Bridgehouse Marine Limited    
Directors’ report for the year ended 31 December 2012

The directors present their annual report on the affairs of Bridgehouse Marine Limited (“the Group” and “the company”) registered number 04352407, together with the audited consolidated financial statements for the year ended 31 December 2012.

Principal activities

The group’s principal subsidiary, Global Marine Systems Limited, is a leading provider of engineering and underwater services, responding to the subsea cable installation, maintenance and burial requirements of our customers around the world. With a fleet of vessels and specialised subsea trenching and burial equipment, we bring a 160 year legacy in deep and shallow water operations.

Global Marine Systems Limited offers cost effective solutions with consistently high service standards for our customers in the markets we operate. The Company is headquartered in the United Kingdom, with resources throughout Europe, Asia Pacific and the Americas.

On 15 November 2012, 100% of the shares in Global Marine Systems Energy Limited, a wholly owned subsidiary of Global Marine Systems Limited, were sold to Prysmian UK Limited.

Results and dividends

Turnover of the Group has increased by £15.9m from £113.4m in 2011 to £129.3m in 2012, with operating losses reducing by £3.0m from £8.2m to £5.2m. The management of the project risks within our contracts in 2012 along with the sale of Global Marine Systems Energy Limited on 15^th November 2012 has resulted in much greater stability in the continuing operations of the business. No dividend is proposed (2011: £Nil).

The statement of total recognised gains and losses includes a loss on exchange of £1.0m in respect of the retranslation of assets, liabilities and investments held in foreign currencies.(2011: gain of £1.5m)

Review of business and future developments

The stable revenue stream that the Group has established in Telecommunications maintenance and vessel chartering allows it to build for growth in the Telecommunications and Oil & Gas markets respectively, both directly and via its established partnerships with Sino-British Submarine Systems and Huawei Technologies.

On 15 November 2012, 100% of the shares in Global Marine Systems Energy Limited were sold by the group’s principal trading subsidiary, Global Marine Systems Limited, to Prysmian UK Limited. With the exception of the Cable Enterprise, Global Marine Systems Limited retains ownership of all vessels previously employed in this business and currently charters two vessels to Prysmian UK Limited.

As prescribed under the terms of the Sale and Purchase Agreement (‘SPA’) the purchaser reviewed the ‘closing accounts’ in December 2012 which resulted in the purchaser submitting a claim under the SPA for a reduction in the overall purchase price.

Bridgehouse Marine Limited    
Directors’ report for the year ended 31 December 2012(continued)

At the date of the approval of the financial statements the outcome of the dispute has yet to be determined. Therefore, based on what they consider to be a reliable estimate of the likely outcome of the final determination, the Directors have made a provision of £12m against the sale price.

Key Performance Indicators (KPIs)

Adjusted Earnings before interest, tax, depreciation and amortisation (EBITDA)

Adjusted EBITDA has been calculated as profit / (loss) on ordinary activities before interest, tax, depreciation, amortisation, exchange, impairment of fixed assets and gain / loss on disposal of assets and investments. It is measured before deducting operating exceptional items. During 2012 adjusted EBITDA has increased by £5.5m.

Cash generation

Cash generation is defined as the difference in opening and closing cash balances. In 2012 the cash balance has increased by £18.9m due primarily to the sale of Global Marine Energy Limited in November 2012.

Returns on investment

Return on investment – is defined as % of earnings before interest, tax amortisation, exchange, impairment of fixed assets and gain / loss on disposal of assets and investments (“EBITA”) divided by average capital employed. Adjusted EBITA has been calculated as profit / (loss) on ordinary activities before interest, tax amortisation, exchange, impairment of fixed assets and gain / loss on disposal of assets and investments. During 2012 the return on investment – adjusted EBITA percentage has increased by 7.9 points.

Non-financial KPI’s

Lost time injury frequency rate (LTIFR)

Health and safety is paramount in our business. Not only is it vitally important to provide employees with a safe place to work, but also any accident is disruptive to the running of the business.

The Group continually reviews and reports all accidents and injuries and in order to benchmark its safety performance against other companies in the industry, the Group reports safety statistics as adopted by the international Marine Contractors Association, of which the Group is a member.

Bridgehouse Marine Limited    
Directors’ report for the year ended 31 December 2012(continued)

Lost time injuries are defined as:

“An accident or injury that prevents a person conducting their normal job from the day following the accident for a period of more than 3 days.”

The LTIFR has decreased from 0.79 in 2011 to 0.30 in 2012. New procedures were introduced during 2011-12 and these have contributed to the reduction of lost time.

The Group has continued with its policy of focused leadership in the area of health and safety. Incidents which are not in themselves accidents but “near misses” are strongly encouraged to be reported and these incidents continue to provide lessons to be learnt which have in turn prevented further incidents and accidents from occurring.

Going Concern

Having reviewed the Group’s cash flow projections for the next 12 months after the date of signing the financial statements, the directors are confident they will have adequate resources to meet the requirements of the business for the foreseeable future. The directors have therefore prepared these consolidated financial statements on a going concern basis.

Quality systems and environment responsibilities

The Group continues to demonstrate its commitment to quality management and the environment by gaining recertification to ISO18001, IS09001 and ESN 14001 during the year. We also retained the RoSPA Presidents Award for the 13^th consecutive year.

Principal risks and uncertainties

The principal business risk acknowledged by the Group is the impact of any reduced demand in the global market for subsea related services. However, Global Marine Systems Limited is well positioned in the telecommunications maintenance market with three long term contracts for at least 3-4 years which will offset any potential volatility encountered in the installation market. Two vessels have also been adapted to address the Offshore Energy market to which they are currently on charter and the Group continues to seek further opportunities in other markets. The Directors are confident that there are sufficient opportunities for growth in the Telecommunications and Oil & Gas markets.

Financial risk management

The Group’s operations expose it to a variety of financial risks that include foreign exchange rate risk, liquidity risk, and credit risk. The Group has in place a risk management process that seeks to limit the adverse effects of these risks on the financial performance of the Group.

Foreign exchange rate risk

The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the US Dollar, the Euro and the Singapore Dollar. Foreign exchange risk arises from current commercial transactions, recognised assets and liabilities and net investments in foreign operations.

The Group manages these risks in a number of ways but primarily by attempting to match assets and liabilities and income and costs denominated in the relevant foreign currencies. As and when surplus funds are generated in foreign currencies they are sold in the spot market. The Group monitors this risk on a regular basis.

Bridgehouse Marine Limited    
Directors’ report for the year ended 31 December 2012(continued)

Liquidity Risk

As with all businesses a key risk to the business is liquidity. The Group maintains medium term debt finance secured on a number of its cable-ships, which, together with cash generated from operations, provide sufficient available funds for future expansion and investment.

Credit Risk

Credit risk is the potential loss arising from any failure by the customers or debtors to fulfil their obligations as and when these obligations fall due. The Group has implemented policies that require appropriate credit checks on potential customers before sales are made. All cash and deposits are placed with reputable “High street” financial institutions. The Group has no significant concentration of credit risk.

Post Balance Sheet Events

On 31 July 2013 the company received a short term loan of £4.5m from its subsidiary Global Marine Systems Limited. This loan is repayable on demand and is non-interest bearing. On 6^th August 2013 the Group made a short term loan of £1.25m to Mr A Ruhan a shareholder of the group holding company. Interest on this loan is charged at 1% per calendar month. On 22 August 2013, the Group made a short term secured loan of £13m to Grenda Investments Limited. Interest on this loan is charged at 1% per calendar month.

Research and development

Technical development is an important part of upgrading and improving techniques for cable laying, cable jointing, cable protection and most recently the efficient transmission of Subsea telecommunication data. The Group remains committed to these principles in all that it does and is continually developing new technology in-house and with its partners.

Directors

The directors who held office during the year and up to the date of these financial statements were as follows:

Gabriel Martin Ruhan (appointed 4^th April 2012)

Stephen Derrick Scott (appointed 5^th April 2012)

Andrew Joseph Ruhan (resigned 24^th September 2012)

Simon John McNally (resigned 24^th September 2012, reappointed 4^th December 2013)

Simon Nicholas Cooper (resigned 22^nd November 2012, reappointed 4^th December 2013)

Directors’ indemnities

Qualifying third party indemnity provisions (as defined by Section 236 Companies Act 2006) for the benefit of the directors were maintained throughout the year and remain in force as at the date of approving the Directors’ report.

Political and charitable donations

During the year the Group made charitable donations of £3,325 (2011: £495) principally to local charities serving the communities in which the Group operates. The Group made no political donations (2011: £nil).

Bridgehouse Marine Limited    
Directors’ report for the year ended 31 December 2012(continued)

Employees

The Group is committed to employment policies, which follow best practice, based on equal opportunities for all employees, irrespective of sex, race, colour, disability or marital status.

Applications for employment by disabled persons are always considered, bearing in mind the respective aptitudes and abilities of the applicant concerned. In the event of a member of staff becoming disabled, every effort is made to ensure that their employment with the company continues and the appropriate training is arranged. It is the policy of the company that the training, career development and promotion of a disabled person should, as far as possible, be identical to that of a person who does not suffer from a disability.

The Group is also committed to providing employees with information on matters of concern to them on a regular basis, so that the views of employees can be taken into account when making decisions that are likely to affect their interests. The Group encourages the involvement of employees by means of regular updates issued by the board on key company issues, financial information and other statistics. Quarterly surveys are also co-ordinated by the Group to obtain employee feedback on issues within the Group.

Elective regime

The Group has passed elective resolutions in accordance with Section 379A of the Companies Act 1985 as amended (“the Act”) to dispense with the formalities of:

^•    the laying of financial statements before the Group in general meeting (Section 252 of the Act),

^•    the holding of annual general meetings (Section 366A of the Act), and

^•    the obligation to appoint auditors annually (Section 386 of the Act).

Section 253(2) gives members the right to require the laying of financial statements before the Group in general meeting. To exercise such right, a member must give notice in writing to that effect, deposited at the, registered office of the Group, within 28 days of the day on which the report and financial statements are sent out, in accordance with Section 238(1) of the Act.

Statement of directors’ responsibilities

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

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the Group and parent company financial statements in accordance with United Kingdom Generally Accepted Accounting Practise (United Kingdom Accounting Standards and applicable law). Under company law, the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and the company and of the profit or loss of the Group for that period. In preparing these financial statements, the directors are required to:

^•    select suitable accounting policies and then apply them consistently;

^•    make judgements and accounting estimates that are reasonable and prudent;

^•    state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;

^•    prepare the financial statements on the going concern basis unless it is inappropriate to presume the company will continue in business.

Bridgehouse Marine Limited    
Directors’ report for the year ended 31 December 2012(continued)

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

Statement of disclosure of information to auditors

Each of the persons who is a director at the date of approval of this report confirms that:

^•    so far as the director is aware, there is no relevant audit information of which the company’s auditors are unaware;

^•    each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company’s auditors are aware of that information.

This confirmation is given and should be interpreted in accordance with the provisions of s418 of the Companies Act 2006.

Independent auditors

BDO LLP was appointed as auditors by the directors during the period and have expressed their willingness to continue in office.

On behalf of the board

Gabriel Ruhan
Director

16 December 2013

Bridgehouse Marine Limited     Independent auditors report to the members of Bridgehouse Marine Limited

We have audited the financial statements of Bridgehouse Marine Limited for the year ended 31 December 2012 which comprise the Group profit and loss account, the Group statement of total recognised gains and losses, the Group note on historical cost profit and losses, the Group and Company balance sheets, the Group cash flow statement and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

This 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.

Respective responsibilities of directors and auditors

As explained more fully in the statement of directors’ responsibilities, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s Ethical Standards for Auditors.

Scope of the audit of the financial statements

A description of the scope of an audit of financial statements is provided on the Financial Reporting Council’s website at www.frc.org.uk/auditscopeukprivate.

Opinion on financial statements

In our opinion the financial statements:

^•    give a true and fair view of the state of the group’s and the parent company’s affairs as at 31 December 2012 and of the group’s loss for the year then ended;

^•    have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

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

Emphasis of matter – uncertain outcome of Expert determination on Sale and Purchase Agreement dispute

We draw your attention to note 19 to the financial statements which describes the uncertainty in respect of the outcome of a Sale and Purchase Agreement dispute where the purchaser is claiming a reduction in the price paid for one of the Group’s subsidiaries, Global Marine Systems Energy Limited. Our opinion is not modified in this respect.

Opinion on other matters prescribed by the Companies Act 2006

In our opinion the information given in the directors’ report for the financial year for which the financial statements are prepared is consistent with the financial statements.

Bridgehouse Marine Limited     Independent auditors report to the members of Bridgehouse Marine Limited(continued)

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

^•    adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

^•    the parent company financial statements 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.

Raymond Adams (Senior statutory auditor)
For and on behalf of BDO LLP, statutory auditor
Ipswich

16/12/13

BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).

Bridgehouse Marine Limited

Company balance sheet as at 31 December 2012
Company Number 04352407

The financial statements on pages 9 to 45 were approved by the board of directors and authorised for issue on 16 December 2013 and signed on its behalf by:

Gabriel Ruhan
Director

Bridgehouse Marine Limited    Group profit and loss account for the year ended 31 December 2012

Bridgehouse Marine Limited    
Group statement of total recognised gains and losses for the year ended 31 December 2012

Group note on historical cost profits and losses for the year ended 31 December 2012

Bridgehouse Marine Limited    
Group cash flow statement for the year ended 31 December 2012

Bridgehouse Marine LimitedNotes to the financial statements for the year ended 31 December 2012

1    Accounting policies

Basis of accounting

The financial statements are prepared on the going concern basis under the historical cost convention, as modified by the revaluation of cable-ships and in accordance with the Companies Act 2006 and applicable accounting standards in the United Kingdom. The principal accounting policies, which have been applied consistently throughout the year, are set out below.

Basis of preparation

The Group financial statements consolidate the financial statements of the company and its subsidiary undertakings, joint ventures and associate undertakings for the year ended 31 December 2012. Subsidiary undertakings are entities (including special purpose entities) over which the Group has the power to govern the financial and operating policies generally accompanying a shareholding of more than one half of the voting rights. Associate undertakings are all entities over which the Group has significant influence but not control, generally accompanying a shareholding of between 20% and 50% of the voting rights. The results of subsidiaries acquired or sold are consolidated for the periods from or to the date on which control passed. The Group’s subsidiary undertakings, associated undertakings and joint ventures (together “the Group companies”) have adopted uniform accounting policies. Acquisitions are accounted for under the acquisition method. All profits or losses on intra Group transactions have been eliminated.

The Group’s associate undertakings and joint ventures are accounted for in accordance with Financial Reporting Standard No 9 ‘associates and joint ventures’, with associates included using the equity method of consolidation and joint ventures included using the gross equity method of consolidation. The consolidated profit and loss account includes the Group’s share of associates’ and joint ventures’ profits less losses while the Group’s share of the net assets of the associates and joint ventures is shown in the consolidated balance sheet. For entities which have non co-terminus year ends, results are consolidated on the basis of management accounts information. The Group’s share of profits or losses on transactions with associates and joint ventures has been eliminated.

Going Concern

Having reviewed the Group’s cash flow projections for the next 12 months after the date of signing of the financial statements, the directors are confident they will have adequate resources to meet the requirements of the business for the foreseeable future. The directors have therefore prepared these consolidated financial statements on a going concern basis.

Goodwill

Goodwill arising on an acquisition of a trade/subsidiary undertaking is the difference between the fair value of the consideration paid and the fair value of the assets and liabilities acquired.

Positive goodwill is capitalised and amortised through the profit and loss account over the directors’ estimate of its useful economic life. Impairment tests of the carrying of goodwill are undertaken:

^•    at the end of the full financial year following acquisition,

^•    in other years if events or changes in circumstances indicate that the carrying value may not be recoverable.

Where the fair value of the assets and liabilities acquired exceeds the fair value of the consideration, the difference is treated as negative goodwill, and is capitalised and amortised through the profit and loss account over the period over which the non-monetary assets acquired are consumed. In the case of fixed assets this is the period over which they are depreciated.

Bridgehouse Marine LimitedNotes to the financial statements for the year ended 31 December 2012(continued)

Tangible fixed assets

Tangible fixed assets with the exception of cable-ships are stated at cost, net of depreciation and any provision for impairment. Cable-ships are stated at valuation net of depreciation. Cost includes the original purchase price of the asset and the costs attributable to bringing the asset to its working condition for its intended use. Cost includes finance costs incurred prior to the asset being available for use

Depreciation is provided on all tangible fixed assets, other than freehold land, at rates calculated to write off the cost less estimated residual value, of each asset on a straight line basis over its estimated useful life as follows:

Plant includes equipment on the cable-ships that is portable and can be moved around the fleet. Plant also includes computer equipment. The expected useful lives of the assets of the business are reassessed periodically.

Assets under construction are not depreciated until they are complete and available for use; when they are reclassified to an asset class and subject to the depreciation rates set out above.

Financial Reporting Standard 15 requires fixed assets which are carried at re-valued amounts to be shown at their current value at the balance sheet date. To achieve this cable-ships are subject to a full external valuation every five years with an interim valuation carried out in the third year of this cycle. At the end of 2012 a full valuation was undertaken on the cable-ships.

An impairment provision is made whenever there is an indication that net book value is greater than the valuation. Impairment losses are charged to the revaluation reserve to the extent that a previous gain has been reversed and thereafter to the profit and loss account as incurred. In the event of a subsequent upwards revaluation of a previously impaired asset, the provision is reversed through operating expenses in so far as it was originally charged to the profit and loss account.

Revaluation reserve

Any surpluses on revaluation of the cable-ships are recognised in the revaluation reserve, except where they reverse previously charged impairment losses, in which case they are recorded in the profit and loss account. Depreciation relating to the re-valued part of the asset is transferred to the profit and loss account as a movement on reserves.

Turnover

Turnover represents amounts receivable for goods and services provided in the normal course of business, net of trade discounts, VAT and other sales related taxes.

Turnover of the business for each market is treated consistently without any differentiation between market sectors, and apart from long-term contracts, revenue is recognised on an accruals basis.

Turnover and profit on long-term contracts are recognised in the financial statements according to the overall state of completion of the contract reached during the period. Amounts recoverable on long term contracts, which are included in accrued income, are stated at the sales net value of the work done less amounts received as progress payments on the account. Excess progress payments are included in deferred income as payments on account. Cumulative costs incurred net of amounts transferred to cost of sales, less provision for contingencies and anticipated future losses on contracts, are included as long term contract balances in stock and work in progress.

Bridgehouse Marine LimitedNotes to the financial statements for the year ended 31 December 2012(continued)

Investments

The Group’s investments in subsidiary undertakings, associate undertakings and joint ventures are stated at cost less any provision for impairment. Impairment reviews are carried out by management should any events occur or business circumstances change which indicate that recoverable amount is below carrying value. Any impairment provisions are charged to the company profit and loss account.

The company has certain contractual agreements with other participants in unincorporated entities that create an entity carrying on a trade or business of its own (joint arrangements — non entity). The company includes the results of these entities within its own results.

The Group’s investments in joint ventures and associate undertakings are accounted for using the Equity method.

Foreign currency

Transactions in foreign currencies are recorded at the rate of exchange at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are reported at the rates of exchange prevailing at that date. Exchange differences are included in the profit and loss account.

The results of overseas operations are translated at average rates of exchange during the year and the balance sheet translated into sterling at the rate of exchange ruling on the balance sheet date. Exchange differences that arise from translation of the opening net assets in foreign subsidiary’s undertakings and any other exchange differences are taken to the profit and loss account reserves.

Leases

Assets held under finance leases and other similar contracts, which confer rights and obligations similar to those attached to owned assets are capitalised as tangible fixed assets and are depreciated over the shorter of their useful lives or the lease period. The capital elements of future asset lease obligations are recorded as liabilities, while the interest elements are charged to the profit and loss account over the period of the leases to produce a constant rate of charge on the balance of capital repayments outstanding.

Rentals under operating leases are charged on a straight-line basis over the lease term, even if the payments are not made on such a basis. Benefits received and receivable as an incentive to sign an operating lease are similarly spread on a straight-line basis over the lease term, except where the period to the review date on which the rent is first expected to be adjusted to the prevailing market rate is shorter than the full lease term, in which case the shorter period is used.

Sale and leaseback

Sale and leaseback arrangements, by means of a finance lease are accounted for in the same manner as a standard finance lease agreement. On sale, the asset is not removed from the fixed assets and any profit or loss on disposal is deferred and amortised over the useful life of the asset.

Leased assets – Lessor

Annual rentals from operating leases are credited to the profit and loss account on a straight line basis over the term of the lease, with the leased asset accounted for in accordance with the policy for tangible fixed assets.

Pensions

The Group operates various pension schemes comprising both defined benefit schemes and defined contribution schemes. The company also makes contributions on behalf of employees whom are members of the Merchant Navy Officers Pension Fund (MNOPF).

Bridgehouse Marine LimitedNotes to the financial statements for the year ended 31 December 2012(continued)

For the defined benefit schemes and the MNOPF scheme the amount charged to operating profit are the current service costs and the gains and losses on settlements and curtailments. These are included as part of staff costs. Past service costs are recognised immediately in the profit and loss account if the benefits have vested. If the benefits have not vested immediately, the costs are recognised over the period until the vesting occurs. The interest cost and the expected return of assets are shown as a net amount of other finance cost or income adjacent to interest. Actuarial gains and losses are recognised immediately in the statement of total recognised gains and losses.

Defined benefit schemes are funded with the assets of the scheme held separately from those of the Group, in separate trustee administered funds. Pension scheme assets are measured at fair value and liabilities are measured on an actuarial basis using the projected unit method and discounted at a rate of equivalent currency and term to the scheme liabilities. The actuarial valuations are obtained at least triennially and are updated at each balance sheet date.

The resulting defined benefit asset or liability is presented separately after net assets on the face of the balance sheet.

For the defined contribution schemes the amount charged to the profit and loss account in respect of pension costs is the contributions payable in the year. Differences between contributions payable in the year and contributions actually paid are shown as either accruals or prepayments in the balance sheet.

Stocks and work in progress

Stocks are valued at the lower of cost and net realisable value on a first in first out basis. Provisions for deterioration and obsolescence are made where appropriate and are charged to the profit and loss account in operating expenses.

Short term work in progress on contracts is stated at cost less foreseeable losses. These costs include only direct labour and expenses incurred to date and exclude any allocation of overheads. The policy for long term work in progress contracts is disclosed within the Turnover accounting policy.

Research and development

Research and development expenditure is written off to the profit and loss account as incurred. Development expenditure is also written off as incurred.

Taxation

The company’s principle trading subsidiary, Global Marine Systems Limited, re-entered into the UK tonnage tax regime on 1 January 2011 for a period of ten years. Under the tonnage tax regime the current year tax charge arising on qualifying activities is calculated by reference to net tonnage of the qualifying ships owned by the Group.

This method replaces both the tax-adjusted commercial profit/loss on qualifying shipping trade and chargeable gains/losses made on disposal of tonnage tax assets as calculated in previous periods. To the extent that the company generates profits/losses, which do not qualify for inclusion under the above regime, they will be taxable under general UK corporation tax principles.

Deferred taxation should not generally arise in respect of profits/losses within the tonnage tax regime. However, where the Group generates profits/losses which do not qualify for inclusion under the above regime, deferred taxation will be provided on income and expenditure dealt with for taxation purposes in periods different from those for accounting purposes, to the extent that it is probable that a liability or asset will crystallise. Deferred tax balances are not discounted.

Other operating income

Other operating income consists of income from miscellaneous asset sales not considered to be part of the core operating business. Revenue and costs are recognised on completion of the sale or event as described in the individual contract.

Bridgehouse Marine LimitedNotes to the financial statements for the year ended 31 December 2012(continued)

Exceptional items

Exceptional items are those material items of income and expenditure which the Group has disclosed separately because of their quantum or incidence so as to give a clearer understanding of the Group’s financial performance.

2    Corresponding figures

The analysis between continuing and discontinued operations for the year ended 31 December 2011 is shown below. Activities discontinued in the year ended 31 December 2012 are shown as part of the discontinued activities. Further details on discontinued operations are given in note 28.

3    Turnover

Turnover, results and net assets are principally derived from telecommunications, renewable energy, oil & gas, and science and research. Contracts within telecommunications include long term agreements for the provision of maintenance of submarine telecommunications cables as well as associated services for the installation either directly with cable owners or indirectly by providing charter services, including transactions with Group companies and joint ventures. Turnover from renewable energy and oil & gas are serviced based and include the installation and associated services in connection with the laying of marine power cables to wind farms and gas pipelines.

Turnover including JVs & Associates as analysed by geographical location of works undertaken in percentage terms is as follows;

Part of the Group’s success has been based on the substitutability of services between market sectors. Cable-ships by nature are also mobile and easily transit between regions as required. Business is contracted to optimise the combination of available business and asset mix and fit at the time of contracting. For this reason, the directors consider that the disclosure of assets and profitability against any particular geographical segments and turnover by market sector would be misleading and seriously prejudicial to the interests of the Group.

Bridgehouse Marine LimitedNotes to the financial statements for the year ended 31 December 2012(continued)

4    Operating costs

The exceptional item relates to one-off losses incurred on the Globe Tech 1 and Gwynt Y Mor projects in Global Marine Systems Energy Limited. In 2011 the losses related to the London Array and Thornton Bank wind farm installation contracts.

5    Operating profit / (loss)

Bridgehouse Marine LimitedNotes to the financial statements for the year ended 31 December 2012(continued)

6    Remuneration of directors

There were no directors emoluments paid as fees relating to director services provided to the Group through related party companies (2011: nil)

7    Employee Information

The average monthly number of persons employed by the Group (including directors) during the year, analysed by category, was as follows:

The company did not employ any persons during the year and therefore had no payroll costs.

Bridgehouse Marine LimitedNotes to the financial statements for the year ended 31 December 2012(continued)

8    Interest receivable and similar income

9    Interest payable and similar charges

10    Tax loss on profit / (loss) on ordinary activities

Bridgehouse Marine LimitedNotes to the financial statements for the year ended 31 December 2012(continued)

On 1 January 2011, the Group renewed its election into the UK Tonnage Tax regime for a period of 10 years. This regime calculates tax payable on qualifying shipping activities in accordance with the net tonnage of qualifying ships, rather than the adjustment of commercial profits.

A reconciliation of the loss before tax at the standard corporation tax rate to the credit for the year is not disclosed as the Group is within the tonnage tax regime, under which taxation is not related to profits and losses.

11    Prior year adjustment

It has come to the attention of the directors that the treatment of leases as operating leases by the joint venture International Cableship Pte Limited is inconsistent with the group accounting policy. Previously no adjustment has been made on consolidation to align accounting policies which has resulted in a prior period adjustment totalling £11,524,000. All comparatives have been restated.

The effects of the change on the financial statements for the year ended 31 December 2011 are summarised below:

12    Intangible fixed assets

Bridgehouse Marine LimitedNotes to the financial statements for the year ended 31 December 2012(continued)

The company has no intangible fixed assets.

13    Tangible assets

Bridgehouse Marine LimitedNotes to the financial statements for the year ended 31 December 2012(continued)

Included in the total net book value of cableships and submersibles of the Group is £82,490,421 (2011: £91,122,817) in respect of assets held under finance leases and hire purchase contracts. Depreciation for the Group the year on these assets was £7,295,903 (2011: £6,460,689).

The historical cost of cableships and submersibles is

Cable-ships and submersibles with total cost of £46,327,753 (2011:£nil) and net book value of £46,327,753 (2011: £nil) are held for use in operating leases.

M3 Marine Pte Limited, an external professional broker provided a market valuation dated both 31 December 2012 for 4 cable-ships and at 4 February 2013 for 2 cable-ships which have been revalued in the balance sheet at 31 December 2012.

Derrick Offshore Limited, also an external professional broker has provided a market valuation dated 22 July 2013 for one cable-ship which has been re-valued in the balance sheet at 31 December 2012.

The directors are not aware of any material change that would affect these valuations and consider them to be reflective of the year end position.

The company has no tangible fixed assets.

14    Investments

The directors believe that the carrying value of each investment is supported by its underlying net assets.

Bridgehouse Marine LimitedNotes to the financial statements for the year ended 31 December 2012(continued)

During 2012 the Group invested $Nil (2011 - $750,000) and $800,000 (2011 - $200,000) into Global Marine Energy Inc. by way of preference share capital and equity loans respectively. This has been written down to Net Asset Value of $96,505 as at 31 December 2012 (31 December 2011 $116,883). This investment has been dissolved in 2013 due to the sale of Global Marine Systems Energy Limited.

The aggregate amount of capital and reserves for each joint venture and associate company at its last year end, together with the profit or loss for its financial year are disclosed below:

The Group’s share of contingent liabilities and capital commitments of the joint ventures and associate companies was £nil (2011: £nil).

The following information is given in respect of the Group’s share of all joint ventures and associates.

In 2012, as in 2011 the Group’s share of operating profits for each joint venture and associate did not exceed 25% of the Group operating profits.

In the opinion of the directors the investments in, and amounts due from, the Company’s subsidiary undertakings, associates and joint ventures are of a value of at least the amounts at which they are stated in the balance sheet.

Bridgehouse Marine LimitedNotes to the financial statements for the year ended 31 December 2012(continued)