomination Committee

meetings

• Plans for Board evaluation and 2025

meetings

November (two-day meeting in

Group Abu Dhabi offices)

June (two-day meeting in Group

Abu Dhabi offices)

• Meetings with and presentations from

senior management

• Strategic discussions and market update

• Discussion of business development

opportunities

• Update on employee engagement within

the Group

• Information technology and digitalisation

project update

• Update on investor relations roadshow

and feedback from current and potential

investors

• Update on full year 2024 forecast and

utilisation

• Update on discussions with the lender

banks and other capital considerations

• Consideration of dividend policy

• Changes to the UK Corporate

Governance Code and implementation

timeline

• Report of the Audit and Risk,

Remuneration and Nomination Committee

meetings

• 2024 full year forecast

• Discussion and approval of the budget

for 2025

• Review of financing arrangements

December

Specific items reviewed and discussed at individual meetings:

Strategic Report Governance Financial Statements

Gulf Marine Services PLC Annual Report 2024

Report of the Board continued

* Non-executive Directors can meet independently of the Chairman to consider matters as appropriate. Any

such matters can then be discussed with, and addressed by, the Board as a whole. This process is working

well in confirming that no significant issues are arising from the combination of the roles of Chairman and

Chief Executive.

The Board Processes

The Board, led by the Executive Chairman

with input from the independent non-executive

Directors and assistance from the Company

Secretary, has designed processes to

maximise Board performance. Key aspects of

these are summarised below:

• The Chairman and the Company Secretary

agree the overall calendar for Board

discussions during the year.

• Board meetings are scheduled to ensure

adequate time for open discussion of each

agenda item allowing for questions, scrutiny,

constructive challenge and full debates on

key matters for decisions to be taken by

consensus though any dissenting views

would be minuted accordingly.

• Board meetings generally take place at the

Group’s Abu Dhabi office with some or all

Directors attending by video.

• The development of the Group strategy is

led by the Executive Chairman, with input,

challenge, examination and ongoing testing

and review by the non-executive Directors.

• Members of the Senior Management team

draw on the collective experience of the

Board, including its non- executive Directors.

• Reporting packs, which are designed to be

clear, accurate and analytical, are distributed

in advance of main Board meetings, with

sufficient time for their review, consideration

and clarification or amplification of reports in

advance of the meeting.

• Once goals have been set and actions

agreed, the Board receives regular reports on

their implementation.

• Management reports with commentary and

analysis are distributed to the Board on a

regular basis.

• The Board reviews the Group’s risk register

and challenges it where appropriate.

• All Directors have open access to the

Group’s key advisers, management and the

Company Secretary, and are also entitled to

seek independent professional advice at the

Group’s expense if appropriate.

Director Induction

and Training

As part of the Board evaluation, the training

needs of the Directors are reviewed. The Board

and its Committees receive briefings on matters

of importance, including corporate governance

developments.

For any newly appointed Directors,

arrangements are in place for an induction

designed to develop their knowledge and

understanding of the Group. The induction

includes briefing sessions, visits to the

Company’s Head Office, meetings with

members of the wider management team and

discussions on relevant business issues. Each

of the current Directors has received briefings

as well as undertaken induction and training

sessions tailored to their individual and general

requirements, including presentations by the

Company Secretary and/or the Company’s

legal advisors, where appropriate.

Reappointment

of Directors

Following the Board evaluation and

recommendations from the Nomination

Committee, the Board considers that all

Directors continue to be effective, have the

required skills, knowledge and experience, are

committed to their roles and have sufficient

time available to perform their duties. In

accordance with the provisions of the Code.

All of the Directors are being proposed for

re-appointment at the Company’s 2025

AGM as set out in the Notice of AGM sent to

shareholders.

Conflicts of Interest

Directors have a statutory duty to avoid

situations in which they have or may have

interests that conflict with those of the

Company, unless that conflict is first authorised

by the Directors. This includes potential

conflicts that may arise when a Director takes

up a position with another company. The

Company’s Articles of Association allow the

other Directors to authorise such potential

conflicts where they arise, and a procedure

including an information protocol are in place

to deal with any actual or potential conflicts

of interest. The Board deals with each actual

or potential conflict of interest on its individual

merit and takes into consideration all the

circumstances.

Any potential conflicts approved by the Board

are recorded in an Interests Register, which

is reviewed by the Board at the beginning

of each principal Board meeting to ensure

that the procedure is operating at maximum

effectiveness.

Board Evaluation

and Effectiveness

The effectiveness with which our Board and its

Committees operate is critical to their success

of in achieving our aims. We believe that these

evaluations can provide a valuable opportunity

to highlight recognised strengths and identify

any areas for development. The Board

conducted a review of its performance during

the past year.

A summary of the internal evaluation

undertaken by the Board is included in the

Nomination Committee Report on page 67.

The Company is not currently required

to conduct an externally facilitated Board

evaluation in terms of the Code although

the Board will keep this matter under review

as the Group develops.

Engagement with

Shareholders and

Other Stakeholders

The Executive Chairman, along with the Chief

Financial Officer, is responsible for shareholder

relations, ensuring that there is effective

communication with shareholders on matters

such as performance, governance and strategy.

Also available to any shareholder with questions

on matters that cannot be addressed through

the usual methods is the Senior Independent

Director. The Senior Independent Director can

be contacted through the Company Secretary.

The Committee Chairs are also available to

shareholders and consult with shareholders,

where appropriate, in respect of significant

areas which come within their Committee’s

remit.

A combination of presentations, group calls

and one-to-one meetings is arranged as part

of our investor relations programme to discuss

the Group’s half-year and full-year results

with current and prospective institutional

shareholders and analysts. Additional meetings

are also held in the intervening periods to

brief existing and prospective investors on

the business.

Comprehensive information on our business

activities and financial developments and

regulatory news announcements is included on

the Investor section of the Company’s website

for shareholders and other stakeholders.

Annual General Meeting

(‘AGM’)

Notice of the 2025 AGM will be issued to

shareholders and available

on the Company’s website.

Mansour Al Alami

Executive Chairman

8 April 2025

Gulf Marine Services PLC Annual Report 2024

Dear Shareholders,

On behalf of the Audit

and Risk Committee

(the Committee), I am

delighted to present our

report discussing the

Committee’s roles and

responsibilities and our

activities during 2024.

Our focus remains on ensuring the robustness

of both the internal and external audit

processes, safeguarding the integrity of

the Group’s financial reporting, enhancing

the effectiveness of its risk management

framework, and addressing other key

governance matters. These critical areas

underpin the successful operation of the

Group’s business and are pivotal to the

achievement of the Group’s strategy in a

sustainable and well-managed manner.

Membership

The Committee is composed of three

independent non-executive Directors. This year

marks the fourth year of service for both Lord

Anthony St John of Bletso and myself, while

Haifa Al Mubarak embarks on her second

year with the Committee, having joined in

October 2023 following the retirement of

Rashed Al Jarwan.

All members of the Committee are independent

non-executive Directors, bringing a diverse

range of expertise that enables us to fulfil our

responsibilities effectively. This composition

aligns with the UK Corporate Governance Code

(the Code), which requires that the Committee

be composed exclusively of independent

non-executive Directors. For more details on

the backgrounds of our Committee members,

please refer to their biographies on pages 56

to 57.

Throughout the year, the Committee worked

closely with management to examine key areas

of judgement and internal reporting. We also

held several discussions with external auditors

to ensure thorough oversight and alignment.

Meetings

The Committee played a crucial role in

governance, assisting the Board in overseeing

financial reporting, internal controls, and risk

management. During 2024, the Committee

met four times, with agendas aligned to key

events in the Group’s financial calendar and

other significant matters within its scope. The

Committee consistently updates the Board

on its activities and how it has fulfilled its

responsibilities. The Company Secretary also

serves as the Committee Secretary. For details

of member attendance at meetings throughout

the year, please refer to page 54.

The Committee’s Terms of Reference, which

are publicly available on the Group’s website,

encompass all requirements outlined in the

Code and are reviewed annually.

The Committee is provided with reports from

external advisers and Senior Management

team as required, to support its responsibilities

and gain a more comprehensive understanding

of specific business issues. The finance

team regularly participates in meetings,

and the Executive Chairman of the Board

is occasionally invited. Both internal and

external auditors join meetings and present

when necessary. The external auditor is sent

copies of all pertinent Committee documents,

including those discussed at meetings in their

absence, along with the minutes of every

Committee session.

Main activities

The following sections provide more in-depth

insight into our specific endeavours under each

of these headings, outlining the actions we, as

a Committee, have taken and the outcomes of

our efforts.

A) Financial reporting

Our primary responsibilities involve advising

the Board on whether the Annual Report

and Accounts are fair, balanced, and

understandable and provide shareholders

with the information necessary to evaluate the

Company and Group’s position, performance,

business model and strategy.

Significant Issues

The Committee specifically focuses on matters

it considers important based on their potential

impact on the Group’s results, or based on the

level of complexity, judgement or estimation

involved in their application. For 2024 and up

to the date of this report, we considered all

significant matters that could be material to the

Group's results for the year and closing balance

sheet position.

The Committee was satisfied with the

management’s judgements and that

appropriate disclosures have been included in

the 31 December 2024 consolidated financial

statements. The ultimate responsibility for

reviewing and approving the Annual Reports

and the half-yearly reports remains with the

Board. The Committee gives due consideration

to laws and regulations, the provisions

of the Code, and the requirements of the

Listing Rules where relevant and provides its

recommendations on the reports to the Board.

Strategic Report Governance Financial Statements

Gulf Marine Services PLC Annual Report 2024

Audit and Risk Committee Report

Audit and Risk Committee Report continued

B) Internal control and

risk management

The Group’s robust internal control framework,

including risk management processes, is

strategically aligned to achieve its business

goals and ensure accuracy of its financial

reporting. While designed to effectively manage

risks, no system can completely eliminate

all potential for error or loss. Therefore, the

Group’s internal controls provide reasonable

assurance against material misstatement or

significant losses.

Throughout the year, the Board diligently

assessed both significant and emerging risks

impacting the Group. Following the successful

refinancing of bank debt during 2024, the

risk of inadequate capital structure was no

longer considered a primary concern. The

Board is actively supported by the Committee,

which regularly reviews the risk heatmap and

associated controls to proactively identify and

mitigate potential risks.

The Committee has also reviewed the

effectiveness of the Group’s financial controls

and the financial reporting process, which

is principally assessed in relation to the

timely identification and resolution of areas

of accounting judgement, and the quality

and timeliness of papers analysing those

judgements. The Committee reviewed control

deficiencies identified during the prior year end

and are satisfied management have improved

majority of areas where control deficiencies

were identified. Where there are areas for

further improvement, management continues to

address these and communicate these matters

with the Committee.

The Group has used a number of experts

to support judgements and calculations

associated with complex accounting treatment.

In its review of the 2024 year-end external

audit findings, the Committee noted areas

for improvement in control effectiveness,

specifically within impairment and revenue

processes. While enhanced controls were

implemented during 2024, the Committee

recognises the need for further enhancements.

Consequently, the Audit and Risk Committee

has planned an in-depth review of internal

controls in 2025 to identify and address these

areas for improvement.

The Committee concluded that, aside from the

aforementioned control areas, GMS’ system

of operational and financial internal control,

encompassing risk management, remains

effective in supporting day-to-day operations.

C) Internal audit

In 2021, Baker Tilly were appointed as the

Group’s internal auditors after a competitive

tendering process that involved other reputable

professional services firms. The Committee

was satisfied with the quality, experience and

expertise of Baker Tilly’s internal audit practice

and their knowledge of the industry and region

in which the Group operates.

In the first half of 2024, the internal auditors

issued reports on audits of Human Resources

(HR) and Information Technology (IT) conducted

primarily in 2023. While these audits identified

some control weaknesses, their overall impact

was assessed as insignificant.

Findings and recommendations to address any

gaps between current practices and industry

best practices were communicated to the

Committee.

Subsequently, the internal auditors were

engaged to audit the Business Development

and Procurement functions during the latter

part of 2024. These audits were also completed

and reported. While some control weaknesses

were identified, they did not pose a material risk

to the Group. Findings and recommendations

were communicated to the Committee.

GMS remains dedicated to strengthening its

internal controls framework, and the Audit

and Risk Committee continues to play an

instrumental role in ensuring that robust risk

management practices are applied consistently

across all levels of the organisation.

Current year key items

Area of Focus and Issue

Impairment/reversal of impairment

of property, plant and equipment

IAS 36 requires that a review for impairment

or reversal of impairment be carried out if

events or changes in circumstances indicate

that the carrying amount of an asset

is materially different to its recoverable

amount.

Expected utilisation levels, day rates, current

backlog and the Group’s weighted average

cost of capital may also impact the value in

use of vessels.

Impairment and reversal of impairment

assessments are judgemental and careful

consideration of the assumptions used in

the determination of the value in use of the

assets is required.

How Addressed and Conclusion

The Committee evaluated management’s approach in determining the recoverable value of the

Group’s vessels.

The Committee evaluated the validity of the assumptions and variations considered in

computing the vessels’ value in use. The feasibility of the long-term business plan and the

suitability of the weighted average cost of capital, which served as key inputs for determining

the discount rate, were considered.

Discussions were held with the external auditor, and the Committee assessed the audit testing

procedures conducted.

After examining management’s assumptions, the Committee concurred with the recognition

of a reversal of impairment of US$ 18.6 million and an additional impairment charge of

US$ 9.4 million on some of the vessels.

The Committee evaluated the Group’s internal controls regarding impairment, primarily focusing

on the identification and resolution of accounting judgement issues, as well as the quality and

timeliness of documents analysing the Group’s position on such judgements.

The Committee scrutinised and challenged the impairment calculations prepared by

management and made sure that there was a rigorous evaluation of internal controls to evaluate

the precision of assumptions and identification of areas requiring enhancement. Additionally, the

Committee assessed the extent of assistance necessary from valuation experts to endorse key

judgements and calculations linked with accounting estimates established by management.

64 Gulf Marine Services PLC Annual Report 2024

D) External audit

The Committee, on behalf of the Board, is

responsible for the relationship with the external

auditors. KPMG Ireland were appointed as

the Group’s auditors in 2022, following a

competitive tender process. The Committee

considers formally the reappointment of the

Group’s external auditor each year, as well as

assessing the independence of the incumbent

auditor on an ongoing basis.

The external auditors provide detailed reports

to the Committee on their audit strategy,

scope and findings. There is regular and open

communication between the Committee,

external auditors and management.

The Committee reviews and discusses the

external audit strategy, as well as the auditors’

evaluations of management’s proposed

treatment of significant transactions and

accounting judgements, actively inviting

challenge and thoroughly considering the

external auditors’ feedback.

During the financial year, the Company has

complied with the mandatory audit processes

and the Committee has complied with the

provisions set out in the Competition and

Markets Statutory Audit Services Order 2014.

In accordance with UK regulations and to help

ensure independence, our external auditor

adheres to a rotation policy based on the

Financial Reporting Council’s (FRC’s) Ethical

Standard that requires the Group audit partner

to rotate every five years.

Provision of audit and

non-audit services

The Committee is responsible for approving the

terms of engagement and remuneration of the

external auditors and has approved KPMG’s

terms of engagement and level of fees for 2024.

To preserve the external auditor’s impartiality

and autonomy, the Committee mandates

specific approval for any non-audit services

valued over US$50,000. In the unlikely scenario

where the cumulative total of non-audit services

exceeds 70% of the overall Group audit fee in

a fiscal year, the provision of additional non-

audit services by the external auditor will be

considered exceptional and necessitate prior

approval from the Committee. The Committee

must ascertain that the external auditor’s

independence and impartiality will not be

compromised in any manner when performing

such non-audit services.

Total audit fees for 2024 were US$ 810,000

(2023: US$ 750,000). The total non-audit

services provided by the Group’s external

auditors for the year ended 31 December

2024 were US$ 150,000 (2023: US$

150,000) which comprised 18% (2023:

20%) of total audit and non-audit fees.

The non-audit fee was incurred in relation to

the interim review. In 2024, the Group also paid

US$ 59,600 in out-of-pocket expenses for the

2023 external audit, while in 2023, it spent

US$ 177,000 on audit overruns and out-of-

pocket expenses related to the 2022 external

audit. The Committee has confirmed that

KPMG's provision of non-audit services during

the current year has not compromised the

external auditor's objectivity and independence.

Note 34 to the consolidated financial

statements provides additional information on

the remuneration paid to the external auditor

for both audit and non-audit services.

Audit and

Risk Committee

effectiveness review

The effectiveness of the Audit and Risk

Committee was reviewed as part of the Board

evaluation commented on page 62.

Ethical conduct and

compliance

Our Whistleblowing Policy encourages

all employees to report any suspected

improprieties related to the Group’s

activities. The Group provides a confidential

whistleblowing hotline that is managed

externally, and all reports are communicated to

the Committee. During the year, there were no

instances of whistleblowing that fell within the

scope of the Group’s policy. The Committee

is confident that the Group has established

suitable measures for the independent

investigation of potential improprieties and for

taking appropriate follow-up action. Our internal

audit team or other third-party specialists may

be engaged to investigate any issues, and we

will be informed of the outcomes.

As part of the Group induction process, Code

of Conduct training is mandatory for all new

employees who join the Group.

The Group has a comprehensive set of anti-

corruption and bribery policies in place. We are

satisfied that we have implemented appropriate

policies and training to ensure that the Group

complies with relevant laws and upholds our

high ethical standards in business conduct.

In November 2024, members of the Board

met the employees in Abu Dhabi, engaging

in discussions to gain valuable insights into

their experiences and perspectives. The visit

included a dinner, fostering open dialogue and

supporting the Group’s commitment to a strong

and transparent company culture.

Jyrki Koskelo

Audit and Risk Committee Chairman

8 April 2025

Strategic Report Governance Financial Statements

Gulf Marine Services PLC Annual Report 2024

Nomination Committee Report

Dear Shareholders,

I am pleased to present

the report of the

Nomination Committee

(the “Committee”), which

summarises our activities

during the past year. The

Committee met three

times during the year to

consider matters within

our areas of responsibility.

The Committee recommends appointments to

the Board after considering the existing balance

of skills, knowledge, diversity, independence

and experience among current members.

Recommendations are based on the merits

and capabilities of the candidate, as well

as the time they can dedicate to the role,

to ensure the promotion of the Company’s

success. The Committee also has a continuous

and proactive approach to succession planning

for the Board and Senior Management. Our role

is also to align the Board composition with the

Group’s culture, values and strategy.

Membership

Currently, the Committee comprises five

members which includes three independent

non-executive Directors, Haifa Al Mubarak,

Jyrki Koskelo and Anthony St John, our non-

independent non-executive Director, Charbel

El Khoury, and myself (Mansour Al Alami) as

Chairman of the Committee.

This composition is in compliance with the 2018

UK Corporate Governance Code (the Code)

which provides that independent non-executive

Directors should comprise the majority of the

Committee. It also complies with the updates

to the Code taking effect for the Company

in 2025.

Key Responsibilities

The Nomination Committee’s responsibilities

include:

• regularly reviewing the composition,

structure, independence and size of the

Board and its Committees;

• evaluating the balance of skills, knowledge,

experience, personal attributes and diversity

on the Board of Directors;

• reviewing succession planning for the Board

and Senior Management; and

• leading the process for Board appointments

and making recommendations to the Board

in respect of new appointments.

Board

The Board comprises five Directors, including

the Chairman, three independent non-executive

Directors and one Director nominated by the

Company’s largest shareholder who was

appointed to the Board after a formal process

which would apply to any director. Each has

particular knowledge, skills and experience

relevant to the Group’s business and therefore

is especially valuable to Board debates. The

Board believes this achieves the appropriate

balance in its membership with more than

half of the Board being considered fully

independent.

One of the pivotal considerations on any

appointment to the Board relates to diversity.

The Nomination Committee takes an active

role in setting and meeting diversity objectives

and strategies for the Company as a whole.

The Board’s policy is to continue to seek

and encourage diversity within long and

short lists, including with regard to gender,

as part of the overall selection process for

non-executive Director roles. Each Director

brings a wealth of skills, knowledge and

experience which together enable the

Board to provide effective leadership to the

Company. Consolidating the Directors’ strong

relationships with key stakeholders as well as

their extensive sector and market knowledge

and experience is beneficial to the maximisation

of the performance of the Board including in

determining of the future direction and growth

of the business. Further details of the Directors’

backgrounds are included in their biographies

on pages 56 to 57.

Another director nominated by a shareholder,

Hassan Heikal, stepped down from the Board

during the year. This had the effect of increasing

the proportion of independent directors on

the Board. While there is therefore no need to

replace Mr Heikal on the Board, the Committee

will keep under review the future requirements

of the Company as part of its ongoing aim to

ensure its membership is aligned with its future

strategy.

Workforce Engagement

Lord Anthony St John of Bletso is the non-

executive Director nominated to oversee the

workforce engagement by the Board. Lord

Anthony has a wealth of experience and

expertise in this area. As part of his initiatives

in workforce engagement Director role,

Lord Anthony led the Board as a whole in

interactive sessions with onshore staff to better

understand progress and any issues directly

from the employee perspective. This was

combined with an offsite event celebrating the

collective wins by the Group in 2024. During this

event, long-service employees were recognised

with awards for 10, 15 and 20 years of service.

An employee engagement survey was also

completed covering several areas including,

culture, environment, remuneration, individual

roles and development within the Company.

The results of surveys were reported to and

discussed by the Board as part of their ongoing

considerations around the workforce.

Reappointment

of Directors

All the Directors being proposed for

reappointment attended meetings they were

scheduled to attend unless unavoidably

prevented from doing so. They all devote

sufficient time to their duties. The evaluation

also confirmed that the roles of the Directors

in other companies in no way impede their

roles within the Company. Indeed, each

demonstrates great enthusiasm as well as

commitment to their roles.

The biographical details of Directors can be

found on pages 56 to 57. All of the Company’s

Directors will stand for re-appointment at the

2025 AGM. The terms of appointment of the

Directors are available for inspection at the

Company’s registered office and at the venue

of the Company’s AGM during that meeting.

Diversity

The Company is committed to a culture that

promotes diversity, including gender diversity,

and to achieving a working environment that

provides equality of opportunity on the Board.

This forms the basis of the Group’s diversity

policy under which diversity is monitored and

reported to the Board in order to ensure it is

maintained and developed over time. As an

international maritime business, the Board is

pleased to recognise the existing diversity of

nationality as well as gender within the Group

as part of its core strategy and will continue

to monitor improvements in the this on an

ongoing basis.

66 Gulf Marine Services PLC Annual Report 2024

Board and Committee Performance Review

As in prior years, an internally facilitated performance review of the Board, its Committees, individual Directors

and the Executive Chairman was conducted. The evaluation followed the process set out below:

Chairman Review

The performance of the Executive Chairman was evaluated by the non-executive Directors. The evaluation was led by the Senior Independent

Director and was concluded to be satisfactory. The Senior Independent provided relevant feedback to the Executive Chairman.

Directors completed a questionnaire on a confidential basis.

The questionnaire was structured to provide Directors with

an opportunity to express their views on a range of matters

including:

• Strategy and risk;

• Board effectiveness and operation;

• Shareholder and Stakeholder Relations;

• Effectiveness of the Board and each of its Committees;

• Executive Chairman’s effectiveness;

• Director effectiveness and independence; and

• Other general observations.

The results of the performance review were collectively

reviewed by the Board and conclusions drawn from this. The

showed positive results overall and identified areas where

further enhancement was possible. The Board has concluded

that the performance of each of the Directors standing for

re-appointment continues to be effective and demonstrates a

commitment to their roles. The Board has also concluded that

its increased focus on longer term strategy should continue,

including at a further strategy meeting later in the year informed

by both internal and external input on current and likely future

industry developments; as well as continuing to progress the

Group’s business on an ongoing basis with the support of its

standing Committees in their areas of responsibility.

This approach to diversity at a Board level

is part of the Group’s approach to diversity

and inclusion which are key objectives in

the Company strategy as an international

maritime business. This policy is consistently

implemented in recruitments to the business

resulting in a wide range of nationalities,

backgrounds, and other aspects of diversity

in the workforce. As a continuation of our

merit-based approach, the Board intends

to work towards further gender diversity in

future Board appointments. In the meantime,

20% of the individuals on the Board are

women and 20% of other members of senior

management are women. With the most recent

appointment to the Board being a woman,

the Board is progressing towards the target

of 40% of female representation. However,

achieving this goal will require additional Board

appointments, which will be made over time.

Whilst this has not been possible to date due to

the membership of the Board, the Board aims

to meet its targets for gender diversity, as set

in the UK Listing Rules, in the future. For the

purposes of this disclosure, 31st December

2024 has been used as the reference date.

Individuals on the Board and in its executive

management are situated overseas where

Data Protection laws restrict the collection

and publication of certain data. In addition, the

Group embraces ethnic diversity within the

Board and the business as part of its normal

operation and believes that drawing distinctions

between individuals based on ethnicity would

work against the ethos it actively pursues and

delivers on.

The Company accordingly does not disclose

the ethnicity of such individuals. It can though

confirm that at least one of the Directors is

from what the Financial Conduct Authority’s

UK Listing Rules describe as a ‘minority

ethnic background’, though as an international

company with Board members each from

different countries in several regions, that is not

a term which we would otherwise use.

The Board also continues to be diverse in terms

of background and international experience

of its members. The Board has a broad range

of experience and expertise covering relevant

technical, operational, financial, governance,

legal and commercial expertise, as well as the

valuable experience of operating in the energy

industry and on an international basis.

The ESG section on pages 44 to 46 provides

further information on the Group’s workforce.

Succession Planning

The Committee recognises the importance

of ensuring business continuity through the

ongoing development of the depth of the

management team, including the operational

aspects and business development.

Succession planning for Senior Management

across the Group is reviewed to enable,

encourage and facilitate the development of

individuals, including internal career progression

opportunities as they arise.

As a practical matter, given the size of the

Company, the Committee recognises that

successors for some posts may be sourced

from external hires although it prioritises talent

development to enable people in the business

to maximise their potential.

In addition to serving as Committee Chairman,

I also hold the role of Executive Chairman of the

Group. The other members of the Nomination

Committee have requested that I continue in

the Executive Chairman position to support

talent development and succession planning

within the Group to help facilitate to split of the

Chairman and CEO roles in the future.

Good progress has been made on talent

development and succession planning in 2024,

and we look forward to reporting next year

on further progress and on our other planned

activities for the coming year.

Mansour Al Alami

Nomination Committee Chairman

8 April 2025

Questionnaire Results

Strategic Report Governance Financial Statements

Gulf Marine Services PLC Annual Report 2024

Remuneration Committee Report

Dear Shareholders,

The Board believes that

retaining and rewarding

the Group’s Executive

and Senior Management

team is critically

important to the Group

achieving and sustaining

its strategic objectives in

medium and long term.

One of the main roles of the Remuneration

Committee is to set the strategy, structure

and levels of remuneration of our Executive

Chairman and Senior Management team. The

Committee also reviews remuneration in the

Group more generally providing guidance to

management and taking this into account when

setting executive remuneration. We do this in

the context of the Group’s strategy and goals to

drive their achievement using internal measures

taking account of comparatives within the

Group and in comparable companies. The

Committee recognises that it has an important

role to play in responding to challenges of talent

shortages and the changing requirements of

the various governments and jurisdictions the

Group and its vessels operate in.

I am pleased to present our Directors’

Remuneration Report for the year ended 31

December 2024. On the Committee with me

are Jyrki Koskelo and Haifa Al Mubarak, both

our other independent non-executive Directors.

Mansour Al Alami and Charbel El Khoury also

attend Remuneration Committee meetings on

invitation although, of course, Mansour Al Alami

does not participate in any decisions in relation

to his own remuneration. The Committee meets

during the year when appropriate to consider

either executive or wider Group remuneration.

This report covers the work of the Committee

during the year. The Company is required to

put the Directors’ Remuneration Policy to a

binding shareholder vote every three years

and this was done at the 2024 Annual General

Meeting (AGM). We are grateful of the support

of shareholders for this and have continued to

implement this accordingly. This year we seek

approval of shareholders of the report on its

implementation on an advisory basis and I trust

shareholders will again be able to support this.

In addition, at this year’s AGM, approval is being

sought for the renewal of the Group’s long-term

incentive plan (LTIP). This is broadly in line with

the LTIP previously approved by shareholders

and will be summarised more fully in the circular

to shareholders in connection with the AGM.

The Committee intends to issue the first awards

under this renewed LTIP following its approval

by shareholders.

The Committee has continued to progress

matters in respect of remuneration in line with

the Policy previously approved by shareholders,

with a focus on creating appropriate

performance parameters as well as structures.

In this report, we have set out key events

that occurred in the past year along with

the rationale for actions taken and planned

to be taken.

Executive Chairman

a) Salary

From his appointment as Executive Chairman

is 2020 until 2024, Mansour Al Alami’s salary

remained at its original below-market rate as he

eschewed any increases until he had achieved

the successful turnaround of the business.

That turnaround having been achieved, he

accepted a salary increase, for the first time,

of 7% with effect from 1 January 2024. With

effect from 1 January 2025, Mr Al Alami has

accepted an increase in salary of 6%, from AED

1,646,100 to AED 1,744,866 , which is in line

with the average cost of living increases being

awarded to onshore staff across the Group.

The Executive Chairman’s salary, having only

been increased twice since his appointment

in 2020, remains relatively low in relation to

market comparatives in similar companies for

the roles he fulfils, particularly in the context of

the vast experience he brings. The Committee

recognises and is grateful for the restraint Mr

Al Alami continues to exercise in relation to his

salary while it seeks to ensure his work and

achievements are fairly recognised through

the variable elements of his remuneration

set out below.

b) Annual Bonus

Annual Bonus targets are set based on metrics

aligned with the implementation of the Group’s

strategy.

The maximum annual bonus potential for

Mansour Al Alami in 2024 was 120% of

salary. The maximum potential for 2025 is

to continue at 120% of salary in line with the

current remuneration policy (not utilising the full

capacity of up to 150% of salary available for

exceptional circumstances). This has allowed

inclusion of key strategic targets and important

personal objectives in addition to financial

targets, as well as reflecting the improved

performance of the Group.

For 2024, the annual bonus was payable based

on the following measures:

Financial targets

• 25% weighting on EBITDA;

• 5% weighting on EBITDA margin;

• 20% weighting on securing contracts for

2024 Revenues;

• 10% weighting on securing contracts for

2025 Revenues; and

• 20% weighting on achieving target leverage;

Strategic targets

• 15% weighting on financing target;

• 5% on strategic partnership target;

Personal objectives

• 10% on capital market development

objectives; and

• 10% on management talent development and

succession planning objectives.

The outcome of these measures, detailed

on page 79 result in a payment of a bonus of

117.49% of the maximum 120% of salary which

reflects the excellent performance of the Group

generally as well as against the bonus targets

in particular. Of this amount 17.49% is to be

deferred into share awards for up to two years

under the terms of the Directors’ Remuneration

Policy.

For 2025, the annual bonus of the Executive

Chairman is intended to be payable for the

following measures (expressed as a percentage

of salary):

Financial targets

• 25% weighting on EBITDA;

• 15% weighting on EBITDA margin;

• 20% weighting on securing contracts for

2026 Revenues;

• 10% weighting on securing contracts for

2027 Revenues;

• 20% weighting on achieving target leverage

subject to Committee-approved capital

allocation adjustments;

Strategic target

• 10% weighting on business development

targets;

Personal objectives

• 10% weighting on share register

development objectives; and

• 10% weighting on organisational and people

development objectives.

These measures are subject to an over-riding

discretion to vary outcomes if a payment

is not justified by overall performance and

developments in the Group.

68 Gulf Marine Services PLC Annual Report 2024

c) Long Term Incentive Plan (LTIP)

As mentioned earlier, shareholders will be

asked at the AGM to approve renewal of the

Company’s LTIP. Awards to management under

LTIP are planned to follow this approval. This

will be the first award since the appointment

of the Executive Chairman since 2020 other

than the award in 2022, which lapsed when

the management instead prioritised the

deleveraging of the Group. For the award to the

Executive Chairman this year, in effect the first

since he was appointed in 2020, the award is

planned to represent 200% of salary in line with

the Directors’ remuneration policy approved

by shareholders. The Committee considers

that LTIP awards can now form an effective

incentive for senior management generally in

generating value for shareholders over the long

term.

Having carefully considered the appropriate

performance conditions for these awards this

year, the Committee has concluded that relative

total shareholder return (TSR) measured over

three years commencing with 2025 against two

different comparative groups of companies will

most appropriately aligns these awards with the

interests of shareholders. TSR measures the

value generated for shareholders in terms of

share price movements and any dividends and

this is then compared to the performance of

the other constituents of the comparator group.

The first of these groups is to be formed by the

constituents of the FTSE SmallCap index of

which the Company is a member. The second

is a group of internationally listed industry

companies selected with the assistance of the

Company’s brokers. The Committee believes

the combination of these comparative groups

will align long-term management incentives

with the long-term interests of shareholders

both on the London market and in the industry

internationally. The Committee also considered

including a profit target in the performance

measures as it normally would though, due to

the challenge of setting such a target that built

in the appropriate challenge over the course of

the next three-years, concluded that this would

be inappropriate for 2025. The Committee will

though keep this under review for next year.

The LTIP awards will only normally vest after

three years in so far as the performance

conditions have been achieved.

d) Non-Executive Director Fees

Following the first increase in rates since 2014

last year, the non-executive Director fees are

being maintained in 2025 at the same levels as

in 2024 with the base fee of £55,000 applying

to all non-executive directors and committee

fees only in relation to the Audit and Risk and

Remuneration Committees as set out on

page 82. These are determined by the Board

without non-executive Directors participating in

decisions regarding their own remuneration.

Conclusion

I would like to thank Jyrki Koskelo and Haifa

Al Mubarak for their input to the extensive

work undertaken by the Committee over the

past year. I believe that the remuneration

arrangements in the Group continues to stand

us in good stead for the coming year and into

the future. We are grateful for the support

shareholders have shown as we continue to

strive to increase shareholder value and further

stakeholder interests alike. I would also like to

thank Mansour Al Alami for his work during the

year and for the performance achieved.

Following this letter are the detailed Directors’

Remuneration Report and a copy of the

Directors’ Remuneration Policy approved by

shareholders at last year’s AGM. I am available

to discuss matters if any shareholder or proxy

advisor has any questions and I am contactable

through the Company Secretary. I welcome this

continued engagement and look forward to the

ongoing support of shareholders.

Lord Anthony St John of Bletso

Remuneration Committee Chairman

8 April 2024

Strategic Report Governance Financial Statements

Gulf Marine Services PLC Annual Report 2024

Remuneration Committee Report continued

Directors’

Remuneration

Policy Report

(Unaudited)

This part of the report, which is not subject

to audit, sets out the remuneration policy

for the Company and has been prepared

in accordance with the provisions of the

Companies Act 2006, the Large and

Medium-sized Companies and Groups

(Accounts and Reports) Regulations 2008.

The policy has been developed taking into

account the principles of the UK Corporate

Governance Code (the Code), the guidelines

published by institutional advisory bodies

and the views of our major shareholders.

The Company is required to prepare and

seek shareholder approval for an updated

Directors’ Remuneration Policy at least once

every three years. The Directors’ Remuneration

Policy became effective from the date of the

2024 AGM. The Policy is intended to apply

for a period of three years from that date

and no changes are being proposed this

year. However, the Committee monitors the

Remuneration Policy on a continuing basis

including consideration of evolving market

practice and relevant guidance; shareholder

views and results of previous voting; policies

applied to the wider employee base; and

with due regard to the current economic

climate. Should the Committee resolve that

the Remuneration Policy should be revised,

such revisions will be subject to a binding

shareholder vote.

The overarching aim is to operate a

Remuneration Policy which rewards senior

executives at an appropriate level for delivering

against the Company’s annual and longer-term

strategic objectives. The Policy is intended to

create strong alignment between executive

Directors and shareholders through inclusion of

a performance-related bonus and LTIP awards.

Policy Overview

The Committee assists the Board in its

responsibilities in relation to remuneration,

including making recommendations to the

Board on the Company’s policy on executive

remuneration.

The Company’s policy is to provide

remuneration to executives to reflect their

contribution to the business, the performance

of the Group, the complexity and geography of

the Group’s operations and the need to attract,

retain and incentivise executives.

The Committee seeks to provide remuneration

packages that are simple, transparent and

take into account best UK and local market

practices in countries where we operate, whilst

providing an appropriate balance between fixed

and variable pay that supports the delivery

of the Group’s strategy.

In its development of the Policy, the Committee

took account of the six factors set out in the

Code summarised below:

• Clarity

The Policy seeks to be transparent and

promote effective engagement with

shareholders and the workforce with

appropriate alignment and open disclosure.

• Simplicity

The Policy seeks to follow a standard

easy to understand structure for ongoing

remuneration with one-off variations only

where appropriate for the Group’s specific

circumstances and none implemented in the

past year.

• Risk

The Policy seeks to balance opportunity with

risk in relation to the specific circumstances

of the Group by structuring targets to align

with sustained success.

• Predictability

The Policy seeks to quantify potential

outcomes from achievement of both

shorter and longer-term objectives as well

as quantifying fixed remuneration and has

determined bonuses to be paid consistently

across the Group.

• Proportionality

The Policy is structured to incentivise and

reward targets to benefit the Group whilst

fairly rewarding Directors for working towards

those targets and retaining overriding

discretion to override formulaic outturns

where it considers appropriate, with target

achievement in the past year having fairly

reflected overall performance.

• Alignment to culture

The Policy is intended to be aligned

with the culture being developed in the

Group of empowerment to achieve Group

objectives coupled with reward for doing

so within an environment of integrity by

ensuring remuneration of different groups

of employees takes account of the overall

approach followed.

The Committee was able to consider corporate

performance on Environmental, Social and

Governance (ESG) issues when setting

executive Directors’ remuneration.

The Committee has ensured that the incentive

structure for Senior Management does not

raise ESG risks by inadvertently motivating

irresponsible behaviour.

In the past year, the policy operated as intended

in terms of driving company performance

and resulting in the appropriate quantum of

remuneration, except for the operation of the

long term incentive plan, which is intended to

be reintroduced in 2025 following approval of

its renewal by shareholders at the upcoming

AGM as set out in the letter from the Committee

Chairman on page 68. No discretion has

needed to be, nor has been, exercised in the

implementation of the remuneration policy

for the past year.

The following table sets out the Directors’

Remuneration Policy.

70 Gulf Marine Services PLC Annual Report 2024

Remuneration Policy table for Executive Directors

Element

of Pay

Purpose and Link

to Strategy Operation Maximum Opportunity Performance Criteria

Base salary • To attract and retain

talented people with

the right range of

skills, expertise and

potential in order to

maintain an agile and

diverse workforce

that can safely deliver

our flexible offshore

support service

• Normally reviewed annually by the

Committee or, if appropriate, in the

event of a change in an individual’s

position or responsibilities

• The level of base salary reflects the

experience and capabilities of the

individual as well as the scope and

scale of the role

• Any increases to base salary

will take into account individual

performance as well as the pay

and conditions in the workforce

• Any increases in base salary

will not take the level of

base salary above the level

justified in the Committee’s

opinion by the factors set

out below

• When determining the

level of any change

in compensation, the

Committee takes into

account:

– Remuneration levels

in comparable

organisations in the

UAE and the Arabian

Peninsula region

– Remuneration levels in

the international market

– Increases for the

workforce generally

– Changes to an

individual’s role,

including any additional

responsibilities

• N/A

Annual

bonus

• To encourage and

reward delivery of

the Group’s annual

strategic, financial

and operational

objectives

• Performance measures and

targets are reviewed annually by

the Committee and are linked

to the Group’s key strategic and

financial objectives

• Annual bonus will normally be paid

wholly in cash up to 100% of base

salary

• Annual bonus in excess of 100%

of base salary will normally be

deferred in GMS shares for up to

two years

• The Committee has the discretion

to defer a greater proportion of the

annual bonus in GMS shares

• Deferral will be under the Deferred

Bonus Plan. Any dividends that

accrue during the deferral period

may be paid in cash or shares at

the time of vesting of the award

• Clawback and/or malus can be

applied for three years from the

end of the financial year to which

a payment relates, in the event of

serious misconduct, reputational

harm, corporate failure, a material

misstatement of the Company’s

financial results or an error in the

calculation of performance targets

• Maximum opportunity of

120% or, in exceptional

circumstances, 150% of

base salary (in the case of

the Executive Chairman

calculated on the uplift

base salary)

• The annual bonus will be based on

Group financial performance, other

than where the Committee deems

appropriate to include additional

specific measures

• The Committee has discretion

to vary annual bonus payments

downwards or upwards if it

considers the outcome would not

otherwise be a fair and complete

reflection of the performance

achieved by the Group and/or the

Executive Director. Performance

below threshold, as shown in

the Corporate Scorecard, results

in zero payment. Payments

increase from 0% to 100% of the

maximum opportunity for levels of

performance between threshold

and maximum performance

targets. If financial and/or (for a

minority of the total) non-financial

or strategic targets not linked to

a set of annual results are used,

these can straddle more than one

financial year where considered

justified

Strategic Report Governance Financial Statements

Gulf Marine Services PLC Annual Report 2024

Remuneration Committee Report continued

Element

of Pay

Purpose and Link

to Strategy Operation Maximum Opportunity Performance Criteria

Long Term

Incentive

Plan (LTIP)

• To incentivise

and reward the

achievement of key

financial performance

objectives and the

creation of long-term

shareholder value

• To encourage

share ownership

and provide further

alignment with

shareholders

• Annual awards of nil-cost

options or conditional shares

with the level of vesting subject

to the achievement of stretching

performance conditions measured

over a three-year period

• Performance targets are reviewed

annually by the Committee and

are set at such a level to motivate

management and incentivise out-

performance

• If the Committee decides it to be

appropriate at the time, awards

may be cashed out instead of

being satisfied in shares

• Dividends that accrue during the

vesting period may be paid in cash

or shares at the time of vesting, to

the extent that shares vest

• Malus and clawback provisions

apply in the event of serious

misconduct, reputational harm,

corporate failure, a material

misstatement of the Company’s

financial results or an error in the

calculation of performance targets.

Clawback can be applied for three

years from the end of the financial

year in which an award vests

• A two-year post-vesting holding

period will normally apply

• Normal maximum

opportunity of 200% of

base salary (exceptional limit

of 300% of base salary)

• Performance is assessed against

metrics which will normally include

a financial measure, such as

EBITDA, and/or a net profit

• 25% of an award will vest for

achieving threshold performance,

increasing pro rata to full vesting

for achievement of maximum

performance targets

• The Committee has discretion

to vary the level of vesting

downwards or upwards if it

considers the outcome would

not otherwise be a fair reflection

of the performance achieved by

the Company and/or to prevent

windfall gains from arising

End of

service

gratuity

• To provide an end of

service gratuity as

required under UAE

Labour Law

• End of service gratuity

contributions are annually accrued

by the Company after an employee

served for more than one year

• The calculation is based on basic

salary, duration of service and type

of the contract: limited or unlimited.

The Committee has no discretion

on the amount. It is set and

regulated by UAE Labour Law

• The maximum pay out to an

employee is limited by UAE

Labour Law to two years’

base salary

• N/A

Benefits • To provide

competitive and cost-

effective benefits

to attract and

retain high-calibre

individuals

• Private medical insurance for the

executive and close family, death

in service insurance, disability

insurance, accommodation

payment of children’s school fees

and remote working expenses (as

applicable)

• Actual value of benefits

provided which would not

exceed those considered

appropriate by the

Committee

• N/A

Gulf Marine Services PLC Annual Report 2024

Element

of Pay

Purpose and Link

to Strategy Operation Maximum Opportunity Performance Criteria

Allowances • Allowances are

set to cover living

and travel costs

where the Director

serves outside their

home country and

is in line with local

market practice and

to cover payments

in lieu of untaken

holiday where such

payments are in line

with the Group’s

policies in relation to

the wider workforce.

• Any increases to allowances

will take into account local

market conditions as well as

the allowances provided to the

workforce

• Allowances relating to air travel

and transport

• N/A • N/A

ownership

guidelines

• To encourage

alignment with

shareholders

• Executive Directors are required to

build and maintain a shareholding

equivalent to at least 200% salary

through the retention of vested

share awards or through open

market purchases

• A new appointment will be

expected to reach this guideline

in three to five years post-

appointment

• Executive Directors are required

to retain 50% of the shares (net

of tax) vesting under the incentive

schemes until the guideline has

been achieved

• Executive Directors ceasing in their

role are required to retain their then

shareholding, up to their minimum

in-service requirement in the first

year and 50% of that in the second

year, subject to the discretion of

the Committee to vary the level or

length of these requirements if it

considers that to be appropriate in

the circumstances at the time

• N/A • N/A

Strategic Report Governance Financial Statements

Gulf Marine Services PLC Annual Report 2024

Remuneration Committee Report continued

Notes to the Table

Annual Bonus

Performance Measures

The annual bonus reflects key financial

performance indicators linked to the Group’s

strategic goals. Financial targets are set at

the start of the financial year with reference to

internal budgets and taking account of market

expectations.

LTIP Performance

Measures

The LTIP performance measures will reward

long-term financial growth and long-term

returns to shareholders. Targets are set by the

Committee each year on sliding scales that

take account of internal strategic planning and

external market expectations for the Group.

Only 25% of rewards are available for achieving

threshold performance with maximum rewards

requiring out-performance of challenging

strategic plans approved at the time of grants.

Discretion

The Committee operates the Company’s

annual short-term and long-term incentive

arrangements for the executive Directors in

accordance with their respective rules, the

Financial Conduct Authority’s UK Listing Rules

and the HMRC rules where relevant. The

Committee, consistent with market practice,

retains discretion over a number of areas

relating to the operation and administration of

the plans. These include the following:

• who participates;

• the timing of the grant of award and/or

payment;

• the size of an award (up to Policy and plan

limits) and/or a payment;

• the annual review of performance measures,

targets and weightings for the annual bonus

and LTIP from year to year;

• discretion relating to the measurement

of performance and adjustments to

performance measures and vesting levels

in the event of a change of control or

restructuring;

• determination of a good leaver (in addition to

any specified categories) for incentive plan

purposes;

• adjustments required in certain

circumstances (e.g. rights issues, corporate

restructuring and special dividends); and

• the ability to adjust existing performance

conditions for exceptional events so that they

can still fulfil their original purpose.

Payments Under

Previous Policies

Any remuneration payment or payment for loss

of office to which a Director became entitled

under a previous Directors’ Remuneration

Policy or before the person became a Director

(unless the payment was in consideration of

becoming a Director) may be paid out even

though it may not be consistent with this Policy.

How Remuneration of the Executive

Directors differs from employees

generally, and how their views are

taken into account in setting the

Remuneration Policy

When considering the structure and levels of

executive Director remuneration, the Committee

reviews base salary, annual bonus and LTIP

arrangements for the management team,

to ensure that there is a coherent approach

across the Group. The annual bonus plan and

LTIP operate on a similar basis across the

Senior Management team. The key difference

in the Policy for Executive Directors is that

remuneration is more heavily weighted towards

variable pay than that of other employees.

This ensures that there is a clear link between

the value created for shareholders and the

remuneration received by the executive

Directors. Because of the lack of visibility and

influence over achievement of performance

measures, the pay of employees outside the

management team is much less linked to Group

performance and is mostly in the form of salary

and benefits.

Whilst the Committee did not formally consult

with employees in respect of the design of the

Director’s Remuneration Policy, it nonetheless

takes into account wider remuneration in

the Group and the views of employees in

determining the Policy and implementation

of Executive remuneration. For example, no

bonuses having been paid in relation to 2022

to assist the Group in achieving its leverage

targets, the Committee took account of

feedback subsequently received and has

approved the payment of bonuses in full in

relation to the performance achieved in 2023

and 2024. Similarly, following feedback on the

long-term incentive awards granted in 2022,

lapsing in 2023 due to non-achievement of the

leverage underpin, the Committee has given

further consideration as to how best to utilise

such awards in future. The role of non-executive

Director overseeing workforce engagement

is held by Lord Anthony St John and further

details regarding workforce engagement can

be found on page 66.

Consideration of Shareholder Views

The Committee engages directly with major

shareholders and their representative bodies

on any major changes planned to the Directors’

Remuneration Policy or how the Policy will

be implemented. This past engagement has

shaped the Remuneration Policy followed

by the Company and the outcomes from

implementation of this, both in terms of

structure, and quantum.

74 Gulf Marine Services PLC Annual Report 2024

Executive Directors’ Recruitment and Promotions

The policy on the recruitment or promotion of an executive Director takes into account the need to attract, retain and motivate the best person for each

position, while at the same time ensuring a close alignment between the interests of shareholders and management, as follows:

Base salary The base salary for a new appointment will be set taking into account the skills and experience of the individual, internal relativities

and the market rate for the role as identified by any relevant benchmarking of companies of a comparable size and complexity.

If it is considered appropriate to set the base salary for a new executive Director at a level which is below market (for example, to

allow them to gain experience in the role) their base salary may be increased to achieve the desired market positioning by way of a

series of phased above inflation increases. Any increases will be subject to the individual’s continued development in the role.

End of service

gratuity,

benefits and

allowances

End of service gratuity, benefits and allowances will be set in line with the Policy, reflective of typical market practice and the Labour

Law for the UAE.

In the event of an executive Director being recruited to work outside the UAE, alternative benefits, pension provision and/or

allowances may be provided in line with local market practice.

Recognising the international nature of the Group’s operations, where appropriate to recruit, promote or transfer individuals to a

different location of residence, the Committee may also, to the extent it considers reasonable, approve the payment of one-off

relocation and repatriation-related expenses. It may also approve legal fees appropriately incurred by the individual in connection

with their employment by the Group.

Annual bonus

and LTIP

The Company’s incentive plans will be operated, as set out in the Policy table above, albeit with any payment pro rata for the period

of employment and with the flexibility to use different performance measures and targets, depending on the timing and nature of

the appointment.

Remuneration

foregone

The Committee may offer cash and/or share-based elements to compensate an individual for remuneration and benefits that

would be forfeited on leaving a former employer, when it considers these to be in the best interests of the Group (and therefore

shareholders).

Such payments would take account of remuneration relinquished and would mirror (as far as possible) the delivery mechanism,

time horizons and performance requirement attached to that remuneration and would not count towards the limits on annual bonus

and LTIP in the Policy.

Where possible, this will be facilitated through existing share plans as set out in the Policy table above, but if not, the Committee

may use the provisions of 9.4.2 of the Financial Conduct Authority’s UK Listing Rules.

Internal

appointments

In the case of an internal appointment, any variable pay element awarded in respect of the prior role will be allowed to pay out

according to its original terms stipulated on grant or adjusted as considered desirable to reflect the new role.

Strategic Report Governance Financial Statements

Gulf Marine Services PLC Annual Report 2024

Remuneration Committee Report continued

Directors’ Service Agreements and Payments for Loss of Office and

Provision for Change of Control

The Committee seeks to ensure that contractual terms of the executive Director’s service agreement reflects best practice.

Notice period Executive Directors’ service agreements are terminable on no more than 12 months’ notice. The Executive Chairman’s present

service agreement is terminable by either the Company or the Executive Chairman on six months’ notice although this may be

amended if considered appropriate but never to be terminated on more than 12 months’ notice. In circumstances of termination

on notice the Committee will determine an equitable compensation package, which may be comprised by some or all of the items

set out below together with legal fees and repatriation expenses having regard to the particular circumstances of the case.

The Committee has discretion to require notice to be worked, to make payment in lieu of notice or to place the Director on

gardening leave.

The Company may terminate the appointment summarily with immediate effect if the Director is guilty of gross misconduct in

accordance with relevant provisions of the UAE Labour Law.

Payment in

lieu of notice

In case of payment in lieu, base salary (ignoring any temporary reduction), allowances, benefits and end of service gratuity will be

paid for the period of notice served or paid in lieu.

If the Committee believes it would be in shareholders’ interests, payments would be made either as one lump sum or in equal

monthly instalments and in the case of payment in lieu will be subject to be offset against earnings elsewhere.

Annual bonus Annual bonus may be payable in respect of the period of the bonus year worked by the Director; there is no provision for an amount

in lieu of bonus to be payable for any part of the notice period not worked. In determining the amount of any annual bonus to be

paid, the Committee will have regard both to the extent to which relevant performance measures have been achieved and to any

other circumstances of departure or the Directors’ performance which the Committee considers relevant. Unless exceptionally the

Committee determines otherwise, the Policy provisions in relation to the deferral of bonuses would be applied. Any annual bonus

previously deferred would normally continue to be deferred under the terms of that plan.

Deferral of bonus under the Deferred Bonus Plan will normally continue for the deferred period after leaving and will then vest in full

but will lapse if the Director has left in circumstances in which their employment could have been terminated without notice. The

deferral will vest in full on death.

LTIP Outstanding share awards under the LTIP normally lapse on leaving employment but are subject to the rules which contain

discretionary provisions setting out the treatment of awards where a participant leaves for designated reasons (i.e. participants

who leave early on account of injury, disability or ill health, death, a sale of their employer or business in which they were employed,

statutory redundancy, retirement or any other reason at the discretion of the Committee).

In these circumstances, a participant’s awards will not be forfeited on cessation of employment and instead will continue to vest on

the normal vesting date or earlier at the discretion of the Committee, subject to the performance conditions attached to the relevant

awards. The awards will, other than in exceptional circumstances, be scaled back pro rata for the period of the incentive term

worked by the Director.

Performance and circumstance of departure would be assessed by the Remuneration Committee as part of any decision to treat

a person as a good leaver and/or to vary pro-rating.

Other

payments

In addition to the above payments, the Committee may make any other payments determined by a court of law or to settle any legal

claim in respect of the termination of a Director’s contract.

Change of

control

In the event of a change of control or a demerger, special dividend or other similar event affecting the share price, the Committee

shall, in terms of the LTIP in its absolute discretion, determine whether and to what extent an unvested award will vest (taking into

account the satisfaction of the performance conditions). The Committee may also decide that the award will vest to a greater or

lesser extent having regard to the Director’s or the Group’s performance or such other factors it may consider appropriate. The

Committee may decide that awards will vest pro rata to take account of early vesting. Alternatively, the award may be exchanged

for equivalent awards over shares in an acquiring company.

The date of the Executive Chairman’s Service Agreement is 7 February 2021, effective 10 November 2020 and is subject to six months’ notice. This

Service Agreement is available for inspection by prior appointment at the Company’s registered office and will be available for inspection at the AGM.

External Appointments

The Committee recognises that an executive Director may be invited to become a non-executive Director in another company and that such an

appointment can enhance knowledge and experience to the benefit of the Group. It is policy that Board approval is required before any external

appointment may be accepted by an executive Director. An executive Director would normally be permitted to retain any fees paid for such services.

The current executive Directors do not hold any such external appointments in public companies.

Gulf Marine Services PLC Annual Report 2024

Non-executive Directors’ Remuneration Policy and Terms of Engagement

The following table sets out the components of the non-executive Directors’ remuneration package.

Element

of Pay

Purpose and Link

to Strategy Operation Maximum Opportunity Performance Criteria

Non-

executive

Directors’ fee

Set to attract, reward and

retain talented individuals

through the provision of

market competitive fees

Reviewed periodically by

the Board or, if appropriate,

in the event of a change in

an individual’s position or

responsibilities

Fee levels set by reference

to market rates, taking into

account the individual’s

experience, responsibility and

time commitments

Total non-executive Director

fees must be within any limit

prescribed by the Company’s

Articles of Association

(currently £750,000) and

individual fees will take

account of the factors set out

in this table. The Board takes

into account external market

practice, pay increases within

the Group, wider economic

factors and any changes

in responsibilities when

determining fee increases

N/A

Non-

executive

Directors’

benefits

Travel to the Company’s

registered office and

operational headquarters

Travel to the Company’s

registered office and

operational headquarters

may in some jurisdictions

be recognised as a taxable

benefit

Costs of travel, grossed-up

where taxable

N/A

Non-executive Directors are appointed by letter of appointment for an initial period of three years (but are subject to annual reappointment), which

are terminable by three months’ notice by the Director or the Company. In relation to a Chairman (where a non-executive appointment), the Company

retains flexibility to set a notice period of up to six months.

The dates of the letters of appointment of the non-executive Directors are:

Charbel El Khoury Non-executive Director 23 August 2021

Jyrki Koskelo Independent non-executive Director 5 February 2021

Lord Anthony St John of Bletso Independent non-executive Director 26 May 2021

Haifa Al Mubarak Independent non-executive Director 10 October 2023

The letters of appointment are available for inspection by prior appointment at the Company’s registered office. For the appointment of a new

Chairman or non-executive Director, the fee arrangement would be set in accordance with the approved Policy in force at that time.

Lord Anthony St John of Bletso

Remuneration Committee Chairman

8 April 2025

Strategic Report Governance Financial Statements

Gulf Marine Services PLC Annual Report 2024

Remuneration Committee Report continued

Annual Report on Remuneration

This part of the report has been prepared in accordance with Part 3 of the Large and Medium-sized Companies and Groups (Accounts and Reports)

Regulations 2008 and 6.6.1R of the UK Listing Rules. The Annual Report on Remuneration will be put to an advisory shareholder vote at the 2025

AGM. Sections of this report that are subject to audit have been indicated.

Shareholder voting at AGM

The 2024 Annual Report on Remuneration will be subject to an advisory shareholder vote at the 2025 AGM. Votes cast by proxy and at the 2024 AGM

in respect of the Directors’ Remuneration Report and the Directors Remuneration Policy was approved with the following results:

Resolution Votes For

% of

Votes For

Votes

Against

% of

Votes Against

Votes

Withheld

Total

Votes Cast

To approve the Directors’ Remuneration

Report for the year ended 31 December 2023 724,542,420 99.98% 115,150 0.02% 1,097, 370 724,657,570

Directors’ Remuneration Policy approved

at 2024 AGM

718,224,734 99.12% 6,4 07,8 35 0.88% 1,122,371 724,632,569

1 The Directors Remuneration Policy is subject to review every three years.

External advice and workforce input received

In carrying out their responsibilities, the Committee seeks external advice as necessary. In 2024, given the continued extensive engagement with

shareholders, the Committee did not seek the advice of external advisors in its deliberations. The Committee does though take account of the

workforce feedback and generally aligns increases in remuneration and common performance target outcomes of the Executive Chairman and other

senior executives with those of the wider workforce.

Executive Directors’ Single Total Figure of Remuneration Earned in 2024

(Audited)

The table below summarises executive Directors’ remuneration in respect of 2024.

Fixed Element of Pay Pay For Performance

Base

Salary

US$’000

Allowances

and

Benefits

US$’000

End of

Service

Gratuity

US$’000 Subtotal

Annual

Bonus

US$’000

Long-Term

Incentives

US$’000 Subtotal

Total

Remuneration

US$’000

Executive Chairman 2024 449 12 7 468 449 – 449 917

Mansour

Al Alami

2023 419 12 24 455 399 – 399 854

1 Allowances include fixed cash and reimbursable allowances for air travel and transport. Other benefits include accommodation, private medical insurance for the

executive and immediate family, death in service insurance and disability insurance. The amounts are shown as per actual expenditures.

2 End of service gratuity is the provision accrued for in the year in accordance with UAE Labour Law. Please refer to page 80 for more information. Pension provision

is not a feature of executive Director remuneration packages.

3 Annual bonus for the financial year.

4 Share plans vesting represent the value of LTIP awards where the performance period ends in the year.

5 The remuneration was paid in UAE Dirhams and reported in US$ using an exchange rate of US$ 1/AED 3.665.

78 Gulf Marine Services PLC Annual Report 2024

Performance against annual bonus targets for 2024 (Audited)

For 2024 the maximum annual bonus opportunity was set at 120% of base salary. The annual bonus was assessed against the following financial

objectives which produced a formulaic outcome of 117.49% as set out in the table below.

Measure

Weighting

(% of base salary)

Performance Range

(From Zero to Full Pay-out) Result

% of Base Salary

Payable

EBITDA 25%

Less than US$ 86m – Greater than US$

99.0m US$ 100.6m 25%

EBITDA margin 5% Less than 53% – Greater than 60% 59.96% 4.99%

Securing contract % of 2025 budget

revenue 20% Less than 60% – Greater than 85% 100% 20%

Securing contract % of 2026 budget

revenue 10% Less than 35% – Greater than 55% 64% 10%

Achieving leverage <2.48 20%

After 31 December 2024 – On or before

31 December 2024 2.0x 20%

Debt Refinancing 15%

After 31 December 2024 – On or before

31 December 2024

Agreement

achieved before

30 September

2024 15%

Strategic partnership target 5%

After 31 December 2024 – On or before

31 December 2024 In progress 2.5%

Objective of development of the

Company’s equity story and investor

relations plans** 10%

Assessed by the Remuneration

Committee Fully achieved 10%

Objective of development and

implementation of senior management

talent development and succession

planning** 10%

Assessed by the Remuneration

Committee Fully achieved 10%

Total 120% 117.49%

EBITDA* <US$ 86.0m US$ 86.0m–US$ 93.4m US$ 93.5m–US$ 99.0m

Score 0% 0.1–20%* 20.1– 35%*

EBITDA Margin* <53% 53–56% 56.1–60.0%

Score 0% 0.1–4.0%* 4.1– 5%*

Securing contracts % of 2025 budget revenue* <60% 60–80% 80.1– 85%

Score 0% 0.1–16%* 16.1–20%*

Securing contracts % of 2026 budget revenue* <35% 35–50% 50.1– 55%

Score 0% 0.1– 8%* 8.1–10%*

Achieving leverage < 2.48 After 31 December 2024

On or before

31 December 2024

Score 0% 20%*

Agreement for debt refinancing After 31 December 2024

On or before

30 September 2024

On or before

31 December 2024

Score 0% 15% 10%*

Strategic Partnership target After 31 December 2024

On or before

31 December 2024

Score 0% 5%*

* Zero to full pay-out is not linear as bands operate within the performance ranges shown.

** The annual bonus potential for Mansour Al Alami in 2024 was 120% of salary. The proportion above 100% of salary or otherwise determined by the Remuneration

Committee (in this case, 17.49% of salary), will be deferred into shares under the Deferred Bonus Plan.

Strategic Report Governance Financial Statements

Gulf Marine Services PLC Annual Report 2024

Remuneration Committee Report continued

LTIP Awards Vesting for 2024 and Directors’ Interests in Share Plan Awards

(Audited)

There were no LTIP awards that vested in the year for Directors.

Executive Directors

End of service gratuity

As required under UAE Labour Law, the Company accrues for the end of service gratuity entitlement in respect of the Executive Chairman.

The gratuity equates to 21 days’ base salary (excluding fixed cash allowances) for each year of the first five years of employment and 30 days’

wages for each additional year of employment thereafter, up to a limit of two years’ total wages.

Director’s pension entitlement (Audited)

The Company does not operate a pension scheme and accordingly no element of remuneration is pensionable.

Statement of Implementation of Directors’ Remuneration Policy in 2024

Base salary in 2025

Base Salary from

1 January 2025

US$’000

Base Salary from

1 January 2024

US$’000 % Change

Mansour Al Alami 476 449 6%

Allowances and benefits for 2025

The cash allowances comprise payments to cover costs of transport will be as follows:

Base Salary from

1 January 2025

US$’000

Base Salary from

1 January 2024

US$’000 % Change

Mansour Al Alami 12 12 0%

Other benefits to be provided directly include accommodation, private medical insurance for the executive Directors and close family in line with local

legal requirements, death in service insurance and disability insurance.

Annual Bonus for 2025

For 2025 the maximum bonus opportunity will again be 120% of base salary. Any proportion above 100% of salary or otherwise determined by the

Remuneration Committee will be deferred into shares under the Deferred Bonus Plan. The annual bonus for the executive Director will be based on

Group financial performance, strategic targets and personal objectives weighted as follows (expressed as a percentage of salary):

Measure Weighting

EBITDA 25%

EBITDA Margin 15%

2024 Secured revenue 20%

2025 Secured revenue 10%

Achieving target leverage subject to Committee-approved capital allocation adjustments 20%

Business development targets 10%

Share register development objectives 10%

Organisational and people development objectives 10%

Total 120%

The targets for the annual bonus are considered commercially sensitive because of the competitive nature of the Company’s market and will be

disclosed in next year’s Annual Report.

Gulf Marine Services PLC Annual Report 2024

Non-executive Directors’ single figure table (Audited)

Fees

2024

US$’000

Fees

2023

US$’000

Total

Remuneration

2024

US$’000

Total

Remuneration

2023

US$’000

Chairman

Mansour Al Alami – – – –

Chairman total – – – –

Non-executive Directors

Jyrki Koskelo 93 62 93 62

Lord Anthony St John of Bletso 99 64 99 64

Charbel El Khoury

– – – –

Haifa Al Mubarak

81 12 81 12

Rashed Al Jarwan

– 36 – 36

Hassan Heikal

– – – –

Non-executive Directors total 273 174 273 174

1 The non-executive Directors’ remuneration is paid in Pound Sterling and reported in US$ using an exchange rate of US$ 1.24/£1 for 2024.

2 Rashed Al Jarwan retired from the Board effective 04 August 2023.

3 Haifa Al Mubarak was appointed to the Board effective 11 October 2023.

4 Hassan Heikal and Charbel El Khoury waived their entitlements to receive a fee for their roles in 2023 and 2024.

Directors’ interests in ordinary shares (Audited)

Through participation in performance-linked share-based plans, there will be strong encouragement for executive Directors to build and maintain a

significant shareholding in the business.

As set out in the existing Directors’ Remuneration Policy, the Committee requires the CEO to build and maintain an increased shareholding in the

Company equivalent to 200% of base salary. The shareholding requirement for any other executive Directors is also 200% of base salary. Until this

requirement is achieved, they are required to retain no less than 50% of the net of tax value of any share award that vests. A new appointment would

normally be expected to reach this guideline in three to five years post-appointment. On cessation of employment, executive Directors will be bound by

post-employment shareholding requirements, as set out in the existing Directors’ Remuneration Policy. The Chairman and non-executive Directors are

able to hold shares in the Company but are not subject to a formal shareholding guideline.

The beneficial interests of the Directors and connected persons in the share capital of the Company at 31 December 2024 were as follows:

31 December

2024

31 December

2023

Shareholding

Ownership

Requirement

Met?

Outstanding

LTIP Awards

Mansour Al Alami 2,571,000 2,571,000 In progress –

Hassan Heikal – – N/A –

Jyrki Koskelo – – N/A –

Lord Anthony St John of Bletso – – N/A –

Haifa Al Mubarak – – N/A –

Charbel El Khoury 13,455 – N/A –

* Full details of the Directors’ shareholdings and share allocations are given in the Company’s Register of Directors’ Interests, which is open to inspection at the

Company’s registered office during business hours.

Strategic Report Governance Financial Statements

Gulf Marine Services PLC Annual Report 2024

Remuneration Committee Report continued

Fees for the non-executive Directors (Audited)

The non-executive Directors’ remuneration is determined by the Board, based on the responsibility and time committed to the Group’s affairs and

appropriate market comparisons. Individual non-executive Directors do not take part in decisions regarding their own fees. Non-executive Directors

receive no other benefits and do not participate in short-term or long-term reward schemes. Hassan Heikal and Charbel El Khoury waived their

entitlements to receive a fee for their roles for both 2023 and 2024. A summary of the fees is set out below. Please note the fees are determined in

Pound Sterling. The non-executive Directors do not have any service contracts with the Company and their services are provided under letters of

appointment detailed in the policy report and are terminable on 1 month’s notice.

Annual Fee

2024

£’000

Annual Fee

2023

£’000

Non-executive Director base fee 55 45

Additional fees:

Senior Independent Director 10 5

Audit and Risk Committee Chair 15 5

Nomination Committee Chair

– –

Audit and Risk Committee and Remuneration Committee Membership allowances (excluding chairs) 5 –

Remuneration Committee Chair 10 5

1 The Chair of the Nomination Committee is also Executive Chairman and there is no separate pay for this position.

Percentage change in remuneration levels

The table below shows the year-on-year variance in base salary, allowances and benefits, and bonus for the Executive Chairman in the 2024 financial

year, compared to that for employees of the Group as a whole:

Measure % Change

Executive Chairman

Base salary 7%

Allowances and benefits 0%

Bonus 13%

All employees

Base salary allowances and benefits 5%

Bonus (21%)

Annual percentage change in Director and employee remuneration

The fees of non-executive Directors, having not been increased since 2014, were reviewed for 2024. Following this review, and taking account of both

market comparables, and the commitments required from non-executive Directors in the Company, the Board increased the base fee of independent

non-executive Directors from £45,000 per annum to £55,000 per annum. Similarly, the fees of the Chairmen of the Audit and Risk Committee and

Remuneration Committee, were increased from £5,000 per annum to £10,000 and £15,000 per annum respectively, the latter reflecting the increasing

role of that Committee in light of the forthcoming changes to the UK Corporate Governance Code. Similarly members of those Committees other than

the Chair will each receive fees of £5,000 per annum. The fees of the Senior Non-executive Director which role includes workforce engagement were

increased from £5,000 to £10,000. These changes are reflected below. There have been no increases in these fee rates for 2025.

The table below shows the annual percentage change in fixed remuneration of base salary, allowances and benefits of Directors and employees in

2024 compared to 2023 and 2023 compared to 2022:

2024 Compared to 2023 2023 Compared to 2022

Base Salary Benefits Annual Bonus Base Salary Benefits Annual Bonus

Mansour Al Alami 7% 0% 19% 0% 0% 100%

Rashed Al Jarwan

N/A N/A N/A 0% N/A N/A

Jyrki Koskelo 22%

N/A N/A 0% N/A N/A

Lord Anthony St John of Bletso

22%

N/A N/A 0% N/A N/A

Charbel El Khoury

N/A N/A N/A N/A N/A N/A

Hassan Heikal

N/A N/A N/A N/A N/A N/A

Haifa Al Mubarak

22%

N/A N/A N/A N/A N/A

FTEs

5% 5% -21% 4% 12% 100%

1 Rashed Al Jarwan retired from the Board effective 4 August 2023.

2 Charbel El Khoury and Hassan Haikal waived their entitlement to receive a fee for this role in these periods.

3 Haifa Al Mubarak was appointed to the Board effective 11 October 2023.

4 Effective August 2023, Lord Anthony St John of Bletso became Senior Independent Directors leading to increase in allowances in 2023.

5 As reported in the Remuneration Committee Report in the 2023 Annual Report and Accounts, fees of non-executive Directors, having not been increased since 2014,

were reviewed for 2024 taking account of both market rates in comparable companies, and the commitments required from non-executive Directors in the Company.

Refer to above table for details on fees for Non-Executive Directors serving on various Board Committees.

6 The significant increase in 2023 bonus reflects management’s decision that no bonus would be payable in 2022, as the Group prioritised deleveraging efforts during that

period.

7 Increments were granted to eligible employees.

82 Gulf Marine Services PLC Annual Report 2024

Relative importance of the spend on pay

The table below shows overall expenditure on pay in the whole Group, including all employees and the directors, in 2024 and 2023 financial years,

compared to returns to shareholders through dividends:

2024

US$’000

2023

US$’000 % Change

Overall expenditure on pay 33,071 30,477 9%

Dividends and share buybacks – – 0%

Committee remit and membership

The Terms of Reference of the Committee have been formally adopted by the Board and are available for inspection in the investor relations section of

the Company’s website. The principal responsibilities of the Committee include:

• setting the strategy, structure and levels of remuneration of our executive Directors and Senior Management;

• ensuring that all remuneration paid to our executive Directors is in accordance with the approved Remuneration Policy; and

• aligning the financial interests of the executive Directors and other management and employees with the achievement of the Group’s objectives.

The Committee assists the Board in fulfilling its responsibilities regarding all matters related to remuneration. This includes proposing the Directors’

Remuneration Policy for shareholder approval and governing the implementation of the Policy. In addition, the Committee monitors the structure and

level of remuneration for the Senior Management team and is aware of pay and conditions in the workforce generally. The Committee also ensures

compliance with UK corporate governance good practice.

The composition of the Committee at 31 December 2024 is in compliance with the Code which provides that all members of the Committee should be

independent non-executive Directors.

Jyrki Koskelo, Haifa Al Mubarak and I served on the Committee throughout the year as independent non-executive Directors.

The Executive Chairman, Charbel El Khoury and the HR team were usually invited to attend for at least part of each meeting to allow the Committee

to benefit from their contextual advice. These individuals were not present when the Committee was debating matters concerning themselves.

The Company Secretary acts as Secretary to the Committee. The Committee met on five occasions during 2024. Members’ attendance at those

meetings is shown on page 54. The Committee also held informal discussions as required.

Performance evaluation of the Committee

The performance of the Committee was evaluated, as part of the overall Board evaluations reported on in the report of the Nomination Committee on

page 67.

Approval of the Directors’ Remuneration Report

The Directors’ Remuneration Report, including the Annual Report on Remuneration was approved by the Board on 8 April 2025 for presentation to

shareholders at the AGM.

Lord Anthony St John of Bletso

Remuneration Committee Chairman

8 April 2025

Strategic Report Governance Financial Statements

Gulf Marine Services PLC Annual Report 2024

Directors’ Report

This Directors’ Report, prepared in accordance with the requirements of the Companies Act 2006 (the Act), 2018 UK Corporate Governance Code

(the Code) (publicly available on the Financial Reporting Council website), the Financial Conduct Authority’s UK Listing Rules, and Disclosure and

Transparency Rules, contains certain statutory, regulatory and other information.

The Strategic Report on pages 2 to 51 includes reviews of the Group business model and strategy, an indication of likely future developments in the

Group, and details of important events since the year ended 31 December 2024.

The Corporate Governance Report on pages 52 to 88 include summaries of the operations of the Board and its Committees, and information

regarding the Group’s compliance with the Code during 2024.

The Strategic Report and the Corporate Governance Report form part of and are incorporated in this Directors’ Report by reference.

Disclosure Requirements of UK Listing Rule 6.6.1R

The following table provides references to where the information required by UK Listing Rule 6.6.1R is disclosed:

UK Listing Rule Requirement Page

Interest capitalised and tax relief Not applicable

Publication of unaudited financial information Not applicable

Details of any long-term incentive schemes Page 69

Waiver of emoluments by a Director Pages 81

Waiver of future emoluments by a Director Not applicable

Non-pre-emptive issues of equity for cash Page 121

Non-pre-emptive issues of equity for cash by any unlisted major subsidiary undertaking Not applicable

Parent participation in a placing by a listed subsidiary Not applicable

Contracts of significance Not applicable

Provision of services by a controlling shareholder Not applicable

Shareholder waivers of dividends Not applicable

Board statement in respect of relationship agreement with the controlling shareholder Not applicable

Climate-related financial disclosures consistent with TCFD recommendations Page 32

Directors

The Directors who served during the year are as follows:

Mansour Al Alami

Lord Anthony St John of Bletso

Haifa Al Mubarak

Charbel El Khoury

Jyrki Koskelo

Hassan Heikal (stepped down from the Board on 4 September 2024)

Biographical details of the current Directors are set out on pages 56 to 57. The beneficial interests of the Directors and connected persons in the share

capital of the Company are set out on page 81 of the Report of the Remuneration Committee.

Powers of Directors

The Directors’ powers are determined by UK legislation and our Articles of Association (the Articles), which are available on the Company’s website.

The Directors may exercise all of the Company’s powers provided that the Articles or applicable legislation do not stipulate that any such powers must

be exercised by the members (shareholders).

Appointment and Replacement of Directors

Directors may be appointed by ordinary resolution of the members or by a resolution of the Directors. Members may remove a Director by passing an

ordinary resolution of which special notice has been given, in accordance with the Act.

Directors wishing to continue to serve seek reappointment annually in accordance with provision 18 of the Code. All Directors are being proposed by

the Board for reappointment at the forthcoming Annual General Meeting (AGM).

Section 172(1) of the Companies Act 2006

For information on how the Directors have engaged with employees, how they have had regard to employee interests, and the effect of that regard,

including on the principal decisions taken by the Company during the financial year, please refer to page 45. Please also refer to pages 34 to 47 in the

Strategic Report where GMS’ business relationships with suppliers, customers and others are identified, and the effect of that regard, including on the

principal decisions taken by the Company during the financial year.

A description of the Group’s diversity policy is set out on page 44 and forms part of this report by reference.

Amendments to the Articles of Association

The Company may alter its Articles by special resolution passed at a general meeting of shareholders.

Gulf Marine Services PLC Annual Report 2024

Indemnification of Directors

The Company has provided indemnification for Directors in accordance with the Company’s Articles and the Act. As far as is permitted by legislation,

all Officers of the Company are indemnified out of the Company’s own funds against any liabilities and associated costs which they could incur in the

course of their duties for the Company, other than any liability to the Company or an associated company.

Change of Control

As at 31 December 2024, the Company was party to the following significant agreements that take effect, alter or terminate, or have the potential

to do so, on a change of control of the Company:

Share Incentive Schemes

The Company’s proposed long-term incentive plan referred to in the Report of the Remuneration Committee on page 69 and to be submitted

to shareholders for approval at the AGM will contain provisions relating to a change of control of the Company. Vesting of outstanding awards

and options on a change of control would normally be at the discretion of the Remuneration Committee, which would, if and where it considered

appropriate, take into account the satisfaction of any applicable performance conditions at that time and the expired duration of the relevant

performance period.

Operational Contracts

The Group is party to a limited number of operational arrangements that have the potential to be terminated or altered on a change of control of the

Company, but these are not considered to be individually significant to the business of the Group as a whole.

Group Banking Facility

Under the terms of the Group’s banking facility agreement, if any person or persons, acting in concert, gains control of the Company by owning shares

carrying 30% or more of its voting rights or otherwise exerting control, this may result in the repayment or prepayment of total balances outstanding

under the Group banking facility within 30 days of notification of a change in control.

Share Capital

Details of the Company’s issued share capital as at 31 December 2024 can be found in Note 13 to the consolidated financial statements, on page 122.

The Company’s share capital comprises ordinary shares with a nominal value of 2 pence each, which are listed on the London Stock Exchange.

Holders of ordinary shares are entitled to receive dividends (when declared by the Board or approved by members), receive copies of the Company’s

Annual Report, attend and speak at general meetings of the Company, appoint proxies and exercise voting rights.

There are no restrictions on the transfer, or limitations on the holding, of ordinary shares and no requirements to obtain approval prior to any transfers.

No ordinary shares carry any special 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 provisions under the Company’s Articles with regard to the rights of

shareholders and the Company pertaining to ordinary shares.

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 on

restrictions on share transfers or on voting rights.

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

The Directors were authorised at the Company’s last Annual General Meeting, held on 5 June 2024, to make market purchases of ordinary shares

representing up to 10% of its share capital at that time and to allot shares within certain limits permitted by shareholders and the Companies Act. The

Directors intend to renew this authority annually and will continue to exercise this power only when, in light of market conditions prevailing at the time,

they believe that the effect of such purchases will be to increase earnings per share and will likely promote the success of the Company for the benefit

of its members as a whole.

In accordance with the Group’s previous debt agreement, the Company issued warrants to its lenders on 2 January 2023, giving them the right to

137,075,773 million shares at a strike price of 5.75 pence per share. During the year, 34,218,700 warrants were exercised by the holders resulting

in issuance of 53,531,734 new ordinary shares. Since year-end, a further 38,353,361 warrants have been exercised by the holders resulting in the

issuance of 59,999,998 new ordinary shares. The outstanding warrants if fully exercised, would entitle the holders to subscribe for 23,544,041

ordinary shares of 2 pence each in the capital of the Company at an exercise price of 5.75 pence per share. The warrants are exercisable by the

holders at any time until 30 June 2025.

Substantial Shareholders

As at 31 December and as at the date of this report, the Company has been notified, in accordance with Chapter 5 of the Disclosure and

Transparency Rules, of voting rights of shareholders of the Company as shown below:

As at 31 December 2024

Number of Shares

As at 31 December 2024

% of Share Capital

As at 08 Apr 2025

Number of Shares

As at 08 Apr 2025

% of Share Capital

MZI Holding Limited 261,680,095 24.46% 261,680,095 23.16%

Merrill Lynch International – – 83,585,501 7.4 0%

Seafox International Limited 83,339,147 7.78% 53,297,645 4.72%

Imperial Financial Holdings Limited 54,066,463 5.05% 54,066,463 4.78%

Fiera Capital (UK) Limited 37,164,522 3.47% 37,164,522 3.29%

Castro Investments Ltd 34,378,680 3.21% 34,378,680 3.04%

Strategic Report Governance Financial Statements

Gulf Marine Services PLC Annual Report 2024

Directors’ Report continued

Risk Management

A description of the main features of the Group’s internal control and risk management arrangements in relation to the financial reporting process are

set out on pages 24 to 30 and forms part of this report by reference. The Group’s financial risk management objectives and policies, including the use

of financial instruments, are set out in Note 26 to the consolidated financial statements on pages 128 to 130.

Post Balance Sheet Events

More details can be found in Note 36 to the consolidated financial statements on page 137.

Likely Future Developments

Information in respect of likely future developments in the business of the Company can be found in the Strategic Report on pages 23 to 51 and forms

part of this report by reference.

Research and Development

The Group did not undertake any research and development activities during the year (2023: none).

Political Donations

The Group made no political donations and incurred no political expenditure during the year (2023: nil).

The Existence of Branches Outside the UK

The Group has two branches in Qatar.

Employees and Policies

The Group gives full consideration to applications for employment from disabled people where the requirements of the job can be adequately fulfilled

by a disabled person.

Where existing employees become disabled, it is the Group’s policy wherever practicable to provide continuing employment under normal terms and

conditions and to provide training and career development and promotion opportunities to them wherever appropriate.

Further information on employees and the Company’s engagement with them is given in the Strategic Report and Corporate Governance Report

on pages 44 to 49 and pages 50 to 51 respectively.

Greenhouse Gas Emissions/Streamlined Energy and Carbon Reporting

Information on the Group’s greenhouse gas emissions/Streamlined Energy and Carbon Reporting is set out on pages 32 to 43 and forms part of this

report by reference.

Dividends

During 2024, the Board of Directors has approved a dividend policy to take effect in the future. No dividend has been paid or is proposed for 2024 (2023: nil).

Going Concern

The Directors have assessed the Group’s financial position through to June 2026 and hold a reasonable expectation of its ability to continue as going

concern for the foreseeable future. With four consecutive years of reported profit and a forecast of continued positive operating cash flows, particularly

in light of the market outlook, the Group remains well-positioned for sustained success.

In December 2024, the Group completed the refinancing of a US$ 300.0 million (AED 1,101.5 million) loan facility (comprising a US$ 250.0 million

(AED 924.0 million) term loan amortised over five years and a US$ 50.0 million (AED 177.5 million) working capital facility), denominated in United Arab

Emirates Dirhams (AED). The working capital facility includes a cash commitment of US$ 20.0 million (31 December 2023: US$ 20.0 million), but if no

cash is drawn, the full facility remains available for performance bonds and guarantees. The working capital facility expires alongside the main debt

facility in December 2029. The three banks, two of which are current lenders, have an equal participation to the term loan and to the working capital

facility.

The refinancing was secured at a more favorable interest rate, which is based on EIBOR plus a margin. The margin is determined by a ratchet

depending on leverage levels. The improved terms will lower financing costs and enhance the Group’s flexibility in capital allocation.

The Group closely monitors its liquidity and is expected to meet its short-term obligations over the next twelve months. Subsequent to the year end,

the Group made prepayments of US$ 40.3 million towards its bank borrowings. The loan prepayments were made after taking into account the

forecast cashflows for 2025.

Gulf Marine Services PLC Annual Report 2024

The forecast used for Going Concern reflects management's key assumptions including those around vessel utilisation, vessel day rates on a vessel-

by-vessel basis. Specifically, these assumptions are:

• average day rates across the fleet are assumed to be US$ 34.8k for the 18-month period to 30 June 2026;

• 92% forecast utilisation for the 18-month period to 30 June 2026;

• pipeline of tenders and opportunities for new contracts that would commence during the forecast period.

A downside case was prepared using the following assumptions:

• no work-to-win during the 18-months period to 30 June 2026;

• options for five vessel contracts are not exercised by the customers during the 18-months period to 30 June 2026;

• 16 percentage points reduction in utilisation for the 18-months period to 30 June 2026;

• interest rate on EIBOR to remain at current levels.

Based on the above scenario, the Group would not be in breach of its current term loan facility. The downside case is considered to be severe,

but it would still leave the Group with sufficient liquidity and in compliance with the covenants under the Group’s banking facilities throughout the

assessment period.

In addition to the above downside sensitivity, the Directors have also considered a reverse stress test, where EBITDA has been sufficiently reduced to

breach debt covenant. This scenario assumes a substantial increase in operational downtime to 19%, compared to the base case cashflows with a

2.5% operational downtime. The significant increase in operational downtime for the forecast period would result in breach of the Debt Service Cover

ratios. However, it is important to note that GMS has reported annual operational downtime of less than 2.5% over the past five years.

Should circumstances arise that differ from the Group’s projections, the Directors believe that a number of mitigating actions can be executed

successfully in the necessary timeframe to meet debt repayment obligations as they become due and in order to maintain liquidity. Potential mitigating

actions include the vessels off hire for prolonged periods could be cold stacked to minimise operating costs on these vessels which has been factored

into the downside case. Additional mitigations could be considered including but not limited to reduction in overhead costs, relaxation/waiver from

covenant compliance and rescheduling of repayments with lenders.

Management is aware of the broader operating context and acknowledges the potential impact of climate change on the Group’s consolidated

financial statements. However, it is anticipated that climate change will have limited effect during the going concern assessment period.

After considering reasonable risks and potential downsides, the Group’s forecasts suggest that its bank facilities, combined with high utilisation at

higher day rates and a pipeline of near-term opportunities for additional work, will provide sufficient liquidity to meet its needs in the foreseeable future.

Accordingly, the consolidated financial statements for the Group for the year ended 31 December 2024 have been prepared on a going concern basis.

Statement on Disclosure to the External Auditor

Each of the Directors of the Company at the time when this report was approved confirms that:

• so far as the Director is aware, there is no relevant audit information of which the Company’s auditor is unaware; and

• they have taken all the steps that they ought to have taken as a Director in order to make himself or herself aware of any relevant audit information

and to establish that the Company’s auditor is aware of that information.

This confirmation is given in accordance with Section 418(2) of the Act.

Reappointment of External Auditor

KPMG, the Group’s external auditor, has indicated their willingness to continue in office and in accordance with Section 489 of the Act, a resolution to

re-appoint them will be put to the 2025 AGM.

Annual General Meeting

Details of the Company’s 2025 AGM are included in the Notice of AGM accompanying this Annual Report. The Notice of AGM sets out the business of

the meeting and includes an explanation of all resolutions to be proposed. Separate resolutions will be proposed in respect of each substantive issue.

The AGM is also used by the Board to take account of views expressed by shareholders and proxy bodies at and following AGMs, updating future

proposals as and when appropriate.

By order of the Board.

Tony Hunter

Company Secretary

8 April 2025

Strategic Report Governance Financial Statements

Gulf Marine Services PLC Annual Report 2024

Statement of Directors’ Responsibilities

Statement of Directors’ Responsibilities in Respect of the Annual Report

and the Financial Statements

The Directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations. 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 Company and of the Group’s profit or loss for that year.

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 Company and of the Group’s profit or loss for that year.

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 enable them to ensure that its financial statements comply

with the Companies Act 2006. They are responsible for such internal controls as they determine is necessary to enable the preparation of financial

statements that are free from material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are

reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.

Under applicable law and regulations, the Directors are also responsible for preparing a Strategic Report, Directors’ Report, Directors’ Remuneration

Report and Corporate Governance Statement that complies with that law and those regulations.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company’s website.

Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Responsibility Statement of the Directors in Respect of the

Annual Financial Report

We confirm that to the best of our knowledge:

• the financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities,

financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole; and

• the Strategic Report includes a fair review of the development and performance of the business and the position of the issuer and the undertakings

included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face. We consider the

Annual Report and Accounts, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to

assess the Group’s position and performance, business model and strategy.

On behalf of the Board

Mansour Al Alami

Executive Chairman

8 April 2025

88 Gulf Marine Services PLC Annual Report 2024

Opinion

We have audited the financial statements of Gulf Marine Services PLC (‘the Company’) and its consolidated undertakings (‘the Group’) for the year

ended 31 December 2024 set out on pages 96 to 148, which comprise the consolidated statement of profit or loss and other comprehensive income,

the consolidated and Company statements of financial position, the consolidated and Company statements of changes in equity, the consolidated

statement of cash flows and related notes, including the material accounting policies set out in note 3.

The financial reporting framework that has been applied in the preparation of the Group financial statements is UK Law, UK adopted international

accounting standards and, as regards the Company financial statements, UK Law and UK accounting standards, including FRS 102 The Financial

Reporting Standard applicable in the UK and Republic of Ireland.

In our opinion:

• the financial statements give a true and fair view of the state of the Group’s and of the Company’s affairs as at 31 December 2024 and of the Group’s

profit for the year then ended;

• the Group financial statements have been properly prepared in accordance with UK adopted international accounting standards;

• the Company financial statements have been properly prepared in accordance with FRS 102 The Financial Reporting Standard applicable in the UK

and Republic of Ireland; and

• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities under those

standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We believe that the audit

evidence we have obtained is a sufficient and appropriate basis for our opinion. Our audit opinion is consistent with our report to the audit committee.

We were appointed as auditor by the directors on 15 August 2022. The period of total uninterrupted engagement is for the 3 financial years ended

31 December 2024. We have fulfilled our ethical responsibilities under, and we remain independent of the Group in accordance with UK ethical

requirements, including the Financial Reporting Council (FRC)'s Ethical Standard as applied to listed public interest entities. No non-audit services

prohibited by that standard were provided.

Conclusions relating to going concern

The directors have prepared the financial statements on the going concern basis as they do not intend to liquidate the Group or the Company or to

cease their operations, and as they have concluded that the Group and the Company’s financial position means that this is realistic. They have also

concluded that there are no material uncertainties that could have cast significant doubt over their ability to continue as a going concern for at least a

year from the date of approval of the financial statements (“the going concern period”).

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the

financial statements is appropriate. Our evaluation of the directors' assessment of the entity’s ability to continue to adopt the going concern basis of

accounting included:

• Obtaining and evaluating the directors’ cash flow projections and challenging each key assumption applied through:

– comparing forecast day rates to signed contracts for contracted periods, and challenging the basis adopted for day rates elsewhere in the

calculations;

– performing retrospective analysis of the directors’ historic budgeting accuracy and comparing historical forecast revenues and costs to actuals;

– assessing whether other assumptions used in the directors’ forecasts including operating expenditure, capital expenditure and working capital

assumptions are reasonable;

– making enquiries of the directors as to its knowledge of events or conditions and related business risks beyond the period of assessment used

by the directors (12 months from the date of approval of the financial statements) that may cast significant doubt on the Group’s and Company’s

ability to continue as a going concern;

– assessing whether the directors have appropriately reflected impacts arising from climate change and energy transition in the going concern

period;

– challenging the appropriateness of downside and stress test scenarios in order to assess the reasonableness of the assumptions included;

– challenging the Group regarding the status of the contract pipeline and the likelihood and timing of contract awards;

• Recalculating the covenant ratios in accordance with the term loan facility to determine whether any breaches of those covenants exist in the

forecast cash flows;

• Testing the mathematical accuracy of the cash flow model used by the directors to prepare the forecasts and resulting covenant calculations;

• Determining whether the cash flow projections are consistent with those used in the Group’s assessment of the recoverability of the carrying value of

its marine vessels and substantiating any differences; and

• Assessing the related disclosures in the Annual Report.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively,

may cast significant doubt on the Group or the Company’s ability to continue as a going concern for a period of at least twelve months from the date

when the financial statements are authorised for issue.

In relation to the Group and the Company’s reporting on how they have applied the UK Corporate Governance Code, we have nothing material to add

or draw attention to in relation to the directors’ statement in the financial statements about whether the directors considered it appropriate to adopt the

going concern basis of accounting.

Strategic Report Governance Financial Statements

Gulf Marine Services PLC Annual Report 2024

Independent Auditor’s Report to the Members of Gulf Marine Services PLC

Report on the Audit of the Financial Statements

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

However, as we cannot predict all future events or conditions and as subsequent events may result in outcomes that are inconsistent with judgements

that were reasonable at the time they were made, the absence of reference to a material uncertainty in this auditor's report is not a guarantee that the

Group or the Company will continue in operation.

Detecting irregularities including fraud

We identified the areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements and risks of

material misstatement due to fraud, using our understanding of the entity's industry, regulatory environment and other external factors and inquiry with

the directors. In addition, our risk assessment procedures included:

• Inquiring with the directors and other management as to the Group’s policies and procedures regarding compliance with laws and regulations,

identifying, evaluating and accounting for litigation and claims, as well as whether they have knowledge of non-compliance or instances of litigation

or claims.

• Inquiring of directors, the Audit and Risk Committee, and inspection of policy documentation as to the Group’s high-level policies and procedures

to prevent and detect fraud , including the internal audit function, and the Group’s channel for “whistleblowing”, as well as whether they have

knowledge of any actual, suspected or alleged fraud.

• Inquiring of directors and the Audit and Risk committee regarding their assessment of the risk that the financial statements may be materially

misstated due to irregularities, including fraud.

• Inspecting the Group’s regulatory and legal correspondence.

• Reading Board and the Audit and Risk committee meeting minutes.

• Performing planning analytical procedures to identify any usual or unexpected relationships.

We discussed identified laws and regulations, fraud risk factors and the need to remain alert among the audit team.

Firstly, the Group is subject to laws and regulations that directly affect the financial statements including companies and financial reporting legislation.

We assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items, including

assessing the financial statement disclosures and agreeing them to supporting documentation when necessary.

Secondly, the Group is subject to many other laws and regulations where the consequences of non-compliance could have a material effect on

amounts or disclosures in the financial statements, for instance through the imposition of fines or litigation or the loss of the Group’s licence to operate.

We identified the following areas as those most likely to have such an effect: UK Companies Act, Listing Rules and tax legislation recognising the

nature of the Group’s activities.

Auditing standards limit the required audit procedures to identify non-compliance with these non-direct laws and regulations to inquiry of the directors

and other management and inspection of regulatory and legal correspondence, if any. Through these procedures, we identified actual or suspected

non-compliance and considered the effect as part of our procedures on the related financial statement items.

We assessed events or conditions that could indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud. As

required by auditing standards, we performed procedures to address the risk of management override of controls and the risk of fraudulent revenue

recognition. We identified fraud risks in relation to the Group charter hire revenue and assessment of the recoverability of the carrying value of the

Group’s marine vessels.

Further detail in respect of Charter hire revenue and Impairment of vessels is set out in the key audit matter disclosures in this report.

In response to the fraud risks, we also performed procedures including:

• Identifying journal entries to test based on risk criteria and comparing the identified entries to supporting documentation.

• Evaluating the business purpose of significant unusual transactions.

• Assessing significant accounting estimates for bias.

• Assessing the disclosures in the financial statements.

As the Group is regulated, our assessment of risks involved obtaining an understanding of the legal and regulatory framework that the Group operates

and gaining an understanding of the control environment including the entity’s procedures for complying with regulatory requirements.

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial

statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed

non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the

inherently limited procedures required by auditing standards would identify it.

In addition, as with any audit, there remains a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions,

misrepresentations, or the override of internal controls. We are not responsible for preventing non-compliance and cannot be expected to detect non-

compliance with all laws and regulations.

Key audit matters: our assessment of risks of material misstatement

Key audit matters are those matters that, in our professional judgement, were of most significance in the audit of the financial statements and include

the most significant assessed risks of material misstatement (whether or not due to fraud) identified by us, including those which had the greatest

effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were

addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate

opinion on these matters.

In arriving at our audit opinion above, the key audit matters, in decreasing order of audit significance, were as follows (unchanged from (2023)):

Gulf Marine Services PLC Annual Report 2024

Independent Auditor’s Report to the Members of Gulf Marine Services PLC continued

Report on the Audit of the Financial Statements

Group key audit matters

Impairment and Impairment Reversals of the Group’s Vessels (net Reversal: US$ 9.2 million) (2023: US$ 33.4 million) and Company’s Investment in

Subsidiary (reversal US$ 75 million (2023: US$ 120 million)).

Refer to page 108 (Group accounting policy) and pages 114 to 117 (Group financial disclosures), page 141 (Parent Company accounting policy) and

pages 143 to 145 (Parent Company financial disclosures).

The key audit matter How the matter was addressed in our audit

The Group’s vessels are the largest balance in

the Group financial statements, with a carrying

amount of US$ 549 million at 31 December 2024

(2023: US$ 562.2 million).

As described in Note 5 certain factors, such as

the improvement in day rates, utilisation and the

market outlook underpinned by an increased

oil price and production environment were

indications that the value of the marine vessels

may have increased as of 31 December 2024

compared to 31 December 2024. As a result of

these triggering events, the Group undertook an

assessment of the recoverability of the carrying

value of its marine vessels as of 31 December

2024. This assessment involved comparing the

carrying value of each vessel, which is deemed

by the Group to be an individual cash generating

unit (‘CGU’), with its respective recoverable

amount, being the higher of value in use (‘VIU’)

and fair value less cost to sell. Following this

assessment the Group recognised a net

impairment reversal of US$ 9.2 million in the year

ended 31 December 2024 for its vessels.

As with the prior year, a fair valuation was

conducted in compliance with Group’s bank

lending arrangements of the Group’s marine

vessels as at 31 December 2024. As described in

Note 4, management concluded that recoverable

amount of each vessel should be based on

VIU. The calculation of VIU is underpinned

by assumptions, notably day and utilisation

rates and the nominal pre-tax discount rate.

As disclosed in Note 4, these assumptions,

particularly the respective vessel’ day and

utilisation rates beyond their contracted term,

are identified as key sources of estimation

uncertainty and judgement.

Due to the sensitivity of the recoverable amounts

to these key assumptions and the subjectivity

and judgement involved impacting the net

impairment reversal in the current year, we

identified a significant risk relating to these

assumptions with regard to the Group’s vessels.

Furthermore, we also identified a potential for

management bias through possible manipulation

of these assumptions and the resulting

recoverable amount.

The carrying amount of Company’s investment

in its subsidiaries represents 79% (2023: 80%)

of the Company’s total assets. The recoverability

of investments is primarily impacted by the VIU

of the marine vessels owned by the Company’s

subsidiary undertakings.

For the reasons outlined above the engagement

team determine this matter to be a key audit

matter.

Our key audit procedures are described below.

• We obtained an understanding of the relevant control surrounding the Group’s preparation of

the discounted cash flow model (VIU), including the assumed day and utilisation rates and the

rate applied to discount the cash flows;

• We tested by enquiry, the reasonableness of the valuation methodology and key assumptions

underpinning the fair value less cost to sell of the Group’s vessels as of 31 December 2024

reported by the external valuer appointed by the Group’s lending banks. We also assessed for

reasonableness of the competence, capabilities and objectivity of that expert;

With respect to the VIU model, we:

• tested its mathematical accuracy

• challenged the reasonableness of the assumed day and utilisation rates by reading contracts

for secured backlog, assessing likelihood of current pipeline opportunities by inspecting

underlying evidence such as tender documents and corroborating these key assumptions

through enquires of the Group’s commercial management team, and considering the historical

rates achieved for individual vessels to assess whether forward looking assumptions are within

a reasonable range;

• inspected the report on forecast day and utilisation rates indicated by an external assessor for

the Group’s marine vessels,

particularly with respect to those rates beyond the respective vessels’ contracted terms and also

discussed these key assumptions with that external assessor as part of our procedures to assess

these assumptions for reasonableness.

We also undertook procedures to assess the external assessor’s independence, competence

and capabilities for the purpose of providing its report;

• A key judgement was made by the audit team to involve our specialist to assess the

reasonableness of the rate applied to discount the forecast cash flows to their present value;

• agreed the operating and capital expenses assumed in the model to the Group’s approved

budget and assessed the reasonableness of these assumptions by performing a retrospective

budget versus actual analysis to gauge the Group’s historical forecasting accuracy and

analytically reviewing forecast costs against historical levels;

• Considering the procedures above, we performed an overall stand back assessment to

determine whether the Group’s VIU estimate was reasonable and assessed whether there was

any evidence of management bias with respect to its VIU calculations;

• We assessed the impact of the Group’s stated commitments around climate change and

energy transition on its assumed cash flow projections. We also considered the existence

of any contradictory evidence that was identified through the performance of each of these

procedures and weighed such evidence in our overall conclusions. Such evidence included the

relevant long-term outlook from external industry and market observers; and

• We assessed the adequacy and reasonableness of the related disclosures in the financial

statements in accordance with relevant accounting standards, including the Group vessels’

sensitivities to future impairment/impairment reversals and the Parent Company’s sensitivity to

future impairment/impairment reversals.

Based on evidence obtained, we found that the Group’s recognition of a net impairment

reversal of $9.2 million as of 31 December 2024, and the calculations underpinning it and the

related disclosures in note 5 was reasonable. We noted that the Group’s carrying value of its

marine vessels continues to be sensitive to further impairment or impairment reversal subject

to changes in assumed day and utilisation rates and the discount rate applied to arrive at each

vessels’ VIU, as described in note 5, and that this assessment is subject to significant estimation

and judgement, as described in note 4. We found that the parent Company’s investment in

subsidiaries and the related impairment reversal to be acceptable.

We identified that the Group’s controls throughout the process of preparing and reviewing the

value in use calculations, were not sufficiently robust to identify errors in the overall assessment.

Our audit procedures appropriately responded to the control deficiencies identified.

Strategic Report Governance Financial Statements

Gulf Marine Services PLC Annual Report 2024

Independent Auditor’s Report to the Members of Gulf Marine Services PLC continued

Report on the Audit of the Financial Statements

Recognition of Charter Hire and Lease Revenue of Group: US$ 144 Million (2023: US$ 133 million)

Refer to pages 105 to 107 (accounting policy) and page 135 (financial disclosures)

The key audit matter How the matter was addressed in our audit

ach of the Group’s vessels earns revenues on

the basis of a specific contract with the relevant

counterparty. Each contract will typically specify

a day rate, which can vary significantly by vessel

and by counterparty, as well as a standby rate

for when the vessel is available for use but not

operational.

As disclosed in the accounting policies in Note

3, revenue is recognised over the term of the

contract for certain performance obligations.

Accordingly, in order for revenue to be recorded

appropriately, management must:

• accurately record the number of days both

on hire and on standby (to ensure both

completeness and accuracy);

• apply the correct contractual rates, net of any

agreed discounts, to the number of days in

each of these categories (to ensure accuracy);

and

• ensure there is an appropriate process for

reviewing all contracts in place to ensure

contractual terms are accounted for in line

with both the lessor accounting requirements

of IFRS 16 (given the required allocation under

IFRS 16 to leasing revenue for hired equipment

on board) and the revenue recognition

principles of IFRS 15.

Due to the significant variability in contract terms

by vessel and by counterparty, and the potential

for management bias to record higher revenues

given it is a key performance indicator for the

Group, the engagement team determine the

accurate recording of charter hire revenue (and

by extension, lease revenue) to be a key audit

matter.

Our key audit procedures are described below.

We evaluated and tested the design and operating effectiveness of the relevant control in the

revenue business process;

We performed a recalculation of charter hire revenue on the number of days on hire/standby

based on customer/third party signed logs and obtained supporting explanations for any gaps

and reconciled this to our knowledge of each vessel’s operational performance during the period;

We agreed the respective marine vessel day rates and terms of hire to the underlying contracts;

We inspected a selection of journals to assess for any evidence of fraudulent revenue recognition

and compared any identified journals to supporting documentation; and

We performed a reconciliation of total billings and total cash receipts during the year, along with

year on year movements in revenue related balance to obtain, in our judgement, additional high

level audit evidence around the completeness, existence and accuracy of revenue recognition.

• Based on the above audit procedures we did not find any material uncorrected error in the

Group’s calculation of charter hire revenue.

We identified that management’s controls throughout the process of preparing and reviewing the

revenue recognition, were not sufficiently robust to identify errors in the overall assessment.

Our audit procedures appropriately responded to the control deficiencies identified.

Gulf Marine Services PLC Annual Report 2024

Our application of materiality and an overview of the scope of our audit

Materiality for the Group and Company financial statements was set at US$ 1.3 million (2023: US$ 1.2 million) and US$ 1.3 million (2023:US$ 1.2

million) respectively, determined with reference to a benchmark of total Group revenues and Company total assets (of which it represents 0.8% (2023:

0.8%) and 0.23% (2023: 0.26%) respectively.

Performance materiality for the Group financial statements and Company financial statements as a whole was set at 65% of materiality (2023:

65%) US$ 0.85 million (2023: US$ 0.78 million) and US$ 0.85 million (2023: US$ 0.78 million) respectively. In applying our judgement in determining

performance materiality, we considered a number of factors including the level of identified misstatements/control deficiencies/changes in the control

environment during the prior period. We applied this percentage in our determination of performance materiality based on the level of identified

misstatements/control deficiencies/changes in the control environment during the prior period.

In our judgement, we consider total revenue to be the most appropriate benchmark for the Group financial statements as it provides a more stable

measure year on year than group profit before tax.

We consider total assets to be the most appropriate benchmark for the Parent Company’s financial statements as the primary nature of the Parent

Company is to hold investments in subsidiaries.

We reported to the Audit and Risk Committee any corrected or uncorrected identified misstatements exceeding US$ 67,000 (2023: US$ 60,000), in

addition to other identified misstatements that warranted reporting on qualitative grounds.

We applied Group and Parent company’s performance materiality to assist us determine what risks were significant risks for the Group and Parent

company respectively.

Our audit was conducted to the materiality levels specified above and was performed by the engagement team in Dublin with the assistance of the

Abu Dhabi office.

We have nothing to report on the other information in the annual report

The directors are responsible for the other information presented in the Annual Report together with the financial statements. The other information

comprises the information included in the strategic report, the governance section of the annual report, the glossary, the other definitions and the

corporate information. The financial statements and our auditor’s report thereon do not comprise part of the other information. Our opinion on the

financial statements does not cover the other information and, accordingly, we do not express an audit opinion or, except as explicitly stated below,

any form of assurance conclusion thereon.

Our responsibility is to read the other information and, in doing so, consider whether, based on our financial statements audit work, the information

therein is materially misstated or inconsistent with the financial statements or our audit knowledge. Based solely on that work we have not identified

material misstatements in the other information.

Opinions on other matters prescribed by the Companies Act 2006

Strategic report and directors' report

Based solely on our work on the other information undertaken during the course of the audit:

• we have not identified material misstatements in the directors’ report or the strategic report;

• in our opinion, the information given in the strategic report and the directors’ report is consistent with the financial statements;

• in our opinion, the strategic report and the directors’ report have been prepared in accordance with the Companies Act 2006.

Directors’ remuneration report

In our opinion the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance with the Companies Act 2006.

Strategic Report Governance Financial Statements

Gulf Marine Services PLC Annual Report 2024

Corporate governance statement

We have reviewed the directors’ statement in relation to going concern, longer-term viability and that part of the Corporate Governance Statement

relating to the Company’s compliance with the provisions of the UK Corporate Governance Code specified for our review by the Listing Rules.

Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate Governance Statement is

materially consistent with the financial statements and our knowledge obtained during the audit:

• Directors' statement with regards the appropriateness of adopting the going concern basis of accounting and any material uncertainties identified

set out on pages 86 to 87;

• Directors’ explanation as to their assessment of the Group's prospects, the period this assessment covers and why the period is appropriate set out

on pages 86 to 87;

• Director’s statement on whether it has a reasonable expectation that the Group will be able to continue in operation and meets its liabilities set out

on pages 86 to 87;

• Directors' statement on fair, balanced and understandable and the information necessary for shareholders to assess the Group's position and

performance, business model and strategy set out on page 88;

• Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks and the disclosures in the annual report that

describe the principal risks and the procedures in place to identify emerging risks and explain how they are being managed or mitigated set out on

pages 24 to 30;

• Section of the annual report that describes the review of effectiveness of risk management and internal control systems set out on page 64; and

• Section describing the work of the audit committee set out on pages 63 to 65.

Based solely on our work on the other information described above:

• with respect to the Corporate Governance Statement disclosures about internal control and risk management systems in relation to financial

reporting processes and about share capital structures:

• we have not identified material misstatements therein; and

• the information therein is consistent with the financial statements and has been prepared in accordance with the applicable legal requirements; and

• in our opinion, the Corporate Governance Statement has been prepared in accordance with relevant rules of the Disclosure Guidance and

Transparency Rules of the Financial Conduct Authority.

We are also required to report to you if a corporate governance statement has not been prepared by the Company. We have nothing to report in these

respects.

We have nothing to report on the other matters on which we are required to report by exception

Under the Companies Act 2006, we are required to report to you if, in our opinion:

• adequate accounting records have not been kept by the Company, or returns adequate for our audit have not been received from branches not

visited by us; or

• the Company financial statements and the part of the Directors’ Remuneration Report to be audited are not in agreement with the accounting

records and returns; or

• certain disclosures of directors’ remuneration specified by law are not made; or

• we have not received all the information and explanations we require for our audit.

We have nothing to report in these respects.

Independent Auditor’s Report to the Members of Gulf Marine Services PLC continued

Report on the Audit of the Financial Statements

94 Gulf Marine Services PLC Annual Report 2024

Respective responsibilities and restrictions on use

Responsibilities of directors for the financial statements

As explained more fully in the directors’ responsibilities statement set out on page 88, the directors are responsible for: the preparation of the financial

statements including being satisfied that they give a true and fair view; such internal control as they determine is necessary to enable the preparation

of financial statements that are free from material misstatement, whether due to fraud or error; assessing the Group and Company’s ability to continue

as a going concern, disclosing, as applicable, matters related to going concern; and using the going concern basis of accounting unless they either

intend to liquidate the Group or the Company or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether

due to fraud, other irregularities or error, and to issue an opinion in an auditor’s report. Reasonable assurance is a high level of assurance, but is not

a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise

from fraud, other irregularities or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence

the economic decisions of users taken on the basis of these financial statements.

A fuller description of our responsibilities is provided on the FRC’s website at www.frc.org.uk/auditorsresponsibilities.

The Company is required to include these financial statements in an annual financial report prepared under Disclosure Guidance and Transparency

Rule 4.1.17R and 4.1.18R. This auditor’s report provides no assurance over whether the annual financial report has been prepared in accordance with

those requirements.

The purpose of our audit work and to whom we owe our responsibilities

Our report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit

work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditor’s report

and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the

Company’s members, as a body, for our audit work, for this report, or for the opinions we have formed.

Terence Coveney (Senior Statutory Auditor)

for and on behalf of KPMG, Statutory Auditor

8 April 2025

1 Harbourmaster Place

IFSC Dublin 1

D01 F6F5

Strategic Report Governance Financial Statements

Gulf Marine Services PLC Annual Report 2024

Consolidated statement of profit or loss and other comprehensive income

		2024	2023
	Notes	US$’000	US$’000
Revenue	28, 31	16 7, 4 9 4	151, 6 0 3
Cost of sales		(85,079)	(8 1 ,987)
Impairment loss of property and equipment	5, 28	(9 ,394)	(3,565)
Reversal of impairment of property and equipment	5, 28	18 ,6 2 1	36,99 3
Expected credit losses	9	(2 ,0 0 6)	(2 07)
Gross profit		89, 63 6	10 2 , 8 37
General and administrative expenses		(17, 0 2 8)	(1 4,645)
Operating profit		72,6 0 8	8 8 ,1 9 2
Finance income	32	89	2 21
Impact of change in fair value of warrants	11	(5,348)	(11, 0 7 7)
Finance expense	33	(23,5 1 7)	(31,4 31)
Foreign exchange loss, net	34	(674)	(9 87)
Other income		23	12
Profit for the year before taxation		4 3 ,18 1	4 4,93 0
Taxation charge for the year	8	(4,921)	(2, 8 62)
Net profit for the year		38,260	42,0 68
Other comprehensive income – items that may be reclassified to profit or loss:
Net hedging gain reclassified to the profit or loss	33	–	279
Net exchange (loss)/gain on translation of foreign operations		(90)	343
Total comprehensive income for the year		3 8 ,17 0	42, 6 9 0
Profit attributable to:
Owners of the Company		3 7, 9 7 6	41, 3 4 2
Non-controlling interest	18	284	726
		38,260	4 2,0 6 8
Total comprehensive income attributable to:
Owners of the Company		3 7, 8 8 6	41, 9 6 4
Non-controlling interest	18	284	726
		3 8 ,17 0	42, 6 9 0
Earnings per share:
Basic (cents per share)	30	3. 61	4.07
Diluted (cents per share)	30	3.39	3.92

All results are derived from continuing operations in each year. There are no discontinued operations in either year.

The attached Notes 1 to 36 form an integral part of these consolidated financial statements.

Gulf Marine Services PLC Annual Report 2024

For the year ended 31 December 2024

		2024	2023
	Notes	US$’000	US$’000
Assets
Non-current assets
Property and equipment	5	592 ,233	6 0 6 , 412
Dry docking expenditure	6	11 , 8 6 7	11, 2 0 4
Right-of-use assets	7	4,22 5	3, 3 47
Total non-current assets		608 ,325	620,9 6 3
Current assets
Trade receivables	9	2 5 , 5 75	30,6 46
Prepayments, advances and other receivables	10	9, 2 29	8 ,0 57
Cash and cash equivalents	12	40,0 07	8,666
Total current assets		74 , 811	4 7, 3 6 9
Total assets		683, 1 36	66 8,332
Equity and liabilities
Capital and reserves
Share capital – Ordinary	13	31, 4 72	3 0 ,117
Capital redemption reserve	13	46,44 5	4 6,4 45
Share premium account	13	111, 9 9 5	9 9 ,10 5
Restricted reserve	14	2 72	272
Group restructuring reserve	15	(4 9 ,710)	(4 9, 710)
Capital contribution	16	9 ,17 7	9 ,17 7
Translation reserve	17	(2 ,632)	(2,5 4 2)
Retained earnings	17	23 2,679	19 4 ,7 0 3
Attributable to the owners of the Company		379,6 98	327,567
Non-controlling interest	18	2,9 98	2 ,7 14
Total equity		38 2 ,69 6	3 3 0 , 281
Current liabilities
Trade and other payables	20	3 7, 7 9 5	35,0 54
Current tax liability		10, 4 3 0	7, 0 3 2
Bank borrowings – scheduled repayments within one year	21	3 9,5 97	41, 5 0 0
Lease liabilities	22	3,503	1,6 2 3
Derivative financial instruments	11	9 ,1 9 2	14 , 2 7 5
Total current liabilities		1 0 0 , 517	9 9,4 84
Non-current liabilities
Provision for employees’ end of service benefits	19	2,6 40	2,3 9 5
Bank borrowings – scheduled repayments more than one year	21	19 6 , 4 2 5	234,4 39
Lease liabilities	22	858	1, 7 3 3
Total non-current liabilities		199,923	23 8, 567
Total liabilities		30 0,4 40	3 3 8 , 0 51
Total equity and liabilities		683, 1 36	66 8,332

The consolidated financial statements were approved by the Board of Directors and authorised for issue on 08 April 2025. Registered Company

08860816. They were signed on its behalf by:

Mansour Al Alami

Executive Chairman

The attached Notes 1 to 36 form an integral part of these consolidated financial statements.

Strategic Report Governance Financial Statements

Gulf Marine Services PLC Annual Report 2024

As at 31 December 2024

Consolidated statement of financial position

Consolidated statement of changes in equity

		Capital	Share
	Share capital –	redemption	premium	Restricted
	Ordinary	reserve	account	reserve
	US$’000	US$’000	US$’000	US$’000
At 1 January 2023	3 0 ,117	46 ,44 5	99,105	272 (49,710) 3,632 9,177 (279) (2,885) 149,712 285,586 1,988 287, 574
Profit for the year	−	−	−	− − − − − − 41,342 41,342 726 42,068
Other comprehensive income for the year
Net hedging gain on interest hedges reclassified to the profit or loss	−	−	−	−
Exchange differences on foreign operations	−	−	−	− − − − − 343 − 343 − 343
Total comprehensive income for the year	−	−	−	− − − − 279 343 41,342 41,964 726 42,690
Transactions with owners of the Company
Share based payment charge	−	−	−	−
Transfer of share option reserve	−	−	−	− − (3,649) − − − 3,649 − − −
Total transactions with owners of the Company	−	−	−	− − (3,632) − − − 3,649 17 − 17
At 31 December 2023	3 0 ,11 7	46,4 45	9 9 ,10 5	272 (49,710) − 9,177 − (2,542) 194,703 327, 5 67 2,714 330,281
Profit for the year	−	−	−	− − − − − − 37,976 37,976 284 38,260
Other comprehensive income for the year
Exchange differences on foreign operations	−	−	−	−
Total comprehensive income for the year	−	−	−	− − − − − (90) 37,976 37,886 284 38,170
Transactions with owners of the Company
Issue of share capital	1 ,355	−	12 , 97 3*	−
Share issuance costs	−	−	(8 3)	− − − − − − − (83) − (83)
Total transactions with owners of the Company	1 ,355	−	12 , 8 9 0	− − − − − − − 14,245 − 14,245
At 31 December 2024	31, 47 2	46,44 5	111, 9 9 5	272 (49,710) − 9,177 − (2,632) 232,679 379,698 2,998 382,696

Group

restructuring

reserve

US$’000

Share-based

payment

reserve

US$’000

Capital

contribution

US$’000

Cash flow

hedge reserve

US$’000

Translation

reserve

US$’000

Retained

earnings

US$’000

Attributable to

the owners of

the Company

US$’000

Non-

controlling

interest

US$’000

Total

equity

US$’000

− − − 279 − − 279 − 279

− 17 − − − − 17 − 17

− − − − (90) − (90) − (90)

− − − − − − 14,328 − 14,328

* Addition to share premium amount reflects cash proceeds US$ 2.5million and release of warrants liability of US$ 10.4million upon exercise of warrants.

Refer to Notes 13 to 17 for description of each reserve.

The attached Notes 1 to 36 form an integral part of these consolidated financial statements.

Gulf Marine Services PLC Annual Report 2024

For the year ended 31 December 2024

Share capital –

Ordinary

US$’000

Capital

redemption

reserve

US$’000

premium

account

US$’000

Restricted

reserve

US$’000

Group	Share-based					Attributable to	Non-
restructuring	payment	Capital	Cash flow	Translation	Retained	the owners of	controlling	Total
reserve	reserve	contribution	hedge reserve	reserve	earnings	the Company	interest	equity
US$’000	US$’000	US$’000	US$’000	US$’000	US$’000	US$’000	US$’000	US$’000
At 1 January 2023 30,117 46,445 99,10 5 272 (4 9 ,7 10)	3,6 32	9 ,17 7	(279)	(2, 885)	14 9 , 7 12	28 5, 58 6	1 ,988	2 8 7, 5 74
Profit for the year − − − − −	−	−	−	−	41, 3 4 2	41, 3 4 2	726	4 2,0 6 8
−	−	−	279	−	−	27 9	−	279
Exchange differences on foreign operations − − − − −	−	−	−	343	−	343	−	343
Total comprehensive income for the year − − − − −	−	−	27 9	343	41 , 3 4 2	41,9 6 4	726	42,6 9 0
−	17	−	−	−	−	17	−	17
Transfer of share option reserve − − − − −	(3,6 49)	−	−	−	3,6 49	−	−	−
Total transactions with owners of the Company − − − − −	(3,632)	−	−	−	3,649	17	−	17
At 31 December 2023 30,117 46,445 99,105 272 (4 9, 710)	−	9 ,1 7 7	−	(2, 5 42)	19 4 , 70 3	3 2 7, 5 6 7	2 , 7 14	33 0 , 2 81
Profit for the year − − − − −	−	−	−	−	3 7, 9 7 6	3 7, 9 76	284	38,260
−	−	−	−	(9 0)	−	(90)	−	(90)
Total comprehensive income for the year − − − − −	−	−	−	(90)	3 7, 9 7 6	3 7, 8 8 6	284	3 8 ,17 0
−	−	−	−	−	−	1 4,328	−	1 4,328
Share issuance costs − − (83) − −	−	−	−	−	−	(8 3)	−	(83)
Total transactions with owners of the Company 1,355 − 12,890 − −	−	−	−	−	−	14 , 2 4 5	−	14 , 2 4 5
At 31 December 2024 31,472 46,445 111,995 272 (49 ,710)	−	9 ,1 7 7	−	(2,632)	232 ,679	379,6 9 8	2 ,99 8	3 82 ,69 6

Other comprehensive income for the year

Net hedging gain on interest hedges reclassified to the profit or loss − − − −

Transactions with owners of the Company

Share based payment charge − − − −

Other comprehensive income for the year

Exchange differences on foreign operations − − − −

Transactions with owners of the Company

Issue of share capital 1,355 − 12,973* −

* Addition to share premium amount reflects cash proceeds US$ 2.5million and release of warrants liability of US$ 10.4million upon exercise of warrants.

Refer to Notes 13 to 17 for description of each reserve.

The attached Notes 1 to 36 form an integral part of these consolidated financial statements.

Strategic Report Governance Financial Statements

Gulf Marine Services PLC Annual Report 2024

Consolidated statement of cash flows

		2024	2023
	Notes	US$’000	US$’000
Operating activities
Profit for the year		38,260	4 2,0 6 8
Adjustments for:
Depreciation of property and equipment	5	2 6 ,19 4	24 , 2 97
Finance expenses		2 3 , 5 11	31,4 31
Impact of change in fair value of warrants	11	5,3 48	11, 0 7 7
Amortisation of dry-docking expenditure	6	5,324	4,687
Depreciation of right-of-use assets	7	4 , 6 41	3 ,1 8 8
Amortisation of borrowings issue cost		6	–
Income tax expense	8	4,921	2, 86 2
Net charge of expected credit losses	9	2 ,0 06	2 07
End of service benefits charge	19	525	723
Impairment loss	5	9 ,394	3,565
Reversal of impairment	5	(18 , 6 2 1)	(36,9 93)
End of service benefits paid	19	(280)	(4 6 8)
Interest income	32	(89)	(2 2 1)
Other income		(23)	(12)
Cash flows from operating activities before movement in working capital		1 0 1 ,11 7	8 6 , 411
Changes in:
– trade and other receivables		1, 8 9 3	2,0 0 3
– trade and other payables		2 ,9 49	8 ,14 0
Cash generated from operations		105,959	9 6,554
Taxation paid		(2 ,3 9 9)	(2,151)
Net cash generated from operating activities		10 3 , 5 6 0	94,40 3
Investing activities
Payments for additions of property and equipment		(2 ,7 8 8)	(3,459)
Dry docking spend excluding drydock accruals		(6, 070)	(9,550)
Interest received		89	221
Net cash used in investing activities		(8 ,76 9)	(12 , 7 8 8)
Financing activities
Proceeds from issue of share capital on exercise of warrants		3 , 897	–
Share issuance cost		(83)	–
Proceeds from bank borrowings	35	2 41 ,18 9	2, 000
Payment of borrowings issue cost	35	(5 ,17 3)	–
Repayment of bank borrowings	35	(27 5,939)	(5 6 ,174)
Interest paid on bank borrowings	35	(2 1, 6 12)	(2 7, 4 2 8)
Principal elements of lease payments	35	(4,4 78)	(3,3 30)
Settlement of derivatives	35	–	3 27
Other finance expenses paid		(79 0)	(3 74)
Interest paid on leases	35	(4 6 1)	(24 5)
Net cash used in financing activities		(63,4 50)	(8 5 , 2 24)
Net increase/(decrease) in cash and cash equivalents		31 , 3 41	(3,6 09)
Cash and cash equivalents at the beginning of the year		8,666	12, 2 7 5
Cash and cash equivalents at the end of the year	12	4 0,0 07	8,666
Non-cash transactions
Recognition of right-of-use assets		5 , 519	3 , 2 31
Addition/(reversal) to capital accruals		–	8 67
(Decrease)/increase in in drydock accruals		(83)	2, 59 0
Release of derivative liability		(10 , 4 31)	–

The attached Notes 1 to 36 form an integral part of these consolidated financial statements.

100

Gulf Marine Services PLC Annual Report 2024

For the year ended 31 December 2024

1 General information

Gulf Marine Services PLC (“GMS” or “the Company”) is a company which is limited by shares and is registered and incorporated in England and Wales

on 24 January 2014. The Company is a public limited company with operations mainly in the Arabian Peninsula region and Europe. The address of

the registered office of the Company is 107 Hammersmith Road, London, United Kingdom, W14 0QH. The registered number of the Company is

08860816. The shareholder pattern of the Group is disclosed on the page 85.

The principal activities of GMS and its subsidiaries (together referred to as “the Group”) are chartering and operating a fleet of specially designed and

built vessels. All information in the notes relate to the Group, not the Company unless otherwise stated.

The Company and its subsidiaries are engaged in providing self-propelled, self-elevating support vessels, which provide a stable platform for delivery

of a wide range of services throughout the total lifecycle of offshore oil, gas and renewable energy activities and which are capable of operations in the

Arabian Peninsula, Europe and other regions.

2 Adoption of new and revised International Financial Reporting Standards

(IFRS)

The accounting policies and methods of computation adopted in the preparation of these consolidated financial statements are consistent with those

followed in the preparation of the Group’s consolidated annual financial statements for the year ended 31 December 2023, except for the adoption of

new standards and interpretations effective as at 1 January 2024.

New and revised IFRSs

The following new and revised IFRSs have been adopted in these consolidated financial statements. The application of these new and revised IFRSs

has not had any material impact on the amounts reported for the current and prior years but may affect the accounting for future transactions or

arrangements.

	Effective for
	annual periods
	beginning on or after
Amendments to IAS 1 Classification of Liabilities as Current or Non-Current and Non-Current Liabilities with Covenants	1 January 2024
Amendments to IAS 7 and IFRS 7 Supplier Finance Arrangements	1 January 2024
Amendments to IFRS 16 Lease Liability in a Sale and Leaseback	1 January 2024

New and revised IFRSs in issue but not yet effective

At the date of authorisation of these consolidated financial statements, the following new and revised IFRSs were in issue but not yet effective:

	Effective for
	annual periods
	beginning on or after
Amendments to IAS 21 Lack of Exchangeability	1 January 2025
Amendments to IFRS 9 and IFRS 7 Classification and Measurement of Financial Instruments	1 January 2026
Annual improvements to IFRS Accounting Standards – Volume 11	1 January 2026
IFRS 18 Presentation and Disclosure in Financial Statements
IFRS 18 will replace IAS 1 for reporting periods commencing on or after 1 January 2027. The following key changes will apply;
1. Operating profit will be defined as a residual capturing all income and expenses not classified as investing or financing items.
2. The operating profit line will be the start of the cash flow statement.
3. Additional disclosures will be included in the accounts on management defined performance measures.
4. Enhanced guidance is provided on how to group items in the primary financial statements and the notes.
The company is still assessing the impact of the new standard with respect to the structure of the income statement and how information is grouped in the financial statements including items labeled as other.	1 January 2027
IFRS 19 Subsidiaries without Public Accountability Disclosures	1 January 2027
Amendments to IFRS 10 and IAS 28 Sale or Contribution of Assets between an Investor and its Associate or Joint
Venture	Optional

Management anticipates that these new standards, interpretations and amendments will be adopted in the Group’s consolidated financial statements

as and when they are applicable and the impact of adoption of these new standards, interpretations and amendments is currently being assessed on

the consolidated financial statements of the Group before the period of initial application.

101

Strategic Report Governance Financial Statements

Gulf Marine Services PLC Annual Report 2024

For the year ended 31 December 2024

Notes to the consolidated financial statements

Notes to the consolidated financial statements continued

3 Material accounting policies

The Group’s material accounting policies adopted in the preparation of these consolidated financial statements are set out below. Except as noted in

Note 2, these policies have been consistently applied to each of the years presented.

Statement of compliance

The consolidated financial statements have been prepared in accordance with UK-adopted international accounting standards in conformity with the

requirements of the Companies Act 2006.

Basis of preparation

The consolidated financial statements have been prepared on the historical cost basis, except for derivative financial instruments that are measured at

fair values at the end of each reporting period. Historical cost is generally based on the fair value of the consideration given in exchange for assets.

For financial reporting purposes, fair value measurements are categorised into Level 1, 2 or 3 based on the degree to which the inputs to the fair value

measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:

• Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;

• Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and

• Level 3 inputs are unobservable inputs for the asset or liability.

The principal accounting policies adopted are set out below.

Going concern

The Directors have assessed the Group’s financial position through to June 2026 and hold a reasonable expectation of its ability to continue as going

concern for the foreseeable future. With four consecutive years of reported profit and a forecast of continued positive operating cash flows, particularly

in light of the market outlook, the Group remains well-positioned for sustained success.

In December 2024, the Group completed the refinancing of a US$ 300.0 million (AED 1,101.5 million) loan facility (comprising a US$ 250.0 million

(AED 924.0 million) term loan amortised over five years and a US$ 50.0 million (AED 177.5 million) working capital facility), denominated in United Arab

Emirates Dirhams (AED). The working capital facility includes a cash commitment of US$ 20.0 million (31 December 2023: US$ 20.0 million), but if no

cash is drawn, the full facility remains available for performance bonds and guarantees. The working capital facility expires alongside the main debt

facility in December 2029. The three banks, two of which are current lenders, have an equal participation in the term loan and in the working capital

facility.

The refinancing was secured at a more favourable interest rate, which is based on EIBOR plus a margin. The margin is determined by a ratchet

depending on leverage levels. The improved terms will lower financing costs and enhance the Group’s flexibility in capital allocation.

The Group closely monitors its liquidity and is expected to meet its short-term obligations over the next twelve months. Subsequent to the year end,

the Group made prepayments of US$ 40.3 million towards its bank borrowings. The loan prepayments were made after taking into account the

forecast cashflows for 2025.

The forecast used for Going Concern reflects management's key assumptions including those around vessel utilisation, vessel day rates on a

vessel-by-vessel basis. Specifically, these assumptions are:

• average day rates across the fleet are assumed to be US$ 34.8k for the 18-month period to 30 June 2026;

• 92% forecast utilisation for the 18-month period to 30 June 2026;

• pipeline of tenders and opportunities for new contracts that would commence during the forecast period.

A downside case was prepared using the following assumptions:

• no work-to-win during the 18-months period to 30 June 2026;

• options for five vessel contracts are not exercised by the customers during the 18-months period to 30 June 2026;

• 16 percentage points reduction in utilisation for the 18-months period to 30 June 2026;

• interest rate on EIBOR to remain at current levels.

Based on the above scenario, the Group would not be in breach of its current term loan facility. The downside case is considered to be severe,

but it would still leave the Group with sufficient liquidity and in compliance with the covenants under the Group’s banking facilities throughout the

assessment period.

In addition to the above downside sensitivity, the Directors have also considered a reverse stress test, where EBITDA has been sufficiently reduced to

breach debt covenant. This scenario assumes a substantial increase in operational downtime to 19%, compared to the base case cashflows with a

2.5% operational downtime. The significant increase in operational downtime for the forecast period would result in breach of the Debt Service Cover

ratios. However, it is important to note, that GMS has reported annual operational downtime of less than 2.5% over the past five years.

Should circumstances arise that differ from the Group’s projections, the Directors believe that a number of mitigating actions can be executed

successfully in the necessary timeframe to meet debt repayment obligations as they become due and in order to maintain liquidity. Potential mitigating

actions include the vessels off hire for prolonged periods could be cold stacked to minimise operating costs on these vessels which has been factored

into the downside case. Additional mitigations could be considered including but not limited to reduction in overhead costs, relaxation/waiver from

covenant compliance and rescheduling of repayments with lenders.

102

Gulf Marine Services PLC Annual Report 2024

For the year ended 31 December 2024

Going concern continued

Management is aware of the broader operating context and acknowledges the potential impact of climate change on the Group’s consolidated

financial statements. However, it is anticipated that climate change will have limited effect during the going concern assessment period.

After considering reasonable risks and potential downsides, the Group’s forecasts suggest that its bank facilities, combined with high utilisation at

higher day rates and a pipeline of near-term opportunities for additional work, will provide sufficient liquidity to meet its needs in the foreseeable future.

Accordingly, the consolidated financial statements for the Group for the year ended 31 December 2024 have been prepared on a going concern basis.

Basis of consolidation

These consolidated financial statements incorporate the financial statements of GMS and subsidiaries controlled by GMS. The Group has assessed

the control which GMS has over its subsidiaries in accordance with IFRS 10 Consolidated Financial Statements, which provides that an investor

controls an investee when the investor is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect

those returns through its power over the investee.

Details of GMS’s subsidiaries at 31 December 2024 and 2023 are as follows:

				Proportion of
				Ownership Interest
Name	Place of Registration	Registered Address		2024	2023	Type of Activity
Gulf Marine Services W.L.L.	United Arab Emirates	Office 403, International Tower,		100%	100%	Marine Contractor
		24th Karama Street, P.O. Box 46046,
		Abu Dhabi, United Arab Emirates
Gulf Marine Services	Qatar	22 Floor, Office 22, Tornado Tower,		100%	100%	Marine Contractor
W.L.L. – Qatar Branch		Majilis Al Tawoon Street, P.O. Box
		2777	4, Doha, Qatar
GMS Global Commercial	United Arab Emirates	Office 403, International Tower,		100%	100%	General Investment
Invt LLC		24th Karama Street, P.O. Box 46046,
		Abu Dhabi, United Arab Emirates
Gulf Marine	United Arab Emirates	ELOB, Office No. E-16F-04,		100%	100%	Operator of offshore
Middle East FZE		P.O. Box 53944, Hamriyah Free Zone,				barges
		Sharjah
Gulf Marine Saudi Arabia	Saudi Arabia	King Fahad Road, Al Khobar,		75%	75%	Operator of offshore
Co. Limited		Eastern Province , P.O. Box 31411				barges
		Kingdom Saudi Arabia
Gulf Marine Services LLC	Qatar	41 Floor, Tornado Tower, West Bay,		100%	100%	Marine Contractor
		Doha, Qatar, POB 6689
Gulf Marine Services (UK)	United Kingdom	c/o MacKinnon’s, 14 Carden Place,		100%	100%	Operator of offshore
Limited		Aberdeen, AB10 1UR				barges
GMS Jersey Holdco. 1*	Jersey	12 Castle Street, St. Helier,		100%	100%	General Investment
Limited		Jersey, JE2 3RT
GMS Jersey Holdco. 2	Jersey	12 Castle Street, St. Helier,		100%	100%	General Investment
Limited		Jersey, JE2 3RT
Offshore Holding Invt SA	Panama	Bloc Office Hub, Fifth Floor,		100%	100%	Holding Company
		Santa Maria Business District, Panama,
		Republic of Panama
Offshore Logistics Invt SA**	Panama	Bloc Office Hub, Fifth Floor,		100%	100%	Dormant
		Santa Maria Business District, Panama,
		Republic of Panama
Offshore Accommodation	Panama	Bloc Office Hub, Fifth Floor,		100%	100%	Dormant
Invt SA**		Santa Maria Business District, Panama,
		Republic of Panama
Offshore Jack-up Invt SA	Panama	Bloc Office Hub, Fifth Floor,		100%	100%	Owner of Barge
		Santa Maria Business District, Panama,				“Kamikaze”
		Republic of Panama
Offshore Structure Invt SA	Panama	Bloc Office Hub, Fifth Floor,		100%	100%	Owner of Barge “Kikuyu”
		Santa Maria Business District, Panama,
		Republic of Panama
Offshore Craft Invt SA	Panama	Bloc Office Hub, Fifth Floor,		100%	100%	Owner of Barge “GMS
		Santa Maria Business District, Panama,				Endeavour”
		Republic of Panama
Offshore Maritime Invt SA**	Panama	Bloc Office Hub, Fifth Floor,		100%	100%	Dormant
		Santa Maria Business District, Panama,
			Republic of Panama

103

Strategic Report Governance Financial Statements

Gulf Marine Services PLC Annual Report 2024

Notes to the consolidated financial statements continued

				Proportion of
				Ownership Interest
Name	Place of Registration	Registered Address		2024	2023	Type of Activity
Offshore Tugboat Invt SA**	Panama	Bloc Office Hub, Fifth Floor,		100%	100%	Dormant
		Santa Maria Business District, Panama,
		Republic of Panama
Offshore Boat Invt SA	Panama	Bloc Office Hub, Fifth Floor,		100%	100%	Owner of Barge “Kawawa”
		Santa Maria Business District, Panama,
		Republic of Panama
Offshore Kudeta Invt SA	Panama	Bloc Office Hub, Fifth Floor,		100%	100%	Owner of Barge “Kudeta”
		Santa Maria Business District, Panama,
		Republic of Panama
GMS Endurance Invt SA	Panama	Bloc Office Hub, Fifth Floor,		100%	100%	Owner of Barge
		Santa Maria Business District, Panama,				“Endurance”
		Republic of Panama
GMS Enterprise	Panama	Bloc Office Hub, Fifth Floor,		100%	100%	Owner of Barge
Investment SA		Santa Maria Business District, Panama,				“Enterprise”
		Republic of Panama
GMS Sharqi	Panama	Bloc Office Hub, Fifth Floor,		100%	100%	Owner of Barge “Sharqi”
Investment SA		Santa Maria Business District, Panama,
		Republic of Panama
GMS Scirocco	Panama	Bloc Office Hub, Fifth Floor,		100%	100%	Owner of Barge “Scirocco”
Investment SA		Santa Maria Business District, Panama,
		Republic of Panama
GMS Shamal	Panama	Bloc Office Hub, Fifth Floor,		100%	100%	Owner of Barge “Shamal”
Investment SA		Santa Maria Business District, Panama,
		Republic of Panama
GMS Keloa Invt SA	Panama	Bloc Office Hub, Fifth Floor,		100%	100%	Owner of Barge “Keloa”
		Santa Maria Business District, Panama,
		Republic of Panama
GMS Pepper Invt SA	Panama	Bloc Office Hub, Fifth Floor,		100%	100%	Owner of Barge “Pepper”
		Santa Maria Business District, Panama,
		Republic of Panama
GMS Evolution Invt SA	Panama	Bloc Office Hub, Fifth Floor,		100%	100%	Owner of Barge “Evolution”
		Santa Maria Business District, Panama,
		Republic of Panama
GMS Phoenix	Panama	Bloc Office Hub, Fifth Floor,		100%	100%	Dormant
Investment SA**		Santa Maria Business District, Panama,
		Republic of Panama
Gulf Marine Services (Asia)	Singapore	1 Scotts Road, #21-07, Shaw Centre,		100%	100%	Operator of offshore
Pte. Limited		Singapore, 228208				barges
Gulf Marine Services (Asia)	Qatar	22 Floor, Office 22, Tornado Tower,		100%	100%	Operator of offshore
Pte. Limited – Qatar branch		Majilis Al Tawoon Street, P.O. Box				barges
		2777	4, Doha, Qatar

* Held directly by Gulf Marine Services PLC.

** These dormant subsidiaries wound up on 29 January 2025.

The results of subsidiaries acquired or disposed of during the year are included in the consolidated statement of profit or loss and other

comprehensive income from the effective date of acquisition or up to the effective date of disposal, as appropriate.

Where necessary, adjustments are made to the results of subsidiaries to bring their accounting policies in line with those used by other members of

the Group. All intra-group transactions, balances, income and expenses are eliminated in full on consolidation.

Non-controlling interests in subsidiaries are identified separately from the Group’s equity therein. The interests of non-controlling shareholders are

initially measured either at fair value or at the non-controlling interests’ proportionate share of the fair value of the acquiree’s identifiable net assets.

The choice of measurement basis is made on an acquisition-by-acquisition basis. Subsequent to acquisition, the carrying amount of non-controlling

interests is the amount of those interests at initial recognition plus the non-controlling interests’ share of subsequent changes in equity. Total

comprehensive income is attributed to non-controlling interests even if this results in the non-controlling interests having a deficit balance.

3 Material accounting policies continued

Basis of consolidation continued

104 Gulf Marine Services PLC Annual Report 2024

For the year ended 31 December 2024

Basis of consolidation continued

Changes in the Group’s interests in subsidiaries that do not result in a loss of control are accounted for as equity transactions. The carrying amounts

of the Group’s interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference

between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognised directly

in equity and attributed to owners of the Group. Acquisitions of subsidiaries and businesses are accounted for using the acquisition method. The

consideration for each acquisition is measured at the aggregate of the fair values (at the date of exchange) of assets given, liabilities incurred or

assumed, and equity instruments issued by the Group in exchange for control of the acquiree. Acquisition-related costs are recognised in profit or loss

as incurred. Fair value is determined as the amount for which an asset could be exchanged, or a liability transferred, between knowledgeable, willing

parties in an arm’s length transaction.

The acquiree’s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under IFRS 3 (2008) are recognised at

their fair value at the acquisition date.

When the Group loses control of a subsidiary, the profit or loss on disposal is calculated as the difference between (i) the aggregate of the fair

value of the consideration received and the fair value of any retained interest and (ii) the previous carrying amount of the assets (including goodwill),

and liabilities of the subsidiary and any non-controlling interests. Amounts previously recognised in other comprehensive income in relation to the

subsidiary are accounted for (i.e. reclassified to profit or loss or transferred directly to retained earnings) in the same manner as would be required if

the relevant assets or liabilities were disposed of. The fair value of any investment retained in the former subsidiary at the date when control is lost is

regarded as the fair value on initial recognition for subsequent accounting under IFRS 9 Financial Instruments: Recognition and Measurement or, when

applicable, the cost on initial recognition of an investment in an associate or jointly controlled entity.

Revenue recognition

The Group recognises revenue from contracts with customers as follows:

• Charter revenue;

• Lease income;

• Revenue from messing and accommodation services;

• Manpower income;

• Maintenance income;

• Contract mobilisation revenue;

• Contract demobilisation revenue; and

• Sundry income.

Revenue is measured as the fair value of the consideration received or receivable for the provision of services in the ordinary course of business, net

of trade discounts, volume rebates, and sales taxes excluding amounts collected on behalf of third parties. Revenue is recognised when control of the

services is transferred to the customer.

Consequently, revenue for the provision of services is recognised either:

• Over time during the period that control incrementally transfers to the customer and the customer simultaneously receives and consumes the

benefits. The Group has applied the practical expedient and recognises revenue over time in accordance with IFRS 15 i.e. the amount at which the

Group has the right to invoice clients.

• Wholly at a single point in time when GMS has completed its performance obligation.

Revenue recognised over time

The Group’s activities that require revenue recognition over time includes the following performance obligation:

Performance obligation 1 – Charter revenue, contract mobilisation revenue, revenue from messing and accommodation services, and

manpower income

Chartering of vessels, mobilisations, messing and accommodation services and manpower income are considered to be a combined performance

obligation as they are not separately identifiable and the Group’s clients cannot benefit from these services on their own or together with other readily

available resources. This performance obligation, being the service element of client contracts, is separate from the underlying lease component

contained within client contracts which is recognised separately.

Revenue is recognised for certain mobilisation related reimbursable costs. Each reimbursable item and amount is stipulated in the Group’s contract

with the customer. Reimbursable costs are included in the performance obligation and are recognised as part of the transaction price, because the

Group is the primary obligor in the arrangement, has discretion in supplier selection and is involved in determining product or service specifications.

Performance obligation 2 – Sundry income

Sundry income that relates only specifically to additional billable requirements of charter hire contracts are recognised over the duration of the

contract. For the component of sundry income that is not recognised over time, the performance obligation is explained below.

105

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Gulf Marine Services PLC Annual Report 2024

Notes to the consolidated financial statements continued

3 Material accounting policies continued

Revenue recognised at a point in time

The Group’s activities that require revenue recognition at a point in time include the following performance obligations.

Performance obligation 1 – Contract demobilisation revenue

Lump-sum fees received for equipment moves (and related costs) as part of demobilisations are recognised when the demobilisation has occurred

at a point in time.

Performance obligation 2 – Sundry income

Sundry income includes handling charges, which are applied to costs incurred by the Group and subsequently billed to the customer. Revenue

is recognised when it is billed to the customer, as this is when the performance obligation is fulfilled, and control has passed to the customer.

Deferred and accrued revenue

Clients are typically billed on the last day of specific periods that are contractually agreed upon. Where there is delay in billing, accrued revenue

is recognised in trade and other receivables for any services rendered where clients have not yet been billed (see Note 9).

As noted above, lump sum payments are sometimes received at the outset of a contract for equipment moves or modifications. These lump sum

payments give rise to deferred revenue in trade and other payables (see Note 20).

Leases

The Group as lessee

The Group assesses whether a contract is or contains a lease, at inception of the contract. The Group recognises a right-of-use asset and a

corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for certain short-term leases (defined as leases with

a lease term of 12 months or less) and leases of low value assets.

Low value assets have a low value purchase price when new, typically US$ 5,000 or less, and include items such as tablets and personal computers,

small items of office furniture and telephones. For these leases, the Group recognises the lease payments as an operating expense on a straight-line

basis over the term of the lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased

assets are consumed. Leases of operating equipment linked to commercial contracts are recognised to match the length of the contract even where

the contract term is less than 12 months.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the

Group’s incremental borrowing rate. This is the rate that would be available on a loan with similar conditions to obtain an asset of a similar value.

Lease payments included in the measurement of the lease liability comprise:

• Fixed lease payments (including in-substance fixed payments), less any lease incentives receivable;

• Variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement date;

• The amount expected to be payable by the lessee under residual value guarantees;

• The exercise price of purchase options, if the lessee is reasonably certain to exercise the options; and

• Payments of penalties for terminating the lease if the lease term reflects the exercise of an option to terminate the lease.

The lease liability is presented as a separate line in the consolidated statement of financial position.

The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest

method) and by reducing the carrying amount to reflect the lease payments made.

The Group remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:

• The lease term has changed or there is a significant event or change in circumstances resulting in a change in the assessment of exercise of a

purchase option, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate.

• The lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed residual value, in which cases

the lease liability is remeasured by discounting the revised lease payments using an unchanged discount rate (unless the lease payments change is

due to a change in a floating interest rate, in which case a revised discount rate is used).

• A lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is remeasured based

on the lease term of the modified lease by discounting the revised lease payments using a revised discount rate at the effective date of

the modification.

There were no such remeasurements made during the year (2023: nil).

The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement

day, less any lease incentives received and any initial direct costs. They are subsequently measured at cost less accumulated depreciation and

impairment losses.

Whenever the Group incurs an obligation for costs to dismantle and remove a leased asset, restore the site on which it is located or restore

the underlying asset to the condition required by the terms and conditions of the lease, a provision is recognised and measured under IAS 37.

To the extent that the costs relate to a right-of-use asset, the costs are included in the related right-of-use asset, unless those costs are incurred

to produce inventories.

106

Gulf Marine Services PLC Annual Report 2024

For the year ended 31 December 2024

Leases continued

The Group as lessee continued

Right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying asset. If a lease transfers ownership of the

underlying asset or the cost of the right-of-use asset reflects that the Group expects to exercise a purchase option, the related right-of-use asset is

depreciated over the useful life of the underlying asset. The depreciation starts at the commencement date of the lease.

The right-of-use assets are presented as a separate line in the consolidated statement of financial position. The Group applies IAS 36 to determine

whether a right-of-use asset is impaired and accounts for any identified impairment loss as described in the ‘Property and Equipment’ policy.

As a practical expedient, IFRS 16 permits a lessee not to separate non-lease components, and instead account for any lease and associated non-

lease components as a single arrangement. The Group has not used this practical expedient. For a contract that contains a lease component and one

or more additional lease or non-lease components, the Group allocates the consideration in the contract to each lease component on the basis of the

relative stand-alone price of the lease component and the aggregate stand-alone price of the non-lease components.

The Group as a lessor

At inception or on modification of a contract that contains a lease component, the Group allocates the consideration in the contract to each lease

component on the basis of their relative stand- alone prices.

When the Group acts as a lessor, it determines at lease inception whether each lease is a finance lease or an operating lease.

To classify each lease, the Group makes an overall assessment of whether the lease transfers substantially all of the risks and rewards incidental to

ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then it is an operating lease. As part of this assessment,

the Group considers certain indicators such as whether the lease is for the major part of the economic life of the asset.

When the Group is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease separately. It assesses the lease

classification of a sub-lease with reference to the right-of-use asset arising from the head lease, not with reference to the underlying asset. If a head

lease is a short-term lease to which the Group applies the exemption described above, then it classifies the sub-lease as an operating lease.

The Group’s contracts with clients contain an underlying lease component separate to the service element. These leases are classified as operating

leases and the income is recognised on a straight line basis over the term of the lease.

The Group applies IFRS 15 to allocate consideration under each component based on its standalone selling price. The standalone selling price of the

lease component is estimated using a market assessment approach by taking the market rate, being the contract day rate and deducting all other

identifiable components, creating a residual amount deemed to be the lease element.

Property and equipment

Property and equipment is stated at cost which includes capitalised borrowing costs less accumulated depreciation and accumulated impairment

losses (if any). The cost of property and equipment is their purchase cost together with any incidental expenses of acquisition. Subsequent

expenditure incurred on vessels is capitalised where the expenditure gives rise to future economic benefits in excess of the originally assessed

standard of performance of the existing assets.

The costs of contractual equipment modifications or upgrades to vessels that are permanent in nature are capitalised and depreciated in accordance

with the Group’s fixed asset capitalisation policy. The costs of moving equipment while not under contract are expensed as incurred.

Depreciation is recognised so as to write-off the cost of property and equipment less their estimated residual values over their useful lives, using the

straight-line method. The estimated residual values of vessels and related equipment are determined taking into consideration the expected scrap

value of the vessel, which is calculated based on the weight and the market rate of steel at the time of asset purchase.

If the price per unit of steel at the balance sheet date varies significantly from that on date of purchase, the residual value is reassessed to reflect

changes in market value.

The estimated useful lives used for this purpose are:

Vessels*	35 years
Vessel spares, fittings and other equipment*	3 – 20 years
Others**	3 – 5 years

* Depreciation of these assets is charged to cost of sales.

** Depreciation of these assets is charged to general and administrative expenses.

Taking into consideration independent professional advice, management considers the principal estimated useful lives of vessels for the purpose

of calculating depreciation to be 35 years from the date of construction of the vessel.

The estimated useful lives, residual values and depreciation method are reviewed at each year end, with the effect of any changes in estimate

accounted for on a prospective basis.

The gain or loss arising on the disposal or retirement of an item of property and equipment is determined as the difference between the sale proceeds

and the carrying amount of the asset and is recognised within administrative expenses in the profit or loss. The depreciation charge for the year is

allocated between cost of sales and administrative expenses, depending on the usage of the respective assets.

107

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Gulf Marine Services PLC Annual Report 2024

Notes to the consolidated financial statements continued

3 Material accounting policies continued

Dry docking

Dry docking costs are costs of repairs and maintenance incurred on a vessel to ensure compliance with applicable regulations and to maintain

certification for vessels. The cost incurred for periodical dry docking or major overhauls of the vessels are identified as a separate inherent component

of the vessels. These costs depreciate on a straight-line basis over the period to the next anticipated dry docking being approximately 30 months.

Costs incurred outside of the dry docking period which relate to major works, overhaul / services, that would normally be carried out during the dry

docking, as well as surveys, inspections and third party maintenance (which are part of the dry docking) of the vessels are initially treated as capital

work-in-progress (“CWIP”) of the specific vessel. Following the transfer of these balances to property and equipment, depreciation commences at the

date of completion of the survey. Costs associated with equipment failure are recognised in the profit and loss as incurred.

Capital work-in-progress

Properties and vessels under the course of construction, are carried at cost, less any recognised impairment loss. Cost includes professional fees

and, for qualifying assets, borrowing costs capitalised in accordance with the Group’s accounting policy. Depreciation of these assets, on the same

basis as other property assets, commences when the assets are ready for their intended use.

Impairment of tangible assets

At the end of each reporting period, the Group reviews the carrying amounts of its tangible assets to determine whether there is any indication that

those assets have suffered an impairment loss or impairment reversal.

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). When

it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating

unit to which the asset belongs. The Group also has separately identifiable equipment (corporate assets) which are typically interchangeable across

vessels and where costs can be measured reliably. When a reasonable and consistent basis of allocation can be identified, corporate assets are also

allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and

consistent allocation basis can be identified.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are

discounted to their present value using a pre-tax discount rate. The discount rate reflects risk free rates of returns as well as specific adjustments

for country risk in the countries the Group operates in, adjusted for a Company specific risk premium, to determine an appropriate discount rate.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset

(or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss.

When an impairment loss subsequently reverses, the carrying amount of the asset (or a cash-generating unit) 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 (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in

profit or loss.

Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take

a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are

substantially ready for their intended use or sale.

All other borrowing costs are recognised in profit or loss in the period in which they are incurred.

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 the Group will

be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting

period, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to

settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material).

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognised

as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.

108

Gulf Marine Services PLC Annual Report 2024

For the year ended 31 December 2024

Employees’ end of service benefits

In accordance with Labour Laws of some of the countries in which we operate, the Group is required to provide for End of Service Benefits for certain

employees.

The only obligation of the Group with respect to end of service benefits is to make the specified lump-sum payments to employees, which become

payable when they leave the Group for reasons other than gross misconduct but may be paid earlier at the discretion of the Group. The amount

payable is calculated as a multiple of a pre-defined fraction of basic salary based on the number of full years of service.

To meet the requirement of the laws of the countries in which we operate, a provision is made for the full amount of end of service benefits payable

to qualifying employees up to the end of the reporting period. The provision relating to end of service benefits is disclosed as a non-current liability.

The provision has not been subject to a full actuarial valuation or discounted as the impact would not be material.

The actual payment is typically made in the year of cessation of employment of a qualifying employee but may be pre-paid. If the payment is made

in the year of cessation of employment, the payment for end of service benefit will be made as a lump-sum along with the full and final settlement of

liability to the employee.

The total expense recognised in profit or loss of US$ 0.5 million (2023: US$ 0.7 million) (Note 19) represents the current period cost for the end of

service benefit provision made for employees in accordance with the labour laws of companies where we operate.

Foreign currencies

The Group’s consolidated financial statements are presented in US Dollars (US$), which is also the functional currency of the Company. All amounts

have been rounded to the nearest thousand, unless otherwise stated. For each entity, the Group determines the functional currency and items

included in the financial statements of each entity are measured using that functional currency.

In preparing the financial statements of the individual companies, transactions in currencies other than the entity’s functional currency (foreign

currencies) are recorded at the rates of exchange prevailing at the dates of the transactions.

At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-

monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value

was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

Exchange differences are recognised in profit or loss in the period in which they arise, except for exchange differences on monetary items receivable

from or payable to a foreign operation for which settlement is neither planned nor likely to occur, which form part of the net investment in a foreign

operation, and which are recognised in the foreign currency translation reserve and recognised in profit or loss on disposal of the net investment.

For the purpose of presenting consolidated financial information, the assets and liabilities of the Group’s subsidiaries are expressed in US$ using

exchange rates prevailing at the end of the reporting period. Income and expense items are translated at the average exchange rates for the period,

unless exchange rates fluctuated significantly during that period, in which case the exchange rates at the dates of the transactions are used. Exchange

differences arising, if any, are recognised in other comprehensive income and accumulated in equity (attributed to non-controlling interests as

appropriate).

On the disposal of a foreign operation (i.e. a disposal of the Group’s entire interest in a foreign operation, or a disposal involving loss of control

over a subsidiary that includes a foreign operation, loss of joint control over a jointly controlled entity that includes a foreign operation, or loss of

significant influence over an associate that includes a foreign operation), all of the accumulated exchange differences in respect of that operation

attributable to the Group are reclassified to profit or loss. Any exchange differences that have previously been attributed to non-controlling interests are

derecognised, but they are not reclassified to profit or loss.

Adjusting items

Adjusting items are significant items of income or expense in cost of sales, general and administrative expenses, and net finance costs, which

individually or, if of a similar type, in aggregate, are relevant to an understanding of the Group’s underlying financial performance because of their

size, nature or incidence. Adjusting items together with an explanation as to why management consider them appropriate to adjust are disclosed

separately in Note 29. The Group believes that these items are useful to users of the Group’s consolidated financial statements in helping them to

understand the underlying business performance through alternate performance measures that are used to derive the Group’s principal non-GAAP

measures of adjusted Earnings Before Interest, Taxes, Depreciation, and Amortisation (“EBITDA”), adjusted EBITDA margin, adjusted gross profit/(loss),

adjusted operating profit/(loss), adjusted net profit/(loss) and adjusted diluted earnings/(loss) per share, all of which are before the impact of adjusting

items and which are reconciled from operating profit/(loss), profit/(loss) before taxation and diluted earnings/(loss) per share. Adjusting items include

but are not limited to reversal of impairment credits/(impairment charges), restructuring costs, exceptional legal & tax costs, and non-operational

finance-related costs.

109

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Gulf Marine Services PLC Annual Report 2024

Notes to the consolidated financial statements continued

3 Material accounting policies continued

Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for each subsidiary based on the jurisdiction in which it operates. Current tax comprises the

expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of

previous years. The amount of current tax payable or receivable is the best estimate of the tax amount expected to be paid or received that reflects

uncertainty related to income taxes, if any. It is measured using tax rates enacted or substantively enacted at the reporting date.

Deferred tax

Deferred tax is recognised on temporary differences between the carrying amounts of the assets and liabilities in the consolidated financial statements

and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary

differences.

Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be

available against which those deductible temporary differences can be utilised. Such deferred tax 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 at the

time of the transaction (i) affects neither accounting nor taxable profit or loss and (ii) does not give rise to equal taxable and deductible temporary

differences.

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 amount of deferred tax assets is reviewed at each reporting 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 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 based on tax laws

and rates that have been enacted or substantively enacted at the reporting date. Deferred tax is charged or credited in the profit or loss, except when it

relates to items charged or credited in other comprehensive income, in which case the deferred tax is also dealt with in other comprehensive income.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set-off current tax assets against current tax liabilities and when

they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.

Share-based payments

Long-term incentive plans

The fair value of an equity instrument is determined at the grant date based on market prices if available, taking into account the terms and conditions

upon which those equity instruments were granted. If market prices are not available for share awards, the fair value of the equity instruments

is estimated using a valuation technique to derive an estimate of what the price of those equity instruments would have been at the relevant

measurement date in an arm’s length transaction between knowledgeable, willing parties.

Equity-settled share-based payments to employees are measured at the fair value of the instruments, using a binomial model together with Monte-

Carlo simulations as at the grant date, and is expensed over the vesting period. The value of the expense is dependent upon certain key assumptions

including the expected future volatility of the Group’s share price at the date of grant. The fair value measurement reflects all market based vesting

conditions. The impact of the revision of the original estimates, if any, is recognised in profit or loss such that the cumulative expense reflects the

revised estimate, with a corresponding adjustment to equity reserves.

Financial assets

Financial assets including derivatives are classified, at initial recognition, and subsequently measured at amortised cost, fair value through other

comprehensive income, or fair value through profit or loss.

The Group has the following financial assets: cash and cash equivalents and trade and other receivables (excluding prepayments and advances

to suppliers). These financial assets are classified at amortised cost.

The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow characteristics and the Group’s

business model for managing them. With the exception of trade receivables that do not contain a significant financing component or for which the

Group has applied the practical expedient, the Group initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair

value through profit or loss, transaction costs.

Trade receivables that do not contain a significant financing component or for which the Group has applied the practical expedient are measured

at the transaction price determined under IFRS 15.

In order for a financial asset to be classified and measured at amortised cost or fair value through other comprehensive income (“OCI”), it needs to give

rise to cash flows that are solely payments of principal and interest (“SPPI”) on the principal amount outstanding. This assessment is referred to as the

SPPI test and is performed at an instrument level.

110

Gulf Marine Services PLC Annual Report 2024

For the year ended 31 December 2024

Financial assets continued

The Group’s business model for managing financial assets refers to how it manages its financial assets in order to generate cash flows. The business

model determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both.

Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the marketplace

(regular way trades) are recognised on the trade date, i.e. the date that the Group commits to purchase or sell the asset.

The Group measures financial assets at amortised cost if both of the following conditions are met:

• the financial asset is held within a business model with the objective to hold financial assets in order to collect contractual cash flows; and

• the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the

principal amount outstanding.

As the business model of the Group is to hold financial assets to collect contractual cash flows, they are held at amortised cost.

Financial assets at amortised cost are subsequently measured using the effective interest rate (“EIR”) method and are subject to impairment.

Gains and losses are recognised in profit or loss when the asset is derecognised, modified or impaired.

Cash and cash equivalents

Cash and cash equivalents include balances held with banks with original maturities of three months or less and cash on hand.

Trade receivables

Trade receivables represent the Group’s right to an amount of consideration that is unconditional (i.e. only the passage of time is required before the

payment of the consideration is due).

Impairment of financial assets

The Group recognises an allowance for expected credit losses (“ECLs”) for all financial assets that are measured at amortised cost or debt instruments

measured at fair value through other comprehensive income. ECLs are based on the difference between the contractual cash flows due in accordance

with the contract and all the cash flows that the Group expects to receive, discounted at the EIR.

For trade and other receivables and accrued revenue, the Group applies a simplified approach.

For trade receivables and accrued revenue, the Group recognises loss allowances based on lifetime ECLs at each reporting date.

The Group has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the

debtors and the economic environment.

The provision rates are grouped together based on days due for various customer segments that have similar loss patterns (geography, customer type

and rating and coverage by letters of credit and other forms of credit insurance).

The Group had an expected credit loss provision of US$ 4.2 million as at 31 December 2024 (31 December 2023: US$ 2.2 million), refer to Note 9 for

further details.

The Group considers a financial asset to move into stage 3 and be in default when there is objective evidence that, as a result of one or more events

that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been affected.

Evidence that a financial asset is credit-impaired includes the following observable data:

• significant financial difficulty of the issuer or counterparty; or

• default or delinquency in interest or principal payments; or

• it becoming probable that the borrower will enter bankruptcy or financial reorganisation.

A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows.

Derecognition of financial assets

The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial

asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Group neither transfers nor retains substantially

all the risks and rewards of ownership and continues to control the transferred asset, the Group recognises its retained interest in the asset and an

associated liability for amounts it may have to pay. If the Group retains substantially all the risks and rewards of ownership of a transferred financial

asset, the Group continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.

111

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Gulf Marine Services PLC Annual Report 2024

Notes to the consolidated financial statements continued

3 Material accounting policies continued

Financial liabilities and equity instruments

Classification as debt or equity

Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements

and the definitions of a financial liability and an equity instrument.

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments

issued by the Group are recorded at the proceeds received, net of direct issue costs.

Financial liabilities

The Group’s financial liabilities include trade and other payables, derivatives, lease liabilities and bank borrowings. All financial liabilities are classified

at amortised cost unless they can be designated as at Fair Value Through Profit or Loss (“FVTPL”).

Derivatives that are not designated and effective as hedging instruments are classified as financial liabilities and are held at FVTPL. Derivatives held

at FVTPL are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to their fair value at the

end of each reporting period with the resulting gain or loss recognised in profit or loss immediately.

Trade and other payables, bank borrowings, lease liabilities, amounts due to related parties and contract liabilities are classified at amortised cost and

are initially measured at fair value, net of transaction costs. They are subsequently measured at amortised cost using the EIR method, with interest

expense recognised based on its effective interest rate, except for short-term payables or when the recognition of interest would be immaterial.

The EIR method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The

EIR is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability, or, where appropriate, a shorter

period.

The Group’s loan facility is a floating rate financial liability. The Group treats the loan as a floating rate financial liability and performs periodic

estimations to reflect movements in market interest rates and alters the effective interest rate accordingly.

Derecognition of financial liabilities

The Group derecognises financial liabilities when, and only when, the Group’s obligations are discharged, cancelled or they expire. The difference

between the carrying amount of the financial liability derecognised and the consideration paid and payable is recognised in the consolidated statement

of profit or loss.

When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are

substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability.

The difference between the carrying amount of the financial liability derecognised and the consideration paid is recognised in the consolidated

statement of profit or loss and other comprehensive income.

When an existing financial liability is replaced by another on terms which are not substantially modified, the exchange is deemed to be a continuation

of the existing liability and the financial liability is not derecognised.

Derivative financial instruments

The Group uses derivative financial instruments, such as interest rate swaps, to hedge its interest rate risks. Such derivative financial instruments are

initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently remeasured at fair value. Derivatives are

carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative.

For the purpose of hedge accounting, hedges are classified as cash flow hedges when hedging the exposure to variability in cash flows that is either

attributable to a particular risk associated with a recognised asset or liability or a highly probable forecast transaction or the foreign currency risk in an

unrecognised firm commitment.

At the inception of a hedge relationship, the Group formally designates and documents the hedge relationship to which it wishes to apply hedge

accounting and the risk management objective and strategy for undertaking the hedge.

The documentation includes identification of the hedging instrument, the hedged item, the nature of the risk being hedged and how the Group will

assess whether the hedging relationship meets the hedge effectiveness requirements (including the analysis of sources of hedge ineffectiveness and

how the hedge ratio is determined).

A hedging relationship qualifies for hedge accounting if it meets all of the following effectiveness requirements:

• there is ‘an economic relationship’ between the hedged item and the hedging instrument;

• the effect of credit risk does not ‘dominate the value changes’ that result from that economic relationship;

• the hedge ratio of the hedging relationship is the same as that resulting from the quantity of the hedged item that the Group actually hedges and the

quantity of the hedging instrument that the Group actually uses to hedge that quantity of hedged item.

Hedges that meet all the qualifying criteria for hedge accounting are accounted for as described below:

112

Gulf Marine Services PLC Annual Report 2024

For the year ended 31 December 2024

Financial liabilities and equity instruments continued

Cash flow hedges

The effective portion of the gain or loss on the hedging instrument is recognised in other comprehensive income (“OCI”) and accumulated in the cash

flow hedge reserve, while any ineffective portion is recognised immediately in the consolidated statement of profit or loss and other comprehensive

income. The cash flow hedge reserve is adjusted to the lower of the cumulative gain or loss on the hedging instrument and the cumulative change in

fair value of the hedged item.

The ineffective portion relating for cash flow hedges are recognised in finance expenses in the profit or loss.

The Group designates interest rate swaps (“IRS”) as hedging instruments. The Group designates the change in fair value of the entire derivative

contracts in its cash flow hedge relationships.

For cash flow hedges, the amount accumulated in OCI is reclassified to profit or loss as a reclassification adjustment in the same period or periods

during which the hedged cash flows affect profit or loss. The amount remaining in the cash flow hedge reserve is reclassified to profit or loss as

reclassification adjustments in the same period or periods during which the hedged expected future cash flows affected profit or loss. The Group

reclassify amounts remaining in the cash flow hedge reserve on a time apportionments basis.

If cash flow hedge accounting is discontinued, the amount that has been accumulated in OCI must remain in accumulated OCI if the hedged future

cash flows are still expected to occur. Otherwise, the amount will be immediately reclassified to profit or loss as a reclassification adjustment. After

discontinuation, once the hedged cash flow occurs, any amount remaining in accumulated OCI must be accounted for depending on the nature

of the underlying transaction as described above.

Warrants

The Group measures the warrants issued at fair value with changes in fair value recognised in the profit or loss.

4 Key sources of estimation uncertainty and critical accounting judgements

In the application of the Group’s accounting policies, which are described in Note 3, the Directors are required to make judgements, estimates and

assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated

assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

In applying the Group’s accounting policies during the year, there was one critical accounting judgement relating to a subsidiary of the Group that

received a tax assessment from the Saudi tax authorities (ZATCA) for an amount related to the transfer pricing of our inter-group bareboat agreement.

While the Directors, guided by the Group’s tax advisors, believe that the Group has complied with the relevant tax legislation and a zero balance is

due, an appropriate provision for this case has been recognised for a potential outcome in an attempt to reach an amicable solution. Further details of

the tax assessment are disclosed in Note 8.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which

the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and

future periods.

The key assumptions concerning the future, and other key sources of estimation uncertainty that may have a significant risk of causing a material

adjustment to the carrying value of assets and liabilities within the next financial year are outlined below:

Impairment and reversal of previous impairment of property and equipment

The Group obtained an independent valuation of its vessels as at 31 December 2024 for the purpose of its banking covenant compliance

requirements. However, consistent with prior years, management does not consider these valuations to represent a reliable estimate of the fair value

for the purpose of assessing the recoverable value of the Group’s vessels, noting that there have been limited, if any, “willing buyer and willing seller”

transactions of similar vessels in the current offshore vessel market on which such values could reliably be based. Due to these inherent limitations,

management concluded that recoverable amount should be based on value in use.

Management carried out an impairment assessment of property and equipment for year ended 31 December 2024. Following this assessment,

management determined that the recoverable amounts of the cash generating units to which items of property and equipment were allocated, being

vessels and related assets, were most sensitive to future day rates, vessel utilisation and discount rate. It is reasonably possible that changes to these

assumptions within the next financial year could require a material adjustment of the carrying amount of the Group’s vessels.

Management does not expect an assumption change of more than 10% in aggregate for the entire fleet within the next financial year, and accordingly,

believes that a 10% sensitivity to day rates and utilisation is appropriate. Further, for discount rate, management does not expect an assumption

change of more than 1% and accordingly, believes that a 1% sensitivity to discount rate is appropriate.

As at 31 December 2024, the total carrying amount of the property and equipment, drydocking expenditure, and right of use assets subject to

estimation uncertainty was US$ 608.3 million (2023: US$ 621.0 million). Refer to Note 5 for further details including sensitivity analysis.

113

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Notes to the consolidated financial statements continued

4 Key sources of estimation uncertainty and critical accounting judgements

continued

Impairment of financial assets

The Group recognises an allowance for expected credit losses (“ECLs”) for all financial assets that are measured at amortised cost or debt instruments

measured at fair value through other comprehensive income. ECLs are based on the difference between the contractual cash flows due in accordance

with the contract and all the cash flows that the Group expects to receive, discounted at the EIR.

Management carried out an impairment assessment of trade receivables and contract assets for the year ended 31 December 2024. Following this

assessment, management considered the following criteria for impairment:

Evidence that a financial asset is credit impaired includes the following observable data:

• significant financial difficulty of the issuer or counterparty; or

• default or delinquency in interest or principal payments; or

• it becoming probable that the borrower will enter bankruptcy or financial reorganisation.

A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows.

Management concluded that the Group had an expected credit loss provision expense of US$ 2.0 million (2023: US$ 0.2 million), refer to Notes 9

for further details.

Fair valuation of Warrants

Management commissioned an independent valuation expert to measure the fair value of the warrants, which was determined using Monte Carlo

option-pricing model. Inputs used in conducting the Monte-Carlo simulation are the impact of movements in both the USD/GBP exchange rate, and

the price per ordinary share over the life of the warrants. The simulation considers sensitivity by building models of possible results by substituting a

range of values. The increase in fair value of the warrants is primarily due to increase in share price and its volatility. A 10% change in share price will

increase or decrease the valuation by US$ 1.5 million. A 10% change in share price volatility will increase or decrease the valuation by US$ 7k.

5 Property and equipment

		Capital	Vessel spares,
		work-in-	fitting and other
	Vessels	progress	equipment	Others	Total
	US$’000	US$’000	US$’000	US$’000	US$’000
Cost
At 1 January 2023	898,200	6,766	60,234	2,250	967, 4 5 0
Additions	−	4,326	−	−	4,326
Transfers	−	(523)	523	−	−
At 31 December 2023	898,200	10,569	60,757	2,250	971,776
Additions	−	2,788	−	−	2,788
Transfers	−	(3,502)	3,502	−	−
At 31 December 2024	898,200	9,855	64,259	2,250	974,564

		Capital	Vessel spares,
		work-in-	fitting and other
	Vessels	progress	equipment	Others	Total
	US$’000	US$’000	US$’000	US$’000	US$’000
Accumulated depreciation and impairment
At 1 January 2023	348,515	2,845	21,219	1,916	374,495
Depreciation expense (Note 34)	20,900	−	3,252	145	24,297
Impairment charge	3,565	−	−	−	3,565
Reversal of impairment	(36,993)	−	−	−	(36,993)
At 31 December 2023	335,987	2,845	24,471	2,061	365,364
Depreciation expense (Note 34)	22,379	−	3,673	142	26,194
Impairment charge	9,394	−	−	−	9,394
Reversal of impairment	(18,621)	−	−	−	(18,621)
At 31 December 2024	349,139	2,845	28,144	2,203	382,331
Carrying amount
At 31 December 2024	549,061	7,010	36,115	47	592,233
At 31 December 2023	562,213	7,724	36,286	189	606,412

114

Gulf Marine Services PLC Annual Report 2024

For the year ended 31 December 2024

Depreciation amounting to US$ 26.2 million (2023: US$ 24.3 million) has been charged to the statement of profit or loss and other comprehensive

income, of which US$ 26.1 million (2023: US$ 24.2 million) was allocated to cost of sales (Note 29). The remaining balance of the depreciation charge

is included in general and administrative expenses (Note 29).

Vessels with a total net book value of US$ 549.1 million (2023: US$ 562.2 million), have been mortgaged as security for the loans extended by the

Group’s banking syndicate (Note 21).

Impairment

In accordance with the requirements of IAS 36 – Impairment of Assets, the Group assesses at each reporting period if there is any indication an

additional impairment would need to be recognised for its vessels and related assets, or if the impairment loss recognised in prior periods no longer

exists or had decreased in quantum. Such indicators can be from either internal or external sources. In circumstances in which any indicators of

impairment or impairment reversal are identified, the Group performs a formal impairment assessment to evaluate the carrying amounts of the Group’s

vessels and their related assets, by comparing against the recoverable amount to identify any impairments or reversals. The recoverable amount is the

higher of the vessels and related assets’ fair value less costs to sell and value in use.

Based on the impairment assessment reviews conducted in previous years, management recognised impairment losses of US$ 59.1 million and

US$ 87.2 million in the years 2019 and 2020, respectively. As a result of improvements in day rates, utilisation, market outlook and reduction of

discount rate, historical impairment losses of US$ 14.9 million, US$ 21.0 million and US$ 37.0 million on various vessels were subsequently reversed

in financial years 2021, 2022 and 2023, respectively. During the financial years 2022 and 2023, additional impairment losses of US$ 13.2 million and

US$ 3.6 million were also recognised on certain vessels, resulting in overall net impairment reversals of US$ 7.8 million and US$ 33.4 million for those

years, respectively.

As at 31 December 2024, and in line with IAS 36 requirements, management concluded that a formal impairment assessment was required. Factors

considered by management included favourable indicators, including an improvement in utilisation, day rates, an increase in market values of vessels

and decrease in interest rate, and unfavourable indicators including the market capitalisation of the Group remaining below the book value of the

Group’s equity.

The Group obtained an independent valuation of its vessels as at 31 December 2024 for the purpose of its banking covenant compliance

requirements. However, consistent with prior years, management does not consider these valuations to represent a reliable estimate of the fair value

for the purpose of assessing the recoverable value of the Group’s vessels, noting that there have been limited, if any, “willing buyer and willing seller”

transactions of similar vessels in the current offshore vessel market on which such values could reliably be based. Due to these inherent limitations,

management has again concluded that recoverable amount should be based on value in use.

The impairment review was performed for each cash-generating unit, by identifying the value in use of each vessel and of spares fittings, capitalised

dry-docking expenditure, capital work in progress and right-of-use assets relating to operating equipment used on the fleet, based on management’s

projections of future utilisation, day rates and associated cash flows.

The projection of cash flows related to vessels and their related assets is complex and requires the use of a number of estimates, the primary ones

being future day rates, vessel utilisation and discount rate.

In estimating the value in use, management estimated the future cash inflows and outflows to be derived from continuing use of each vessel and

its related assets for the next four years based on its latest forecasts. The terminal value cash flows (i.e., those beyond the four-year period) were

estimated based on historic mid-cycle day rates and utilisation levels calculated by looking back as far as 2014, when the market was at the top of

the cycle through to 2022 levels as the industry starts to emerge out of the bottom of the cycle, adjusted for anomalies. The terminal value cash flow

assumptions are applied until the end of the estimated useful economic life of each vessel, which is consistent with the prior year. Such long-term

forecasts also take account of the outlook for each vessel having regard to their specifications relative to expected customer requirements and about

broader long-term trends including climate change.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate. The discount rate of

11.98% (2023: 12.93%) is computed on the basis of the Group’s weighted average cost of capital. The cost of equity incorporated in the computation

of the discount rate is based on the industry sector average betas, risk-free rate of return as well as Group specific risk premium reflecting any

additional risk factors relevant to the Group. The cost of debt is based on the Group’s actual cost of debt and the effective cost of debt reported by the

peer group as at 31 December 2024. The weighted average is computed based on the industry capital structure.

The impairment review led to the recognition of a net impairment reversal of US$ 9.2 million (2023: US$ 33.43 million). The key reason for the reversal

is further improvement in general market conditions compared to prior year and a decrease in discount rate from 12.93% to 11.98% predominantly due

to reduction in the cost of debt of the Group.

In accordance with the Companies Act 2006, section 841(4), the following has been considered:

a) the Directors have considered the value of some/all of the fixed assets of the Group without revaluing them; and

b) the Directors are satisfied that the aggregate value of those assets are not less than the aggregate amount at which they were stated in the

Group’s accounts.

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Notes to the consolidated financial statements continued

5 Property and equipment continued

Impairment continued

Details of the impairment reversal by cash-generating unit, along with the associated recoverable amount reflecting its value in use, are provided

below:

	Impairment		Impairment
	reversal/	Recoverable	reversal/	Recoverable
	(Impairment)	amount	(Impairment)	amount
	2024	2024	2023	2023
Cash Generating Unit (CGUs)	US$’000	US$’000	US$’000	US$’000
E-Class -1	–	89,296	12,414	94,441
E-Class -2	404	59,257	(3,565)	62,481
E-Class -3	–	8 8,128	907	79,985
E-Class -4	14,099	98,435	6,584	88,582
E-Class	14,503	335,116	16,340	325,489
S-Class -1	–	61,870	4,462	61,092
S-Class -2	–	64,196	–	67,067
S-Class -3	–	65,065	–	68,787
S-Class	–	191,131	4,462	196,946
K- Class -1	(1,168)	14,750	1,773	16,264
K-Class -2	3,287	18,859	1,102	17,0 3 3
K-Class -3	(4,402)	14,018	2,025	18,353
K-Class -4	(1,168)	14,992	4,464	16,268
K-Class -5	(2,656)	18,361	1,321	22,047
K-Class -6	831	50,190	1,941	51,075
K-Class	(5,276)	131,170	12,626	141,040
Total	9,227	657,417	33,428	663,475

The table below compares the long-term day rate and utilisation assumptions used to project future cash flows from 2029 onward (the terminal value)

with the contracted rates secured for 2025:

	Day rate	Utilisation
	change % on	change % on
Vessels class	2025 levels	2025 levels
E-Class CGUs	21%	-12%
S-Class CGUs	-7%	-1%
K-Class CGUs	-9%	-24%

The below table compares the long-term day rate and utilisation assumptions used to forecast future cash flows during the year ended 31 December

2024 against the Group’s long-term assumptions in the impairment assessment performed as at 31 December 2023:

	Day rate	Utilisation
	change % on	change % on
Vessels class	2024 levels	2024 levels
E-Class CGUs	-0.5%	1.7%
S-Class CGUs	0.0%	0.0%
K-Class CGUs	0.0%	-4.7%

The impairment reversal recognised on E-Class vessels reflect further increases in short-term assumptions on day rates and utilisation relative to the

Group’s previous forecasts. The forecast of 21% increase in day rates relative to 2025 reflects improving market conditions coupled with a limited

supply of vessels with the capabilities of the E-Class such as their large crane capacities and superior leg length. As these vessels are the most

capable of all the vessels in the fleet it is anticipated they will be able to demand higher day rates and utilisation going forward.

The net impairment recognised on the Group’s K-Class vessels primarily reflects the changes short-term forecast day rates and utilisation. When

reviewing the longer-term assumptions, the Group has assumed a lower day rate and utilisation for terminal values to reflect higher competition

in the market for smaller vessels.

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For the year ended 31 December 2024

Key assumption sensitivities

The Group has conducted an analysis of the sensitivity of the impairment test to reasonable possible changes in the key assumptions (long-term day

rates, utilisation and pre-tax discount rates) used to determine the recoverable amount for each vessel as follows:

Day rates

		Day rates higher by 10%		Day rates lower by 10%
	Impact	Number of	Impact	Number of
	(in US$ million)	vessels impacted	(in US$ million)	vessels impacted
	(Impairment)/		(Impairment)/
	impairment		impairment
Vessels class	reversal of*		reversal of*
E-Class CGUs	28.4	2.0	(11.8)	2.0
S-Class CGUs	–	–	(5.1)	1.0
K-Class CGUs	11.7	5.0	(33.6)	6.0
Total fleet	40.1	7.0	(50.5)	9.0

* This reversal of impairment/(impairment charge) is calculated on carrying values before the adjustment for impairment reversals in 2024.

There would be incremental impairment reversal of US$ 30.9 million and impairment charge of US$ 59.7 million for the 10% increase and decrease in

day rates assumption respectively. The additional effect of impairment charge on corporate assets would be US$ 2.6 million, only under the reduced

day rates sensitivity.

The total recoverable amounts of the Group’s vessels as at 31 December 2024 would have been US$ 768.8 million under the increased day rates

sensitivity and US$ 546.0 million for the reduced day rate sensitivity. With a 7% reduction in day rates, the recoverable amount would equal the

carrying value of the vessels.

Utilisation

		Utilisation higher by 10%		Utilisation lower by 10%
	Impact	Number of	Impact	Number of
	(in US$ million)	vessels impacted	(in US$ million)	vessels impacted
	(Impairment)/		(Impairment)/
	impairment		impairment
Vessels class	reversal of*		reversal of*
E-Class CGUs	24.9	2.0	(11.8)	2.0
S-Class CGUs	–	–	(5.1)	1.0
K-Class CGUs	8.5	5.0	(33.6)	6.0
Total fleet	33.4	7.0	(50.5)	9.0

* This reversal of impairment/(impairment charge) is calculated on carrying values before the adjustment for impairment reversals in 2024.

There would be incremental impairment reversal of US$ 24.3 million and impairment charge of US$ 59.7 million for the 10% increase and decrease in

utilisation assumption respectively. The additional effect of impairment charge on corporate assets would be US$ 2.6 million, only under the reduced

utilisation sensitivity.

The total recoverable amounts of the Group's vessels as at 31 December 2024 would have been US$ 736.3 million under the increased utilisation

sensitivity and US$ 546.0 million for the reduced utilisation sensitivity. With a 7% reduction in utilisation, the recoverable amount would equal the

carrying value of the vessels.

Management would not expect an assumption change of more than 10% across all vessels within the next financial year, and accordingly, believes

that a 10% sensitivity to day rates and utilisation is appropriate.

Discount rate

An additional sensitivity analysis was conducted by adjusting the pre-tax discount rate upwards and downwards by 100 basis points (1%). Given that

the change in the discount rate from the previous year is less than 100 basis points, such sensitivity was deemed appropriate for this analysis.

		Discount rate higher by 1%		Discount rate lower by 1%
	Impact	Number of	Impact	Number of
	(in US$ million)	vessels impacted	(in US$ million)	vessels impacted
	(Impairment)/		(Impairment)/
	impairment		impairment
Vessels class	reversal of*		reversal of*
E-Class CGUs	3.9	2.0	20.1	2.0
S-Class CGUs	–	–	–	–
K-Class CGUs	(11.4)	6.0	(2.0)	5.0
Total fleet	(7.5)	8.0	18.1	7.0

* This (impairment charge)/impairment reversal is calculated on carrying values before the adjustment for impairment reversals in 2024.

There would be incremental impairment charge of US$ 16.8 million and impairment reversal of US$ 8.9 million for the 10% increase and decrease in

pre-tax discount rate assumption respectively.

The total recoverable amounts of the vessels as at 31 December 2024 would have been US$ 701.8 million under the reduced discount rate sensitivity

and US$ 617.9 million for the increased discount rate sensitivity.

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Notes to the consolidated financial statements continued

6 Dry docking expenditure

The movement in dry docking expenditure is summarised as follows:

	2024	2023
	US$’000	US$’000
At 1 January	11,204	8,931
Expenditure incurred during the year	5,987	6,960
Amortised during the year (Note 34)	(5,324)	(4,687)
At 31 December	11,867	11,204

7 Right-of-use assets

			Communications	Operating
	Buildings		equipment	equipment		Total
	US$’000		US$’000	US$’000		US$’000
Cost
At 1 January 2023	2,448		251	10,496		13,195
Additions	519		894	1,818		3,231
Derecognition of fully depreciated assets	–		–	(567)		(567)
At 31 December 2023	2,967	1,14	5	11,747		15,859
Additions	240		1,233	4,046		5,519
Derecognition of fully depreciated assets	(2,020)		–	(10,885)		(12,905)
At 31 December 2024	1,187		2,378	4,908		8,473
Accumulated depreciation
At 1 January 2023	1,867		251	7,70	6	9,824
Depreciation for the year	574		106		2,508	3,188
Derecognition of fully depreciated assets	–		–		(500)	(500)
At 31 December 2023	2,441		357		9,714	12,512
Depreciation for the year	475		721		3,445	4,641
Derecognition of fully depreciated assets	(2,020)		–		(10,885)	(12,905)
At 31 December 2024	896		1,078		2,274	4,248
Carrying amount
At 31 December 2024	291		1,300		2,634	4,225
At 31 December 2023	526		788		2,033	3,347

The consolidated statement of profit or loss and other comprehensive income includes the following amounts relating to leases.

	2024	2023
	US$’000	US$’000
Depreciation of right of use assets (Note 34)	4,641	3,188
Expense relating to short term leases or leases of low value assets (Note 34)	260	228
Lease charges included in operating activities	4,901	3,416
Interest on lease liabilities (Note 33)	461	245
Lease charges included in profit before tax	5,362	3,661

The total cash outflow for leases amounted to US$ 5.2 million for the year ended 31 December 2024 (2023: US$ 3.8 million).

118

Gulf Marine Services PLC Annual Report 2024

For the year ended 31 December 2024

8 Taxation charge for the year

Tax is calculated at the rates prevailing in the respective jurisdictions in which the Group operates. The overall effective rate is the aggregate of taxes

paid in jurisdictions where income is subject to tax (being principally Qatar, the United Kingdom, Saudi Arabia and United Arab Emirates), divided by

the Group’s profit.

	2024	2023
	US$’000	US$’000
Profit from operations before tax	43,181	44,930
Tax at the UK corporation tax rate of 25% (2023: 23.5%)	10,795	10,568
Effect of different tax rates in overseas jurisdictions	(849)	(13,461)
Expense not deductible for tax purposes	7,323	2,413
Overseas taxes	1,698	1,714
Increase in unrecognised deferred tax	1,764	1,113
Prior year tax adjustments	2,236	630
Income not taxable for tax purposes	(18,046)	(115)
Total tax charge	4,921	2,862

During the year, the tax rates on profits were 10% in Qatar (2023: 10%), 25% in the United Kingdom (2023: 23.52%), 20% in Saudi Arabia (2023: 20%)

and 9% in United Arab Emirates (2023: nil) applicable to the portion of profits generated from respective jurisdictions. The Group also incurred 2.5%

Zakat tax (an obligatory tax to donate 2.5% of retained earnings each year) on the portion of profits generated in Saudi Arabia (2023: 2.5%).

The Group incurs 5% withholding tax on remittances from Saudi Arabia (2023: 5%). The withholding tax included in the current tax charge amounted

to US$ 1.9 million (2023: US$ 1.6 million).

The Group expects the overall effective tax rate in the future to vary according to local tax law changes in jurisdictions which incur taxes, as well as any

changes to the share of Group’s profits or losses which arise in tax paying jurisdictions.

At the consolidated statement of financial position date, the Group has unused tax losses of US$ 38.2 million (2023: US$ 30.2 million), arising from UK

operations, available for offset against future profits with an indefinite expiry period. Only one E-class vessel operates in UK with one more expected to

operate from 2026. Based on the projections, there are insufficient future taxable profits to justify the recognition of a deferred tax asset. On this basis

no deferred tax asset has been recognised in the current or prior year. The unrecognised deferred tax asset calculated at the substantively enacted

rate in the UK of 25% amounts to US$ 9.5 million as at 31 December 2024 (2023: US$ 7.6 million).

Any changes to estimates relating to prior periods are presented in the “prior year tax adjustments” above.

Factors affecting current and future tax charges

United Kingdom (UK)

In the Spring Budget 2021, the UK Government announced that from 1 April 2023 the corporation tax rate would increase to 25%. Deferred taxes

at the balance sheet date have been measured using these enacted tax rates as disclosed in these consolidated financial statements.

The future effective tax rate of the Group could be impacted by changes in tax law, primarily increasing corporation tax rates and increasing

withholding taxes applicable to the Group.

United Arab Emirates (UAE)

On 9 December 2022, the UAE Ministry of Finance released Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses

(Corporate Tax Law or the Law) to enact a Federal Corporate Tax regime in the UAE. This Law has become effective for accounting periods beginning

on or after 1 June 2023.

The Group’s UAE operations are subject to a 9% corporation tax rate with effect from 01 January 2024 for income exceeding AED 375,000

(US$ 102,000).

GMS has considered deferred tax implications in the preparation of these consolidated financial statements in respect of property and equipment

and potential timing differences that could give rise to a deferred tax liability. There are currently no UAE tax laws that would impact treatment of

depreciation and amortisation of property, plant and equipment, that would result in such a timing difference. Hence, management has concluded that

no adjustments to these consolidated financial statements are necessary.

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Notes to the consolidated financial statements continued

8 Taxation charge for the year continued

Factors affecting current and future tax charges continued

Kingdom of Saudi Arabia

A subsidiary of the Group received a tax assessment from the Saudi tax authorities (ZATCA) for an amount of US$ 9.2 million (including delay fines)

related to the transfer pricing of inter-group bareboat agreement, for the period from 2017 to 2019. The Group has currently filed an appeal with the Tax

Violations and Disputes Appellate Committee (TVDAC) against the assessment raised by ZATCA. The Directors have considered the claim, including

consideration of third-party tax advice received. Noticing the claim retrospectively applied on the financial year 2017, in respect of a law which was

issued in 2019, which applied a “tested party” assessment different to that supported by the Group tax advisors and using an approach which the

Directors (supported by their tax advisors) consider to be inconsistent with the principles set out in the KSA transfer price guidelines, the Directors

believe that the Group has complied with the relevant tax legislation. Nevertheless, during 2023, to reach an amicable solution, the Group had also

filed a settlement application with the Alternate Dispute Resolution Committee (ADRC), which subsequently requested a settlement offer. The Directors

have submitted a settlement proposal and are currently awaiting a response from the ADRC.

Appropriate provisions for this case have been recorded in the financial statements reflecting the Directors current best estimate of the outflows in line

with IFRIC 23. The Directors will continue to keep this matter under review.

9 Trade receivables

	2024	2023
	US$’000	US$’000
Trade receivables (gross of allowances)	29,807	32,872
Less: Allowance for expected credit losses	(4,232)	(2,226)
Trade receivables	25,575	30,646

Gross trade receivables, amounting to US$ 29.8 million (2023: US$ 32.9 million), have been assigned as security against the loans extended by the

Group’s banking syndicate (Note 21).

Trade receivables disclosed above are measured at amortised cost. Credit periods are granted on a client by client basis. The Group does not hold

any collateral or other credit enhancements over any of its trade receivables nor does it have a legal right of offset against any amounts owed by the

Group to the counterparty. For details of the calculation of expected credit losses, refer to Note 3.

Impairment has been considered for accrued revenue but is not considered material.

The movement in the allowance for ECL and bad and doubtful receivables during the year was as follows:

	2024	2023
	US$’000	US$’000
At 1 January	2,226	2,019
Net charge of expected credit losses (Note 34)	2,006	207
At 31 December	4,232	2,226

Trade receivables are considered past due once they have passed their contracted due date. The net charge of expected credit loss provision during

the year was US$ 2.0 million (2023: US$ 0.2 million).

Management carried out an impairment assessment of trade receivables for the year ended 31 December 2024 and concluded that the Group had

an expected credit loss provision of US$ 4.2 million as at 31 December 2024 (31 December 2023: US$ 2.2 million).

During January 2023, a customer entered administration. The Group had traded with this customer in the past and accordingly, had recorded an

allowance for 50% of the balance receivable in the previous year. During the year, the Group recognised allowance for the remaining 50% of the

balance.

Included in the Group’s trade receivables balance are receivables with a gross amount of US$ 4.4 million (2023: US$ 4.1 million) which are past due

for 30 days or more at the reporting date. At 31 December, the analysis of Trade receivables is as follows:

					Number of days past due
	Current	< 30 days	31-60 days	61-90 days	91-120 days	> 120 days	Total
	US$’000	US$’000	US$’000	US$’000	US$’000	US$’000	US$’000
Trade receivables	23,933	1,513	–	–	–	4,361	29,807
Less: Allowance for expected credit losses	(97)	(5)	–	–	–	(4,130)	(4,232)
Net trade receivables 2024	23,836	1,508	–	–	–	231	25,575
Trade receivables	28,714	26	–	–	–	4,132	32,872
Less: Allowance for expected credit losses	(110)	–	–	–	–	(2,116)	(2,226)
Net trade receivables 2023	28,604	26	–	–	–	2,016	30,646

Six customers (2023: seven) account for 99% (2023: 99%) of the total trade receivables balance (see revenue by segment information in Note 28).

When assessing credit risk, ongoing assessments of customer credit and liquidity positions are performed.

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For the year ended 31 December 2024

10 Prepayments, advances and other receivables

	2024	2023
	US$’000	US$’000
Accrued revenue	4,237	2,656
Prepayments	2,073	3,557
Deposits*	95	86
Advances to suppliers	2,824	1,758
At 31 December	9,229	8,057

* Deposits include bank guarantee deposits of US$ 39k (2023: US$ 39k). Guarantee deposits are paid by the Group for employee work visas under UAE Labour Laws.

11 Derivative financial instruments

Warrants

Under the terms of the Group’s old loan facility, the Group was required to issue warrants to its previous lenders as GMS had not raised

US$ 50.0 million of equity by 31 December 2022.

On 2 January 2023, as the US$ 50.0 million equity raise did not take place, therefore 87,621,947 warrants were issued to the previous lenders.

Based on the final report prepared by a Calculation Agent, the warrants give right to their holders to acquire 137,075,773 shares at an exercise price of

5.75 pence per share for a total consideration of £7.9 million. Warrant holders will have the right to exercise their warrants up to the end of the term of

the loan facility, being 30 June 2025.

During the year, 34,218,700 warrants were exercised by the holders resulting in issuance of 53,531,734 new ordinary shares with a nominal value

of 2 pence per share and share premium of 3.75 pence per share. The fair value of the warrants that were exercised was recalculated at the time of

exercise. The fair value of 34,218,700 warrant exercised was calculated at US$ 10.4 million. This fair value is added to the actual cash raised of US$

3.9 million, in line with Companies Act 2006 to give a total increase in share capital and share premium of US$ 14.3 million. Issue costs of US$ 83k

have been reduced from the share premium account. Shares issued as a result of the exercise of warrants were ordinary shares with identical rights

and privileges as the existing shares of the Group.

Management commissioned an independent valuation expert to measure the fair value of the outstanding warrants as of 31 December 2024, which

was determined using Monte Carlo option-pricing model that takes into consideration the impact of movements in both the USD/GBP exchange rate,

and the price per ordinary share, over the life of the warrants. The simulation considers sensitivity by building models of possible results by substituting

a range of values. Warrants valuation represents a Level 3 fair value measurement under the IFRS 13 hierarchy. The fair value of the 53,403,247

outstanding warrants as at 31 December 2024 was US$ 9.2 million (31 December 2023: US$ 14.3 million for 87,621,947 warrants). On a per warrant

basis, 31 December 2024 valuation stands at US$ 0.172 per warrant representing a 5.3% increase from the 31 December 2023 valuation of US$

0.163 per warrant, which is primarily attributable to increase in the share price of the Company. The share price increased from 14.5 pence as at 31

December 2023 to 15.1 pence as at 31 December 2024. A 10% change in share price will increase or decrease the valuation by US$ 1.5 million. A

10% change in share price volatility will increase or decrease the valuation by US$ 7k.

Interest Rate Swap

The Group had an Interest Rate Swap (IRS) arrangement, originally in place, with a notional amount of US$ 50.0 million. The remaining notional

amount hedged under the IRS as at 31 December 2024 was nil (31 December 2023: nil). The IRS hedged the risk of variability in interest payments

by converting a floating rate liability to a fixed rate liability. The IRS arrangement matured during the year 2023, therefore, the fair value of the IRS as at

31 December 2024 was nil (31 December 2023: nil). In 2020 cash flows of the hedging relationship for the IRS were not highly probable and, therefore,

hedge accounting was discontinued from that point.

IFRS 13 fair value hierarchy

Apart from warrants, the Group has no other financial instruments that are classified as Level 3 in the fair value hierarchy in the current year that

are determined by reference to significant unobservable inputs. There have been no transfers of assets or liabilities between levels of the fair value

hierarchy. There are no non-recurring fair value measurements.

Derivative financial instruments are made up as follows:

	Interest
	rate swap	Warrants	Total
	US$’000	US$’000	US$’000
At 1 January 2024	–	(14,275)	(14,275)
Derecognition of warrants exercised	–	10,431	10,431
Impact of change in fair value of warrants	–	(5,348)	(5,348)
As at 31 December 2024	–	(9,192)	(9,192)

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Notes to the consolidated financial statements continued

11 Derivative financial instruments continued

IFRS 13 fair value hierarchy continued

	Interest
	rate swap	Warrants	Total
	US$’000	US$’000	US$’000
At 1 January 2023	386	(3,198)	(2,812)
Net loss on changes in fair value of interest rate swap	(59)	–	(59)
Final settlement of derivatives	(327)	–	(327)
Impact of change in fair value of warrants	–	(11,077 )	(11,077)
As at 31 December 2023	–	(14,275)	(14,275)

12 Cash and cash equivalents

	2024	2023
	US$’000	US$’000
Interest bearing
Held in UAE banks	1,901	1,422
Non-interest bearing
Held in UAE banks	36,486	964
Held in banks outside UAE	1,620	6,280
Total cash and cash equivalents	40,007	8,666

13 Share capital and other reserves

Ordinary shares at £0.02 per share

	Number of	Ordinary
	ordinary shares	shares
	(Thousands)	US$’000
At 1 January 2024	1,016,415	30,117
Issue of share capital (Note 11)	53,531	1,355
As at 31 December 2024	1,069,946	31,472

	Number of	Ordinary
	ordinary shares	shares
	(Thousands)	US$’000
At 1 January 2023	1,016,415	30,117
As at 31 December 2023	1,016,415	30,117

Capital redemption reserve

		Capital
	Number of	redemption
	ordinary shares	reserve
	(Thousands)	US$’000
At 1 January 2024	350,488	46,445
As at 31 December 2024	350,488	46,445

Share premium

	Number of	Share premium
	ordinary shares	account
	(Thousands)	US$’000
At 1 January 2024	1,016,415	99,105
Issue of share capital (Note 11)	53,531	12,973
Share issue cost	–	(83)
As at 31 December 2024	1,069,946	111,995

122

Gulf Marine Services PLC Annual Report 2024

For the year ended 31 December 2024

Prior to an equity raise on 28 June 2021 the Group underwent a capital reorganisation where all existing ordinary shares with a nominal value

of 10 pence per share were subdivided and re-designated into 1 ordinary share with a nominal value of 2 pence and 1 deferred share with a

nominal value of 8 pence each. The previously recognised share capital balance relating to the old 10 pence ordinary shares was allocated pro rata

to the new subdivided 2 pence ordinary shares and 8 pence deferred shares. The deferred shares had no voting rights and no right to the profits

generated by the Group. On winding-up or other return of capital, the holders of deferred shares had extremely limited rights, if any. The Group had

the right but not the obligation to buyback all of the deferred shares for an amount not exceeding £1.00 in aggregate, which with the shareholders

approval, was completed on 30 June 2022. Accordingly, 350,487,787 deferred shares were cancelled. Following the cancellation of the Deferred

shares on 30 June 2022, a transfer of US$ 46.4 million was made from Share capital – Deferred to a Capital redemption reserve. There was no dilution

to the shares ownership as a result of the share reorganisation.

Under the Companies Act, a share buy-back by a public company can only be financed through distributable reserves or the proceeds of a fresh issue

of shares made for the purpose of financing a share buyback. The Company had sufficient reserves to purchase the Deferred shares for £1.00.

The Group has issued ordinary share capital on the exercise of previously issued warrants to its lenders which has resulted in issuance of ordinary

shares of 53,531,734 on 31 May 2024 (refer Note 11).

14 Restricted reserve

The restricted reserve of US$ 0.3 million (2023: US$ 0.3 million) represents the statutory reserves of certain subsidiaries. As required by the

Commercial Companies Law in the countries where those entities are established, 10% of profit for the year is transferred to the statutory reserve until

the reserve equals 50% of the share capital. Following a recent change to the Regulations of Companies in Kingdom of Saudi Arabia, apportions can

cease when the reserve equals 30% instead of 50% of the share capital, although the subsidiary continues to maintain this at 50%. This reserve is not

available for distribution. No amounts were transferred to this reserve during the year ended 31 December 2024 (2023: US$ nil).

15 Group restructuring reserve

The Group restructuring reserve arose on consolidation under the pooling of interests (merger accounting) method used for the Group restructuring.

Under this method, the Group was treated as a continuation of GMS Global Commercial Investments LLC (the predecessor parent Company) and

its subsidiaries. At the date the Company became the new parent company of the Group via a share-for-share exchange, the difference between the

share capital of GMS Global Commercial Investments LLC and the Company, amounting to US$ 49.7 million (2023: US$ 49.7 million), was recorded in

the books of Gulf Marine Services PLC as a Group restructuring reserve. This reserve is non-distributable.

16 Capital contribution

The capital contribution reserve is as follows:

	2024	2023
	US$’000	US$’000
At 31 December	9,177	9,177

During 2013, US$ 7.8 million was transferred from share appreciation rights payable to capital contribution as, effective 1 January 2013, the

shareholders have assumed the obligation to settle the share appreciation rights. An additional charge in respect of this scheme of US$ 1.4 million was

made in 2014. The total balance of US$ 9.2 million is not available for distribution.

17 Translation reserve and retained earnings

Foreign currency translation reserve represents differences on foreign currency net investments arising from the re-translation of the net investments in

overseas subsidiaries.

Retained earnings include the accumulated realised and certain unrealised gains and losses made by the Group.

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Notes to the consolidated financial statements continued

18 Non-controlling interest

The movement in non-controlling interest is summarised as follows:

	2024	2023
	US$’000	US$’000
At 1 January	2,714	1,988
Share of profit for the year	284	726
At 31 December	2,998	2,714

The following table summarises the information relating to the subsidiary that has material non-controlling interest, before any intra-group eliminations.

	2024	2023
	US$’000	US$’000
Statement of financial position information:
Non-current assets	340	129
Current assets	18,750	16,408
Non-current liabilities	(24)	(18)
Current liabilities	(10,346)	(6,952)
Net assets	8,720	9,567
Net assets attributable to non-controlling interests	2,998	2,714
Statement of profit or loss and other comprehensive income information:
Revenue	41,900	38,088
(Loss)/profit after tax and zakat	(842)	1,306
Total (loss)/comprehensive income	(842)	1,306
Profit allocated to non-controlling interests	284	726
Statement of cashflow information:
Cash flows from operating activities	(4,203)	(1,162)
Cash flows from financing activities (dividends: nil)	(842)	(795)
Net decrease in cash and cash equivalents	(5,045)	(1,957)

19 Provision for employees’ end of service benefits

In accordance with Labour Laws of some of the countries where the Group operates, it is required to provide for end of service benefits for certain

employees. The movement in the provision for employees’ end of service benefits during the year was as follows:

	2024	2023
	US$’000	US$’000
At 1 January	2,395	2,140
Provided during the year	525	723
Paid during the year	(280)	(468)
At 31 December	2,640	2,395

20 Trade and other payables

		2024	2023
		US$’000	US$’000
Trade payables		18,767	13,213
Due to related parties (Note 23)		531	962
Accrued expenses		14,916	16,090
Deferred revenue		2,856	3,546
VAT payable		295	392
Other payables		430	851
	37,79	5	35,054

No interest is payable on the outstanding balances. Trade and other payables are all current liabilities.

124

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For the year ended 31 December 2024

21 Bank borrowings

Secured borrowings at amortised cost are as follows:

	2024	2023
	US$’000	US$’000
Term loans	241,189	273,939
Less: Unamortised issue costs	(5,167)	–
	236,022	273,939
Working capital facility (utilised)	–	2,000
	236,022	275,939

At the end of the reporting period, all bank borrowings are unhedged.

The movement of the bank borrowings during the year are as follows:

	2024	2023
	US$’000	US$’000
At 1 January	275,939	328,085
Repayment of bank borrowings	(275,939)	(56,174)
Additional bank borrowings	241,189	2,000
Unamortised issue costs incurred	(5,173)	–
Amortisation of issue costs	6	–
Payment in kind interest	–	2,028
At 31 December	236,022	275,939

On 30 December 2024, the Group completed refinancing of its bank borrowings. The purpose of the refinancing is primarily to settle in full all the

amounts outstanding under the previous debt facility (which was scheduled to mature on 30 June 2025) as well as to fund the fees and expenses in

relation to this transaction. Management determined that this refinancing transaction is a new loan (rather than modification of the existing loan), thus,

the new debt obligation is recognised and the previous debt facility was extinguished.

Bank borrowings are presented in the consolidated statement of financial position as follows:

	2024	2023
	US$’000	US$’000
Non-current portion
Bank borrowings	196,425	234,439
Current portion
Bank borrowings – scheduled repayments within one year	39,597	39,500
Working capital facility	–	2,000
	236,022	275,939

The principal terms of the new debt facility are as follows:

• The facility is denominated in UAE Dirhams (AED) and will consist of a term loan of AED 924.0 million (US$ 250.0 million) and revolving credit facility

of AED 177.5 million (US$ 50.0 million).

• The term loan will have a tenor of five years, where 80% of the term loan is payable in 19 equal quarterly instalments and the remaining 20% is

payable on maturity.

• The term loan carries floating rate linked to Emirates Interbank Offered Rate (EIBOR) plus a margin based on a ratchet depending on the Group’s

leverage level.

• The facility is secured by mortgage of 13 vessels owned by the Group with a net book value of US$ 549.1 million (Note 5), including the assignment

of trade receivables amounting to US$ 29.8 million (Note 9), bank balance amounting to US$ 40.0 million (Note 12) and insurance proceeds.

• The facility is subject to certain financial covenants such as Interest Cover, Debt Service Cover, Gearing Ratio and Senior Net Leverage which are to

be tested every six months. The financial covenant related to Security Cover is tested annually. All applicable financial covenants under the Group’s

debt facility were met as of 31 December 2024 and are expected to be compliant in the next 12 months.

Subsequent to the reporting period, the Group has made prepayments of US$ 40.3 million towards its term loan.

125

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Gulf Marine Services PLC Annual Report 2024

Notes to the consolidated financial statements continued

21 Bank borrowings continued

The principal terms of the previous facility, as well as the related securities as at 31 December 2023 were as follows:

• The facility’s main currency was US$ repayable with a Secured Overnight Financing Rate (SOFR) plus a margin based on a ratchet depending on

leverage levels. The facility was expiring by June 2025.

• The revolving working capital facility amounts to US$ 40.0 million. US$ 25.0 million of the working capital facility was allocated to performance bonds

and guarantees and US$ 15.0 million allocated to funded portion, of which US$ 2.0 million was utilised as of 31 December 2023.

• During the first quarter of 2023, the Group had accrued PIK amounting to US$ 2 million. However, on the succeeding quarter, the Group had

achieved a reduction in the net leverage ratio to below 4.0, and PIK was no longer accrued. Further, as a result, the margin rate on the loan had

decreased from 4% to 3.1%.

• The facility was secured by mortgages over its whole fleet with a net book value at 31 December 2023 of US$ 562.2 million. Additionally, gross trade

receivables amounting to US$ 32.9 million have been assigned as security against the loans extended by the Group’s banking syndicate (Note 9).

• The Group also provided security against gross cash balances, being cash balances amounting to US$ 8.7 million at 31 December 2023 (Note 12)

before the restricted amounts related to visa deposits held with the Ministry of Labour in the UAE which are included in deposits. These had been

assigned as security against the loans extended by the Group’s banking syndicate.

• As an equity raise of US $50.0 million did not take place by 31 December 2022, 87.6 million warrants were issued on 2 January 2023, giving debt

holders the right to 137,075,773 million shares at a strike price of 5.75 pence per share. The warrants will expire in June 2025, which was the original

maturity of the facility.

• The facility was subject to certain financial covenants including: Debt Service Cover, Interest Cover, and Net Leverage Ratio, which were tested

bi-annually in June and December. There were additional covenants relating to general and administrative costs, capital expenditure and Security

Cover (loan to value) which were tested annually in December. Further, there were restrictions to payment of dividends until the net leverage ratio falls

below 4.0 times, a level reached in second quarter of 2023. All applicable financial covenants under the Group’s debt facility were compliant till the

repayment of the facility.

		Outstanding amount
	Current	Non-current	Total
	US$’000	US$’000	US$’000	Security	Maturity
31 December 2024:
Term loan – scheduled repayments within one year	40,632	–	40,632	Secured	December 2029
Term loan – scheduled repayments within more than one year	–	200,557	200,557	Secured	December 2029
Unamortised issue costs	(1,035)	(4,132)	(5,167)	Secured	December 2029
	39,597	196,425	236,022
31 December 2023:
Term loan – scheduled repayments within one year	39,500	–	39,500	Secured	June 2025
Term loan – scheduled repayments within more than one year	–	234,439	234,439	Secured	June 2025
Working capital facility – scheduled repayment within one year	2,000	–	2,000	Secured	June 2025
	41,500	234,439	275,939

22 Lease liabilities

	2024	2023
	US$’000	US$’000
As at 1 January	3,356	3,522
Recognition of new lease liability additions	5,512	3,231
Interest on lease liabilities (Note 33)	461	245
Principal element of lease payments	(4,478)	(3,330)
Derecognition of lease liability	(29)	(67)
Interest paid	(461)	(245)
As at 31 December	4,361	3,356
Maturity analysis:
Year 1	3,503	1,623
Year 2	858	1,297
Year 3 – 5	–	436
	4,361	3,356
Split between:
Current	3,503	1,623
Non-current	858	1,733
	4,361	3,356

126

Gulf Marine Services PLC Annual Report 2024

For the year ended 31 December 2024

23 Related party transactions

Related parties comprise the Group’s major shareholders, Directors and entities related to them, companies under common ownership

and/or common management and control, their partners and key management personnel. Pricing policies and terms of related party transactions

are approved by the Group’s Board.

Balances and transactions between the Group and its subsidiaries, which are related parties, have been eliminated on consolidation and are not

disclosed in this note.

Key management personnel:

As at 31 December 2024, there were 2.6 million shares held by Directors (31 December 2023: 2.6 million).

Related parties

The Group’s principal subsidiaries are outlined in Note 3. The related parties comprising of the Group’s major shareholders are outlined in the Directors

Report in the annual report. The other related parties during the year were:

Partner in relation to UAE Operations	Relationship
National Catering Company Limited WLL	Affiliate of a significant shareholder of the Company
Sigma Enterprise Company LLC	Affiliate of a significant shareholder of the Company
Aman Integrated Solutions LLC	Affiliate of a significant shareholder of the Company

The amounts outstanding to National Catering Company Limited WLL as at 31 December 2024 was nil (2023: US$ 0.5 million) included in trade and

other payables (Note 20).

The amount outstanding to Sigma Enterprise Company LLC as at 31 December 2024 was US$ 0.5 million (2023: US$ 0.5 million) included in trade

and other payables (Note 20).

The amounts outstanding to Aman Integrated Solutions LLC as at 31 December 2024 was US$ 18k (2023: US$ 3k) included in trade and other

payables (Note 20).

During 2024, there were no transactions with Seafox international or any of its subsidiaries (2023: nil).

Significant transactions with the related party during the year:

	2024	2023
	US$’000	US$’000
National Catering Company Limited WLL – Catering services	86	581
Sigma Enterprise Company LLC – Vessel maintenance and overhaul services	440	2,372
Aman Integrated Solutions LLC – Laboratory services	15	18

Compensation of key management personnel

The remuneration of Directors and other members of key management personnel during the year were as follows:

	2024	2023
	US$’000	US$’000
Short-term benefits	1,192	983
End of service benefits	26	24
	1,218	1,007

Compensation of key management personnel represents the charge to the profit or loss in respect of the remuneration of the executive and

non-executive Directors. At 31 December 2024, there were four executive and non-executive Directors (2023: four). Further details of remuneration

of the Board and key management personnel relating to 2024 are contained in the Directors’ Remuneration Report in the annual report.

24 Contingent liabilities

At 31 December 2024, the banks acting for Gulf Marine Middle East FZE, one of the subsidiaries of the Group, had issued performance bonds

amounting to US$ 31.1 million (31 December 2023: US$ 19.6 million), all of which were counter-indemnified by other subsidiaries of the Group.

25 Commitments

	2024	2023
	US$’000	US$’000
Capital commitments	6,678	7,8 25

Capital commitments comprise mainly capital expenditure, which has been contractually agreed with suppliers for future periods for equipment or the

upgrade of existing vessels.

127

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Gulf Marine Services PLC Annual Report 2024

Notes to the consolidated financial statements continued

26 Financial instruments

Categories of financial instruments

	2024	2023
	US$’000	US$’000
Financial assets:
Current assets at amortised cost:
Cash and cash equivalents (Note 12)	40,007	8,666
Trade receivables and other receivables (Notes 9 and 10)*	29,907	33,388
Total financial assets	69,914	42,054

* Trade and other receivables exclude prepayments and advances to suppliers.

	2024	2023
	US$’000	US$’000
Financial liabilities:
Derivatives recorded at FVTPL:
Warrants (Note 11)	9,192	14,275
Financial liabilities recorded at amortised cost:
Trade and other payables (Note 20)*	34,644	31,116
Lease liabilities (Note 22)	4,361	3,356
Current bank borrowings – scheduled repayments within one year (Note 21)	39,597	41,500
Non-current bank borrowings – scheduled repayments more than one year (Note 21)	196,425	234,439
Total financial liabilities	284,219	324,686

* Trade and other payables excludes amounts of deferred revenue and VAT payable.

The following table combines information about the following;

• Fair values of financial instruments (except financial instruments when carrying amount approximates their fair value); and

• Fair value hierarchy levels of financial liabilities for which fair value was disclosed.

	2024	2023
	US$’000	US$’000
Financial liabilities:
Recognised at level 3 of the fair value hierarchy:
Warrants (Note 11)	9,192	14,275

The fair value of financial instruments classified as Level 3 are, in certain circumstances, measured using valuation techniques that incorporate

assumptions that are not evidenced by the prices from observable current market transactions in the same instrument and are not based on

observable market data.

The fair value of the Group’s warrants at 31 December 2024 has been arrived at on the basis of a valuation carried out at that date by a third-party

expert, an independent valuer not connected with the Group. The valuation conforms to International Valuation Standards. The fair value was

determined using a Monte-Carlo simulation.

Favourable and unfavourable changes in the value of financial instruments are determined on the basis of changes in the value of the instruments as a

result of varying the levels of the unobservable parameters, quantification of which is judgmental. There have been no transfers between Level 2 and

Level 3 during the years ended 31 December 2024 and 31 December 2023.

Capital risk management

The Group manages its capital to support its ability to continue as a going concern while maximising the return on equity. The Group does not have a

formalised optimal target capital structure or target ratios in connection with its capital risk management objectives. The capital structure of the Group

consists of net bank debt and total equity. The Group continues to take measures to deleverage the Company and intends to continue to do so in the

coming years.

Material accounting policies

Details of the material accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on

which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in Note 3

to the consolidated financial statements.

Financial risk management objectives

The Group is exposed to the following risks related to financial instruments – credit risk, liquidity risk, interest rate risk and foreign currency risk.

Management actively monitors and manages these financial risks relating to the Group.

128

Gulf Marine Services PLC Annual Report 2024

For the year ended 31 December 2024

Credit risk management

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group and arises principally

from the Group’s trade and other receivables and cash and cash equivalents.

The Group has adopted a policy of dealing when possible, with creditworthy counterparties while keen to maximise utilisation for its vessels.

Cash balances held with banks are assessed to have low credit risk of default since these banks are highly regulated by the central banks of the

respective countries. At the year-end, cash at bank and in hand totalled US$ 40.0 million (2023: US$ 8.7 million), deposited with banks with Fitch short-

term ratings of F2 to F1+ (Refer to Note 12).

Concentration of credit risk arises when a number of counterparties are engaged in similar business activities, or activities in the same geographic

region, or have similar economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic,

political or other conditions. Concentration of credit risk indicates the relative sensitivity of the Group’s performance to developments affecting a

particular industry or geographic location. During the year, vessels were chartered to five companies in the Arabian Peninsula region and one company

in Europe, including NOCs and engineering, procurement and construction (“EPC”) contractors.

At 31 December 2024, six companies in specific regions accounted for 99% (2023: nine companies in specific regions accounted for 99%) of the

outstanding trade receivables.

The credit risk on liquid funds is limited because the funds are held by banks with high credit ratings assigned by international agencies.

The amount that best represents maximum credit risk exposure on financial assets at the end of the reporting period, in the event counterparties failing

to perform their obligations generally approximates their carrying value.

The Group considers cash and cash equivalents and trade and other receivables which are neither past due nor impaired to have a low credit risk and

an internal rating of ‘performing’. Performing is defined as a counterparty that has a stable financial position and which there are no past due amounts.

Liquidity risk management

Ultimate responsibility for liquidity risk management rests with the Board of Directors. The Group manages liquidity risk by seeking to maintain

sufficient facilities to ensure availability of funds for forecast and actual cash flow requirements.

The table below summarises the maturity profile of the Group’s financial liabilities. The contractual maturities of the Group’s financial liabilities have

been determined on the basis of the remaining period at the end of the reporting period to the contractual maturity date. The maturity profile is

monitored by management to assist in ensuring adequate liquidity is maintained. Refer to Going Concern in Note 3.

The maturity profile of the assets and liabilities at the end of the reporting period based on contractual repayment arrangements was as follows:

					Contractual cash flows
		Carrying
		amount	Total	1 to 3 months	4 to 12 months	2 to 5 years
31 December 2024	Interest rate	US$’000	US$’000	US$’000	US$’000	US$’000
Non-interest bearing financial liabilities
Trade and other payables*		34,644	34,644	34,644	–	–
Interest bearing financial liabilities	7.87%- 8.6%
Bank borrowings – principal		236,022	241,189	10,158	30,474	200,557
Interest on bank borrowings		–	41,138	4,016	10,548	26,574
Lease liabilities		4,361	4,631	991	2,753	887
Interest on lease liabilities		–	221	73	119	29
		275,027	321,823	49,882	43,894	228,047

					Contractual cash flows
		Carrying
		amount	Total	1 to 3 months		4 to 12 months		2 to 5 years
31 December 2023	Interest rate	US$’000	US$’000	US$’000		US$’000	US$’000
Non-interest bearing financial liabilities
Trade and other payables*		31,116	31,116	31,116		–	–
Interest bearing financial liabilities	8.6%-9.2%
Bank borrowings – principal		275,939	275,939	4,000		37,500	234,439
Interest on bank borrowings		133	32,984	5,955	17,16	4	9,865
Lease liabilities		3,356	3,356	618		1,155	1,583
Interest on lease liabilities		–	251	60		110	81
		310,544	343,646	41,749		55,929	245,968

* Trade and other payables excludes amounts of deferred revenue and VAT payable.

In addition to above table, capital commitments are expected to be settled in next 12 months.

129

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Gulf Marine Services PLC Annual Report 2024

Notes to the consolidated financial statements continued

26 Financial instruments continued

Interest rate risk management

The Group is exposed to cash flow interest rate risk on its bank borrowings. The Group enters into floating interest rate instruments for the same.

Further, the Group had an Interest Rate Swap (IRS) arrangement, originally in place, with a notional amount of US$ 50.0 million. The remaining notional

amount hedged under the IRS as at 31 December 2024 was nil (31 December 2023: nil). The IRS hedged the risk of variability in interest payments by

converting a floating rate liability to a fixed rate liability. The IRS arrangement was matured during the year 2023, therefore, the fair value of the IRS as at

31 December 2024 was nil (31 December 2023: nil). In 2020 cash flows of the hedging relationship for the IRS were not highly probable and, therefore,

hedge accounting was discontinued from that point.

Foreign currency risk management

The majority of the Group’s transactions are denominated in US Dollars, UAE Dirhams, Euros and Pound Sterling. As the UAE Dirham, Saudi Riyal and

Qatari Riyal are pegged to the US Dollar, balances in UAE Dirham, Saudi Riyal and Qatari Riyal are not considered to represent significant currency

risk. Transactions in other foreign currencies entered into by the Group are short-term in nature and therefore management considers that the currency

risk associated with these transactions is limited.

The carrying amounts of the Group’s significant foreign currency denominated monetary assets include cash and cash equivalents and trade

receivables and liabilities include trade payables. The amounts at the reporting date are as follows:

	Assets		Liabilities
	31 December		31 December
	2024	2023	2024	2023
	US$’000	US$’000	US$’000	US$’000
US Dollars	46,218	21,912	9,025	3,421
UAE Dirhams	9,402	1,154	239,278*	6,482
Saudi Riyals	2,065	8,531	1,037	1,307
Pound Sterling	381	12	1,077	2,003
Euros	7,210	6,141	–	–
Qatari Riyals	4,371	3,694	455	–
	69,647	41,444	250,872	13,213

* Includes bank borrowings.

At 31 December 2024, if the exchange rate of the currencies other than the UAE Dirham, Saudi Riyal and Qatari Riyal had increased/decreased by

10% against the US Dollar, with all other variables held constant, the Group’s profit for the year would have been higher/lower by US$ 0.7 million (2023:

higher/lower by US$ 0.4 million) mainly as a result of foreign exchange loss or gain on translation of Euro and Pound Sterling denominated balances.

27 Dividends

There was no dividend declared or paid in 2024 (2023: nil). No final dividend in respect of the year ended 31 December 2024 is expected to be

proposed at the 2024 AGM. Our future dividend policy allocating 20%-30% of the annual adjusted net profit for distributions to shareholders, through

a dividend and /or potential share buybacks, provided other plans permit and that loan covenants are fully met, was announced during the year.

130

Gulf Marine Services PLC Annual Report 2024

For the year ended 31 December 2024

28 Segment reporting

The Group has identified that the Directors and senior management team are the chief operating decision makers in accordance with the requirements

of IFRS 8 ‘Operating Segments’. Segment performance is assessed based upon adjusted gross profit/(loss), which represents gross profit/(loss) before

depreciation and amortisation and loss on impairment of assets. The reportable segments have been identified by Directors and senior management

based on the size and type of asset in operation.

The operating and reportable segments of the Group are six K-Class vessels, three S-Class vessels and four E-Class vessels.

All of these operating segments earn revenue related to the hiring of vessels and related services including charter hire income, messing and

accommodation services, personnel hire and hire of equipment. The accounting policies of the operating segments are the same as the Group’s

accounting policies described in Note 3.

				Gross profit before adjustments
				for depreciation, amortisation
	Revenue			and impairment charges
	2024	2023	2024	2023
	US$’000	US$’000	US$’000	US$’000
E-Class vessels	71,799	60,955	52,269	41,864
S-Class vessels	42,286	35,018	30,141	23,217
K-Class vessels	53,409	55,630	31,381	33,375
	167,494	151,603	113,791	98,456
Depreciation charged to cost of sales			(26,052)	(24,153)
Amortisation charged to cost of sales			(5,324)	(4,687)
Expected credit losses			(2,006)	(207)
Adjusted gross profit			80,409	69,409
Impairment loss			(9,394)	(3,565)
Reversal of impairment			18,621	36,993
Gross profit			89,636	102,837
Finance expense			(23,517)	(31,431)
Impact of change in fair value of warrants			(5,348)	(11,077)
Other general and administrative expenses			(17,028)	(14,645)
Foreign exchange loss, net			(674)	(987)
Other income			23	12
Finance income			89	221
Profit for the year before taxation			43,181	44,930

Segment revenue reported above represents revenue generated from external customers. There were no inter-segment sales in the years.

Segment assets and liabilities, including depreciation, amortisation and additions to non-current assets (other than vessels), are not reported to the key

decision makers on a segmental basis and are therefore, not disclosed.

Information about major customers

During the year, five customers (2023: four) individually accounted for more than 10% of the Group’s revenues. The related revenue figures for these

major customers, the identity of which may vary by year, was US$ 41.9 million, US$ 39.1 million, US$ 36.4 million, US$ 26.1 million and 18.4 US$

million (2023: US$ 49.7 million, US$ 38.1 million, US$ 25.3 million and US$ 15.4 million).

Geographical segments

Revenue by geographical segment is based on the geographical location of the customer as shown below.

	2024	2023
	US$’000	US$’000
United Arab Emirates	44,684	58,452
Saudi Arabia	41,900	38,088
Qatar	62,492	40,680
Total – Arabian Peninsula region	149,076	137,220
Total – Europe	18,418	14,383
Worldwide Total	167,494	151,603

131

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Gulf Marine Services PLC Annual Report 2024

Notes to the consolidated financial statements continued

28 Segment reporting continued

Type of work

The Group operates in both the oil and gas and renewables sector. Revenues are driven from both client’s operating and capital expenditure. Details

are shown below.

	2024	2023
	US$’000	US$’000
Oil and Gas	149,076	137,220
Renewables	18,418	14,383
Total	167,494	151,603

Reversal of impairment of US$ 14.5 million and impairment charge of US$ 5.3 million was recognised in respect of property and equipment (Note 5)

(2023: Reversal of impairment of US$ 37.0 million and impairment charge of US $ 3.6 million) attributable to the following reportable segments:

	2024	2023
	US$’000	US$’000
E-Class vessels	(14,503)	(16,340)
S-Class vessels	–	(4,462)
K-Class vessels	5,276	(12,626)
	(9,227)	(33,428)

	E-Class	S-Class	K-Class
	vessels	vessels	vessels	Total
	US$’000	US$’000	US$’000	US$’000
2024
Depreciation charged to cost of sales	13,881	5,834	6,337	26,052
Amortisation charged to cost of sales	1,848	1,810	1,666	5,324
(Reversal of impairment charge)/impairment charge – net	(14,503)	–	5,276	(9,227)
2023
Depreciation charged to cost of sales	12,892	5,660	5,601	24,153
Amortisation charged to cost of sales	2,035	692	1,960	4,687
Net reversal of impairment	(16,340)	(4,462)	(12,626)	(33,428)

132

Gulf Marine Services PLC Annual Report 2024

For the year ended 31 December 2024

29 Presentation of adjusted non-GAAP results

The following table provides a reconciliation between the Group’s adjusted non-GAAP and statutory financial results:

			Year ended 31 December 2024				Year ended 31 December 2023
	Adjusted			Adjusted
	non-GAAP	Adjusting	Statutory	non-GAAP		Adjusting	Statutory
	results	items	total	results		items	total
	US$’000	US$’000	US$’000	US$’000		US$’000	US$’000
Revenue	167,494	–	167,494	151,603		–	151,603
Cost of sales
– Vessel operating expenses before depreciation, amortisation and impairment	(53,703)	–	(53,703)	(53,147)		–	(53,147)
– Depreciation and amortisation	(31,376)	–	(31,376)	(28,840)		–	(28,840)
Expected credit losses	(2,006)	–	(2,006)	(207)		–	(207)
Net reversal of impairment*	–	9,227	9,227	–		33,428	33,428
Gross profit	80,409	9,227	89,636	69,409		33,428	102,837
General and administrative
– Amortisation	(4,641)	–	(4,641)	(3,18	8)	–	(3,188)
– Depreciation	(145)	–	(145)		(145)	–	(145)
– Other administrative costs	(11,366)	–	(11,366)		(10,727)	–	(10,727)
– Exceptional items/legal costs**	–	(876)	(876)		–	(585)	(585)
Operating profit	64,257	8,351	72,608		55,349	32,843	8 8,192
Finance income	89	–	89		221	–	221
Finance expense	(23,517)	–	(23,517)		(31,431)	–	(31,431)
Impact of change in fair value of warrants	(5,348)	–	(5,348)		(11,077 )	–	(11,077)
Other income	23	–	23		12	–	12
Foreign exchange loss, net	(674)	–	(674)		(987)	–	(987)
Profit before taxation	34,830	8,351	43,181		12,087	32,843	44,930
Taxation (charge)/credit
– Taxation charge	(2,613)	–	(2,613)		(2,329)	–	(2,329)
– Exceptional tax expense**	–	(2,308)	(2,308)		–	(533)	(533)
Profit for the year	32,217	6,043	38,260		9,758	32,310	42,068
Profit attributable to:
Owners of the Company	31,933	6,043	37,976		9,032	32,310	41,342
Non-controlling interests	284	–	284		726	–	726
Earnings per share (basic)	3.04	0.58	3.61		0.89	3.18	4.07
Earnings per share (diluted)	2.85	0.54	3.39		0.86	3.06	3.92
Supplementary non statutory information
Operating profit	64,257	8,351	72,608		55,349	32,843	88,192
Add: Depreciation and amortisation	36,162	–	36,162		32,173	–	32,173
Adjusted EBITDA	100,419	8,351	108,770		87, 522	32,843	120,365

* The reversal of impairment/impairment charge on certain vessels have been added back to gross profit to arrive at adjusted gross profit for the year ended 31

December 2024 and 2023 (refer to Note 5 for further details). Management has adjusted this due to the nature of the transaction which it believes is not directly related

to operations management are able to influence. This measure provides additional information on the core profitability of the Group.

** These exceptional items/legal cost and exceptional tax expense relates to expected tax outcomes.

133

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Gulf Marine Services PLC Annual Report 2024

Notes to the consolidated financial statements continued

29 Presentation of adjusted non-GAAP results continued

			Year ended 31 December 2024			Year ended 31 December 2023
	Adjusted			Adjusted
	non-GAAP	Adjusting	Statutory	non-GAAP	Adjusting	Statutory
	results	items	total	results	items	total
	US$’000	US$’000	US$’000	US$’000	US$’000	US$’000
Cashflow reconciliation:
Profit for the year	32,217	6,043	38,260	9,758	32,310	42,068
Adjustments for:
Net reversal of impairment*	–	(9,227)	(9,227)	–	(33,428)	(33,428)
Amortisation of borrowings issue cost	6	–	6	–	–	–
Finance expenses	23,511	–	23,511	31,431	–	31,431
Impact of change in fair value of warrants	5,348	–	5,348	11,077	–	11,077
Other adjustments**	40,035	3,184	43,219	34,145	1,118	35,263
Cash flow from operating activities before movement in working capital	101,117	–	101,117	86,411	–	86,411
Change in trade and other receivables	1,893	–	1,893	2,003	–	2,003
Change in trade and other payables	2,949	–	2,949	8,140	–	8,140
Cash generated from operations	105,959	–	105,959	96,554	–	96,554
Income tax paid	(2,399)	–	(2,399)	(2,151)	–	(2,151)
Net cash flows from operating activities	103,560	–	103,560	94,403	–	94,403
Net cash flows used in investing activities	(8,769)	–	(8,769)	(12,788)	–	(12,788)
Other finance expenses paid	(790)	–	(790)	(374)	–	(374)
Payment of borrowings issue cost	(5,173)	–	(5,173)	–	–	–
Other cash flows used in financing activities	(57,4 87)	–	(57,487)	(84,850)	–	(84,850)
Net cash flows used in financing activities	(63,450)	–	(63,450)	(85,224)	–	(85,224)
Net change in cash and cash equivalents	31,341	–	31,341	(3,609)	–	(3,609)

* The reversal of impairment/impairment charge on certain vessels and related assets have been added back to cash flow from operating activities before movement in

working capital for the year ended 31 December 2024 and 2023 (refer to Note 5 for further details).

** These exceptional items/legal cost and exceptional tax expense relates to expected tax outcomes.

30 Earnings per share

	2024	2023
Profit for the purpose of basic and diluted earnings per share being profit for the year attributable
to Owners of the Company (US$’000)	37,976	41,342
Profit for the purpose of adjusted basic and diluted earnings per share (US$’000) (Note 29)	31,933	9,032
Weighted average number of shares (‘000)	1,050,932	1,016,415
Weighted average diluted number of shares in issue (‘000)	1,120,919	1,055,003
Basic earnings per share (cents)	3.61	4.07
Diluted earnings per share (cents)	3.39	3.92
Adjusted earnings per share (cents)	3.04	0.89
Adjusted diluted earnings per share (cents)	2.85	0.86

Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company (as disclosed in the consolidated statement

of profit or loss and other comprehensive income) by the weighted average number of ordinary shares in issue during the year.

Adjusted earnings per share is calculated on the same basis but uses the profit for the purpose of basic earnings per share (shown above) adjusted

by adding back the non-operational items, which were recognised in the consolidated statement of profit or loss and other comprehensive income

(Note 29). The adjusted earnings per share is presented as the Directors consider it provides an additional indication of the underlying performance

of the Group.

Diluted earnings per share is calculated by dividing the profit attributable to equity holders of the Company by the weighted average number

of ordinary shares in issue during the year, adjusted for the weighted average effect of outstanding warrants and LTIPs during the year.

Adjusted diluted earnings per share is calculated on the same basis but uses adjusted profit (Note 29) attributable to equity holders of the Group.

The following table shows a reconciliation between the basic and diluted weighted average number of shares:

	2024	2023
	’000s	’000s
Weighted average basic number of shares in issue	1,050,932	1,016,415
Weighted average effect of warrants	69,987	38,588
Weighted average diluted number of shares in issue	1,120,919	1,055,003

134

Gulf Marine Services PLC Annual Report 2024

For the year ended 31 December 2024

31 Revenue

All revenue in the above table is in scope of IFRS 15 with the exception of lease income which is in scope of IFRS 16.

	2024	2023
	US$’000	US$’000
Charter hire	75,902	76,111
Lease income	67,857	57,073
Messing and accommodation	12,755	9,173
Manpower income	6,673	5,418
Mobilisation and demobilisation	3,712	2,255
Sundry income	595	1,573
	167,494	151,603
Revenue recognised – over time	166,816	149,871
Revenue recognised – point in time	678	1,732
	167,494	151,603

Included in mobilisation and demobilisation income is an amount of US$ 3.5 million (2023: US$ 0.6 million) that was included as deferred revenue at

the beginning of the financial year.

Lease income:

	2024	2023
	US$’000	US$’000
Maturity analysis:
Year 1	87,739	68,207
Year 2	61,892	56,551
Year 3*	54,545	26,305
Year 4*	34,650	24,895
Year 5*	11,693	22,449
	250,519	198,407

* Presented in comparative financial statements as “Year 3-5 US$ 73,649K”.

Further descriptions on the above types of revenue have been provided in Note 3.

32 Finance income

	2024	2023
	US$’000	US$’000
Bank interest	89	221

33 Finance expense

	2024	2023
	US$’000	US$’000
Interest on bank borrowings	21,612	29,456
Gain on IRS reclassified to profit or loss	–	279
Loss on changes in fair value of interest rate swap (Note 11)	–	59
Interest on lease liabilities (Note 22)	461	245
Other finance expenses	1,438	1,392
Amortisation of borrowings issue cost	6	–
	23,517	31,431

135

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Gulf Marine Services PLC Annual Report 2024

Notes to the consolidated financial statements continued

34 Profit for the year

The profit for the year is stated after charging/(crediting):

	2024	2023
	US$’000	US$’000
Total staff costs (see below)	33,643	31,230
Depreciation of property and equipment (Note 5)	26,194	24,297
Amortisation of dry-docking expenditure (Note 6)	5,324	4,687
Depreciation of right-of-use assets (Note 7)	4,641	3,188
Net charge of expected credit losses (Note 9)	2,006	207
Auditor’s remuneration (see below)	960	1,127
Foreign exchange loss – net	674	987
Other income	(23)	(12)
Expense relating to short term leases or leases of low value assets (Note 7)	260	228
Reversal of impairment loss – net (Note 5)	(9,227)	(33,428)

The average number of full time equivalent employees (excluding non-executive Directors) by geographic area was:

	2024	2023
	Number	Number
Arabian Peninsula Region	659	598
Rest of the world	30	30
	689	628

The total number of full-time equivalent employees (including executive Directors) as at 31 December 2024 was 727 (31 December 2023: 660).

The number of full-time employees increased in the year due to an increase in offshore headcount from the second half of the year.

Their aggregate remuneration comprised:

	2024	2023
	US$’000	US$’000
Wages and salaries	33,071	30,477
End of service benefit (Note 19)	525	723
Share based payment charge	–	17
Employment taxes*	47	13
	33,643	31,230

* Employment taxes include nil (2023: US $ 6K) in respect of social security costs for our crew working in France.

The analysis of the auditor’s remuneration is as follows:

	2024	2023
	US$’000	US$’000
Group audit fees	710	700
Overruns and out of pocket expenses in relation to 2023 Group audit	–	177
Subsidiary audit fees	100	100
Total audit fees	810	977
Audit-related assurance services	150	150
Total fees	960	1,127

136

Gulf Marine Services PLC Annual Report 2024

For the year ended 31 December 2024

35 Changes in liabilities arising from financing activities

The table below details changes in the Group’s liabilities arising from financing activities, including both cash and non-cash changes. Liabilities arising

from financing activities are those for which cash flows were, or future cash flows will be, classified in the Group’s consolidated statement of cash flows

as cash flows from financing activities.

		Lease	Bank
	Derivatives	liabilities	borrowings
	(Note 11)	(Note 22)	(Note 21)
	US$’000	US$’000	US$’000
At 1 January 2023	2,812	3,522	328,085
Financing cash flows
Repayment of bank borrowings	–	–	(56,174)
Working capital facility	–	–	2,000
Principal elements of lease payments	–	(3,330)	–
Settlement of derivatives	327	–	–
Interest paid	–	(245)	( 27,4 28)
Total financing cash flows	327	(3,575)	(81,602)
Non-cash changes:
Recognition of new lease liability additions	–	3,231	–
Derecognition of lease liability	–	(67)	–
Interest on lease liabilities (Note 33)	–	245	–
Interest on bank borrowings (Note 33)	–	–	29,456
Net gain on change in fair value of IRS (Note 11)	59	–	–
Impact of change in fair value of warrants (Note 11)	11,077	–	–
Total non-cash changes	11,136	3,409	29,456
At 31 December 2023	14,275	3,356	275,939
Financing cash flows
Repayment of bank borrowings	–	–	(275,939)
Proceeds from bank borrowings	–	–	241,189
Payment of borrowings issue costs	–	–	(5,173)
Principal elements of lease payments	–	(4,478)	–
Interest paid	–	(461)	(21,612)
Total financing cash flows	–	(4,939)	(61,535)
Non-cash changes:
Recognition of new lease liability additions	–	5,512	–
Derecognition of lease liability	–	(29)	–
Interest on lease liabilities (Note 33)	–	461	–
Interest on bank borrowings (Note 33)	–	–	21,612
Amortisation of borrowings issue costs	–	–	6
Derecognition of warrants exercised (Note 11)	(10,431)	–	–
Impact of change in fair value of warrants (Note 11)	5,348	–	–
Total non-cash changes	(5,083)	5,944	21,618
At 31 December 2024	9,192	4,361	236,022

36 Events after the reporting period

Subsequent to the period end:

• The Group made prepayments towards the bank borrowings of US$ 40.3 million.

• 38,353,361 warrants were exercised by the holders resulting in issuance of 59,999,998 new ordinary shares.

• Certain governments have announced the introduction of increased tariffs on imports. The announcement has caused instability in financial markets

and has increased the risk of recession, inflation and increases in cost of debt. The situation is rapidly evolving. The announcement of tariffs is

considered a non-adjusting post reporting date event. An estimate of the impact of recently announced tariffs cannot be made currently. While we

expect that the future demand for SESV’s to remain overall unchanged, our plans to increase resilience to secure GMS through a potential downturn

of the economy are more than ever crucial. Management is constantly and closely monitoring the developments.

137

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Gulf Marine Services PLC Annual Report 2024

Notes

2024

US$’000

2023

US$’000

Non-current assets

Investment in subsidiaries 5 443,697 368,666

Other receivables 7 119,041 93,943

Total non-current assets 562,738 462,609

Current assets

Other receivables 7 109 143

Cash and cash equivalents 6 163 25

Total current assets 272 168

Creditors: Amounts falling due within one year

Other payables 9 116,650 91,464

Warrants 10 9,192 14,275

Net current liabilities 125,570 105,571

Net assets 437,168 357,038

Equity

Share capital – Ordinary 11 31,472 30,117

Capital redemption reserve 11 46,445 46,445

Share premium account 11 111,995 99,105

Retained earnings 247,256 181,371

Total equity 437,168 357,038

The Company reported a profit for the financial year ended 31 December 2024 of US$ 65.9 million (2023: US$ 105.5 million).

The separate financial statements of Gulf Marine Services PLC (registered number 08860816) were approved by the Board of Directors and authorised

for issue on 08 April 2025.

Signed on behalf of the Board of Directors

Mansour Al Alami

Executive Chairman

The attached Notes 1 to 13 form an integral part of these separate financial statements.

Company statement of financial position

138 Gulf Marine Services PLC Annual Report 2024

For the year ended 31 December 2024

capital –

Ordinary

US$’000

Capital

redemption

reserve

US$’000

premium

account

US$’000

Share-based

payment

reserve

US$’000

Retained

earnings

US$’000

Total

equity

US$’000

At 1 January 2023 30,117 46,445 99,105 3,631 72,277 251,575

Profit for the year − − − − 105,463 105,463

Other comprehensive income for the year − − − − − −

Total comprehensive income for the year − − − − 105,463 105,463

Transactions with owners of the Company

Share-based payment charge − − − 17 (17) −

Transfer of share option reserve − − − (3,648) 3,648 −

Total transactions with owners of the Company − − − (3,631) 3,631 −

At 31 December 2023 30,117 46,445 99,105 − 181,371 357,038

Profit for the year − − − − 65,885 65,885

Other comprehensive income for the year − − − − – –

Total comprehensive income for the year − − − − 65,885 65,885

Transactions with owners of the Company

Issue of share capital 1,355 − 12,973* − − 14,328

Share issuance cost − − (83) − − (83)

Total transactions with owners of the Company − − 12,890 − − 14,245

At 31 December 2024 31,472 46,445 111,995 − 247, 256 437,168

* Addition to share premium amount reflects cash proceeds US$ 2.5million and release of warrants liability of US$ 10.4million upon exercise of warrants.

The attached Notes 1 to 13 form an integral part of these separate financial statements.

139

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Gulf Marine Services PLC Annual Report 2024

For the year ended 31 December 2024

Company statement of changes in equity

1 Corporate information

Gulf Marine Services PLC (“the Company”) is a public company limited by shares in the United Kingdom under the Companies Act 2006 and

is registered in England and Wales. The address of the registered office of the Company is 107 Hammersmith Road, London, United Kingdom,

W14 0QH. The registered number of the Company is 08860816. The Company is the parent company of the Gulf Marine Services PLC Group

comprising of Gulf Marine Services PLC and its underlying subsidiaries (“the Group”). The shareholder pattern of the Group is disclosed on

page 85 of the annual report. The consolidated Group accounts are publicly available.

2 Material accounting policies

Currency

The functional and presentational currency of the Company is US Dollars (“US$”).

Going concern

The Company’s ability to continue as a going concern is premised on the same assessment as the Group.

The Directors have assessed the Group’s financial position through to June 2026 and hold a reasonable expectation of its ability to continue as going

concern for the foreseeable future. With four consecutive years of reported profit and a forecast of continued positive operating cash flows, particularly

in light of the market outlook, the Group remains well-positioned for sustained success.

In December 2024, the Group completed the refinancing of a US$ 300.0 million (AED 1,101.5 million) loan facility (comprising a US$ 250.0 million

(AED 924.0 million) term loan amortised over five years and a US$ 50.0 million (AED 177.5 million) working capital facility), denominated in United

Arab Emirates Dirhams (AED). The working capital facility includes a cash commitment of US$ 20.0 million (31 December 2023: US$ 20.0 million),

but if no cash is drawn, the full facility remains available for performance bonds and guarantees. The working capital facility expires alongside the

main debt facility in December 2029. The three banks, two of which are current lenders, have an equal participation in the term loan and in the

working capital facility.