ANNUAL REPORT
AND ACCOUNTS
JAMES FISHER AND SONS PLC
2021
James Fisher and Sons plc
T: +44 (0) 1229 615 400
F: +44 (0) 1229 836 761
E: enquiries@james-fisher.com
W: www.james-fisher.com
James Fisher and Sons plc Annual Report 2021
LED BY OUR PURPOSE
STRATEGIC REPORT
At a glance 02
Our history 04
Chairman’s review 06
Investment case 08
Operations review 10
Business model and strategy 12
Sustainability at James Fisher 14
Our stakeholders 20
Our markets 22
Chief Executive’s review 24
Our divisions
- Marine Support 28
- Specialist Technical 30
- Offshore Oil 32
- Tankships 34
Sustainability
- Planet 36
- People 42
- Partnership 48
Task Force on Climate-realated Financial Disclosures 52
Key performance indicators 57
Financial review 58
Principal risks and uncertainties 61
Non-financial information statement 70
GOVERNANCE
Governance at a glance 74
Chairman’s introduction to corporate governance 76
Governance framework
78
Board of Directors 80
Corporate governance report 82
Nominations Committee report 86
Audit Committee report 89
Directors’ remuneration report 94
Directors’ report 111
Statement of Directors’ responsibilities 116
FINANCIAL STATEMENTS
Independent auditor’s report 120
Consolidated income statement 128
Consolidated statement of other
comprehensive income 129
Consolidated and Company statement of financial position 130
Consolidated and Company cash flow statement 131
Consolidated statement of changes in equity 132
Company statement of changes in equity 133
Notes to the financial statements 134
Subsidiaries and associated undertakings 188
Group financial record 192
Investor information 193
INSIDE THIS REPORT
www.james-fisher.com
We are a business that strives to successfully solve our
customer’s complex and difficult problems in some of the
harshest environments. We do this by engaging, enabling
and empowering our people to achieve, supported and
guided by our values:
DRIVEN BY OUR VALUES
ENERGY:
We go above and beyond, delivering
exceptional results for all stakeholders
We love what we do and take pride
in our positive impact
We are empowered to take the right
decisions, quickly
INTEGRITY:
We always strive to do the right thing
We treat everyone as we would like
to be treated, creating relationships
based on trust and fairness
We collaborate by listening respectfully
and speaking honestly
PIONEERING SPIRIT:
We respond innovatively to our
customers’ current and future needs
We are entrepreneurial and think
creatively to solve difficult problems
We challenge conventional thinking
and find better ways
RESILIENCE:
We are accountable and courageous,
and face up to difficult situations
We are tenacious in the pursuit
of our purpose
We seek feedback, we learn and
we develop together
For the latest news and information on
our Company and its activities check out
our corporate website to stay up to date.
Governance Financial statements
Strategic report
James Fisher and Sons plc // Annual Report 2021
Strategic report
Annual Report 2021 \\ James Fisher and Sons plc 01
Welcome to our Annual Report and Accounts 2021
During 2021 we remained focused on
enacting our purpose-led strategy. Resetting
the business by addressing strategic and
operational challenges, and concentrating
our portfolio on markets where we have a
highly differentiated value proposition and
are able to achieve sustainable, profitable
growth. Together with our extraordinary
people, we have faced unprecedented
circumstances, however, we are confident
that the strategic framework implemented
over the last year and our focus on execution
will place the Group on a sound footing for
2022 and beyond.
Eoghan O’Lionaird - Chief Executive Officer
Read the Chief Executive’s review
on page 24
At a glance
The global footprint of James Fisher reflects the diverse
range of customers and markets served. With our network
of Group company facilities, partners, agents and support
bases, we are well placed to deliver flexible, highly
responsive and localised support to our customers.
A LEADER
WITH GLOBAL
IMPACT
INDUSTRY RECOGNISED
The James Fisher Group includes
industry recognised companies which
offer a diverse selection of services
within key global markets.
We are a supplier of choice across the industries
we serve, with an unrivalled ability to meet the
constantly developing needs of our customers
operating in challenging environments. James
Fisher’s expertise ranges from marine and subsea
services including diving and ROV, to specialist
load monitoring, container weighing and nuclear
decommissioning work.
OPERATIONAL HIGHLIGHTS
ENERGY
The energy transition is creating
unparalleled opportunities for our
business. As a Group we are well
positioned to play a responsible role
in an evolving oil and gas sector
through production, transportation
and decommissioning phases.
Accelerated investment in offshore
wind around the globe, meanwhile,
will ultimately compensate for any
future reduction in oil and gas demand.
Read more on our markets
on page 22
MARINE
Demand in the marine sector
softened considerably due to
reduced economic activity, however,
increased investment planned in
offshore infrastructure, recovery of
commodity prices post-pandemic
and a return to a more normal
pattern of global trade should
precipitate a sustained increase in
demand and accelerate projects
deferred or delayed due to COVID.
Read more on our markets
on page 22
DEFENCE
The Group, which commands
leadership positions in submarine
rescue and special operations, has
continued to experience strong
demand in the defence sector.
Applying its innovative solutions
for the improvement of diver safety
and equipment reliability, the
business has also seen continued
demand for its commercial diving
equipment globally.
Read more on our markets
on page 22
Revenue (£m)
£494.1m
2020: £518.2m
Underlying operating profit* (£m)
£28.0m
2020: £40.5m
Underlying profit before tax (£m)
£19.7m
2020: £31.5m
Cash conversion (%)
168%
2020: 220%
Net borrowings (£m)
£185.6m
2020: £198.1m
Read more on our key performance
indicators on page 57
* Excludes separately disclosed items.
James Fisher uses alternative performance measures (APMs) as key financial indicators
to assess the underlying performance of the business. APMs are used by management as
they are considered to better reflect business performance and provide useful additional
information. APMs include underlying operating profit, underlying profit before tax, underlying
diluted earnings per share, underlying return on capital employed, underlying Ebitda, cash
conversion and underlying net borrowings. An explanation of APMs is set out in note 2 of the
financial statements.
Strategic report Strategic report
Governance
Financial statements
Annual Report 2021 \\ James Fisher and Sons plc 0302 James Fisher and Sons plc // Annual Report 2021
WE’VE COME A LONG WAY
James Fisher has a long history from its origins in the nineteenth century Barrow hematite
trade to its position today as a global provider of trusted engineering solutions.
Read more on our heritage online at:
www.james-fisher.com/about/heritage/
Our pioneering spirit has enabled
us to adapt to changing times.
175
years of innovation
1952
PUBLIC COMPANY
The Company became a public
company listed on the stock exchange on
17 October 1952 with six million five-shilling
ordinary shares quoted.
1996
EXPANSION
Following the Coe Metcalf Shipping
acquisition a decade earlier, the Company
further expands with the addition of P&O
Tankships becoming the major operator of
product tankers in North-West Europe.
2019
EXPANDED OFFERINGS
2019 saw in a series of acquisitions including
Martek Marine, SM Continental and Ortega
Submersibles, further enhancing the
Company’s niche capabilities.
1847
FOUNDING YEAR
The Company is founded. A family-run
shipping business based in Barrow-in-Furness,
it is formed to transport iron ore and coal
around the coast of Britain.
2012
LANDMARK ACHIEVEMENTS
James Fisher celebrated its 165
th
anniversary.
1840s
PIONEERING SPIRIT
Joseph Fisher anticipated demand of iron
ore ahead of the expansion of the railways.
By capitalising on Barrow-in-Furness’s
rich mineral deposits, he demonstrated
the pioneering spirit which was to become
synonymous with the Company.
1965
INNOVATING FOR NUCLEAR
The conversion of Stream Fisher for the
carriage of irradiated nuclear fuel in 1965
fulfilled the unique requirements of the nuclear
industry and demonstrated the Company’s
ability to solve complex problems.
2005
STRATEGIC TRANSFORMATION
The acquisition of Fendercare Marine
in 2005 initiated a period of strategic,
targeted growth and further advanced
the Company’s transition from traditional
shipping to marine services.
1883
FLEET MODERNISATION
Despite adverse trading conditions, the
vision existed to transform the fleet. After
transitioning from wooden to steel-hulled
sailing ships, the Company took delivery
in 1883 of the first in a series of steamers.
2015
ADVANCEMENT IN RENEWABLES
The award of a major support contract
for the construction of Galloper windfarm
in 2015 represented a significant turning point
in the Company’s advancement within the
renewables market.
2021
RESETTING
In 2021 the Company announced its strategy
for delivering sustainable, profitable growth
and improved returns for all stakeholders.
SUPPORTING THE ADVANCE OF ENERGY
TRANSITIONS SINCE 1847
Energy has always been at the heart
of James Fisher’s activities.
Throughout its history, the Company has actively
responded to, and helped advance shifts in energy
systems. Beginning with its adoption of steam power
over sail in the nineteenth century, it has successfully
transitioned to and helped harness new forms of energy
from traditional oil and gas and nuclear to renewables
and LNG.
COAL
OIL AND GAS
Supporting the full life
cycle from exploration
through to production,
transportation and
decommissioning.
Drawing on nearly 40 years’ experience,
James Fisher supports the nuclear
industry through the provision of specialist
engineering and manufacturing services.
From concept design to decommissioning,
it overcomes complex challenges in uniquely
hazardous environments.
NUCLEAR
During the 1880s James
Fisher transitioned its fleet
from sail to steam.
Investing in environmentally
sustainable growth.
Applying knowledge and expertise gained in other
industries, together with the latest technologies, the
Company serves the fast-growing renewable energy
space in support of meeting global net zero goals.
RENEWABLES
The Company was founded to
service the need for efficient
transportation of coal as well
as iron ore, and it continued
to support this energy stream
throughout the 1960s and 1970s,
facilitating the construction of
coal-powered stations with heavy
lift vessels.
James Fisher is a world leader in the
provision of specialist products and
services to the oil and gas industry.
It transfers close to 600m barrels
of oil at sea annually.
Providing innovative
solutions from new build
to end of life.
Coal
Oil and gas
Nuclear
Renewables
LNG
Our history
Strategic report
Governance
Financial statements
04 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 05
Strategic report
Chairman’s review
The key strategic challenge
for the Company over the
next decade is in defining
the optimal approach
to address the energy
transition, capitalising on
the many opportunities that
are available in renewables.
I joined James Fisher
on 1 May 2021, with the
Company amid some major
strategic and operational
challenges. As with many
businesses, COVID has
been very disruptive from an
operational perspective, and
we owe a debt of gratitude
to our employees for their
commitment to minimising
the impact on our customers
by continuing to deliver our
critical services throughout
the pandemic.
2021 performance
2021 was a disappointing year. Revenue
declined by 4.7% to £494.1m (2020:
£518.2m) driven by the Marine Support
division being £34.9m (14.0%) behind 2020.
Within Marine Support, the Fendercare ship-
to-ship transfer revenues were some 36%
behind a record year in 2020. Underlying
operating profit fell by 30.9% to £28.0m
(2020: £40.5m) with the profitability of our
Fendercare, JFD and Tankships businesses
being particularly challenged. As a result of
those performance challenges, combined
with a high level of financial leverage, the
Company did not pay an interim dividend for
2021 and the Board is not recommending the
payment of a final dividend for the year. The
Board recognises the importance of paying
dividends and is committed to reinstating the
dividend when appropriate.
There is no doubt that the performance of
James Fisher has been impacted by COVID
over the past couple of years, but this is not
the sole reason for the Company’s recent
poor performance.
The Company has in the past made a
number of acquisitions which have enhanced
earnings per share in the short term, but
which have contributed to an increase in
debt levels and a long-term decline in return
on capital employed. Poor performance in
a number of these acquired businesses,
combined with weakness in trading in our
traditional Tankships, Fendercare and JFD
businesses, led to a disappointing financial
performance in 2021 and a high level of debt.
Our overriding short-term priorities are: firstly
to reduce our debt and optimise our portfolio
through a series of disposals; and secondly,
to focus on improving our operational and
financial performance.
In 2021 we sold the Paladin dive support
vessel and the Materials Testing and NDT
businesses. Looking forward, we have
reviewed our portfolio with a view to executing
further disposals to both reduce debt and to
optimise the portfolio and simplify the Group
by refocusing on markets where James Fisher
can deliver sustained, differentiated value to
our customers.
In terms of performance improvement, we
have begun an operational excellence pilot
programme which will see Lean methodologies
being rolled out across the Group, with the
objective of improving product and service
quality, customer service and cost efficiency.
We will soon embark on a Group-wide
commercial excellence programme, aimed at
improving our capability in sales effectiveness,
creating customer value and commercial
contracting. During the year, we also undertook
another Group-wide employee engagement
survey, the first to be externally-supported, and
this has highlighted several areas that we can
address to improve employee engagement.
Our CEO, Eoghan O’Lionaird, has expanded
the Executive Committee by including the
divisional managing directors, thereby
increasing the focus on operational
management. This, in turn, will bring the
Group functions closer to the operations and
will unlock synergies through operating more
effectively as an integrated leadership team.
We are putting these foundations in place to
turnaround and improve Group performance.
However, it will take time for the changes to
take effect and, like any turnaround, to bear
fruit. Nonetheless the Board is pleased that
these challenges are being tackled head on
with the objective of creating a platform from
which we can sustainably grow the business
in the future.
Future direction
With a backdrop of ever-increasing focus on
climate change, and the acceleration of an
energy transition to a low carbon economy,
the oil and gas services industry is likely to
decline over the long-term. However, it will take
time for the required global low carbon energy
infrastructure to be developed. Over that period
of development, the energy transition requires
the continued provision of environmentally
responsible products and services that
support our existing oil and gas customers.
As the pace of the energy transition towards
sustainable energy sources accelerates, we
are equally focused on accelerating our own
transition, as new opportunities emerge for our
well-established and fast-developing services
supporting the growth of renewable energy. We
see those opportunities most notably in offshore
wind and the responsible decommissioning of
redundant oil and gas assets. We are well-
positioned in these fast-emerging sectors,
where the Group can combine its traditional oil
and gas-oriented subsea capabilities with newer,
renewable-energy specific solutions, such as
the installation, monitoring and management of
high voltage cabling in offshore wind, and the
provision of bubble curtains that protect sea
life from the noise impact of pile-driving during
the construction of the wind farms. The key
strategic challenge for the Company over the
next decade is in defining the optimal approach
to address the energy transition, capitalising
on the many opportunities that are available
in renewables, whilst enabling our customers
to make their own transitions in a financially
and environmentally responsible manner. It is
a challenge on which our management team
is keenly focused and will continue to define
with more precision as the shape of the energy
transition becomes clearer.
Board changes
I am very grateful to my predecessor, Malcolm
Paul, for all that he did for James Fisher after
being appointed to the Board in 2011. After
becoming Chairman in 2018, Malcolm played
a key role in supporting Eoghan O’Lionaird
following his appointment as Chief Executive
Officer in 2019. In addition, Stuart Kilpatrick
stepped down from the Board early in the year.
Stuart, the Group Finance Director since 2010,
played an important role in the development of
James Fisher over the last decade. On behalf
of the Board, I would like to thank Malcolm and
Stuart for their contributions, and to wish them
every success for the future.
Duncan Kennedy joined the Board as Chief
Financial Officer on 4 May 2021. Duncan brings
considerable international and listed company
experience to the Company, and will play a key
role in strengthening the performance culture
across the Group.
I was also pleased to welcome two new
Non-Executive Directors to the Board. Kash
Pandya was appointed to the Board on
1 November 2021 and brings a wealth of
international experience as a FTSE 250 Chief
Executive, having operated in many of the same
geographies and sectors as James Fisher.
Claire Hawkings, who was appointed to the
Board on 1 January 2022, brings extensive
international oil and gas experience, as well
as expertise in sustainability, health and safety
and the challenges of the energy transition.
Mike Salter will step down as a Non-Executive
Director at the AGM in May 2022 after serving
nine years on the Board. He has made a
considerable contribution to James Fisher, and
his experience of the marine and oil and gas
services industries will be much missed.
I am very grateful to the Board for its support
and commitment in dealing with the challenges
faced during what was a difficult year.
Employees
I would like to finish this statement where I
started, by again expressing my gratitude, on
behalf of the Board, to the employees of James
Fisher for all they have done in dealing with the
challenges of the past year, including those
resulting from the COVID pandemic. Working
for a Group that delivers critical solutions
to customers’ complex problems in harsh
environments is always challenging, and I have
huge respect for how our employees go about
this in their day-to-day jobs.
Conclusion
The last two years have been among the most
challenging that the Company has experienced
in its 175-year history. The Board is committed
to delivering a successful turnaround of the
James Fisher Group and believes that the
steps it is taking strategically, operationally, and
financially are in the best long-term interests of
all stakeholders. In taking these steps we will
continue to live by our purpose and values.
I look forward to being able to report on our
progress over the coming years and to returning
the Group to sustainable profitable growth.
Angus Cockburn
Chairman
OFFSHORE WIND
We have continued to build on our
successes in offshore wind through
2021 securing several construction
support and operations and maintenance
contracts both in the UK, Europe and Asia
Pacific. We have continued to build our
experienced talent base and have identified
a number of investment opportunities to
pursue during 2022.
Strategic report
Governance
Financial statements
06 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 07
Strategic report
WHY INVEST IN JAMES FISHER
STRENGTHS UNDERPINNED BY...
Investment case
We are committed to delivering sustainable profitable growth
and improved returns for all our stakeholders.
STRONG GROWTH POTENTIAL
Within each of our core markets substantial
opportunities exist for growth. We are well
positioned to capitalise on developments
within oil and gas extraction, transportation
and offshore wind and anticipate additional
opportunities to invest in less mature markets
where our differentiated solutions can
be applied.
HIGHLY DIFFERENTIATED
OFFERING
Our focus on solving difficult problems in
specialist, high-margin niche segments
sets us apart from potential competitors,
with customers valuing the unique assets,
capabilities and skills we’ve invested in.
This differentiation is further enabled through
the innovation, technology and IP we develop.
MARKET LEADING POSITION
We hold leading positions across several
markets and geographies including in ship-
to-ship transfers, submarine rescue, high-
voltage engineering for offshore wind and
subsea unexploded ordnance removal.
We are the primary fleet operator for the
delivery of petrol, diesel and heating fuels
to the ports of Britain and Ireland and are
pioneers in nuclear decommissioning.
PARTNER OF CHOICE
Our customers require the support of
companies able to adapt to their expanding
needs, and our size, geographical spread and
accreditations recommend us as a long-
term, credible partner. Throughout our 175
years, we’ve reliably demonstrated an ability
to solve difficult problems in the harshest
of environments – a trustworthy partner
with a reputation for safety, environmental
consciousness and efficiency.
COMMITMENT TO PURPOSE
We recognise that collective success
depends upon a shared understanding of
the fundamental aims and ambition of the
Company. Authentic, inspiring and practical,
our purpose sets a clear direction to unite
our key stakeholders interests and is
an effective tool for driving growth at an
individual, team, operating company, division
and Group level. Forward-looking, our
purpose guides future strategic decision-
making, investment and innovation.
EXCEPTIONAL PEOPLE
Central to the success of our operations
are our people. Working across continents,
sometimes in the harshest of environments,
our people extol our valued behaviours,
demonstrating strong local expertise,
exemplary teamwork, selflessness and
unparalleled fortitude. It is their talents and
passion for creating value for internal and
external stakeholders, that will facilitate our
strategy of sustainable, profitable growth.
VALUED BEHAVIOURS
Reflective of our history, our core guiding
behaviours ‘pioneering spirit’, ‘integrity’,
‘energy’ and ‘resilience’ are intrinsic to who we
are today as an organisation. Representing the
principles we aspire to uphold, both internally
and externally, they are pivotal to our ability to
maintain high standards of delivery, long-term
flourishing relationships and a strong working
culture. Integral to our purpose, they help
propel the business forward.
CULTURE OF INNOVATION
Combining instinctive curiosity with subject
matter expertise and a deep practical
understanding of applications, our people drive
continual innovation. Supported by a culture in
which autonomy and collaboration are actively
encouraged, they intuitively generate ideas to
improve safety and efficiency, and to lower risk
and cost.
MARGIN IMPROVEMENT
We are determined to embed lean and
continuous improvement principles throughout
our business to guarantee consistent and
efficient operational delivery.
We are constantly evaluating ways to improve
our delivery performance and adopting
best practice, methodologies, systems and
processes with the sole aim of creating
additional value.
PROCESS EXCELLENCE
Committed to process excellence, we’re
focused on actively managing our portfolio,
reducing leverage and deploying a balanced
capital allocation process, improving and
scaling commercial and contracting capabilities
and striving for a world-class safety, risk and
project management culture. We believe
this will enable us to deliver sustainable
growth, improved margins and ROCE and
reduced leverage.
Committed to
sustainability:
SUPPLIER RELATIONSHIPS
We value relationships with suppliers and
partners who can help us reliably, repeatedly
and responsibly satisfy our customer needs and
sustainability goals.
We recognise that our partners help us deliver
world-leading solutions, and we are committed
to treating them fairly and equitably.
Read more on our supplier
relations on page 21
There are huge opportunities
for James Fisher in renewable
energy and decommissioning.
Strategic report
Governance
Financial statements
08 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 09
Strategic report
A BACK TO BASICS APPROACH
RESET (2020-22)
Define purpose and valued behaviours; focus
on critical and urgent.
Reset to a back to basics approach
Focus on select market niches
Actively re-engage all stakeholders
Fix or exit underperforming businesses
and assets
We’re preparing for the future with our three phase
roadmap, created and deployed to address strategic
and operational challenges.
REINFORCE (2021-23)
Fix portfolio; accelerate operational performance,
invest in the energy transition.
Reinforce foundations on which sustainable
profitable growth will be built
Define and deploy KPIs across all stakeholders
Continue active portfolio management
Invest in technology to fuel the energy transition
REALISE (2023-25)
Top quartile sustainable profitable growth.
Realise medium-term environmental and
financial targets
Deliver top quartile industry sustainable growth
Accelerate growth of new business in energy
transition
OUR DIVISIONS
Marine Support
Our Marine Support businesses provide
products, services and solutions to the global
marine industry. These are supplied to a range
of end market sectors including marine, oil
and gas, ports, construction and renewables.
Read more on pages 28 and 29
Specialist Technical
Our Specialist Technical businesses supply
diving equipment and services, submarine
rescue vessels and through-life rescue
services and engineering solutions to the
international defence market and UK nuclear
decommissioning market. Other subsea
services provided to the defence sector include
special operation swimmer delivery vehicles.
Read more on
pages 30 and 31
Offshore Oil
Our Offshore Oil businesses supply a range
of services and equipment to the global oil
and gas and renewable energy industries.
This includes the design and engineering of
specialist equipment, platform maintenance
and modification, well testing support,
subsea operations and maintenance services.
Read more on
pages 32 and 33
Tankships
Our Tankships division operates a fleet
of product and chemical tankers which
trade along the UK and northern European
coastline carrying clean petroleum products
and chemicals including increasing volumes
of bio fuels. The division performed 1,362
port calls this year carrying liquid cargoes
from refineries and terminals, to major coastal
storage facilities. The division also operates
a port in Plymouth, UK.
Read more on
pages 34 and 35
OUR CORE MARKETS
Knowing our strengths
We are refocusing our portfolio on niche
segments within our chosen markets where
we can offer differentiated, distinctive and
defensible value and where we can accelerate
investments in support of a responsible
energy transition.
We have a strong track record of success
across the three global markets of marine,
energy and defence, operating in the
higher-margin areas often where these
markets intersect.
Read more on
page 22
Marine
Recognising both the ongoing importance
of the marine sector for the transportation of
commodities and the developments shaping
its future (changing energy mix, scarcity of
resources and geopolitical tensions), we are
focusing attention on commercial marine,
offshore renewables and defence opportunities.
We are investing in new transportation modes
and technology, expanding our liquefied natural
gas ship-to-ship services to reflect changes
in cargo demands and port infrastructure,
and applying our capabilities to help minimise
pollution and protect marine life in fulfilment of
our sustainability goals and purpose.
Energy
We are focused on growth across the
energy mix. There is a real opportunity for
James Fisher to grow in offshore wind by
interconnecting multiple capabilities from
across the group.
In addition, we’re building adjacent positions
in the maturing oil and gas market segments
boosted by the energy transition where our
skills are unique and where there is increased
demand for our decommissioning services.
Defence
We deliver long-term value to all our customers
by: ensuring the safety of submariners through
our innovative and technologically advanced
submarine rescue solutions; designing safe
and reliable rebreathers to safeguard divers
at pressure, facilitating the safe insertion and
extraction of special operations forces and
sponsoring developments in environmentally
sensitive unexploded ordnance disposal.
Shifting global power bases and ensuing
political instability together with developments
in automation will continue to drive defence
security, threat detection, qualification and
mitigation requirements.
R
R
R
STRONG MANAGEMENT
Capital allocation
Capital allocation is a critical process in
our strategy and our priority is to return to
sustainable, profitable growth. Our targets
are to consistently deliver more than 10%
operating profit and more than 15% ROCE as
well as reducing the Group’s leverage. Capital
allocation will also be used to improve our
impact on the environment.
Portfolio management
Focused on businesses within our core
markets with highly differentiated offerings
achieving or promising sustainable profitable
growth, we’re adopting a ‘fix or exit’ strategy
for those unable to demonstrate a clear
competitive advantage. In line with this
strategy, we have recently divested James
Fisher Testing Services, James Fisher NDT
and JFN GmbH. Combining this with an asset
light strategy, allows us to focus on priority
areas.
Operational excellence
Our operational excellence approach focuses
on removing wasteful activities from our
processes and systems to provide efficient,
and effective value creation utilising a lean
toolset. This value stream understanding
coupled with a problem-solving culture, will
enable us to deliver best-in-class products
and services to our customers in a consistent
and sustainable manner.
Commercial excellence
Focusing on the design and delivery of
sales and marketing best practices our
commercial excellence programme takes
into consideration value stream design and
the provision of a commercial toolset to
maximise profitable revenue, consistently
improve salesforce effectiveness, and
provide a product and service mix with the
flexibility our customers require.
Read more in our Chief Executive’s
review on page 24
Watch our video on Capital Markets
Day on https://www.youtube.com/
watch?v=RF7oLj0PWVk
Operations review
Governance Financial statements
10 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 11
Strategic reportStrategic report
FORGING THE WAY AHEAD
Business model and strategy
BUSINESS MODEL
We are focused on market segments where
our responsive, niche and entrepreneurial
businesses can deploy innovative products
and services that create superior value whilst
attaining the highest standards of safety,
efficiency, environmental performance,
regulatory compliance and ethical standards.
Our customers are predominantly large
multinational corporations, governments
and other high assurance counterparties.
CULTURE
The key element at the core of James
Fisher is our people. Our decentralised and
entrepreneurial culture encourages personal
accountability and development through
understanding between customers’ needs,
overcoming the unique challenges of the
environments in which we operate and
supporting development and deployment of
unique solutions focused on value creation for
all our stakeholders through rapid decision-
making.
STRATEGY
The Group’s strategy is to grow
organically through leveraging its
existing skills, technology and asset
base in areas of specialist expertise
and through investment in people,
working capital and equipment.
This is supported by selective acquisitions that expand
the product or service offering or extend geographical
coverage to strengthen our value proposition. James
Fisher has a number of entrepreneurially-led businesses
which hold leading positions in their specific operational
niche and which are supported and encouraged to pursue
new opportunities. Our businesses operate in harsh and
challenging environments where our specialist expertise in
solving complex problems in response to customer needs
is highly valued and rewarded. We pursue opportunities
in market segments and geographies that are less mature
and fast-growing where our track record in delivering
safe and trusted solutions provides assurance to our
customers. Our niche capabilities create further possibilities
to pursue adjacent market sectors and exploit integration
opportunities to increase the value we create.
We are a business that strives to successfully solve
our customers’ complex and difficult problems in
some of the harshest environments. We do this only
by engaging, enabling and empowering our people
to achieve, supported and guided by our values:
are cash-generative
have operating margins in excess
of 10%
provide returns on capital employed
in excess of 15%
PIONEERING SPIRIT:
Innovation is rooted
in our identity
INTEGRITY:
Fairness and trust
underpin our
stakeholder
relationships
A purpose-led and values-driven journey
ENERGY:
Passion drives
all that we do
RESILIENCE:
Tenacity helps
us rise to the
challenges
we face
Our focus on operational
excellence requires that our
businesses:
RESET
REINFORCE REALISE
2021-2023
Fix portfolio; accelerate
operational performance;
invest in energy transition.
2023-2025
Top quartile sustainable
profitable growth.
2020-2022
Define purpose and valued
behaviours; focus on critical
and urgent.
Local communities
Environment
Over the last two years, we’ve
Reset to a ‘back to basics’ approach
to managing our business; we’ve
concentrated on select market niches,
actively re-engaged stakeholders and
deployed a ‘fix or exit’ policy regarding
underperforming businesses and assets.
During this phase we aim to realise our
medium-term environmental and financial
targets, delivering top quartile sustainable
growth and accelerating growth of new
business in energy transition.
We’re now beginning the reinforce
phase of our roadmap; strengthening
our continuous improvement principles,
defining and deploying KPIs across all
stakeholder groups, continuing to actively
manage our portfolio and investing in
technology for future growth including for
the energy transition.
CREATING VALUE FOR ALL
OUR STAKEHOLDERS
Shareholders
Customers and suppliers
Employees
Our 3Rs roadmap will address strategic and operational challenges
VALUED BEHAVIOURS OPERATIONAL EXCELLENCE
Minimising the environmental impact
of our operational footprint and the
nature of the activities we undertake
while actively investing in supporting
the energy transition.
Understanding and adapting to the
changing needs of our customers
and suppliers whilst anticipating their
future requirements and supporting
their sustainability efforts.
Empowering, developing and
supporting our people to attain
their goals and realise their potential.
Continually seeking opportunities
for engaging and supporting local
communities through procurement,
content sourcing, recruitment,
training and social enterprises.
Implementing a strategy to deliver
more sustainable returns for our
shareholders.
Our strategy for
sustainable growth
is underway.
Pioneering safe and trusted
solutions to complex problems
in harsh environments to create
a sustainable future.
S
h
a
r
e
h
o
l
d
e
r
s
E
m
p
l
o
y
e
e
s
C
u
s
t
o
m
e
r
s
a
n
d
s
u
p
p
l
i
e
r
s
L
o
c
a
l
c
o
m
m
u
n
i
t
i
e
s
E
n
v
i
r
o
n
m
e
n
t
C
o
m
m
e
r
c
i
a
l
e
x
c
e
l
l
e
n
c
e
C
a
p
i
t
a
l
a
l
l
o
c
a
t
i
o
n
P
o
r
t
f
o
l
i
o
m
a
n
a
g
e
m
e
n
t
O
p
e
r
a
t
i
o
n
a
l
e
x
c
e
l
l
e
n
c
e
E
N
E
R
G
Y
M
A
R
I
N
E
D
E
F
E
N
C
E
Strategic report
Governance
Financial statements
12 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 13
Strategic report
PLANET, PEOPLE, PARTNERSHIP
Sustainability at James Fisher
Sustainability is integral to our plan
for delivering profitable growth for our
shareholders, and central to how we
create value for all of our stakeholders.
Creating a sustainable future for our
families, friends and colleagues is
important to each and every one of us,
and we as individuals and James Fisher
as a company need to step up, take
responsibility and commit to driving
positive change.
The development of our sustainability
strategy has been guided by our purpose.
It will help create a sustainable future for
James Fisher by leveraging our intrinsic
strengths and capabilities. I am delighted
to share this strategy with you.
Our stakeholders
The sustainability strategy brings all our stakeholders into the heart of
the Group and informs how we actively engage with them. Our strategic
objectives are aligned with the interests of our stakeholders and are
outlined below:
Materiality assessment
We conducted a rigorous materiality assessment during 2021 to
determine areas of greatest importance for our business and our
stakeholders. This extensive assessment involved internal and external
stakeholder engagement and utilised a leading-edge big data platform
to consolidate stakeholder feedback, analyse the data and develop the
James Fisher materiality matrix.
The assessment was conducted in three phases:
1. Issue identification – we created a long list of current and emerging
issues relevant to James Fisher from publicly available sources (e.g.,
industry publications, Sustainable Development Goals, Global Reporting
Initiative guidelines and competitor/peer sustainability reports) and
internal sources (e.g., risk register, staff survey, customer research).
2. Stakeholder validation – we interviewed a range of representative
external stakeholders and key management and decision-makers
from James Fisher operating companies to review the long list
of issues.
3. Issue prioritisation – we analysed the stakeholder feedback and
used the big data platform to produce the final list of 17 overarching
issues and the materiality matrix, ranking and cross-referencing each
against importance to external stakeholders as well as importance to
James Fisher.
The materiality matrix has been validated and approved by the Board,
with nine issues highlighted as priority areas of focus for James Fisher.
Shareholders: Consistently deliver attractive returns for
shareholders
Deliver long-term growth in underlying earnings per share,
dividends and return on capital employed
Grow strategically and profitably by leveraging existing
specialist skill base to serve global markets
Create incremental value by expanding our offerings and
capabilities through investments and bolt-on acquisitions
Employees: Make James Fisher a rewarding place to work
Ensure the safety and wellbeing of all employees
Encourage and support innovation and accountability
Develop individual and organisational excellence by
investing in training and competence development
Customers and suppliers: Establish trust-based
relationships and deliver on shared goals
Develop solutions and offerings that address current and
anticipated customer needs
Ensure customers and suppliers share our values and are
committed to operating responsibly
Exceed customer and supplier expectations for safety and
integrity
Support our customers in achieving their sustainability
targets and influence our suppliers to set targets of their
own
Local communities: Be a good citizen and active member
of the community
Encourage our employees to engage and make a
difference
Create local employment and sourcing opportunities within
our communities
Ensure sustainability drives our decision-making process
and operations
Invest and engage in people development, wellbeing,
training, and other initiatives to enhance the lives of people
in the community
Environment: Uphold responsible business practices
Assess and quantify the impact of our operations on the
environment
Develop and implement plans to conduct our operations
more responsibly, identifying opportunities to improve
Advocate for the environment where we operate and
engage in preservation/restoration initiatives
We have defined KPIs for all stakeholder groups and are in the process
of deploying these KPIs across the Group. These KPIs form the basis of
how we will monitor, measure, and track the impact of our stakeholder
engagements. Further details about KPI targets and how we plan to
deliver these targets for each stakeholder group are outlined on
pages 36 to 51.
Prioritised material issues
1. Portfolio choices
2. Resource efficiency
3. GHG emissions
4. Top talent
5. Diversity and inclusion
6. Health, safety and security
7. Innovation
8. Customer engagement
9. Governance
Other material issues
10. Pandemic/COVID
11. Biodiversity and
ecosystems
12. Cyber, IT and data
13. Climate change
14. Local communities
15. Disaster preparedness
16. Human rights
17. Infrastructure and energy
security
Focus area
15
4
1
2
3
7
5
8
6
9
11
10
12
13
14
16
17
Low
High
Importance to James Fisher
Importance to external stakeholders
Importance to James Fisher
Importance to external stakeholders
Low High
High
Foreword
James Fisher is a leading provider of specialist products and services
to global energy, marine, and defence industries: we build offshore
windfarms, rescue naval submarines in distress, transfer essential
fuels around the UK’s coasts, install subsea communications cables,
decommission subsea oil infrastructure and nuclear reactors, and
more. Our rich 175-year heritage is built on the core values of delivering
excellence, continual innovation, and commitment to our stakeholders.
Due to climate change, the energy transition, growing global population,
rising social inequality, and other macro-challenges facing the world
today, sustainability and profitability are intertwined. We believe that
the successful companies of the future will be those that embed
sustainability in their culture and DNA. At James Fisher, sustainability
means:
Delivering strong, profitable growth
Building on our 175-year history
Having a positive impact on all our stakeholders
We identify with five core stakeholder groups - namely shareholders,
employees, customers and suppliers, local communities in which
we operate, and the environment. Placing them at the core of our
sustainability strategy, we previously made a commitment to:
Invest in capabilities and technologies to deliver a responsible energy
transition
Harness the potential of our pioneering employees
Be good citizens of our local communities
Become a trusted partner for our customers and suppliers
Drive performance to improve returns for shareholders
These commitments guided our 2021 materiality assessment and its
outcome informed our sustainability strategy. The sustainability strategy
is defined across three pillars that translate our ambition into action:
Planet: Protect and restore the environment
People: Improve the lives of our people and those in the communities
where we operate
Partnership: Innovate responsibly and deliver consistent results for our
customers and shareholders
Our increased focus on sustainability will position our businesses to
succeed in the dynamic, diverse and niche markets we operate in.
This report unveils our sustainability strategy, including our stated
commitments and Key Performance Indicators (KPIs) with which we
will measure and track progress in the years to come. Recognising that
our commitments and scope of ambition may evolve with changes in
the market and regulatory landscape, we will routinely review our KPIs
for relevance and consistency, and update when necessary.
Eoghan O’Lionaird
Chief Executive Officer
Strategic report
Governance
Financial statements
14 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 15
Strategic report
PARTNERSHIP
Innovate responsibly
and deliver consistent
results for our customers
and shareholders
Sustainability at James Fisher cont.
PLANET
Protect and restore
the environment
PEOPLE
Improve the lives of our people
and those in the communities
where we operate
Our sustainability strategy
Underpinned by our purpose, the three pillars of our sustainability strategy – Planet, People,
Partnership – reinforce each other and, together, support our business growth strategy.
Our purpose
Pioneering safe and
trusted solutions to
complex problems in
harsh environments to
create a sustainable future.
People PartnershipPlanet
Transform and refocus our business
to ensure our impact on the
environment is net positive, and that
we enable our stakeholders to do
the same
Attract, develop, and retain a high-
performing workforce, and enhance
people’s lives by ensuring equal access
to opportunities, providing purposeful
and safe work, and promoting our core
values where we operate
Leverage our deep industry expertise
and track record for excellence to
innovate responsibly and deliver
consistent, value generating results
for our customers and shareholders
Portfolio choices
Evolve our portfolio to serve the energy
transition, with focus on growing
renewables and remediation capabilities.
SDG:
Top talent
Ensure talent is a strategic differentiator,
through focused recruitment,
engagement and training, and by
prioritising the health and wellbeing of
our people and those in the communities
where we operate.
SDGs:
Innovation
Develop and champion creative solutions
to complex challenges through the
integration and smart application of
our specialist domain expertise, and in
partnership with other players in
the industry.
SDG:
Resource efficiency
Minimise waste and improve productivity
by embedding Circular Economy and
Lean principles in our DNA.
SDG:
Diversity and inclusion
Promote a diverse and inclusive
workplace by recruiting where we work,
enforcing pay parity, and celebrating
the uniqueness of individuals and their
communities.
SDGs:
Customer engagement
Build stronger customer relationships to
better understand and resolve pain points,
and foster collaboration towards value
creation and shared success.
SDG:
GHG emissions
Reduce our GHG emissions footprint
by sourcing energy and fuels from
low carbon sources, and investing in
emissions abatement initiatives towards
a net zero future.
SDG:
Health, safety and security
Prioritise the health, safety and security
of our employees, customers, suppliers
and local communities through a ‘goal
zero’ approach, with focus on education,
engagement, advocacy, and policy
development.
SDG:
Governance
Commit to openness and accountability
by living our valued behaviours, ensuring
appropriate business policies, standards
and controls are in place, and improving
transparency of our supply chain.
SDG:
7
12
13
4 8
5 10
8
9
8
16
3
Foundational Transformational
Our contribution to the UN
Sustainable Development
Goals (SDGs)
Launched in 2015, the UN
SDGs are a call to action to
promote prosperity across all
countries whilst protecting
the planet we share. We
have evaluated the impact of
our strategy execution and
determined that our efforts
will contribute to 10 of the
17 SDGs.
We aim to directly engage
all stakeholders, internal
and external, and increase
coordination of activities
across the Group to have a
net positive impact on the
environment, tackle climate
change, improve health
and wellbeing, responsibly
consume materials and
energy resources, reduce
inequality, contribute to
economic growth and
champion a low-carbon
economy.
Read more on our emissions
reduction efforts and focus on
supporting clients to reduce their
impact on pages 40 and 41
Read more on how we are pioneering
safe operations across the world on
page 47
Read more on our responsible
business policies and processes
on page 51
Read more on how we are
restructuring our customer
engagement processes on
page 50
Read more on how we are solving
complex challenges with innovative
solutions on pages 48 and 49
Read more on how we are developing
future talent and contributing to the
wellbeing of our communities
on pages 42 and 43
Read more on our focus on
renewables and remediation
solutions on pages 36 to 38
Read more on our asset utilisation
improvement initiatives on
page 39
Read more on our community
development and engagement
initiatives on pages 44 to 46
The nine priorities from our materiality assessment have been mapped across these
pillars, progressing from foundational to transformational based on maturity and
strategic impact.
Foundational – Focused on fundamental capabilities that establish our credibility and
ensure we have a right to operate in our chosen markets
Transformational – Focused on differentiating capabilities that improve our
competitive advantage and reposition James Fisher as a leader in our chosen markets
Strategic report
Governance
Financial statements
16 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 17
Strategic report
Sustainability at James Fisher cont.
Sustainability frameworks
The sustainability frameworks we use for reporting are outlined below.
Memberships, commitments and participations
Science Based Targets (SBTi): To support
our target setting exercise and emissions
reduction commitments in alignment with the
2015 Paris Agreement to limit global warming
to well below 2°C (preferably to 1.5°C,
compared to pre-industrial levels), we have
chosen the SBTi criteria as the standard for
James Fisher.
The Greenhouse Gas Protocol: The
GHG protocol is the guiding reference for
our emissions footprint consolidation and
validation exercise. This allows us to assess the
emissions impact of our operations across the
entire value chain and identify where to focus
reduction activities. The standards have been
used in the development of our Scope 1, 2 and
3 identification, measurement, and reporting
methodology.
UK Streamlined Energy and Carbon
Reporting (SECR): In accordance with the
guidance on SECR that came into force
on 1 April 2019, we have calculated and
reported our emissions footprint and energy
consumption in the Directors’ report (see page
114 for our SECR disclosure).
Carbon Disclosure Project (CDP): The
CDP reporting structure promotes visibility and
accountability in our management of risks and
opportunities around climate change, water
security and deforestation. We responded to
the CDP disclosure in 2020 and 2021 and are
committed to reporting in 2022 and onwards.
Task Force on Climate-Related Financial
Disclosure (TCFD): The framework provides a
structured approach for effective climate-
related disclosures to better inform our
stakeholders on risks, opportunities, and
business resilience to climate change. We are
committed to reporting our climate-related risks
based on the recommendations of the TCFD
(see page 52 for our TCFD summary).
UN Sustainable Development Goals
(SDGs): Enables the mapping of our strategy
execution impact to reflect our corporate social
responsibility efforts.
SUSTAINABILITY COMMITTEE
Responsibility: steering and decision accountability for Group sustainability agenda
STAKEHOLDER WORKING GROUPS (WG)
Responsibility: translating Group sustainability agenda into stakeholder-focused objectives and initiatives
SUSTAINABILITY CHAMPIONS
Responsibility: driving the Group sustainability agenda and monitoring
performance within operating companies
Environment WG
Portfolio choices
Resource efficiency
GHG emissions
Health and Safety Committee
Health, safety and security
Employee WG
Top talent
Diversity and inclusion
Local Communities WG
Top talent
Diversity and inclusion
Customer WG
Innovation
Customer engagement
Supplier WG
Governance
Sustainability Committee
The James Fisher Sustainability Committee, led
by the Chief Executive Officer, reports directly
to the Board of Directors and centres the
Group’s sustainability strategy activation across
all our operating companies.
Responsibilities
Articulate James Fisher Group sustainability
strategy and ambition
Recommend sustainability objectives,
priorities and initiatives to the Board, having
regard to the interests of our stakeholders
Define and recommend non-financial KPIs
and targets to the Board
Communicate sustainability objectives,
priorities, and KPIs to Group operating
companies and drive strategy execution
Report to the Board on progress of strategy
execution and implementation initiatives
Stakeholder Working Groups
The Sustainability Committee is supported by
six stakeholder working groups, each with the
mandate to represent and protect the interest
of one or more of our stakeholders.
Responsibilities
Translate overarching sustainability objectives
and priorities into stakeholder-focused
objectives, KPIs and targets
Identify, recruit, and empower sustainability
champions within operating companies, to
drive roll-out of sustainability communication
and initiatives
Support operating companies with planning
course of action and delivery of stakeholder-
focused objectives and KPIs
Sustainability Champions
Each operating company has a sustainability
champion, nominated by the operating
company Managing Director. Champions
function as core members of one or more
stakeholder working groups.
Responsibilities
Translate Group sustainability objectives and
priorities into operating Company-specific
objectives, KPIs and targets
Function as subject matter expert, coach,
mentor, and advocate on sustainability-related
matters
Drive communication, engagement, and
execution of sustainability agenda within each
operating company
Sustainability team structure
Strategic report
Governance
Financial statements
18 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 19
Strategic report
Our stakeholders
Engagement and collaboration through our
value chain is essential. Partnering with our
stakeholders, understanding their challenges
and managing risks, we can find solutions for
our shared success, sustain our business and
benefit all our stakeholders.
We have aligned our strategic priorities with the
requirements and needs of our stakeholders to
enable delivery of profitable, sustainable value.
The Board recognises that it has a duty to
act in the best interest of the Company for
the benefit of its shareholders, as well as
considering other stakeholder interests.
In its decision-making, the Board considers
all relevant factors, including:
How the decision would align with the
Group’s over-reaching purpose
The likely short-, medium- and long-term
consequences of the decision
The value created for our investors
The enhancement of our performance created
by the decision
The potential impacts on our people, local
communities and environment of making the
decision
The need to create strong, mutually-beneficial
customer and supplier relationships
The Group’s commitment to business ethics
Section 172(1) statement
This section serves as our section 172(1)
statement explaining how the Directors have
had regard to the matters set out in section
172(1)(a) to (f) Companies Act 2006, when
performing their duty under section 172.
The Board aims to promote the success of the
Company for the benefit of its shareholders
as a whole, taking into account the long-term
consequences of its decisions while giving
due consideration to the interests of the
Company’s stakeholders (including employees,
customers, suppliers, shareholders, as well as
the environment and local communities which
are impacted by our operations), while also
considering the importance of maintaining our
reputation for high standards of business conduct.
Examples of what that has looked like in practice
over the past year can be found as follows:
Stakeholder: Strategic report:
Shareholders Pages 82 to 85
Employees Pages 42 to 47
Customers/suppliers Pages 50 and 51
Environment Pages 36 to 41
Local communities Pages 45 and 46
Further information about how the Directors
have accounted for stakeholders in their
decision-making in 2021 is set out on page 82
in the Corporate governance report.
Shareholders
Why we engage
Shareholders help to provide the financial
liquidity we require to operate and are key
beneficiaries in the value created by the
Group. We are committed to transparent
communication and engagement with them.
How the Board engages
The Directors have regular meetings with
investors, principally through investor
roadshows, investor events and the
AGM.
The Chairman meets with the
Company’s largest equity shareholders
to discuss results and other
announcements.
The Annual Report and Accounts and
the Group website set out the Group’s
strategy, progress against its strategy
and the Group’s activities.
How we supported during 2021
We were unable to hold an AGM
due to COVID restrictions, but held a
pre-AGM webinar and Q&A session
online, enabling shareholders to receive
the 2020 results presentation and ask
questions prior to their proxy vote.
Consultation with shareholders on the
new remuneration policy (approved at
the 2020 AGM) was led by the chair of
the Remuneration Committee.
The Company completed a refinancing
and has started to implement a disposal
programme, aimed at improving
leverage.
New Chairman and other Board
appointments aimed at bringing
additional experience and skills to
the Board.
Reverting to physical AGM in 2022.
Environment
Why we engage
Our activities are inextricably linked to the
environmental considerations related to
climate change and the energy transition.
This creates specific risks and opportunities
which, when managed effectively and
responsibly, will reposition James Fisher
for a sustainable future.
How the Board engages
The Board receives regular updates and
recommendations from the Sustainability
Committee. The Sustainability Committee
is led by the Group CEO and includes
the leaders of all our stakeholder working
groups, including the environment working
group. Stakeholder working groups
act in the interest of the stakeholders
they represent, and improvement
recommendations are communicated
accordingly.
The Board engages with shareholders
directly to understand their ESG priorities.
ESG specialist advisers provide expert
support to the Board in relation to
sustainability and the Group’s role in
relation to climate change and the energy
transition.
How we supported during 2021
The Group conducted an extensive
emissions footprint reporting and
consolidation exercise across all operating
companies, choosing the one-year
period spanning 1 October 2020 to 30
September 2021 as our base year for
target setting.
The new sustainability strategy, with Planet
as one of its core pillars, was put forward
and approved by the Board. An ongoing
portfolio management programme is
aimed at aligning the composition of the
Group with our sustainability objectives,
material issues, and stated commitments.
We made efforts to implement the
recommendations set out by the Task Force
on Climate-related Financial Disclosures
(TCFD) and aim to publish a comprehensive
TCFD report later in 2022 when ongoing
efforts have been concluded.
The Group continued its reporting and
disclosures in accordance with the Carbon
Disclosure Project (CDP) and the UK
SECR regulation.
Key issues raised
Operational and financial
performance
Strategy implementation
Capital structure, liquidity and
capital allocation
Risk management and controls
ESG
Local communities
Why we engage
Aligned with our purpose and values, we
must conduct business responsibly and
sustainably to ensure that we support the
local communities that are impacted by
our global operations.
How the Board engages
Through the Sustainability Committee,
the Board receives updates on the
implementation of each business’s local
communities strategy.
The Board actively encourages and
supports employees to engage
with projects across the UK and
internationally to help make a positive
impact, either through charitable
fundraising, volunteering their time, or
collection and distribution of items to
support those less fortunate or in need.
The Board regularly reviews the Group to
consider how our businesses and their
services align with the Group purpose.
How we supported during 2021
We supported our companies and
people who were providing support
locally in response to the global
pandemic.
We have developed and launched our
new sustainability strategy.
We have provided assistance to
individuals through a difficult period for
many due to the pandemic and other
international issues, including through
extension of the employee assistance
programme to friends and family.
Key issues raised
Environmental and social impacts
of our operations
Health and safety
Supporting people in difficult times
Employees
Why we engage
We are committed to ensuring that James
Fisher is a great place to work. Attracting
and developing talent is a key driver of the
Group’s sustainable and profitable growth.
How the Board engages
Although restricted by the pandemic, the
Executive Directors have held town hall
meetings, in person where possible and
virtually in other cases, engaging with
employees via Q&A sessions in relation
to purpose, values, strategy, employee
engagement and Group performance.
Inken Braunschmidt (designated
Non-Executive Director) has undertaken
a number of engagement activities,
including through her role on the
employee engagement group, and
reports back to the Board on a
regular basis.
We built on the Group engagement
survey with the support of Gallup,
providing valuable insights for the Board
on issues that matter to our people.
The Company makes available an
employee sharesave scheme to
encourage employees’ involvement
in Company performance.
How we supported during 2021
We have continued the implementation
of the Group’s employee strategy and
are adapting to the limitations imposed
by the pandemic e.g., moving trainings
online to reach a wider audience.
We have deepened engagement and
coordination through online “lunch and
learns” available to anyone in the Group
to hear about different businesses.
We have extended our mental health
first aid training and now have over 80
trainers across the Group.
We have continued our internship
programme, with interns bringing fresh
ideas and energy into the businesses.
Key issues raised
Development and progression
Collaboration
Remuneration
Recognition
Diversity and inclusion
Customers and suppliers
Why we engage
The Group’s success depends on achieving
a deep understanding of the challenges our
customers face, and the complexities posed
by the environments in which they operate.
In doing so and with the support of our
supply chain, we can identify products
and services to support them.
How the Board engages
The Board receives regular updates
from business Managing Directors on
their strategic priorities, their markets
and key customers.
Through the Sustainability Committee,
the Board receives updates on efforts
within the Group to engage with and
support our customers and suppliers
(led by the customer and supplier
working groups).
Where appropriate, our Executive
Directors and divisional Managing
Directors work with major customers to
ensure we develop innovative products
and services to find solutions to their
problems.
How we supported during 2021
Investment has continued into innovation
in products and services to meet
customer needs.
We have sought to align our process
for obtaining customer feedback in order
to have a coordinated view of
our customers’ key requirements.
We are revising our Code of Ethics to
align with our sustainability policy and
the changing macro factors impacting
our industries and environment.
Through the supplier working group,
we are identifying synergies and other
benefits of procurement coordination
between Group businesses, as well as
introducing a supplier code of conduct
to create within the supply chain clear
accountability and alignment with our
sustainability priorities.
Key issues raised
Innovation and problem solving
High quality service
Trusted relationships
Social and environmental impacts
Payment practices
Key issues raised
Climate change
Energy transition
Strategy and implementation
Financial performance
Governance
ENGAGING FOR VALUE
Strategic report
Governance
Financial statements
20 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 21
Strategic report
RESPONDING TO GLOBAL MARKET DRIVERS
Anticipating change to deliver innovation, operational
excellence and specialist engineering to a diverse range
of global market sectors.
Our markets
OUR RESPONSE
Mega trends are presenting
both near-and longer-term
opportunities for above market
growth for James Fisher.
In response to the energy transition,
we’re demonstrating our commitment
to reducing GHG emissions with low
carbon shipping in our Tankships
division; we’re fulfilling a growing need
to decommission offshore assets with
our well severance and infrastructure
removal capabilities; we’re proving
ourselves as a key, innovative partner
in developing offshore wind; and we’re
supporting our customers in their
journeys to alternative fuels as with our
expansion in LNG ship-to-ship transfers.
Emerging markets are creating additional
opportunities for geographic expansion
while resource scarcity concerns are
prompting us to consider oxygenation
for aquaculture, flare gas reduction
and waste management. Acceleration
in technology meanwhile, is acting
as a catalyst for our own advances in
IP-backed innovation, digitalisation
of offshore services and remote and
autonomous subsea operations.
CLIMATE CHANGE AND
RESOURCE SCARCITY
Climate change consequences and the need
to cut emissions are driving a transition to
renewable energy whilst population growth
across developing markets is increasing
demand for resources.
TECHNOLOGICAL
BREAKTHROUGHS
Technology is advancing exponentially,
with significant transformation in data
automation and visualisation. Effective
and timely adoption of innovative technology
is increasingly viewed as a prerequisite
of successful differentiation.
SHIFTING GLOBAL
ECONOMIC POWER
Economic growth within emerging
markets is stimulating increased energy
consumption whilst global political
instability is escalating defence concerns
and amplifying economic turbulence.
1. JFN
2. Digital
JFD
Tankships
3. Data Services
Decommissioning
Fendercare
RMSPumptools
JF Renewables
Offshore Oil
JF Subtech
1
32
ENERGY
DEFENCE MARINE
We set ourselves
apart where our
core markets intersect
The three global mega trends of climate
change and resource scarcity, shifting
global economic power and technological
breakthroughs have been identified as
key market drivers for James Fisher,
influencing the decision to refocus on
the core markets of marine, energy and
defence. The necessity to achieve a reduced
carbon footprint, growing share for low
energy sources (such as gas, nuclear and
renewables), greater regulation around
information management, enlarging
demand for remote asset management and
increasing requirements for basic resources
and defence capabilities are some of the
features we recognise within these long-
term trends which afford our stakeholders
opportunities.
James Fisher locations
Governance Financial statements
22 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 23
Strategic reportStrategic report
Chief Executive’s review
It has been, without question, a most
disappointing and difficult year. The challenges
we have faced during 2021 have been both
unprecedented in magnitude and unpredictable
in nature. We underestimated the headwinds
faced by some of our businesses, employees
and management teams, who have been
profoundly tested by ongoing restrictions on
travel; uncertainty in investment decisions;
disruption to supply chains; inflationary
pressures; competition for skilled resources;
and a fundamental shift in working practices.
With that as the backdrop, the Group’s
revenue, at £494.1m, was 4.7% below 2020.
Underlying operating profit of £28.0m was
30.9% below the £40.5m achieved in 2020.
The Group recorded a loss before tax of
£29.0m compared to a loss before tax
of £52.5m.
The Group has borne through very difficult
circumstances largely thanks to the
extraordinary efforts of our people. The
headwinds we faced have served to further
strengthen our resolve and commitment to
focusing our business portfolio on markets
where we have a highly differentiated value
proposition and can achieve sustainable,
profitable growth.
We are confident that the efforts of governments
worldwide will gradually enable businesses and
their supply chains to serve their customers in
a more normalised way, leading to a recovery
in our core markets. Following two supremely
challenging years, we are focusing our efforts
in areas we can directly influence and control in
order to place the Group on a firm footing for
2022 and beyond.
At our Capital Markets Day in June 2021 we
outlined a roadmap to achieve this based on
three phases: ”Reset, Reinforce and Realise”.
Throughout the year we have continued to
execute the Reset and Reinforce phases
to create the foundations for sustainable
profitable growth.
Health and safety
Our overarching goal remains to maintain the
health and safety of our employees, contractors,
suppliers and customers at all times. The nature
of our operations means that we frequently face
hazards and harsh environments for which we
are well prepared, trained and equipped. The
work that we have done in coordinating health
and safety statistics, incident information and
best practice is beginning to yield results in
reducing the number of incidents, and, crucially,
in promoting further strengthening of our
safety culture.
However, the most significant challenge to
our goal remains the more human aspects of
complacency, routine, familiarity and distraction.
These are inherently more difficult to address,
requiring active participation and personal
engagement to assess and act on potential
threats to individuals and those around them.
In response we have launched a Group-wide
awareness campaign with the aim of bringing
health and safety to the forefront of employees’
minds and making it relatable to their specific
job role and work environment, whilst equipping
people with the ability to identify hazards and
empowering them to voice concerns and to take
the appropriate action regardless of seniority.
These measures, in addition to enhanced
training of existing employees and as part of the
on-boarding process for new hires, will further
reinforce our commitment to health and safety
and will strengthen its foundation in our culture.
Short-term initiatives:
Portfolio management
During the year we completed the disposal of
two businesses: a materials testing business
in the UK and Ireland and a non-destructive
testing business predominantly serving the
aerospace and process industries. Both were
very sound businesses, but they were neither
connected to the key markets we are pursuing,
nor did they add to the wider Group as a
source of competitive advantage.
We value all our businesses including those
we divest, and it is important to us that we
consider all stakeholders in making decisions,
including in finding the right future owner for
those that leave the Group so that they can
continue their journeys and flourish. In both
cases I believe we have achieved the best
possible outcome and I would like to thank
the employees of these businesses for their
contribution and wish both them and their
new owners every success for the future.
In June we concluded the sale of the dive
support vessel (DSV) Subtech Paladin to its
new owners, Indian offshore service provider
Seamec, marking the first step in the return
to a more asset light strategy, focusing on the
delivery of high-end niche services. This strategy
makes extensive use of partnerships to facilitate
preferential access to vessels on an as-needed
basis. Since this approach was adopted, we
have successfully completed several complex
subsea projects in the West Africa region
as a customer of the Paladin’s new owner.
We continue to explore similar opportunities,
including the potential for a sale and leaseback
option for the DSV Subtech Swordfish, which
was also acquired in 2019. We have secured
a framework agreement with an important Tier
1 contractor that will see the vessel utilised on
a long-term basis in the Middle East region.
As 2022 progresses, we will continue to
critically evaluate the portfolio against
our tests of strategic fit and business
attractiveness (which we define as offering
a combination of competitive advantage,
growing markets, and attractive financial
returns). Further divestments are likely, with
the aim of reducing net debt, simplifying the
Group’s portfolio, and allowing us to allocate
capital to strong growth prospects, such as
decommissioning and renewable energy.
Operational and commercial
excellence
During 2021 a number of initiatives have been
commenced with specific focus on improving
the underlying performance of the Group:
An Operational Excellence programme
to drive improvement in capacity, delivery
performance and customer satisfaction
through the implementation of Lean
principles.
Investment in upskilling our project delivery
and commercial resources to ensure that
progress and project budgets are effectively
controlled and that delivery, margins and
customer satisfaction are improved.
Continuous improvement in our risk
management, contracting principles and
internal controls frameworks to provide robust
governance and mitigate margin erosion.
A Commercial Excellence programme
focused on identifying and capturing value
in our key markets including cross-Group
coordination of sales resources to address
specific market opportunities where the
Group can capture additional value.
Implementation of best practice tools and
methodologies to drive sales and commercial
effectiveness.
Adoption of customer engagement metrics
to inform and improve satisfaction scores,
as well as retention and referral rates.
Longer-term focus
Our three markets of choice are: energy,
marine and defence. These markets offer
strong growth potential and we are making
progress in developing differentiated niche
propositions that are highly valued and
rewarded by our customers.
The “energy transition” is creating new growth
prospects for our businesses. As a Group, we
are well positioned to take advantage of the
opportunities that will arise in a more responsible
oil and gas sector and the expected transition
away from oil and gas into renewable and
other energy supplies. Within oil and gas, we
see continued and new opportunities for our
services in the production, transportation and
decommissioning sectors. The global need for
decommissioning of old and abandoned oil
and gas assets is significant and we believe
that our solutions in high-speed cutting, lifting
and well-abandonment are well placed to serve
this growing demand under our newly formed
James Fisher Decommissioning brand.
There is unquestionably an accelerated global
investment in offshore wind powered energy
production, a key solution to the world’s
challenge to decarbonise against a backdrop
of ever-growing demand for energy. James
Fisher has a growing presence in the offshore
wind market and the long-term expectation
is that this will ultimately compensate for any
reduction in demand for our oil and gas-
related products and services over the coming
decades. Whilst activity levels during 2021
were more subdued than anticipated, there is
increased visibility of future requirements and
confirmation of projects for delivery in 2022
and beyond. We have consolidated our market
offering under the James Fisher Renewables
brand, which for the first time brings all the
relevant operating companies and services
under one go-to-market brand.
Demand in the marine sector softened
considerably in 2021 due to reduced economic
activity. However, we anticipate that the general
increase in investment in offshore infrastructure,
recovery of commodity prices post-pandemic,
and a return to a more normal pattern of global
trade should underpin a steady increase in
demand and completion of projects that were
deferred or delayed due to COVID.
In the defence sector, the Group holds leading
positions in submarine rescue, and life support
and diving equipment. Our innovative solutions
for defence customers frequently address
challenges in the commercial subsea sector,
particularly in terms of safety and reliability
in extremely hazardous environments. We
continue to supply our commercial diving
equipment in over 40 countries globally. The
business has a number of active product
innovation opportunities aimed at maintaining
our leading position and the pipeline for subsea
vessel construction projects is strong.
Sustainability
We recognise the environment as one of
our key stakeholders, but also consider
sustainability to encompass financial security,
robust governance and workforce stability. In
2021, the year of COP26, we have developed
with the support of external experts an
ambitious and considered sustainability
strategy with science-based targets. Work is
ongoing in 2022 to build on these foundations.
We firmly believe that by investing in local
communities, working closely with our
customers and suppliers, and having a strong
employee strategy, our shareholders will
also benefit. In this way we are creating an
intrinsically sustainable company.
A special thanks to our people
At the onset of the COVID pandemic, like
many other businesses, the Group needed to
prioritise employee health and safety, and to
adapt to a remote working environment. The
hybrid working model that evolved during that
time is proving itself to be less transitory than
perhaps some had assumed. We see this
working model as a step towards creating a
more sustainable work/life balance, as well as
yielding benefits for our other stakeholders.
That said, we also recognise that this new
working model has, at times, created its own
stresses and to address this, we very quickly
stepped up our mental health support and
employee engagement programme and this
has continued to develop in 2021. We know
that we have work to do to fulfil our ambitions
in this critical area and are grateful for the
feedback received from our employees during
2021’s employee engagement survey, in
response to which action plans across the
Group are being implemented during 2022.
Rather than being discouraged by the
challenges of the pandemic and remote
working, our extraordinary people have been
emboldened by them. They have doubled
down in understanding and meeting our
customers’ needs. They have given up their
time to offer assistance in our communities,
bring food to the needy and help the unwell.
I am immensely proud of our people. It is
in times of adversity that our true values
are evident, and throughout this past year,
James Fisher’s people have time and again
demonstrated their pioneering spirit, integrity,
energy and resilience and they continue to do
so in support of those affected by the war in
Ukraine. Although the path has been difficult it
is to the great credit of our people that we have
advanced so far on our journey to becoming a
purpose-led, values-driven business serving all
our stakeholders. I cannot thank them enough.
I am immensely proud of
our people. It is in times
of adversity that our true
values are evident, and
throughout this past year,
James Fisher people
have time and time again
demonstrated their
pioneering spirit, integrity,
energy and resilience.
Strategic report
Governance
Financial statements
24 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 25
Strategic report
Looking ahead
2021 was a challenging and disappointing
year for the Group. We experienced ongoing
disruption from the global pandemic, our
markets did not recover at expected rates,
and we underestimated the headwinds being
faced by some of our businesses.
In June 2021, we outlined a roadmap to achieve
our objective of greater than 10% operating
profit margin and greater than 15% return on
capital employed. This roadmap is based on
three phases: ”Reset, Reinforce and Realise”.
Throughout the year we continued to execute
the Reset and Reinforce phases to create the
foundations for sustainable profitable growth.
Having sold Paladin and two of our businesses,
during 2022 we will continue to optimise our
portfolio to focus on businesses where we
have a competitive advantage, strong growth
prospects and attractive returns. The internal
change agenda will continue at pace. We are
executing a number of self-help initiatives,
focusing on operational and commercial
excellence, including a Lean programme, to
improve the underlying performance of the
Group.
Performance in January and February 2022 was
in line with management’s expectations. The full
year outcome will be influenced by ship-to-ship
transfer business performance; JFD securing
new project wins from its pipeline; the strength
of our subsea business during the busy mid-
year period; our ability to manage inflationary
pressures on the cost base; and the uncertainty
arising from the current geopolitical environment.
In 2022 we celebrate 175 years since James
Fisher founded the Company in Barrow-in-
Furness. In the intervening years, largely thanks
to the pioneering spirit, integrity, energy and
resilience of its employees, the Company has
continually adapted to overcome some of the
most challenging events the world has ever
known, and I have no doubt that we will do so
again to deliver sustainable, profitable growth
for our investors and value creation for all our
stakeholders.
The Board remains confident in the Group’s
strategy to deliver sustainable profitable growth
from the significant market opportunities that
are available to it and remains committed to
executing on its long-term strategy.
Operating review
Marine Support
The Marine Support division consists of three
businesses, all aimed at supporting the marine
and energy markets. Marine Contracting
principally provides subsea services to both
the oil and gas and offshore wind markets;
Fendercare provides essential ship-to-ship
transfer services and related products; and
Digital and Data Services provides innovative
technological solutions aimed at improving the
efficiency and productivity of our customers’
offshore assets. The division saw a significant
decline in both revenue and underlying operating
profit in 2021, although there was a reduced
level of separately disclosed items, with non-
cash provisions of £26.0m against goodwill,
doubtful receivables and tangible assets
recognised in the year.
Marine Contracting
The business showed positive progress during
2021. Revenue increased by 4.0% to £113.3m
and after a particularly challenging year in
2020, operating losses were significantly
reduced. As part of our strategy to reduce
the asset-intensity of this business and to
focus more on partnering and the provision of
differentiated services, the business sold one of
its dive support vessels in June and the other is
now on long-term hire for the majority of 2022.
EDS, the high voltage cabling specialist
providing services to the offshore wind industry,
continued its positive momentum with three
new multi-year contracts to maintain offshore
windfarm electrical infrastructure over periods of
13 to 15 years. The contracts are worth more
than £40m over the period, which includes
“availability” bonuses of around £8m for
ensuring a pre-agreed level of uptime that could
be earned and recognised in future periods.
In Mozambique, the major LNG project remains
suspended due to the ongoing security issues
in the region. The Group settled all outstanding
claims against its customer prior to the end of
2021 and is ready to support the remobilisation
of the project in due course.
The order book for 2022 is strong, with several
projects deferred from 2021 expected to
commence in the first half of the year and a
good level of identified tendering targets.
Fendercare
Following a record year in 2020, the
Fendercare business experienced a significant
decline in 2021. Not only was the comparative
year of 2020 boosted by crude oil trading
Marine Support
2021
2020 Change %
Revenue (£m)
214.5
249.4 (14.0)
Underlying operating profit (£m)
5.0
10.1 (50.5)
Operating profit (£m)
(21.0)
(69.5) 69.8
on the back of the significant volatility in the
oil price in 2020, but the business was also
challenged in 2021 by unfavourable market
developments in Malaysia and Brazil. Revenue
from the Fendercare Group was £77.9m, some
32% below 2020. Within this, the ship-to-ship
(STS) revenues were down 36%.
The business is responding to the challenges by
focusing on securing new sites to conduct STS
operations in Malaysia, and has been successful
in securing new contracts in Brazil. Although a
return to the record highs seen in 2020 is not
expected (absent significant volatility in the oil
price) the business is expected to show some
growth in 2022. A steady increase in the number
of enquiries for LNG STS operations provides
some encouragement for the future.
The sale of related products such as fenders
also declined in 2021 as customers sought
to defer capital expenditure. An inventory
provision of £2.7m has been recognised in
the period, reflecting a prolonged reduction
in expectations for product sales as a direct
result of the pandemic.
Digital and Data Services (DDS)
DDS is a collection of businesses aimed at
providing technology solutions to the oil and
gas and renewable energy markets. Revenue
in 2021 fell by 9% to £23.3m, principally due
to JF Strainstall, the provider of load and
asset monitoring solutions, which experienced
difficult market conditions with the downturn in
construction activity reducing demand for its
products. Other businesses, such as AIS, which
has developed and sells Digital Twin software,
providing operators with an online, real-time
asset management solution aimed at reducing
their operating costs by allowing asset condition
to be monitored from anywhere in the world
rather than on site, showed good growth, with
new contract wins servicing offshore oil BP and
Chevron in particular.
Specialist Technical
Specialist Technical saw modest revenue growth
of 2.1%, but a reduction in underlying operating
profit of £4.1m, adversely affected by the
write-off of £2.5m in relation to customer claims
previously recognised but ultimately not agreed.
Separately disclosed items of £2.9m recognised
in the year included the impairment of tangible
and intangible assets within the JFD business.
JFD experienced a mixed year. Work continued
on its significant long-term projects, with three
submarine rescue vessels (SRVs) and a 500m
saturation diving spread all progressing well
towards final milestones. One of the SRVs was
delivered to its Korean customer in December
and only relatively minor work is required in
2022 to complete all other projects, triggering
final payment milestones.
The business is looking to secure new projects
during 2022, with a strong sales pipeline,
although with no new orders in hand, the
projects side of the business is at a cyclical
low point. Demand for diving equipment was
subdued during 2021 as many customers had
fewer divers in the water, largely due to COVID
restrictions, and deferred spend on
new equipment.
The Group’s nuclear decommissioning
business, JFN, showed some positive
momentum during the first half of the year,
but results for the full year were ultimately held
back by the decision of a major customer to
defer to 2022 new project awards expected in
H2 2021. The level of tendering activity early
in 2022 is encouraging, with new contracts for
engineering design work already won early in
the year.
Offshore Oil
Offshore Oil achieved strong revenue growth
of 10.6% during the year, driven by increased
demand for its bubble curtain solutions and
well-testing services. This traditional oil and gas
service business has seen significant success
in repositioning itself into new markets, such as
the supply of bubble curtain solutions to offshore
wind construction projects which protect subsea
wildlife from the noise of piling, as well as an
earlier stage opportunity in aquaculture which
is showing promising signs of future demand.
Bubble curtain revenues increased from £3.9m
in 2020 to £7.4m in 2021.
James Fisher Offshore, which offers
decommissioning services to the oil and gas
industry experienced a somewhat frustrating
year, with projects delayed at short notice during
the second half of the year and the impact of a
bad debt provision against amounts receivable
from a financially distressed customer holding
back profitability. Despite the project delays
in Q4 2021, demand for decommissioning
services continues to increase, with 13% growth
in revenue to £8.0m in 2021 (2020: £7.1m).
RMSpumptools (RMS) saw strong demand
for its market-leading artificial lift products,
which both prolong the useful life of oil
wells and prevent the unwanted escape of
methane gas during production. As the oil
industry increasingly focuses on minimising its
environmental impact, we believe that demand
for RMS products will continue to increase.
Separately disclosed items of £16.3m have
been recognised in relation to goodwill
impairment (£13.9m) and receivables (£2.4m).
The impairment in respect of receivables
relates to a specific counterparty risk and
receivables billed over 12 months ago in
relation to certain projects.
Tankships
Revenue for the year was broadly in line with
2020, however profitability was adversely
affected by a combination of the UK lockdown
in Q1 2020, increased operating costs due
to enhanced COVID safety protocols and
quarantine requirements, and a short-term dip
in utilisation during September. Utilisation rates
across the fleet increased over the course
of the year from an average of 86% in Q1 to
95% in Q4. The business’s exposure to the
shorter-term spot-rate charters has increased
slightly in the year to c. 23% (2020: c. 21%)
as a result of contracts that have not been
renewed. During the first two months of 2022,
utilisation rates were strong and spot charter
rates are showing good signs of recovery.
Impairment charges of £3.5m have
been recognised in the year, reflecting a
reassessment of residual values of older
vessels that are reaching end of life. The two
newly-commissioned dual-fuel (marine gasoil
and LNG) vessels are well into the construction
phase and are due for delivery late in 2022,
replacing two vessels that are approaching the
end of their useful operational lives.
Cattedown Wharves, which serves the South
West of England, performed well in the year
notwithstanding the lockdown in Q1 2021.
Volumes of cargo transported through the
port have now largely recovered to pre-
pandemic levels.
Eoghan O’Lionaird
Chief Executive Officer
Specialist Technical
2021
2020 Change %
Revenue (£m)
133.2
130.4 2.1
Underlying operating profit (£m)
9.9
14.0 (29.3)
Operating profit (£m)
7.0
12.4 (43.5)
Offshore Oil
2021
2020 Change %
Revenue (£m)
86.3
78.0 10.6
Underlying operating profit (£m)
11.1
11.2 (0.9)
Operating profit (£m)
(5.2)
8.4 (161.9)
Tankships
2021
2020 Change %
Revenue (£m)
60.1
60.4 (0.5)
Underlying operating profit (£m)
4.8
8.0 (40.0)
Operating profit (£m)
1.3
8.0 (83.8)
Chief Executive’s review cont.
DECOMMISSIONING
We are building a strong position in helping
customers in their decommissioning of
oil and gas assets – particularly subsea,
where we have specialist knowledge and
capability. In 2021, we secured a number of
significant decommissioning “wins” across
the North Sea, Middle East and Asia Pacific
– notably in the Gulf of Thailand.
Strategic report
Governance
Financial statements
26 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 27
Strategic report
Our Marine Support businesses provide products,
services and solutions to the global marine market.
These are supplied to a range of end market sectors
including marine, oil and gas, ports, construction
and renewables.
SUSTAINABLE
SOLUTIONS
INVESTING IN LNG
Fendercare utilises new LNG transfer
system to support leading global
energy company.
Fendercare has invested in a market-leading liquefied
natural gas (LNG) ship-to-ship system amidst growing
demand for LNG which is viewed as a transition fuel
on the path to clean energy.
The investment, combined with Fendercare’s vast
experience in conducting highly complex LNG
transfers, enabled the successful completion of a
series of LNG STS operations for one of the world’s
leading global energy companies in November 2021.
Following pre-operation due diligence including
risk assessments, dynamic mooring studies and
compatibility assessments, equipment was mobilised
offshore with an expert team and three back-to-back
STS transfers were safely and efficiently undertaken
off the coast of Malaysia.
These operations were quickly followed in December
by the first ever LNG ship-to-ship transfer in Denmark.
The wholly-owned LNG transfer system enables
Fendercare to quickly respond to demand from
customers, demand which is predicted to increase
in future, as more countries transition from legacy
options to cleaner sources of fuel, such as LNG,
and as owners and operators look for alternative
options to transferring at terminals.
Read more on our markets
on page 22
FENDERCARE is the leading provider of
ship-to-ship transfers of oil and liquefied
natural gas. The main market drivers for these
services are over-supply, available storage
capacity, and fluctuations in prices caused
by demand. Fendercare is also a leading
provider of mooring and safety equipment to
the global marine industry to support new-
builds, conversions and port infrastructure
development projects.
JF RENEWABLES supports the global
offshore wind market through the provision
of highly specialist services employed in site
preparation, installation, commissioning and
operations and maintenance phases. Demand
is driven by increased investment in offshore
wind with increasing numbers of new sites
being constructed and operational sites
requiring support.
JF SUBTECH provides specialist subsea
services in support of construction, operations
and maintenance and decommissioning
activities for the offshore wind, oil and gas
and marine markets globally. Demand is
driven by increased investment in marine
infrastructure, asset management campaigns
and decommissioning of legacy assets.
JF STRAINSTALL is a leading provider of
structural integrity monitoring services and
technologies that are deployed in a range of
marine applications such as mooring systems
for fixed and floating assets and high integrity
infrastructure applications in the construction
and transport sectors.
The market drivers for JF Strainstall are
increased investment in construction projects
in the marine, oil and gas, infrastructure and
renewables sectors and asset optimisation
and life extension of existing or legacy
infrastructure, where our niche offering and
innovative products and services provide
assurance to customers and their stakeholders.
Statutory operating profit/(loss) (£m)
£(21.0)m
Revenue (£m)
£214.5m
Underlying operating profit* (£m)
£5m
Return on capital employed (%)
3.5%
£(69.5)m 2020
2019 11.9%
2018 17.9%
2020 5.0%
2019 £24.5m
2018 £28.2m
2019 £311.6m
2018 £269.9m
2020 £249.4m
2021 £214.5m
2020 £10.1m
* before separately disclosed items
2018 £29.1m
2021£(21.0)m
2019 £14.9m
2021 £5m
2021
3.5%
Our divisions - Marine Support
Governance Financial statements
28 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 29
Strategic reportStrategic report
Our Specialist Technical businesses supply diving equipment
and services, submarine rescue vessels and through-life rescue services,
special operation swimmer delivery vehicles, saturation diving systems
and engineering solutions to the international defence, UK nuclear
decommissioning and commercial diving markets.
RESPECTED
PARTNER
LONG-TERM STRATEGIC
PARTNERSHIPS
Capability support contract for
UK MOD Astute class submarine.
Supporting defence customers through long-term
strategic partnerships is fundamental to JFD.
The award of a four-year capability support contract
(with one-year extension option) for the UK Ministry
of Defence (MOD) Astute class submarine attests
to this. Worth in excess of £20m, the contract,
which commenced in June 2021, is for the provision
of equipment-level in-service support including core
and non-core tasking and spares.
Combining experienced and knowledgeable people;
efficient systems and processes; and proactive
management with streamlined decision-making, has
enabled JFD to prepare a carefully considered and
innovative offer which will deliver a tailored, fit-for-
purpose solution offering best value to all stakeholders.
The contract will be managed out of JFD’s Capability
Support Hub located a short distance from HMNB
Clyde. A unique facility, the hub possesses all the
support capabilities required to ensure a guaranteed
service to the UK Royal Navy’s submarine fleet, with
assets ready for operational requirements, whenever
needed, without compromise.
It is this ability to manage and maintain critical life
support assets at exceptional levels of availability,
that underpins JFD’s long-term strategic partnerships
with navies around the world.
JFD currently provides subsea rescue services,
products, engineering services and training to 80
countries and 33 of the world’s navies including the
Royal Navy, Australian, Singaporean, Indian and
South Korean navies.
JFD is a world leader in fixed and portable
saturation diving systems and related diving
equipment – demand for which is largely
driven by the construction and replacement
of dive support vessels which in turn drives
ancillary service and product demand. Its end
markets are oil and gas and defence based
on service, repair and ongoing calibration
requirements, and projects requiring specialist
diving equipment.
JFD is also a leading provider of submarine
rescue services with the ability to design,
deliver and operate submarine rescue
vehicles. Providing a very niche area of
capability, it has long-term service contracts
with navies. The driver is the tendering
of defence projects for provision of the
equipment, which can lead to longer-term
service contracts to operate the service.
The business also provides swimmer delivery
vehicles to the special operations markets.
JFN
provides engineered decommissioning
solutions and remote handling equipment to
the nuclear industry as well as calibration,
servicing and repair services for radiological
instrumentation. The market drivers for JFN
are the demand for its products operable
in hazardous environments, services and
lifetime support from the UK decommissioning
industry, radiological calibration requirements
and projects within defence.
Statutory operating profit (£m)
£7.0m
Revenue (£m)
£133.2m
Underlying operating profit* (£m)
£9.9m
Return on capital employed (%)
9.8%
2019 £149.4m
2018 £159.6m
2020 £130.4m
2019 £18.1m
2018 £20.2m
2020 £12.4m
2019 16.7%
2018 18.5%
2020 12.9%
2019 £18.4m
2018 £20.9m
2020 £14.0m
* before separately disclosed items
2021 £133.2m
2021 £7.0m 2021 9.8%2021 £9.9m
Our divisions - Specialist Technical
Credit: Contains public sector onformation under the Open
Government Licence v3.0
Governance Financial statements
30 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 31
Strategic reportStrategic report
Our Offshore Oil businesses supply a range of services
and equipment to the global oil and gas and renewable
energy industries. This includes the design and engineering
of specialist equipment and technology, platform
maintenance and modification, well testing support, subsea
operations and maintenance services.
INNOVATIVE
SOLUTIONS
INCREASING OFFSHORE
DECOMMISSIONING EFFICIENCIES
Acquisition advances customer
sustainability goals by enabling
effective management of legacy
infrastructure.
In June 2021, James Fisher announced the acquisition
of the entire share capital of engineering solutions and
consultancy company, Subsea Engenuity Limited.
The move extends its current decommissioning
capability under James Fisher Offshore (JFO) and
demonstrates the Group’s commitment to advancing
its customers’ sustainability goals through the effective
management of legacy infrastructure.
The deal secured access to innovative well
abandonment technology affording customers a route
to eliminating ongoing platform maintenance costs,
as well as technology for well cap setting allowing
the seabed to be returned to its natural state with no
pollution impact.
The acquisition of Subsea Engenuity’s innovative
technology is consistent with our purpose of pioneering
safe and trusted solutions for our customers and is
evidence of our commitment to proactively align
our business choices and investments with support for
the energy transition including through the responsible
management of existing infrastructure and assets.
To date, JFO has completed more than 100 discrete
decommissioning workscopes through the provision
of specialist equipment, expertise and personnel.
The addition of Subsea Engenuity’s unique well
abandonment technology will allow JFO to significantly
grow its share of an estimated addressable market of
£170m annually.
SCANTECH AS is a leading provider of
ATEX (ATmospheres EXplosives) products
and support services to the energy sector.
Its equipment is designed and certified to
NORSOK standards and supplied to the
Norwegian oil and gas market for platform
maintenance, well testing and specific projects.
The driver for the business is the operation
and maintenance spend on offshore rigs in
the Norwegian sector.
SCANTECH OFFSHORE
is a leading
provider of environmental mitigation equipment,
air compressors, steam generators, heat
suppression equipment and qualified personnel
for large multinational oil service and major
marine contracting companies in well testing
and offshore wind markets worldwide. The
driver for the business is the operation and
maintenance spend on offshore rigs and the
need to protect the marine environment with
noise mitigation during offshore piling operations
and unexploded ordnance (UXO) disposal.
RMSPUMPTOOLS is a world leader in
artificial lift specialist completion technology
and innovative accessory tools for electrical
submersible pumps supplied to the global
downhole oil and gas market. The driver for the
business is the need to improve well productivity.
FISHER OFFSHORE provides engineering
solutions, equipment and full project support
for offshore and subsea operations in the
oil and gas and marine sectors. Its market
driver is maintenance, inspection and repair
demand, and subsea pipeline and cable
projects in the oil and gas, renewables and
communication sectors with a particular focus
on offshore decommissioning.
Statutory operating profit/(loss) (£m)
£(5.2)m
Revenue (£m)
£86.3m
Underlying operating profit* (£m)
£11.1m
Return on capital employed (%)
10.2%
2019 £88.2m
2018 £71.4m
2020 £78.0m
2019 £13.7m
2020
2019 10.3%
2018 4.6%
2020 8.9%
2019 £14.2m
2018 £5.9m
2020 £11.2m
* before separately disclosed items
2021 £86.3m
2021 10.2%
2021 £11.1m
2021
£(5.2)m
2018 £5.0m
£8.4m
Our divisions - Offshore Oil
Governance Financial statements
32 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 33
Strategic reportStrategic report
Our Tankships division operates a fleet of product and
chemical tankers which trade along the UK and northern
European coastline carrying clean petroleum products and
chemicals including increasing volumes of biofuels from
refineries and terminals, to major coastal storage facilities.
The division also operates a port in Plymouth, UK.
PIONEERING
CHANGE
COMMITTING TO LOWER CARBON
SHIPPING
Tankships division demonstrates
Group’s commitment to reducing GHG
emissions with the addition of two LNG
dual-fuel IMO II tankers.
James Fisher Everard (JFE) will add two liqueified
natural gas (LNG) dual-fuel IMO II tankers to its existing
fleet during 2022 - the first clean product tankers
of this size to incorporate this emissions-reducing
propulsion technology.
The two vessels will also incorporate innovations in
design and construction technology to further enhance
hydrodynamic performance, to improve operational
efficiency, reduce greenhouse gas emissions and
improve local air quality.
This commitment to supporting both the environmental
goals of its customers and the sustainability goals
of James Fisher also allows JFE to contribute to the
International Maritime Organisation’s (IMO)
commitment to structural GHG reductions.
James Fisher has a long history, spanning more
than 170 years, of pioneering innovations in the
marine industry, having first adopted steam over
sail in 1883, and subsequently motor propulsion
during the early twentieth century. The first adoption
of LNG as a cleaner alternative to conventional
oil based propulsion fuels in this class of vessel
continues the entrepreneurial spirit of James Fisher,
and demonstrates the Company’s commitment to its
stakeholders and the environment.
Read more about our sustainability
commitment on page 14
JAMES FISHER EVERARD (JFE) distributes
clean petroleum products and chemicals under
contracts with primarily oil majors around
the European coast and to islands and ports
with size restricted access. It operates a
fleet of double-hulled product and chemical
tankers with capacity ranging from 3,000mt to
35,000mt. The business driver is the level of
consumption of clean products (petrol, diesel,
gasoil and kerosene) and chemical/biofuels in
the UK, Ireland and northern Europe. Products
carried serve the marine, transport, agriculture,
aviation and chemical industries.
CATTEDOWN WHARVES The division
operates Cattedown Wharves, a port in
Plymouth which provides berthing and marine
services to the oil majors which own tank farms
in Plymouth. It also handles dry cargoes such
as animal feed being imported into the South
West and clay being exported from the region.
The primary driver for the business is the level
of consumption of clean oil products within the
South West region of the UK.
JAMES FISHER SHIPPING SERVICES
(JFSS) provides technical vessel and crew
management to the James Fisher fleet of
tankers, as well as to the wider tanker, research
and specialised vessel markets.
Statutory operating profit (£m)
£1.3m
Revenue (£m)
£60.1m
Underlying operating profit* (£m)
£4.8m
Return on capital employed (%)
14.7%
2019 £67.9m
2018 £60.7m
2020 £60.4m
2019 £12.0m
2018 £9.9m
2020 £8.0m
2019 35.4%
2018 37.8%
2020 25.5%
2019 £12.0m
2018 £9.9m
2020 £8.0m
* before separately disclosed items
2021 £60.1m
2021 14.7%2021 £4.8m
2021 £1.3m
Our divisions - Tankships
Governance Financial statements
34 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 35
Strategic reportStrategic report
Climate-related risk and
opportunity analysis
We engaged the services of specialist
consultants to evaluate climate-related risks
and opportunities facing the Group. The
exercise involves a climate scenario analysis,
an important and useful tool used to identify
and assess the implications of different future
climate scenarios and associated levels of
global warming, including:
Policy, legal, technology and reputational
risks in the different warming scenarios
Opportunities such as new markets and
new products that may arise
The exercise will inform strategic decision-
making, financial planning, and the
development of appropriate corporate
governance structures that help to pre-empt
climate-related risks and opportunities.
Specifically, this will provide James Fisher with:
An improved understanding of the potential
impact of climate change scenarios on the
business across all stakeholder groups
A climate scenario analysis quantification
tool which will enable us to actively track real
world events against modelled scenarios and
to adapt its planning accordingly
A stronger positioning that satisfies all TCFD
reporting requirements and recommendations
Further details can be found in the
TCFD Summary section on page 52
How we will deliver against target
Set new portfolio boundaries
To better focus efforts, we have structured our core capabilities into three broad categories:
Energy solutions: Development of products, services, and solutions for the energy industry,
with a focus on renewables (offshore wind). James Fisher will continue to deliver services to the oil
and gas industry where it makes sense to do so, e.g., where our standards of safety and service
quality mean that withdrawing our expertise would result in a net negative impact on the planet.
2021 Contract wins for renewables
and remediation scope, £94.5m
54.9
United Kingdom
18.1
18.1
Rest of Europe
15.4
16.1
Asia
3.3
Middle East
0.3
North America
Renewables £m
O&G decommissioning £m
Regions and countries
Rest of Europe
Denmark
France
Germany
Italy
Spain
Sweden
Asia
Taiwan
Malaysia
Middle East
Saudi Arabia
56.9
2.0
0.7
North America
Canada
USA
Top clients
Boskalis
Equinor
Equitix
Heerema
Iberdrola
McDermott
NPCC
Ocean Winds
Ørsted
Prysmian
RWE
Renewables
Sapura
Seaway7
Swancor RE
Vattenfall
Weatherford
PLANET
Why it is important
The James Fisher Group is a portfolio of
service companies operating at the intersection
of energy, marine, and defence markets.
Our activities are inextricably linked to
environmental considerations related to climate
change and the energy transition. This creates
specific risks and opportunities that, when
properly managed, open new markets and
revenue streams.
Over the past 10+ years, we have strategically
funded environmentally sustainable growth
by actively reinvesting cash from our legacy
position in oil and gas into both established
and growing positions in the renewable energy
and environmental remediation value chains.
Progress in 2021
Active portfolio management
In line with our stated objectives and target, we
developed and deployed a set of clear tests
underpinned by well established frameworks to
assess all businesses within our portfolio.
The outcome of this assessment informed
critical decisions on what businesses to fix, exit,
and invest in for future growth. For example, the
decision to sell James Fisher Testing Services
and James Fisher NDT was based on strategic
fit, and the onboarding of a Broad-based Black
Economic Empowerment (BBBEE) partner into
James Fisher Subtech, South Africa was to
improve our competitive strength.
Global contract wins
Our efforts to reposition James Fisher operating
companies as leaders within their chosen
capabilities in the global renewables and
remediation value chain is yielding fruit, with
significant contract wins realised during 2021.
The services we will provide span across a
range of capabilities, including:
OFTO asset management
Noise attenuation with big bubble curtains
Asset commissioning, including HV safety
management
Topsides inspection, repair and maintenance
Terminations and testing
Cutting and dredging services
Wellhead severance
Pull-in high voltage cables
UXO investigation and removal
Crane delivery for HVDC platforms
Blade inspection and repair
PORTFOLIO CHOICES
KPI BASELINE (2021) TARGET TARGET DATE
% Revenue from
renewables and
remediation offerings
17% During 2022, we will set clear targets, with the
aim to report in 2023
Strategic fit
Does the business
operate within our core
markets, and align with
our purpose?
Attractiveness
Is the market attractive?
How much more could be
captured with existing/new
capabilities?
Can we create and
maintain a sustainable
competitive position?
Can we consistently and
sustainably deliver target
operating profit margins
and ROCE?
Market share and
growth rate
Competitive
strength
Sustainable
profitability
CRITERIADESCRIPTION
+ +
1
2
A B C
Over the course of our
175-year history, we have
successfully navigated several
industrial transformations,
and helped advance shifts in
energy systems.
Beginning with our conversion to steam
power from sail in the Nineteenth
Century, we have successfully
transitioned to and helped harness new
forms of energy – from coal to oil and
gas, nuclear, renewables and LNG.
The large-scale transition from fossil
fuel to clean energy sources, while
challenging, is another opportunity for
us to differentiate ourselves. Our focus
is to reduce our own carbon footprint
by transitioning to low carbon energy
sources and alternative fuels, improving
our energy efficiency, applying circular
economy principles to our operations,
and ultimately supporting our clients
in doing the same. As many of our
businesses operate within the energy
value chain, we will continue to grow our
capabilities to service the growing global
demand for clean energy, the evolution
of legacy energy demand, and increasing
demand for remediation to mitigate the
impact of human activities on the planet.
Sustainability
HIGH VOLTAGE SUCCESS AT SAINT-BRIEUC
EDS HV won a high voltage, turnkey safety-management commissioning contract with Iberdrola
for Saint-Brieuc, Brittany’s first large-scale offshore windfarm.
Leveraging its considerable experience of energising windfarms safely and efficiently, EDS
will help ensure a smooth transition from commissioning through to the operations and
maintenance phase at Saint-Brieuc. The windfarm will feature 62 turbines, each set 1km
apart and covering 75km
2
, at a site 16km off the French coast. The contract is valued at
£5.2m.
“We have developed the ability to provide a complete turnkey management service for the
high voltage aspect of wind farm construction and we can now offer a trusted and expert
package which is unparalleled in the market. With full project management, highly trained
teams and 24/7 remote control centre support throughout construction, we can provide
exactly what Iberdrola needs for Saint-Brieuc, and for their proposed windfarms elsewhere
in the world.” – Ryan Calvert, Strategy, Sales and Commercial Director at EDS
Strategic report
Governance
Financial statements
36 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 37
Strategic report
WELL ABANDONMENT CAPABILITIES EXPANDED
In a move to expand our decommissioning expertise, James Fisher acquired Subsea
Engenuity, a subsea project and engineering consultancy. Subsea Engenuity was identified for
its expertise, innovation and drive to create better technologies and solutions for subsea well
abandonment. The acquisition was announced in June 2021.
With the acquisition came the expertise and skillsets of the original owners and innovators,
bringing with them over 30 years combined experience in marine engineering, naval
architecture, downhole tooling and design, and SEABASS, a vessel-based subsea well
abandonment tool.
SEABASS is a revolutionary, single trip mechanical locking system for the abandonment of
category 2 wells. It is designed to remove contaminants and provide barriers to allow the well
site to return to its original environmental state.
Progress in 2021
Deployment of Lean methodology
In 2021, we actively sought and recruited a
Head of Lean, with the mandate to build a
“Lighthouse” within the Group, showcasing
the benefits that a Lean approach will bring to
business operations and delivery. This journey
is commencing with RMSpumptools. The
ambition is to deploy and scale Lean principles
across the Group based on success and
learnings from RMSpumptools.
RESOURCE EFFICIENCY
KPI BASELINE (2021) TARGET TARGET DATE
KPI under
consideration
During 2022, we will evaluate the right KPI that reflects our ambition,
with the aim to report a baseline in 2023
Why it is important
At James Fisher, we want to ensure that
our resources are utilised in a sustainable
manner, that we protect the life systems that
support the planet’s natural resources, and
that our workforce is environmentally aware in
carrying out their day-to-day tasks. Our focus
is to do more with the resources already in
place, with the long-term view of doing more
with less resource than is required today.
This will be achieved through the application
of Lean methodology and other operational
excellence principles.
At its core, Lean methodology organises
people, materials, water, energy and associated
activities in a way that delivers increased value
to all stakeholders while eliminating waste. By
building Lean methodology into our structure
and core systems, employees and extended
teams have the tools and techniques at their
disposal to drive efficiencies and ensure we can
accurately measure and then reduce/remove
wasteful activities that consume time, cost,
and valuable resources, but add little value
to our stakeholders.
Sustainability cont.
Remediation: Removal of pollutants or
contaminants from and restoration of the
environment. Current efforts are focused on
growth in decommissioning of oil and gas
infrastructure, with the aim to expand other
remediation scopes such as oxygenation
and remediation for aquaculture, flare gas
reduction, emissions monitoring, and waste
management.
Life preservation: Development of products,
services, and solutions that preserve the life
of people, assets, and other life forms in the
environments where we operate. JFD, one
of our portfolio businesses, is specialised in
submarine escape and rescue and provides
a range of innovative and highly capable
underwater life support systems for defence
divers. The development of offering and
capabilities for marine life preservation would
be an obvious extension for the Group, and we
will continue to evaluate this as other priorities
are successfully managed.
Reinforce internal processes
Efforts to upgrade and standardise internal
processes across the Group are ongoing,
with focus on portfolio management, new
opportunity development, and capital
allocation. This will ensure transparency in
evaluating our businesses, improve decision-
making, reinforce the right mindset, and
enable us to leverage our collective strength
in serving our customers.
Explore new frontiers
Beyond offshore wind, new opportunities
abound globally for the decarbonisation of
energy and we at James Fisher are beginning
to explore them. Some of these opportunities
are outlined below:
Reduce: Energy utilisation efficiency through
digital applications, alternative fuels e.g.,
hydrogen
Reuse/Recycle: Reuse of offshore assets,
recycling of decommissioned materials for
industry
Remove: Carbon capture and storage (CCS)
As a widely-based services supplier with
marine, nuclear, transportation, oil and gas
and renewable energy expertise, we are well-
positioned to create value in these adjacent
sectors.
We will continue to explore opportunities where
our technology can play a significant role in
solving complex challenges and preserving
our planet. In Norway for example, ScanTech
AS is in dialogue with the Stavanger Municipal
Council to use our nanobubble offering to
reverse environmental damage at a local lake
within Hålandsvannet.
CENTRALISED ASSET
MANAGEMENT – FROM
REGIONAL TO GLOBAL
James Fisher Subtech (JF Subtech),
an operating company within the Marine
Support division, provides turnkey
project solutions and subsea support
and services to the renewables, oil and
gas, and civils markets. In 2021, due to
high asset intensity and the continuous
drive to increase utilisation, JF Subtech
initiated a centralised, global approach to
asset management ensuring that internal
equipment solutions are evaluated before
committing to third party rental.
To support local customer desires to
build diver-less capabilities in South
America, SM Continental SA (Continental),
another operating company within the
Marine Support division, was qualified
as a remotely operated vehicle (ROV)
service provider to Petrobras and SBM
Offshore. The subsequent transfer of four
Observation Class ROVs from the United
Kingdom to Brazil secured Continental
a long-term contract with Petrobras,
providing year-round ROV support and
increasing asset utilisation by 70%.
Other examples of asset management
successes include the transfer of a Cougar
ROV from the United Kingdom to the dive
support vessel (DSV) Subtech Swordfish
operating offshore Qatar. This proved
instrumental in achieving continuous vessel
utilisation since mid-year 2021.
Asset optimisation
Due to our business model, some of the
portfolio businesses within the Marine Support
division are asset intensive. We continued to
improve utilisation of these assets through the
innovative management strategies outlined
below
1. Centralised asset management
Previously, assets such as vessels and
portable equipment e.g. Remotely Operated
Vehicles (ROVs) were managed regionally
across different James Fisher entities. We
now monitor and track our asset base from
a global perspective to determine where they
can be more effectively utilised. This has
resulted in the transfer of ROVs across regions
e.g., from the UK to Brazil to build capability
based on client demand.
2. Move to asset-light model
In 2019 we acquired two dive support vessel
(DSV), the Paladin and the Swordfish. Due to
challenging market conditions, we have adapted
our asset management approach, returning to
an asset-light strategy: and
sold the Paladin
secured long-term frame agreement
contracts for the Swordfish
established partnerships with vessel owners/
operators facilitating access to multiple
vessels in exchange for market access
How we will deliver against target
As Lean methodology, principles and
improvement initiatives are implemented across
the Group, a Lean operating system framework
will materialise. This system will comprise Lean
leaders and champions who support and
embed the capability, with the aim to improve
product excellence, commercial excellence,
and operational excellence.
We will continue to drive improvements by:
standardising policies and processes to
embed the right culture and mindset across
the Group
implementing centralised functions,
processes, and information management
systems where it makes sense to do so e.g.,
centralising CRM system at division level
promoting knowledge sharing and learning
through curated programmes and campaigns
We have strengthened our investment
decision-making process by revising and
updating the assessment criteria. We will
continue to invest in strategically significant
assets where such investments provide a
differentiated level of service or sustainable
competitive advantage.
Strategic report
Governance
Financial statements
38 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 39
Strategic report
PIONEERING MODIFICATIONS
SET SAIL FOR A GREENER
FUTURE
James Fisher Tankships division has
demonstrated its commitment to reduce
carbon emissions with the addition of
two dual-fuel tankers to the James Fisher
Everard (JFE) fleet.
The two new IMO II tankers will run
alongside the existing fleet and will be the
first clean product tankers of this size to
feature propulsion technology that reduces
greenhouse gas (GHG) emissions. The
vessels are configured to run on either
conventional fuel or LNG (liquefied natural
gas) and are specially designed for
enhanced hydrodynamic performance.
The new additions will be replacing two of
JFE’s oldest vessels, the Thames Fisher
and Mersey Fisher.
A study conducted by the Society for
Gas as a Marine Fuel (SGMF) estimates
that the use of LNG as an alternative
fuel can result in up to 21% emissions
reduction over the entire vessel life cycle,
when compared with existing marine
fuels. Pioneering the adoption of LNG as
a cleaner alternative to conventional fuels
for this class of vessel is testament to the
entrepreneurial spirit of James Fisher.
“James Fisher is committed to protecting
the environment, both in terms of our
operational footprint and the nature of
the activities we undertake. The adoption
of LNG dual fuel propulsion vessels is
evidence that we are proactively aligning
our business choices with customer and
environmental needs and demonstrably
applying our Company values.”
– Eoghan O’Lionaird, CEO
Why it is important
We are committed to minimising and
possibly eliminating the detrimental impact
of greenhouse gas (GHG) emissions from
our operational activities. We have stated our
commitment to setting net zero emissions
targets in alignment with the Paris Climate
Agreement. We also recognise the importance
of helping our customers reach their own net
zero emissions targets.
Progress in 2021
We engaged the services of specialist advisors
and conducted an extensive emissions footprint
reporting and consolidation exercise across
the Group, preceded by a coaching session
on reporting definitions, standards and criteria.
This was to ensure that those responsible
for reporting in a diverse group of operating
companies do so effectively for this and future
reporting cycles. As a result, our reported
emissions footprint has increased, reflecting
emissions from international activities and leased
assets in our baseline, some of which were not
captured in the past.
GHG emissions were calculated in accordance
with the requirements of the GHG Protocol
Corporate Accounting and Reporting Standard
for the 1-year period spanning 1 October 2020
to 30 September 2021 (our target base year).
Emission conversion factors from the UK
Department for Business, Energy and Industrial
Strategy (BEIS) and International Energy
Agency (IEA) were applied in the calculations.
The baseline we have reported for Scope 1 and
Scope 2 will be the reference against which
future emissions footprint calculations will be
benchmarked.
GREENHOUSE GAS (GHG) EMISSIONS
KPI BASELINE (2021) TARGET TARGET DATE
Scope 1 and Scope 2 emissions 114,374 tCO
2
e During 2022, we will set clear targets, with the aim to report in 2023
Scope 3 emissions We will continue to evaluate and measure Scope 3 emissions in line with the GHG Protocol Standards.
We aim to report a baseline and targets in two to three years
How we will deliver against target
Develop net zero emissions pathway
Following an extensive Scope 1 and Scope 2
footprint review and the setting of an interim
target, efforts are underway to:
model emissions reduction pathway at Group
and operating company levels
map our approach to net zero emissions.
This will be done in alignment with the SBTi
guidance and target setting criteria.
Improve reporting and visibility
In parallel with the extensive emissions reporting
and consolidation exercise of 2021, we are
developing a centralised, Group-level emissions
reporting and visualisation portal. Once
completed and rolled out, this tool will ease
and standardise internal reporting across all our
operating companies by enabling:
automated conversion calculations from any
unit into the tCO
2
e
data and report submittal at any day and
time of year
user-friendly, live dashboard visualisation,
with reporting consolidated at Group and
operating company level.
Ultimately, we are aiming for near real-time
visibility of our emissions footprint to improve
visibility across our global operation and
facilitate proactiveness in our monitoring and
reduction efforts.
For the benefit our external stakeholders, we
will continue to report our emissions footprint
and energy consumption in accordance with
the UK SECR regulation (see page 114 for our
SECR report). Communicate our environmental
impact in alignment with the CDP guidelines,
and highlight identified risks, opportunities,
and our business resilience to climate change
through the TCFD reporting (see page 52 for
our TCFD Summary).
Define Scope 3 mapping criteria
The GHG Protocol Corporate Value Chain
(Scope 3) Accounting and Reporting Standard
has set 15 categories for scope 3, of which
we evaluated emissions from business travel in
2021. We are now assessing which of the 15
categories are most material for our operating
companies and will work with key suppliers and
customers in our value chain to identify, map,
and measure Scope 3 emissions footprint,
and put in place effective emissions reduction
programmes.
Scope 3 emissions categories
1: Purchased Goods and Services
2: Capital Goods
3: Fuel- and Energy-Related Activities Not
Included in Scope 1 or Scope 2
4: Upstream Transportation and Distribution
5: Waste Generated in Operations
6: Business Travel
7: Employee Commuting
8: Upstream Leased Assets
9: Downstream Transportation and
Distribution
10: Processing of Sold Products
11: Use of Sold Products
12: End-of-Life Treatment of Sold Products
13: Downstream Leased Assets
14: Franchises
15: Investments
While the focus was to properly document
our Scope 1 and Scope 2 emissions, we have
commenced with identifying and measuring
our Scope 3 emissions. This is a much more
complicated exercise given the diverse and
fragmented nature of our businesses. The
exercise will involve coordinated engagement
with key partners within our supply chains and
we will work to influence their journey towards
net zero through our actions.
Scope 1 emissions are direct emissions from
owned or controlled sources and activities – fuel
combustion on-site in gas boilers, fleet vehicles,
furnaces, air-conditioning leaks. Emissions
from mobile combustion, mainly our vessels
and fleet vehicles, accounted for 98.9% of our
Scope 1 emissions, with a 1% contribution from
stationary combustion (space heating), and
0.1% from fugitive sources (refrigerants).
Scope 2 emissions are indirect emissions from
the generation of purchased electricity, steam,
heating and cooling. Purchased electricity
accounted for 94% of our emissions in this
scope, with a 6% contribution from purchased
chilled water. Our Scope 2 emissions were
found to be relatively low as many of our facilities
in the UK and Singapore, are already sourcing
100% renewable energy from service providers.
As part of our Scope 2 emissions abatement
efforts, we will plan to roll out this best practice
across all regions, encouraging purchase of all
energy from renewable sources, where available.
Scope 3 emissions are indirect emissions from
sources and activities that we neither own nor
control but we indirectly impact within our value
chain. As a first step and for 2021, we measured
and consolidated emissions impact from
business travel only. The reason for prioritising this
category is that the nature of support services we
provide across our operating companies involves
frequent travel and mobilisation on and off work
sites around the world.
Emissions from air travel accounted for 86.3%
of our Scope 3 emissions (86.8%), with an 8%
contribution from hotel stays, 5.2% from rentals
and travel reimbursements, and less than 1%
from rail travel.
2021 Scope 1 emissions, 113.2 KtCO
2
e
111.9
Mobile combustion
1.2
Stationary combustion
0.1
Fugitive emissions
2021 Scope 2 emissions, 1.2 KtCO
2
e
1.1
Purchased electricity
2021 Scope 3 emissions, 3.2 KtCO
2
e
2.7
Air travel
0.3
Hotel stays
0.2
Rentals / reimbursements
0.0
Rail travel
0.1
Chilled water
Sustainability cont.
CARBON CAPTURE
OPERATIONS, CANADA
RMSPumptools was selected to provide
‘packer penetrator systems’ at the Clive
Field in Alberta, to protect the oil well
casing from the potentially damaging
effect of the captured CO
2
.
‘These systems were critical to safe
operations and RMSPumptools was
selected for this project as the provider of
the most reliable systems for this harsh
environment,’ says Canada regional
manager, Colin Drever. ‘We are thrilled
to be involved in a cutting-edge project
which allows oil to be extracted with a
net zero impact on emissions.’
Strategic report
Governance
Financial statements
40 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 41
Strategic report
PEOPLE
TOP TALENT
KPI BASELINE (2021) TARGET TARGET DATE
Employee Engagement Mean
(Gallup)
3.6 (5-point scale) During 2022, we will set clear
targets, with the aim to report
in 2023
Employee retention rate 78.1%
Why it is important
Our employees are our most important assets. United by a common purpose and shared valued
behaviours, their talents, energy, and dedication enable us to create value for all our stakeholders.
With James Fisher operations spread across six continents, our people are geographically
dispersed and represent a multitude of cultures. While our decentralised and entrepreneurial
culture ensures our businesses develop more intimate customer relationships and adapt readily
to changes in the markets, regions, and communities where we operate, there is a risk that
employees become disconnected from the Group’s leadership and overarching vision. Therefore,
we must focus on building a healthy and engaging work environment, prioritising our employees’
wellbeing, career, and personal development to ensure that we get the best out of them and that
their efforts are in line with the Group’s growth priorities.
Progress in 2021
During 2021, we focused our efforts on
implementing and driving change across three
themes: employee engagement, wellbeing, and
talent management.
Employee engagement
In prior years, engagement surveys were
conducted, collated, and analysed internally
by the HR team. In 2021, we outsourced this
exercise and introduced the Gallup’s Q12
Employee Engagement Survey. The Gallup
approach is tested and tried, and we scored a
mean score of 3.6 on a 5-point grading scale.
The transparency achieved from the analysis of
survey results has empowered managers to take
ownership of outcomes and work collaboratively
with their teams to improve engagement levels.
To support managers in developing engagement
plans and executing initiatives, we nominated
and are training engagement champions across
the Group.
Inken Braunschmidt, as designated Non-
Executive Director for employee engagement,
has joined the engagement working group,
with employee representatives from around
the Group, has presented to employees on
the activities of the Board and Committees,
and has engaged with employees at the
senior management conference and during
a number of site visits following the lifting of
travel restrictions.
Inken has reported back to the Board on a
regular basis on her activities and the key
themes communicated by employees.
Wellbeing
A healthy workforce is more resourceful,
productive, innovative, motivated, and
committed. We aim to deliver a physically and
mentally healthy workplace within which our
employees can thrive. To do this effectively, we
have drawn on industry-leading expertise and
best practices to design our 2022 wellbeing
plan, with emphasis on prioritising preventative
measures to address the root cause of existing
challenges. This will require extensive education,
awareness, training, and sensitisation to
encourage employee participation and minimise
the risk of associated stigma.
We continued to promote and monitor the
uptake of our Employee Assistance Programme
and are taking action to increase awareness of
the benefits and features, for example, making
the programme available to family and friends.
We have over 80 trained Mental Health First
Aiders (MHFAs) across the Group and are
continuing to train more volunteers. We have
also set a target to train 50% of the MHFA
population in Suicide First Aid by year-end 2022.
Our responsibilities extend beyond our
employees to the communities where we live
and work. By providing a great place to work
and building the communities that support
our businesses, we can ensure a sustainable
future for James Fisher. To that end, the Group
encouraged employees to contribute their time
and talents in support of their communities
in various capacities, providing financial
assistance and sponsorship as needed.
For example, James Fisher Group HR team
donated supplies and volunteered at a local
food bank, to support those facing hardships
during the Christmas holiday. Further details
can be found on page 42.
Talent management
To unlock and empower our talent of today
and the future, we must invest in attracting
and retaining them. This means that our talent
management efforts, while focused on our
current employees, necessarily extend to
potential employees within our communities.
We have revised our talent management policy
and are in the process of structuring a Group-
wide, global talent management process to
guide recruitment, career development and
management efforts. We have introduced a new
process for Organisational Management Review
(OMR), succession planning, performance
improvement planning, and for identifying high
potential performers. We also designed a new
leadership training programme for all managers
and rolled out four of the 12 modules.
Group-wide, we executed two six-month
internship programmes, providing opportunities
for recent graduates whose career prospects
had been hampered by the COVID pandemic.
While interns gained vital work experience, they in
turn injected new energy and fresh ideas into the
businesses. In addition, some of our employees
got the opportunity to develop core leadership
skills as mentors and managers.
As our contribution to the community and
to develop future talent for our industries,
we have partnered with universities and
institutions of learning in various capacities.
For example, through our partnership with
Engineering UTC Northern Lincolnshire, an
England-based university technical college for
14- to 19-year-olds, we created a ‘sponsored
classroom’ where budding engineers are
taught the importance of engineering in the
renewable energy industry.
We also have a business partnership with
Meldrum Academy, a secondary school
in Scotland.
PARTNERSHIP WITH
MELDRUM ACADEMY
James Fisher Decommissioning (JF Decom)
is engaged in a partnership with Meldrum
Academy, a secondary school in Scotland,
as part of its commitment to developing
future minds for the world of work.
Mentor Programme: JF Decom have
matched mentors from the business with
mentees from the academy. Each mentor,
with their experience and knowledge,
helps students enhance key skills that
will help them thrive in professional
environments – communication,
leadership, problem solving and
teamwork.
Online Business Partnership Group:
The Business Partnership Group, an
initiative set up by Developing the Young
Workforce (DYW) Scotland, consists of
a dozen local businesses and is led by
Meldrum Academy. As part of this group,
JF Decom provides an employer’s view on
the school’s initiatives to prepare pupils for
the world of work ahead of them.
JF Decom has supported various events
such as the #Nowrongpath, an event
organised for parents to learn about the
different routes available to their children
preparing to leave school.
JF Decom has also contributed
informational materials about the industry
where we work, the work we do, and
career opportunities available.
Young Person’s Guarantee: JF Decom
has signed up to Young Person’s Guarantee
(YPG). YPG is an initiative that aims to
connect with every 16–24-year-old in
Scotland with the opportunity of a job,
apprenticeship, higher education, training
programmes or volunteering opportunities.
HR TEAM DAY AT LOCAL FOOD BANK
How we will deliver against target
Apply top-down approach
We believe that managers must lead by example
and be strong advocates for our talent initiatives
to be successful. Therefore, we will systematically
develop and roll out training to educate, raise
awareness, empower, sensitise, and coach
leaders across the organisation. We will reinforce
the importance of healthy team relationships and
intervene when people are struggling.
Engage and communicate consistently
To deliver our goal of having an engaged,
connected, and committed workforce, we are
in the process of restructuring and curating our
communication and training campaigns, built
around the HR business partners, engagement
champions, and wellbeing champions. These
campaigns will include:
monthly lunch and learns to deep-dive on
pertinent topics including health, wellbeing,
career, leadership, and community
engagement
online training workshops, webinars,
newsletters, and videos.
We aim to monitor and measure the success
of our engagement initiatives by conducting an
engagement survey every six months. Analysis
of results will enable us to adapt improvement
plans in alignment with our objectives and to set
clear targets against which our performance is
consistently measured.
Upgrade internal learning programmes
An integral part of talent management is learning
and development. At James Fisher, our ambition
is to create a transformative culture of learning,
engage and empower our employees, and
continuously improve their proficiency. We are
evaluating various learning programmes and
talent support mechanisms we believe will help
to build top talent:
mentoring programme: More senior employees
provide career guidance to mentees
shadowing programme: Employees shadow
colleagues in desired roles to learn about what
it entails, and the skills required for success
career development toolkit: Help employees
own, design, and drive their career progress.
In December 2021, the James Fisher Group HR team donated supplies and volunteered at a
local food bank, to support those facing hardships in the local community.
Challenge: The Living Waters (LW) Storehouse – a charity food bank run by volunteers from
the Living Waters Church – provides emergency food for thousands of people in crisis each
year within the Chorley area. With a 34% increase in local people requiring support from the
food bank, LW was struggling to meet its food parcel demands in time for Christmas.
Solution: Acknowledging the food bank’s requirements, James Fisher’s HR team purchased
necessary items, and 10 team members spent the day volunteering at the food bank.
“The team helped us pack almost 500 parcels, brought donations and they were all in good
spirits. This was a successful packing session and set us ahead for the collection days that
were imminent, allowing us to focus on other obligations.
I’m very thankful for their time and to James Fisher for graciously gaving them the time away
for the day. This reduced the pressure and stress on both me and the volunteers that are
working tirelessly during these challenging times.”
– Helen Schilz, Living Waters Storehouse
At James Fisher, we have a responsibility to our people,
our customers and those in the communities where
we operate.
We are committed to ensuring that James Fisher is a great place to work by providing safe
and meaningful work, empowering, and supporting our employees to deliver optimal quality for
our customers, acknowledging and rewarding employee contribution to the Group’s success,
and promoting employee wellbeing. We extend this commitment to our local communities,
conscious that our talent pool is fed by the local communities we operate in and that enhancing
the lives of people in these communities will deliver benefits for James Fisher as well.
Sustainability cont.
Strategic report
Governance
Financial statements
42 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 43
Strategic report
Sustainability cont.
CHARITY CHALLENGE: FROM
HARTLEPOOL TO THE
EIFFEL TOWER
Two keen fitness enthusiasts from Rotos
360, a business unit within the Marine
Support division, embarked on a gruelling
charity challenge, cycling, rowing,
marching, and running the 566 notional
miles from their local gym in Hartlepool to
the Eiffel Tower in Paris. They used gym
equipment including an exercise bike to
simulate the 327 miles from Hartlepool
to Dover and the 182 miles from Calais
to Paris, a rowing machine to cover the
31 miles across the English Channel, a
step-up box to cover the 1,665 steps to
the top of the Eiffel Tower and the seafront
on Hartlepool’s promenade to cover the
remaining distance.
Aaron Myers and Ben Bywater completed
the challenge with ten others, all working in
pairs, to raise awareness and funds (over
£10,000) for Great Ormond Street Hospital.
“We set a time limit of 44 hours but
managed to finish more quickly than
expected, with Ben’s team smashing a
time of 33 hours,” says Aaron.
2021 Community initiatives split by region
2021 Community initiatives split by theme
Asia
North America
Africa
United Kingdom
Career/business support
Education
Hobby
Health and wellbeing
Total number of
initiatives = 30
34%
60%
10%
77%
10%
Local community efforts
During 2021, our employees contributed their
time and talents to support causes across
the world. Our goal was not to only support
the charities and organisations, but for our
employees to engage with the people we were
helping directly, because it is in those instances
that we have the biggest impact. No matter
how big or small the interaction, we found that
employees came away with a greater sense of
purpose, better appreciation for the benefits
of volunteering, and a renewed energy to
contribute even more.
Some examples of our community initiatives
are outlined below:
Total number of
initiatives = 30
Health and wellbeing
James Fisher Nuclear (JF Nuclear)
supported Mark Harding, an Army veteran
who executed a Walking Home for
Christmas campaign to support a wounded
veteran charity in the United Kingdom.
Mark pulled a snow pulk from Wigton
through Penrith to Carlisle, and then walked
an additional 12 miles in Sunderland to
add up to 50 miles. Funds went towards
subsidising the cost of treatment for
veterans with PTSD. Leigh Dunn from JF
Nuclear joined Mark to pull the snow pulk.
Fendercare Marine is a Futurestars partner
and continues to support the charity’s efforts
in Africa. In 2021, employees sorted through
25,000 items, loading up 20 pallets of
donated items that made their way to Ghana
through Futurestars.
In Kuala Lampur, Fareen Noor is setting a
good example by feeding the homeless with
her home-cooked meals.
Hobby
Since 2020, JF Subtech has sponsored a
15-year-old Junior Motorboat Champion
from Lowestoft, United Kingdom. Due to our
sponsorship, she can afford to compete at an
international level.
Education
During British Science Week, Marc Glenn
from EDS HV was guest speaker at Euxton
Primrose Hill Primary School. He engaged
students on the offshore wind and
renewables industry.
Career/business support
As part of our supplier development
contribution to the Broad-based Black
Economic Empowerment (BBBEE) integration
programme in South Africa, office and training
areas were supplied by the JF Subtech team
at no cost to local suppliers.
Historically, these volunteer programmes were
coordinated in an ad hoc manner and within
small teams across operating companies. With
the creation of the local communities working
group, the mission is to further incentivise
employees to volunteer and ensure that future
programmes are executed in a more structured
manner, leveraging our size to scale impact and
initiating partnerships with other organisations/
institutions where possible. We know that the
diversity of our people and their talents will act
as a force multiplier, and we are challenging
ourselves to have even greater impact in the
years to come.
DIVERSITY AND INCLUSION
KPI Baseline (2021) Target Target date
% Female employees as a
proportion of total employees
23% During 2022, we will set clear targets,
with the aim to report in 2023
% Black, Asian and minority
ethnic (BAME) employees as a
proportion of total employees
During 2022, we will establish a baseline, with the aim to
commit to a target in 2023
Total charitable employee days
“donated”
Number of community initiatives
executed by James Fisher
Why it is important
The Company operates in 25 countries across
the world, in complex, high-risk, historically
male-dominated fields. In alignment with our
values, we believe that equality, diversity, and
inclusion are critical to how we operate. Our
mission is to cultivate a working environment
where everyone knows they belong, where
our people are comfortable with sharing their
perspectives and experiences without fear of
recrimination, uniqueness is embraced, and
equal pay and access to opportunity exist
for people of all backgrounds, personalities,
and abilities. With a diverse workforce and an
inclusive work environment, we are better able
to harness the wealth of ideas that will drive
our success.
Our commitment to equality, diversity and
inclusion extends beyond our own workforce.
We aim to benefit and positively influence the
communities where we live and work through
proactive engagement, employing local people,
contributing to local economies, and investing
in local supply chains.
Progress in 2021
Diversity metrics
The ratio of female employees to total
employees remained the same in comparison
with the previous year. During 2021,
we extended the Executive Team to include
heads of operating divisions. This had the
ripple effect of expanding the pool of Senior
Managers that report directly to the Executive
Team (see table below – Gender diversity
metrics, 2020 vs 2021).
Following an in-depth review of our
employee information gathering process
and in compliance with the UK General Data
Protection Regulation (UK GDPR), we have
expanded the list of requirements to include
ethnicity-based metrics. We have rolled out
these requirements for all new hires and are
working to collate ethnicity information for all
employees who joined before 2021.
Training and policy
We rolled out two training programmes
targeting senior leadership:
1. Leading in an Inclusive World: Delivered
with the support of specialist advisors, the
training equipped senior leaders with the tools
to advocate diversity and inclusion, and to
challenge contrary behaviour.
2. ‘Leading the Business’ series: Online diversity
and inclusion training module rolled out for all
line managers across the business.
In response to an identified need, we
introduced the Bereavement and Pregnancy
Loss policy, shedding light on the cultural
aspects of bereavement so that our employees
are afforded the necessary support.
Partnership
James Fisher is signed up to the If Not Now,
When? campaign. The campaign is driven
by a community of over 80 CEOs who are
committed to achieving black and wider race
inclusion by first establishing an internal culture
that is fully representative and inclusive of
individuals from BAME backgrounds, and then
extending that commitment to customers,
suppliers, and other key stakeholders.
Alongside other co-signatories, we are:
diversifying the face of our organisation:
Setting targets on BAME talent and holding
recruiters accountable for presenting diverse
shortlists.
measuring: Investigating the specific
challenges and barriers faced by BAME
talent and implementing processes to track
ethnicity data.
starting the conversation: allowing senior
leaders and middle managers to speak
boldly about issues of systemic racism and
creating safe spaces for these conversations
to take place.
3%
3%
3%
Gender diversity metrics, 2021 vs 2020
2021 2020
Gender diversity Male Female % Female Male Female % Female
Main Board Directors 6 2
(1)
25% 5 2 29%
Executive Team 8 4 33%
(3)
5 2 29%
Senior Managers
(2)
69 34 33%
(3)
34 25 42%
Employees 1,991 577 22% 2,115 623 23%
Total 2074 617 23% 2159 652 23%
(1) In Q1 2022, we appointed Claire Hawkings to the Board, increasing the total of Main Board Directors to
nine and raising the % female metric up to 33%
(2) Includes those reporting to members of the Executive Team, including Senior Managing Directors
(3) Movement in % female metric is due to the extension of the Executive Team to include heads of
operating divisions
Annual Report 2021 \\ James Fisher and Sons plc 4544 James Fisher and Sons plc // Annual Report 2021
Strategic report
Governance
Financial statements
44 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 45
Strategic report
RMSPUMPTOOLS SUPPORT A COMMUNITY PROJECT
How we will deliver against target
Scale up recruitment efforts
We have strengthened female representation
on the Board with the appointment of Claire
Hawkings, increasing the total of Main Board
Directors to nine and raising the % female metric
up to 33%. We continue to intensify efforts to
improve the diversity of our employee pool.
Reinforce internal processes
As we revise and communicate our culture
statement, including our equality, diversity and
inclusion policies and principles in alignment
with the sustainability agenda, and work to
set clear gender- and ethnicity-related targets,
we will also update our recruitment processes
to deliver our stated objectives. We must
ensure that our recruitment partners share
our values and support our efforts to increase
our talent pool across the spectrum of human
demographic differences – gender, ethnicity,
age, sexual orientation, religion, socio-economic
status, or physical ability. We must also sensitise
interviewers, internal and external, about their
conscious and unconscious biases, to ensure
that prospects that do not fit with preconceived
notions of what an ideal employee might be are
not adversely impacted.
In compliance with the UK General Data
Protection Regulation (UK GDPR), we aim
to expand the list of employee information
requirements to include other demographic
differences – sexual orientation, physical
disability, and religion. We will continue to
review and update our monitoring and tracking
processes to ensure transparency and accuracy.
Extend diversity and inclusion training
We aim to extend our diversity and inclusion
leadership training to all aspiring managers and
are exploring options for non-manager training,
to better inform and empower the remainder of
our employee pool.
Centralise coordination of local
community efforts
Building on our successes in 2021, we will
continue to:
Work with local communities as collaborators
and partners rather than simply focusing on
them as beneficiaries and strengthen existing
partnerships
Support STEM initiatives, promote education
in local schools and explore further
partnership opportunities
Engage customers and suppliers on their
community development efforts, with the
intent to collaborate where possible.
A team of volunteers from RMSpumptools’ Aberdeen site day at the Pitcaple Environmental
Project’s (PEP) Pitscurry site, to refurbish the charity’s garden areas for its service users.
Challenge: PEP Pitscurry, a charity organisation located in Inverurie, Scotland, provides
training and support for adults with learning or physical disabilities. Pitscurry required
volunteers to help create outdoor living landscapes that enhance the benefit for its service
users and the wider community – helping towards Pitscurry’s sustainable development goals.
Solution: One team member visited the site prior to the volunteering day to understand what
works and supplies were needed for the refurbishments. On the day, a team of 15 employees
worked tirelessly to stain wooden cabins and perform various maintenance tasks in the
garden area.
Staff and service users at PEP’s Pitscurry site were overwhelmed by the number of volunteers.
“The team stained three wooden cabins which were in desperate need of being painted,
extending the lifetime of these much-needed spaces which are used for music therapy and
bases for some of our service users. They also removed the large net from the orchard area,
which was a huge help as it’s usually one of the annual jobs which can be difficult for service
users to help with. The RMSpumptools employees also did some general tidying up around
the site!”
– Lorraine Ewen, Day Services Deputy Manager at Pitscurry.
Sustainability cont.
HEALTH, SAFETY AND SECURITY
KPI BASELINE (2021) TARGET TARGET DATE
Number of fatalities 0 0 YoY
Lost Time Incident Frequency
(LTIF)*
2.6 During 2022, we will set clear
targets, with the aim to report
in 2023
Total Recordable Injury Frequency
Rate (TRIFR)**
7.4
Why it is important
We work in challenging, high-risk environments
to solve complex problems. Protecting our
people, the people who work with us and
those impacted by our activities is vital. We
want people to return to their homes, families,
and friends every day and safely. This is
the inspiration for our “goal zero” incidents
vision. To embed the right mindset and realise
this vision, we will invest our efforts in three
areas: policy development, education, and
engagement.
The Group’s health, safety and security
priorities, objectives, and performance
monitoring are coordinated and governed by:
The Health and Safety Committee: Chaired by
the CEO and comprising the Executive Team,
the committee has oversight and conducts
quarterly reviews of the Group’s health, safety
and security performance
The Safety Forum: Comprising the health and
safety leaders from each operating company,
the forum is responsible for providing updates
on health, safety and security issues and
events, sharing best practices, and advising
the Health and Safety Committee on Group-
wide initiatives to improve performance.
Through the efforts of the Health and Safety
Committee and the Safety Forum, we will
empower our people to prioritise their own
health, safety, and security, ensure the safety
and security of assets we own and/or control,
and engage with customers, suppliers, and
other partners to align them with our policies,
standards, processes, and values.
Progress in 2021
Engagement and empowerment
We continued to engage and empower all our
employees, emphasising the responsibility and
authority they have, to intervene where individuals
and assets may be at risk and stop any job where
the standards of health, safety and security are
compromised. We executed several internal
campaigns and initiatives such as the Health and
Safety Hints and Tips intranet page, where health
and safety best practice from around the Group
is regularly updated. We also ensured that health,
safety and security priorities were affirmed in
leadership townhalls throughout the year.
Increased participation from the managing
directors (MDs) of operating companies in the
Safety Forum has increased its effectiveness.
Through proactive engagement and
communication, best practices, learnings,
knowledge, and ideas were cross-pollinated
across the group, driving performance
improvement towards our ‘goal zero
incidents’ vision.
Process improvement
We aligned on a consistent approach to Root
Cause Analysis, with the goal to identify and
understand the underlying or systemic causes
of incidents, rather than staying focused on the
generalised or immediate cause. This ensures
that our incident resolution approach and
corresponding recommendations address the
incident root cause, to prevent reoccurrence.
The “5 Whys” technique is a tool that has been
deployed for this purpose.
The technique involves asking ‘“why?” several
times over, each question forming the basis of the
next until a root cause is identified.
How we will deliver against target
During 2022, we aim to deploy a centralised,
cloud-based health, safety and security
reporting tool that will enable continuous
reporting of individual operating company
performance data and the monitoring of
consolidated Group information. We will
explore opportunities where digital applications
and solutions can improve efficiencies and
continue to upgrade reporting, management,
and monitoring systems across the Group
where necessary.
We will ensure that the relevant policies,
including the Health, Safety and Security policy,
are aligned with our sustainability priorities
and continue to educate, inform, and engage
employees, customers, suppliers and other
industry partners on safety matters.
* LTIF = (Number of lost time injuries x 1,000,000) / (Total hours worked)
** TRIFR = ((Fatality + Lost Time Injury + Restricted Work Day Case + Medical Treatment Case) x 1,000,000)/
(Hours Worked)
Incident Root Cause
Define the problem
Why is it happening?
Why is that?
Why is that?
Why is that?
Why is that?
THE 5 WHYS
UXO INVESTIGATION AT
SOFIA OFFSHORE WIND
FARM
JF Renewables has completed the first
part of a two-phase contract to investigate
unexploded ordnance (UXO) and potential
archaeological features ahead of the
installation of export cables for RWE’s
Sofia Offshore Wind Farm, located off the
north-east coast of the UK.
“Expertise gained from performing more
than 3,000 UXO investigations around
the globe enabled us to identify additional
targets and to ensure phase one of the
work was completed to the highest safety
standard.”
– Wayne Mulhall, Managing Director at JF
Renewables.
Strategic report
Governance
Financial statements
46 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 47
Strategic report
INNOVATION
KPI BASELINE (2021) TARGET TARGET DATE
KPI under consideration During 2022, we will evaluate the right KPI that reflects our
ambition, with the aim to report a baseline in 2023
Why it is important
In our 175-year history, we have differentiated
ourselves through innovation and technology.
We are pioneers in our chosen markets,
emerging as the global leader in submarine
rescue, removal of offshore unexploded
ordnance (UXO) and ship-to-ship (STS)
transfer. We were the first to decommission
a Magnox nuclear reactor, are experts
in high voltage (HV) engineering, and we
design bespoke digital solutions for asset
owners and operators in high risk, critical
infrastructure sectors.
The energy, marine, and defence markets
are going through a period of transformation,
galvanised by climate change, energy transition,
and other macro challenges. To position
ourselves for success and take advantage
of the opportunities that result from this
transformation, we must continue to innovate.
Our innovation goal is value creation – to deliver
tangible revenue gains and cost savings for
our customers. We consistently strive to better
understand market challenges, articulating the
value we can and do create by:
Tapping into the brain power and
expertise of our capable people to feed
the innovation stream.
Partnering with customers and key
industry players to co-design, develop, and
commercialise cutting-edge solutions to
industry challenges.
Engaging our suppliers to ensure services
are provided in accordance with our valued
behaviours and code of conduct.
To improve efficiencies and accelerate pace,
we aim to centrally facilitate and support
innovation efforts to better identify synergy
opportunities, particularly where multiple
operating companies serve the same markets,
customers, and suppliers, or operate in the
same region.
Progress in 2021
Individual James Fisher operating companies
have applied their own unique methodologies
to the innovation process, driving cutting-
edge, market defining solutions as in the
examples below.
Product innovation
JF Decommissioning’s SEABASS well
abandonment tool: A strategic investment made
through the acquisition of Subsea Engenuity.
SEABASS is a cost and time effective alternative
to rig-based solutions when abandoning
category 2 wells, due to its ability to deploy from
a vessel and its suitability for any water depth.
Scan Tech’s ScanOxy™ oxygenation system:
Scan Tech AS have developed ScanOxy™
based on gas production and management
experience from the oil and gas industry.
The complete engineered system comprises
an electrical compressor, oxygen generator,
control system, nanobubble generator, and
distribution system, and is primed for use in
aquaculture. ScanOxy™ is perfect for both
offshore and onshore fish farms in recirculating
aquaculture systems (RAS) systems, well boats
and hatcheries, and provides local oxygen
production in lieu of liquid oxygen tanks or
bottles. Scan Tech’s ScanOxy™ nanobubble
technology is easily scalable, enables continuous
oxygen production, is largely unaffected by
water quality, and technologically ahead when
compared with most stable nanobubbles.
Service innovation
Fendercare Marine’s LNG ship-to-ship (STS)
transfer: By utilising a new transfer system, the
Fendercare team successfully delivered three
successive LNG STS transfers off the coast
of Malaysia. The new system is a universal,
“plug and play” system providing the latest
in technology and ensures that maximum
throughput can be achieved. The system has
been manufactured to meet all necessary ISO
accreditations and applicable Safety Integrity
Levels (SIL).
Among Fendercare Marine’s LNG achievements
are many firsts, including the first open seas LNG
STS for two of the world’s largest gas majors, the
first LNG STS at Cyprus and Gibraltar and the
world’s first on the buoy LNG STS operation.
Workflow Modelling: James Fisher Asset
Information Services (AIS) has developed a user-
led design thinking approach that is delivered
through a workflow modelling workshop format.
The workshops are an immersive, engaging,
and fast-paced interaction, resulting in the
creation of a prioritised map of challenges
specific to the customer and sector in which
they operate. The map allows AIS to then
structure and tailor solutions that will deliver
optimal value to customers and the industry at
large. The workflow modelling offering has been
successfully deployed for customers in oil and
gas and renewables markets.
James Fisher operates in specialised segments of
the energy, marine and defence markets where a
strong track record of safety, integrity, innovation and
responsible operations is a key differentiator.
In these niche areas, success is defined by the ability to consistently deliver safe and
trusted solutions, providing assurance to all stakeholders by minimising their risk exposure.
Our culture of shared success means that we seek out collaborations – with customers,
suppliers and other industry players – that align with our values and contribute to our shared
vision for a sustainable future. We aim to build trust with our partners through transparency,
compliance, and by operating with the highest standards of business ethics.
Commercial innovation
James Fisher Renewables (JFR) turnkey
offering: JFR’s asset optimisation turn-key
offering consolidates capabilities across James
Fisher operating companies to deliver end-to-
end operations and maintenance solutions for
offshore transmission asset owners (OFTOs).
It integrates a flexible approach to contract
maintenance with our expertise in delivering
on complex projects.
With the turn-key contract model, JFR won
three multi-million pound, 13-15-year contracts
with BBEC (Balfour Beatty Equitix Consortium),
leading investors and long-term fund managers
of core infrastructure assets.
Innovation partnerships
Ultra-High Temperature Automatic Diverter
Valve (ADV): In partnership with an independent
oil and gas operator and a third-party
development partner, RMSpumptools
developed and successfully piloted an ultra-
high temperature ADV for Steam Assisted
Gravity Drainage (SAGD) wells in Canada. In
traditional SAGD applications, wells are drilled
as a pair – a steam injector well and a producer
well. With the ultra-high temperature ADV, the
same well can be used for both steam injection
and production. This cuts the requisite number
of wells in half, decreasing the environmental
footprint required to recover the same amount
of oil, and reducing the risk of pollution and
environmental damage from drilling operations.
Digital Twin: James Fisher Asset Information
Services (AIS) entered a comprehensive
partnership deal with digitalisation experts
APIteq, to further develop, expand and
deliver digital twin products and services
to clients around the world. The combined
teams represent the most experienced
group of experts in the world regarding
photogrammetric digital twin models and
their application in industrial energy and
process markets. Focus is on driving down
costs, enhancing safety and productivity,
reducing carbon footprint, and supporting
industrial clients to transition to efficient
digital workflows.
The Big Bubble Barrier (BBB): In partnership
with German specialist, HydroTechnik Lübeck,
ScanTech Offshore provides environmental
protection through the application of Big
Bubble Barrier (BBB) technology. The BBB is
a compressed air system that can be used to
flexibly reduce noise emissions during offshore
development projects and protect marine
life during ammunition clearance underwater
blasting. While the BBB technology has
been in use for about 50 years, there was
unprecedented surge in demand during 2021
due to the size and stackability of ScanTech
Offshore compressors.
How we will deliver against target
To improve the efficiency of our innovation
process and bring consistency to how we
manage the development of products,
services, and capabilities, we have
introduced and are integrating some
tried-and-true innovation methodologies
pertinent to our complex portfolio e.g. design
thinking and Lean. These methodologies
will enable our operating companies to
refine their product and service portfolio,
to better understand customer needs and
how success is defined, to apply design
thinking and agile methodology in developing
minimum viable products, to improve the
speed to market, and to objectively measure
the value and impact of solutions for
stakeholders.
During 2022, we will evaluate the right KPI that
reflects our innovation ambition, with the aim to
set targets by 2023.
REMOTE DESIGN THINKING WORKSHOP FOR OIL AND GAS MAJOR
Due to the COVID pandemic, James Fisher Asset Information Services (AIS) adapted the
delivery of its in-person design thinking (DT) workshops to virtual. Even so, the remotely
conducted workshops were engaging and collaborative, delivering desired results for
the customer.
Challenge
As part of a broader digitalisation strategy, the oil and gas major wanted to explore use
cases and model the impact that implementing digital solutions could have on its operational
business, including enhancing the management of its oil and gas platforms.
Solution
AIS ran a series of DT workshops with the Company which aimed to solve its unique and
complex problems by aligning teams around the real needs of its users. The workshops were
conducted in Portuguese to suit the customer’s needs.
During the sessions, the major identified the key stakeholders and activities, the pain points
it was facing, and the impact of removing these challenges. User problems included:
Multiple asset trips for all planning activity.
No flow of data or integration between systems.
Not able to prioritise work execution effectively based on factors such as location and risk.
AIS explored how its digital twin solution, R2S, could add value to the major’s operations
and help to mitigate identified challenges.
Results
The DT workshops allowed the major to gain clarity on existing issues with its key operational
processes. The major was able to understand and calculate the value of different digital
solutions to solve identified challenges.
Following the success of the remote DT sessions, the Company undertook further value-
focused workshops with AIS to solve deep-rooted business challenges.
Partnering with Asset
Information Services is an
exciting opportunity for us
at APIteq, as it allows us
to support our collective
clients with the best-in-
class digital twin software
platform on the market.
Per Erik Berger, CEO of APIteq AS
Sustainability cont.
PARTNERSHIP
Strategic report
Governance
Financial statements
48 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 49
Strategic report
CUSTOMER ENGAGEMENT
KPI BASELINE (2021) TARGET TARGET DATE
Customer Net Promoter Score (NPS) During 2022, we will establish a baseline, with the aim to commit to a target in 2023
Why it is important
Responsiveness to customers’ current
needs and anticipation of their future pain
points is critical to how James Fisher
operating companies build strong, trust-
based relationships. Our success depends
on achieving a deep understanding of the
challenges that our customers face, and the
complexities posed by the environments in
which they operate.
Due to our decentralised, entrepreneurial
model, each operating company and its
subsidiaries are well positioned to directly
engage customers and adapt solutions to
address their challenges, both local and
global. With support from Group functions
and the stakeholder working groups, we
aim to design a more robust engagement
approach, with the purpose of identifying
opportunities to consolidate, simplify and
reinforce efforts towards building more
effective customer relationships.
Progress in 2021
The customer working group, comprising
representatives from each operating company,
was set up with the mission to put in place a
structured methodology to gain feedback from
customers, to measure their attitudes towards
our businesses over time, and to drive action
towards customer relationship improvement.
By having open conversations to discuss
existing challenges and best practices, the
working group was able to:
Align behind the customer Net Promoter
Score (NPS) as the chosen KPI for measuring
customer perception across all operating
companies.
Consolidate a list of six core questions to be
used in requesting customer feedback.
How we will deliver against target
Determine NPS baseline
The NPS metric is being piloted across a
selection of participating operating companies,
with a view to rolling it out Group-wide by year
end. Individual company NPS scores will be
aggregated to give a Group-level customer NPS
score – our customer NPS baseline. Insight from
this exercise will inform our target setting and
initiatives that will drive future progress.
Reinforce internal processes
We will continue to improve on our processes
to enable us to identify and celebrate best
practice across our businesses, learning
from each other and leveraging industry best
practices to accelerate pace. We will also
explore a common approach to our sales
methodology and the systems surrounding
it, as we look to develop and communicate
a common James Fisher culture to our
customers and other external stakeholders.
GOVERNANCE
KPI BASELINE (2021) TARGET TARGET DATE
% suppliers signed up to James
Fisher Supplier Code
During 2022, we will establish a baseline, with the aim to commit to a target in 2023
Why it is important
We believe that every James Fisher employee,
from the Board of Directors to the engineer
at the work site, must live and breathe our
valued behaviours – pioneering spirit, integrity,
energy and resilience. By extension, we expect
our suppliers to align with and demonstrate
these valued behaviours. A solid governance
framework is required to underpin our strategy
implementation and ensure that we continue
to deliver value for all our stakeholders while
managing and minimising our risk exposure
(see page 61 for more information on our
principal risks).
Business ethics
Our business ethics commitments are
established in the Group’s Code of Ethics,
Anti-Bribery and Corruption Policy and
Modern Slavery Policy. Clear expectations
and obligations are set with our employees,
partners, suppliers and customers in alignment
with these policies and processes are put in
place to monitor compliance. These policies
are continually reviewed to ensure alignment
with evolving challenges in the world, whilst
staying true to our core values and principles.
Several training programmes and assurance
processes support our policies, and these are
described in detail on page 70.
Supply chain management
We want to work with responsible suppliers
who adhere to our principles and are
committed to sustainable business practices.
Our supplier onboarding process includes
a detailed questionnaire that captures
their governance processes, policies and
commitments, and examines the credentials of
their own supply chains. We strive to lead by
example, using our own credentials to set the
tone for what we expect from our suppliers.
Progress in 2021
Corporate governance
We reviewed and identified several governance
improvements that will help to strengthen
the Group’s foundation and support the
implementation of its strategy:
Improvements identified by CGI as part of the
externally facilitated Board and Committee
evaluation are described on page 85.
Changes to the Group’s risk management
systems and controls following a review by
PwC LLP are set out on page 61.
Implementation of these governance
improvements is underway.
Supply chain management
The Supplier Working Group was established
to create mutually sustainable, beneficial and
collaborative supplier partnerships that offer
superior value whilst attaining the highest
standards aligned to our Group values.
Focus in 2021 was to:
Identify efficiencies: While individual
operating companies are responsible for
managing their own supply chains and
procurement processes, the working group
has highlighted opportunities to optimise
cost through common categorisation,
spend allocation, and supplier relationship
management. For example, we are realising
new economies of scale where operating
companies have been using the same
suppliers or purchasing similar products.
Revise supplier onboarding questionnaire
to include key elements of our sustainability
strategy and evolving commitments.
Improve sharing of best practices across
operating companies, using the supplier
working group as the medium.
How we will deliver against target
Review Code of Ethics
We will review and refresh our Code of Ethics
to align with our sustainability strategy and the
changing macro factors that impact our world
and industries.
Revise supplier management processes
We aim to formalise and introduce a supplier
code of conduct, to instil financial and social
transparency in the supply chain, with the
intention of creating accountability and full
disclosure around issues such as human rights,
health and safety and environmental impacts.
The supplier code will be an extension of our
current supplier onboarding questionnaire.
We will continue to target further opportunities
for improving supply chain efficiency, develop
stronger, open relationships with our suppliers,
and streamline the Group’s approach to
understanding and influencing our suppliers’
commitments to our sustainability strategy and
the Code of Ethics.
Sustainability cont.
STACKABLE COMPRESSORS
FOR BUBBLE BARRIER
ScanTech Offshore has the world’s largest
fleets of 1600cfm Zone II and Rig-Safe air
compressors in a containerised, stackable
design, that frees up deck space and
allows for reduction in costly management
bandwidth. Engineered to operate in arctic
or tropical climates, these compressors
provide reliability and high performance at
reduced physical footprint.
In April 2021, 27 stackable air
compressors were shipped out of the
ScanTech Offshore UK base in Great
Yarmouth on their way to Taiwan, where
they were used to create bubble curtains
around the installation of 186 pin piles at
one of the windfarms there.
“We are able to provide the maximum
amount of compressed air for the
smallest possible footprint on any heavy-
lift installation vessel. This means our
compressor package can be adapted
for use with a variety of different vessel
configurations.”
– Barry Craig, Project Manager
Strategic report
Governance
Financial statements
50 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 51
Strategic report
Task Force on Climate-related
Financial Disclosures (TCFD)
summary
Investors, customers, and regulators want to
understand how companies are planning for
and adapting to changing climate. 2021 saw
the UK host the COP26 Climate Summit in
Glasgow and, with a plethora of pledges and
announcements, momentum for action on
climate change is growing. This is evidenced by
the 2021 Status Report from the TCFD which
shows that a growing number of countries,
including the UK, are aligning their official
reporting requirements to the TCFD framework.
James Fisher and Sons plc (the Company) and
its group of companies (the Group) take the
TCFD reporting requirements seriously. We are
building on our progress from previous years
to develop a net zero strategy and conduct
climate scenario analysis, with support from
specialist third-party advisory (SLR Consulting).
The Company has prepared its TCFD
disclosures in line with guidance in the 2021
updates to the TCFD Final Report and Annex,
including the supplementary guidance for all
sectors. At the time of this publication, several
key elements of our TCFD disclosure work are
still in progress and will be disclosed as part of
a more in depth TCFD report to be published
later in 2022.
At the time of publication, the Company has
made climate-related financial disclosures
consistent with the TCFD recommendations
and recommendations disclosures in this TCFD
summary against:
governance (all recommended disclosures)
risk management (all recommended
disclosures)
strategy (disclosures (a) and (b))
metrics and targets (disclosures (a) and (b)).
For strategy disclosures (a) and (b), further
work is underway to enhance the identification,
impact and reporting for climate-related risks
and opportunities, and how these map over
the short, medium and long term. This further
work will be published in an updated TCFD
report which the Company will publish later
in the year.
Current metrics used by the Company are
included in the sustainability report in the
Strategic report on pages 40 and 41. Work is
ongoing to enhance and extend the metrics
used by the Company. This further work will
be published in an updated TCFD report which
the Company will publish later in the year.
The Company has not included climate-related
financial disclosures consistent with the TCFD
recommendations and recommendations
disclosures in relation to:
strategy (disclosure (c) – scenario analysis)
metrics and targets (disclosure (c) – targets)
Due to the diverse nature of the Group’s
operations and the difficulties in obtaining,
verifying and consolidating relevant data
and rolling out and embedding the relevant
modelling and analytical processes and
capabilities within each operating company,
the Company has further work to do to be
able to enhance its disclosures with respect to
strategy and metrics and targets. That work
is underway, and the Company expects to be
able to publish a full TCFD report by the end of
the year. The TCFD summary in the strategic
report provides detail on the steps being taken
to address the areas of disclosure that require
enhancement and completion.
Here, we describe our governance and risk
management processes in line with the TCFD
reporting requirements and provide insight into
our ongoing efforts around net zero and climate
scenario analysis. We aim to publish a more
comprehensive report once the current scope
is completed later in 2022.
Governance
The Company’s Board of Directors (the Board)
has ultimate responsibility for James Fisher’s
climate change strategy, with day-to-day
responsibility delegated to the Group CEO. The
Group CEO is supported by the governance
structures described below.
Group Support Functions
The Group’s operating companies are
supported by Group functional teams. Each
functional team reports to or is led by an
Executive Director. The Board retains an
oversight role and receives regular reports on
key issues as follows:
Financial, tax and treasury matters from the
Group Finance Director
People and HR matters from the Group
Human Resources Director
Legal and regulatory matters from the Group
General Counsel and Company Secretary
Strategy and sustainability matters, including
climate strategy, risks, and commitments,
from the Head of Corporate Development.
The Sustainability Committee
Climate-related issues are assessed throughout
the year by the Sustainability Committee. The
Sustainability Committee meets monthly to
develop plans for delivering and embedding
the sustainability strategy across the Group
(including the climate strategy), to monitor and
track progress against plan, to support Group
leadership and functions on sustainability-related
matters and to discuss recommendations to
be made to the Board. On a quarterly basis,
the Sustainability Committee consolidates and
reviews these recommendations then presents
a list of actions and decisions to be made to the
Board.
Members of the Sustainability Committee
include:
Group CEO
Group General Counsel and Company
Secretary
Head of Corporate Development
Group HR Director
Group Strategy Manager
10 representatives of the stakeholder working
groups, aligned with the Group’s sustainability
priorities.
The governance structure of the Sustainability
Committee is described in more detail on page 18.
Risk Committee
The Company has a Risk Committee that
meets quarterly and is attended by the
Executive Directors and the heads of functional
teams. Each functional head provides a report
that identifies any matters in their functional
area which relates to the Group’s principal
risks and uncertainties, or to the individual
operating companies’ risk registers. The
minutes of the Risk Committee are reported
to the Board, and any key issues raised are
discussed at meetings of the Board. The main
responsibilities of the Risk Committee are to:
Keep under review the effectiveness of the
Group’s overall risk management framework
and processes and ensure corrective action is
taken where necessary
Make recommendations to the Board/Audit
Committee with respect to the appropriate
risk appetite for the Group
Review the principal and emerging risks
that the Group is willing to take across all
major activities considering the Group’s
risk appetite, long-term strategy and the
interest of all stakeholders impacted by the
Group’s activities – shareholders, employees,
customers, suppliers, the environment, and
local communities
Review reports from functional heads on risks
encountered in interactions with the operating
companies
Review reports from the operating companies
on their principal risks and mitigating activities,
as well as any emerging risks
Ensure that a robust assessment of the
principal and emerging risks facing the
Group has been undertaken annually by
reference to risk registers from operating
companies and functions.
The terms of reference of the Risk Committee
are aligned to bring recommendations
for improvements of risk reporting to the
Audit Committee and the plc Board at the
appropriate time in the Board’s corporate cycle.
Internal Audit Function
The Group’s Internal Audit function is
supported by a co-sourcing arrangement with
PricewaterhouseCoopers (PwC LLP). Main
responsibilities of the function are to:
Conduct audit assurance for all operational,
compliance, financial and other risks in all
businesses and locations throughout the
Group, both existing and under development
Make recommendations for improvement
and follows up to ensure that management
implements recommendations made
Provide consulting and advisory services
related to governance, risk management
and control so long as Internal Audit’s
independence will not be compromised.
The annual Internal Audit plan is determined
on a risk assessment basis and is reviewed
and approved by the Audit Committee.
The head of Internal Audit attends all
Audit Committee meetings and, twice
annually, presents a summary of the Internal
Audit findings, recommendations, and
implementation progress. Internal Audit also
implements the annual risk evaluation process
and the internal control and risk management
review questionnaire process with the
individual businesses before their presentation
to the Board.
During 2021, alongside its assistance
in overseas locations, the co-source
partner PwC were asked to expand their
remit to include internal audits in certain
functional areas within the UK, including
IT implementation and finance, where the
partner’s specialist skills will complement the
Group’s Internal Audit function.
The Audit Committee
The Audit Committee is made up of the Non-
Executive Directors. The Audit Committee
supports the Board in determining the nature
and extent of principal risks it is willing to take
in achieving its strategic objectives, and in
monitoring the effectiveness of the Company’s
risk management and internal control systems.
Further details in relation to the Audit
Committee can be found in the Governance
section from pages 89 to 93.
Strategy
In the 2020 Annual Report, we articulated
how climate change is a key consideration
in defining the strategic direction of our
businesses. As such, we have identified the
energy transition as the most defining strategic
challenge and opportunity for the Group.
This is driven largely by the transition from
fossil fuels to renewable energy and other low
carbon energy sources. We are aligning our
strategy accordingly, supporting the energy
industry’s own transition efforts by expanding
our portfolio of solutions and offerings, in
particular in the renewables and oil and gas
decommissioning sectors.
Climate change has been identified as one
of the Group’s principal risks. The Board
considers the transition away from fossil
fuels and the exponential growth of the
renewables market to represent both a risk
and an opportunity for the Group. The risks
are mitigated by the continued strategic
diversification of the Group into new markets,
and the expansion of our core capabilities
through direct investments and bolt-on
acquisitions. Identified opportunities are set out
in more detail in the Sustainability section on
page 22.
In terms of climate-related impact, the Group
may endure the operational impacts of extreme
weather events, as well as potential changes
in technologies, markets, and regulation
in response to climate change. This could
increase costs, challenge the viability of Group
services, or affect asset values. The Group is
also conscious of the need to reduce its impact
on climate, including its carbon footprint.
In 2021, in alignment with our ongoing
commitment to develop our climate strategy,
we carried out a detailed climate risk and
opportunity assessment. The results of this
assessment have allowed us to identify the
three pillars and nine focus areas for our ESG
strategy, and feed into a scenario analysis
and quantification exercise that is currently
underway and expected to be completed
before the half year. The process is described
in more detail on page 54.
Task Force on Climate-related Financial Disclosures
Strategic report
Governance
Financial statements
52 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 53
Strategic report
Risk scoring methodology
Risk scoring followed risk determination
guidelines provided by the Intergovernmental
Panel on Climate Change (IPCC) and was aligned
to James Fisher’s internal risk management
processes. The term risk signifies the possibility
of adverse effects in the future, driven by the
occurrence of a hazard. Risk therefore occurs
when organisations, assets, societies, processes,
or systems become exposed to hazard. To
determine the level of vulnerability to risk, three
terms were considered: exposure, sensitivity,
and capacity to adapt. Sensitivity reflects the
predisposition of organisations, assets, societies,
processes, or systems to be adversely affected
by climate-related risks. Capacity to adapt refers
to characteristics or actions that may reduce
the level of risk posed by a hazard and thereby
alleviate vulnerability. Two types of capacity to
adapt were considered in recognition of the two
overarching TCFD climate-related risk categories:
adaptive capacity – the ability of organisations,
assets, societies, processes, or systems to
alleviate the level of physical risks through
actions; and transition capacity – the ability of
organisations, assets, societies, processes,
and systems to alleviate the level of transition
risks through actions. Vulnerability, which is
determined as a function of risk exposure,
sensitivity, and adaptive/transition capacity, is
therefore the degree to which organisations,
assets, societies, processes, or systems will be,
or have the propensity to be, negatively affected
by risk.
The sensitivity and adaptive capacity scores of
the hazards identified were validated at a Group
level and operating company level during a
series of workshops held with representatives
from the operating companies and the Group
functions. Final risk scores were then determined
by considering vulnerability, likelihood of
occurrence (likelihood), and magnitude of impact
(magnitude). Both likelihood and magnitude will
vary as functions of time and climate scenario.
For example, most physical risks associated with
climate change (e.g., flooding, drought etc.) are
expected to occur more frequently, and have
greater impact, under higher-emissions/higher-
warming climate scenarios, as well as further into
the future. However, transition risks (e.g., policies
implementing a rapid decarbonisation of the
economy) may be more likely and have greater
impact under lower-emission climate scenarios
(e.g., Orderly and Disorderly Transition scenarios),
as well as in the near-term (e.g., if nation states
impose regulations within the next 12 months).
The likelihood of occurrence and magnitude
were considered over three timescales (short-
term, medium-term, and long-term) and three
climate scenarios (Orderly Transition, Disorderly
Transition, Hot house World).
Except for risk exposure, which was considered
binary, the risk scoring methodology was based
on a five-point scoring system:
1. Very high sensitivity (5) indicated an
organisation, asset, society, process, or
system that is very highly predisposed to
being adversely affected
2. Very high adaptive/transition capacity (5)
indicated an organisation, asset, society,
process, or system that is very highly capable
of alleviating risk through mitigation actions
3. A high vulnerability score (a function of
sensitivity and adaptive/transition capacity)
indicated an organisation, asset, society,
process, or system that had very high
sensitivity to risk and very low adaptive/
transition capacity
4. Very high likelihood scores (5) indicated risks
that are ‘very likely’ to occur
5. Very high magnitude scores (5) indicated very
high (catastrophic) impact should a risk occur.
Total risk scores were the product of
vulnerability, likelihood, and magnitude, and
therefore scale between 1 and 125. Finally, risk
scores were normalised to 100 to provide intra-
and intercompany comparability.
Opportunities were scored against two key
metrics: opportunity size, and ability of the
relevant company to execute the opportunity.
The objective of the approach was to provide
an indicative score to assist with future
prioritisation. Further investigation should
be carried out to better understand the
competitive landscape and market size for
individual opportunities.
Climate scenario analysis process
Having selected three climate scenarios and
identified and prioritised risks and opportunities
associated with short-, medium- and long-
term timeframes across each scenario, the
next phase of the journey for the Company
is for us to consider the implications of
different climate scenarios and their potential
financial implications for the Group. At the
time of publication this work is ongoing, with
a workshop session scheduled for February
2022 with the Executive Committee members
to discuss the implication of different scenario
categories and to develop and validate the
underlying assumptions, which will feed into
the subsequent modelling activities with
representatives from the wider Group. The
output of this workshop will feed into a scenario
analysis financial quantification exercise, the
results of which will be published in the Group’s
subsequent TCFD report later in 2022.
Risk management
The Board is responsible for management of
all risks in the Group, including climate-related
risk, and is supported by the Group functions
(including Internal Audit), the Sustainability
Committee, the Risk Committee and the
Audit Committee.
Approach
The Group employs a bottom-up and top-
down approach to risk management.
Bottom-up perspective: Quarterly Board
meetings are held at the operating company
level and provide a forum to discuss and
report changing risks and mitigation options,
including options for climate-related risks.
Any changes are then communicated to
the Risk Committee. Assurance is provided
by Internal Audit through the internal audit
cycle and, twice annually, the Internal
Audit team consolidates risk registers and
risk management questionnaires from the
operating companies for review by the Risk
Committee to understand better the view of
risk from the operating companies
Top-down perspective: The Risk
Committee overlays the operating company
risks (provided by their registers and
questionnaire responses), with the view
from the functional teams, and with any
macro external issues which are impacting
or may impact the Group
More details on this process are set out below.
The Risk Committee and Executive Directors
report the results of this bottom-up and top-
down approach to risk management to the
Board and Audit Committee. The results of that
assessment, including risk management and
mitigating activities, are set out on pages 61
to 69.
At most scheduled Board meetings, there is
a deep dive into one of the Group’s principal
risks and, twice annually, the Board reviews
the Group’s principal and emerging risks, their
mitigating activities, any changes, and the
Company’s risk appetite.
Internal controls and frameworks
The internal control and risk management
framework comprises a series of policies,
processes, procedures, and organisational
structures which are designed to ensure
that the level of risk to which the Group is
exposed is consistent with the Group’s risk
appetite and strategic objectives, as defined
by the Board. The framework is overseen by
the Risk Committee. The Risk Committee
also consolidates reporting, overlays the
functional and macro-economic view of risk
and reports to the Board on the management
and assessment of risk within the Group.
An assessment of the Company’s risk
management and internal control systems is
carried out annually by the Audit Committee
on behalf of the Board. Results of these
assessments are reported in the Audit
Committee report as set out on pages
89 to 93.
Systems
Key features of the Group’s risk management
systems used to identify and monitor material
risks are as follows:
A risk evaluation process commences in
the operating companies with an annual
exercise to identify the significant operational
and financial risks facing the business. Each
trading business is required to maintain an
up-to-date risk register, which identifies key
risks, assigns each a “risk score” based on
the likelihood of the identified risk arising
and the potential impact on the business of
an adverse outcome, both before and after
mitigation measures are taken. The risks and
their respective risk scores before and after
mitigation are reviewed at business level
To support this process, each operating
company Managing Director completes
an internal control and risk management
review questionnaire on an annual basis.
This exercise is a robust self-assessment
of operational controls and compliance
with Group policies, applicable laws and
regulations relating to their business. This
ensures that Managing Directors identify risks
and relevant mitigating strategies, and have
in place adequate control systems to identify,
mitigate, and report any weaknesses that
require management attention
The risk registers and annual review reports
are reviewed by Internal Audit, the Risk
Committee, and the Board. They are used
twice a year by the Board to help determine
the Group’s principal and emerging risks and
uncertainties, their potential impacts, how
they are being managed and/or mitigated,
and any change in the nature of the risk.
Internal Audit uses them to define its areas
of focus for the forthcoming period
Task Force on Climate-related Financial Disclosures cont.
Disorderly
Sudden and
unanticipated
response is disruptive
but sufficient enough
to meet climate goals
Too little, too late
We don’t do enough
to meet climate goals,
the presence of
physical risks spurs a
disorderly transition
Orderly
We start reducing
emissions now in a
measured way to
meet climate goals
Hot house world
We continue to
increase emissions,
doing very little, if
anything, to avert the
physical risks
Physical risks
Orderly Disorderly
Transition pathway
Transition risks
Risk and opportunity
identification process
The approach taken on the climate-related risk
and opportunity analysis followed guidance set
out by the TCFD, and considers climate-related
risks under two overarching categories:
Risks related to the transition to a lower-
carbon economy (transition risks)
Risks related to the physical impacts of
climate change (physical risks).
The TCFD categorises transition risks as risks
that occur due to policy and legal changes,
technology changes, market changes and
reputation changes. The TCFD categorises
physical risks as risks that occur as discrete
events (acute risks), and/or because of longer-
term shifts in prevailing climate conditions
(chronic risks).
Furthermore, we considered risks over three
timeframes and three climate scenarios, as
defined below.
Timescales
(as highlighted in the third column):
Short-term: 0-1 year
Medium-term: 1-5 years
Long-term: >5 years
Climate scenarios:
Orderly transition: early, ambitious action to a
net zero CO
2
emissions economy
Disorderly: action that is late, disruptive,
sudden and/or unanticipated
Hot house world: limited action leads to a hot
house world with significant global warming
and, as a result, strongly increased exposure
to physical risks.
The approach uses climate scenarios defined
in best practice guidelines by the Network for
Greening the Financial System, a consortium of
central banks and supervisors (NGFS, 2020)
1
as set out in the graphic below. The scenarios
are designed to act as a foundation for analysis
across institutions, creating much needed
consistency and comparability of results.
Because these scenarios are being used by a
growing number of central banks, supervisors,
and companies to better understand risks to
financial systems, economies, and businesses,
we have chosen them to provide greater
comparability and to enable our stakeholders
to assess our response to climate change
across all markets where we operate.
1 NGFS (2020) Guide to Climate Scenario Analysis
for central banks and supervisors. Network
for Greening the Financial System, Technical
Document.
Strategic report
Governance
Financial statements
54 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 55
Strategic report
Annual Report 2021 \\ James Fisher and Sons plc 57
Key performance indicators
Task Force on Climate-related Financial Disclosures cont.
Non-financial KPIs are set out in the Sustainability report by reference to the priority areas. For any priority not currently including a non-financial KPI,
metrics and targets are under development and the Company intends to publish the full non-financial KPIs before the next Annual Report and Accounts.
The Company has aligned its strategy with the
key risk and opportunities of climate change
and the energy transition. Similarly, following
a review of the Group’s risk management
systems by PricewaterhouseCoopers (PwC),
the Group is realigning the risk management
process with the strategic review cycle so that
risks, including climate change related risk,
are considered as part of the Group’s strategic
review and budgeting process. This also allows
the operating companies to build their principal
and emerging risks (and opportunities) into their
own strategic outlook at an operating level.
Each operating company reviews and presents
to the Board on its strategy over a five-year
period, including the opportunities which arise
from climate-related factors. Their strategies are
then consolidated at Group level, impacting on
financial planning for operating costs, capital
expenditure and allocation, acquisitions and
divestments, and access to capital. By way of
example, this process has enabled ScanTech
Offshore, a company that traditionally operates
an oil and gas business, to identify opportunities
for noise attenuation during piling for offshore
wind projects. Also, the Tankships division has
made investments in two new dual fuel vessels,
offering customers a lower emissions option for
the transfer of their products.
These risk and opportunity processes have
been assisted by the Sustainability Committee
which recommends the Group’s sustainability
policy and approach to the Board. During
2021, the Sustainability Committee engaged
the support of specialist third-party advisorors
to assist in carrying out additional, more
focused reviews of climate-related risks and
opportunities. The team are working closely
with the management teams of each operating
company, with outcomes being routinely
reviewed with the Sustainability Committee and
reported to the Board. This has resulted in the
Company’s summary of climate-related risk
and opportunity set out on page 64.
In future, James Fisher’s identification of climate-
related risk and opportunity will be undertaken
as part of the Group’s strategy review with
the Board, with related policy and day-to-day
management of climate matters continuing to
be overseen by the Sustainability Committee.
This will bring closer alignment between the
Group’s environmental commitments and the
Group’s strategy, at both a Group and individual
operating company level.
Metrics and targets
The Group has quantified and reported its
Scope 1 and Scope 2 emissions, setting
a baseline against which future emissions
reduction efforts will be measured. During
2021, we started the process of modelling our
near-term (2030) and long-term (2050) Scope
1 and Scope 2 emission reduction targets, with
2021 as the base year.
An interim emissions reduction target will be
disclosed at the same time as the forthcoming
full TCFD report, to be published later in 2022.
In addition, efforts are underway to map out
emissions reduction pathways for Scope 1
and Scope 2 emissions in order to meet our
near- and long-term targets. These pathways
will include both our scheduled and planned
emissions reduction options.
Considering the diverse nature of the Group’s
operating companies, the markets they operate
in, regional variations deriving from our global
footprint, the complexity of our supply chain,
and the multiple categories as defined by
the GHG protocol, quantification of Scope 3
emissions will take more time to establish and
will involve more intimate detailed engagement
with suppliers and customers. During 2021,
we started the process of mapping out our
Scope 3 emissions in accordance with the
requirements of the Corporate Value Chain
(Scope 3) Accounting and Reporting Standard
and reported on our footprint in business
travel category. In 2022, we will expand on our
measurement of Scope 3 emissions footprint
beyond business travel, with the ambition to
report on fuel and energy-related activities,
waste generated in our operations, employee
commuting, and upstream leased assets.
In parallel, we will put effective processes in
place for measuring and collating information
on other outstanding Scope 3 emission
categories. Further details can be found
in the GHG Emissions section on page 40.
In guiding efforts in modelling the Group’s
pathway to net zero, we have adopted the
Science Based Targets initiative (SBTi) criteria.
We aim to reduce our emissions in alignment
with the SBTi guidance once the measurement
of the full breadth of our Scope 1, 2 and 3
emissions have been completed.
A key output of the ongoing TCFD-aligned,
climate-related risk and opportunity identification
and climate scenario analysis engagement is
the identification of relevant metrics and targets
that will help to build climate resilience into the
Group’s strategy. The identification and ranking
of material risks and opportunities is the first
step towards developing insight into the financial
impact of climate change on the Company. The
next stages in the climate scenario analysis are
as follows:
Define and parameterise three climate
scenarios based on different climate futures
under three temperature regimes, including
a high warming scenario and Paris-aligned
1.5°C trajectory
Develop narratives that explore the
socioeconomic, political, and physical
climate conditions associated with each
climate scenario
Integrate key risks and opportunities
identified in the risk and opportunities
analysis into the climate scenarios and
develop trajectories of key indicators that
are material to the Company
Quantify the financial impact of key risk and
opportunity indicators on the Company under
different climate scenarios using modelled
trajectories, business costs and revenues,
and assumptions about the changing
landscape under different climate scenarios
The process will identify key climate-related
indicators, which will become the focus for
developing metrics that the Company will track
on its transition towards a preferred climate
future. We aim to publish the relevant metrics
and targets that will enable us monitor and
track performance in the Group’s subsequent
TCFD report.
Underlying operating profit (£m)
Underlying operating profit is after adjusting for separately disclosed items
and is the underlying profit from operations before interest.
Operating margin (%)
Operating margin is the ratio of underlying operating profit to revenue.
The Group’s operating margin in 2021 was 5.7% (2020: 7.8%).
2019 66.3
2018 62.1
2021 28.0
2020 40.5
2019 10.7
2018 11.0
2021 5.7
2020 7.8
2017 54.1
2017 10.8
Underlying profit before tax (£m)
Underlying profit before taxation is after interest and before separately
disclosed items and related taxes. Underlying profit before taxation in 2021
was £19.7m (2020: £31.5m).
2019 58.5
2018 56.1
2021 19.7
2020 31.5
2017 48.6
Return on operating capital employed (%)
Return on operating capital employed is defined as underlying operating
profit divided by average operating capital employed. Operating capital
employed comprises tangible fixed assets, intangible fixed assets,
operating debtors net of creditors, less provisions. The Group’s post-tax
return on operating capital employed was 3.6% in 2021 (2020: 6.7%).
2019 11.3
2018 12.2
2021 3.6
2020 6.7
2017 12.0
Cash conversion (%)
Cash conversion is defined as the ratio of operating cash flow to
underlying operating profit. Operating cash flow is defined as underlying
operating profit, adding back depreciation and amortisation and adjusting
for net movements in working capital, pension payments and for the cash
profits of associates. Cash conversion was 168% in 2021 (2020: 220%)
and has averaged 132% over five years.
2019 99
2018 157
2021 168
2020 220
2017 57
Gearing (times)
Gearing is defined as the ratio of underlying net borrowings to underlying
earnings before interest, tax, depreciation and amortisation. The gearing of
the Group at 31 December 2021 was 2.6 times (2020: 2.3 times).
2019 2.1
2018 1.3
2021 2.6
2020 2.3
2017 1.7
Strategic report
Governance
Financial statements
56 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 57
Strategic report
Financial review
2021 was another challenging
year for the Group. The
pandemic continued to
adversely affect trading
conditions, resulting in both
revenue and underlying
operating profit being
below 2020. Despite the
reduction in performance our
businesses have remained
resilient throughout, which
is testament to the hard
work and dedication
of all employees.
Underlying performance in 2021
Revenue was 4.7% below 2020 at £494.1m
(2020: £518.2m). It was a mixed performance
across the divisions, with Specialist Technical
and Offshore Oil showing growth, Tankships
being in line and Marine Support behind 2020.
Within Marine Support, the ship-to-ship (STS)
transfer revenues in the Fendercare business
showed a significant decline due to 2020
being a record year, compounded by market
challenges in Malaysia and Brazil.
Gross margin was down by 220 bps to 24.4%
compared to 26.6% in 2020. Contributing
factors include the reduction in higher margin
STS revenues and a provision against slow-
moving inventory reflecting reduced demand
for Fendercare’s related fender products,
together with increased operating costs as a
result of enhanced COVID safety protocols
across the world, particularly in our offshore
project-based businesses and Tankships
division which both rely on mobilising significant
numbers of people over the course of a year.
Admin expenses were 4.3% below 2020 at
£94.5m, as the Group continued to keep tight
control over its operating expenses following
cost reductions achieved in 2020. No general
pay increase was awarded to employees in
2021, which is something the Board has sought
to rectify in 2022, with an average pay increase
of 3% being awarded in January against a
backdrop of increasing inflation and competition
for talent.
Foreign exchange provided a modest headwind
in the year, with an average GB£:US$ rate
of £1:$1.37 compared to £1:$1.29 in 2020.
This adversely affected revenue by 2.1% and
underlying operating profit by 4.5% respectively.
Underlying operating profit fell from £40.5m in
2020 to £28.0m in 2021.
Separately disclosed items
Principally as a result of a second year of
reduced profitability and the ongoing impacts
from the pandemic, the Group has recognised
a net charge in relation to separately disclosed
items of £48.7m, reduced from £84.0m in 2020.
In 2021, non-cash goodwill and intangible
asset impairments of £29.2m (2020: £19.4m)
have been recognised principally in relation
to the Marine Support and Offshore Oil
divisions, as future growth expectations have
been tempered by the ongoing effects of the
pandemic. Impairment provisions have also
been made against tangible fixed assets,
principally vessels, of £9.3m (2020: £34.0m
including £31.6m in relation to two dive support
vessels). The carrying value of these assets
prior to impairment exceeded both the value in
use and likely recoverable amount.
Bad debt impairments of £4.3m have been
made in respect of receivables relating to a
specific counterparty risk and receivables
billed over 12 months ago in relation to certain
projects (2020: £19.3m provision against three
specific projects). All balances, including those
provided for in 2020, continue to be pursued,
with a number of ongoing legal actions to
support recovery. The Group reassessed
the methodology applied to expected credit
losses and now requires all debt over 180
days overdue to be provided for unless there is
compelling evidence to support future collection.
Costs of material litigation of £3.1m (2020:
£nil) have been incurred in relation to a
number of resolved and ongoing disputes.
The Group sold the Paladin dive support
vessel and two businesses during the year.
These sales generated net proceeds of
£20.8m. After deducting the carrying values
of the related assets, liabilities and goodwill,
the Group recognised a net profit of £0.6m
in relation to the disposals.
The net cash outflow in relation to other
separately disclosed items was £1.7m
(2020: £3.3m).
Statutory operating loss
The Group’s operating loss, which is the sum
of underlying operating profit and separately
disclosed items, reduced to £20.7m (2020:
£43.5m) as a result of lower separately
disclosed items partially offset by the reduction
in underlying operating profit.
Finance charges
The Group’s net finance charges reduced by
£0.7m to £8.3m (2020: £9.0m). Bank interest
reduced from £7.0m to £6.0m during the year
as a result of lower borrowings. Non-cash
pension and lease liability charges are broadly
in line with 2020 at £2.3m (2020: £2.0m).
The Group’s interest cover ratio, which is
calculated by dividing underlying operating
profit by net finance charges (excluding IFRS16
finance charges) is 5.4 times (2020: 6.1 times),
which compares to banking covenants that
require the ratio to be greater than 3.0 times.
Taxation
The Group has recognised an overall net tax
credit of £0.8m in the year (2020: net charge
of £4.8m). The underlying tax charge for the
year is £10.1m (2020: £7.2m) representing an
underlying effective tax rate of 51.2% (2020:
22.8%). Compared to the UK Corporation Tax
rate of 19%, the following principal factors
have had an adverse impact in 2021:
Losses incurred during 2021 but not provided
for as a deferred tax asset (+13pps)
Higher effective tax rate in overseas
jurisdictions (+11pps)
Retranslation of the Group’s net deferred
tax liability to 25% from 19%, reflecting the
forthcoming UK Corporation Tax increase
(+7pps).
Tax on separately disclosed items is a net
credit of £10.9m, relating principally to the
recognition of a deferred tax asset in the UK
on certain fixed assets that were impaired in
2020. This follows a review of the likely future
profitability of the UK group and likely duration
of the ongoing business associated with those
fixed assets. Corporation Tax payments during
the year were in line with 2020 at £7.9m.
Dividend and EPS
Having regard to the financial position of the
Group, the Board has recommended no
dividends during 2021 (2020: interim dividend
£4.0m; no final dividend). The Board remains
committed to reintroducing a sustainable
dividend policy at the right time. Basic and
diluted earnings per share are a loss of 55.2p,
compared to a loss of 114.2p in 2020.
Cash flow and borrowings
The Group generated £48.9m (2020: £88.0m)
from operating activities. The reduction is due
to lower profits and a negative working capital
movement in the year. Net working capital
was an outflow in 2021 of £8.1m (2020: net
inflow £19.9m), driven primarily from timing of
payments on long-term projects. A number of
cash milestones are due in 2022 from
long-term projects.
Net cashflow from separately disclosed items
(excluding the sale of assets and businesses
which is included in “investing activities”) was
£1.7m (2020: £3.9m) and tax payments were
in line with 2020 at £7.9m.
Cash flows from investing activities generated
a £1.9m outflow (2020: £24.2m outflow) as
the disposal of the Paladin dive support vessel
and two businesses between them generated
£20.9m in proceeds. This was balanced against
the deployment of £22.1m (2020: £18.9m) of
capital expenditure, principally aimed at ensuring
the sea-worthiness of our vessels (£4.3m),
investment in decommissioning and related
equipment (£3.8m), upgrading our bubble
curtain equipment (£1.8m) and the purchase of
ship-to-ship transfer equipment, for both LNG
and oil operations (£2.5m).
Investment in M&A was much reduced, with
£1.1m being deployed in 2021, principally in
relation to the acquisition of Subsea Engenuity,
compared to £7.9m in 2020 which related
to the purchase of Fathom and deferred
consideration on previously completed
transactions.
The Group reduced net debt, including all
lease liabilities, by £12.9m to £185.2m. Within
this, the net bank borrowing position improved
by £26.0m to £139.6m (2020: £165.6m).
Additional lease liabilities principally relate to a
new charter vessel in the Caribbean and the
renewal of seven existing leases within the
Tankships division (see table A).
The Group’s net debt for the purposes of
its banking covenants consists of net bank
borrowings, finance lease liabilities (on an
IAS17 basis), and bonds and guarantees, as
summarised in table B. On a covenants basis,
net debt has reduced by £47.8m. The ratio of
net debt : Ebitda has remained broadly steady
at 2.9 times, which compares to banking
covenants requiring the ratio to be less than
3.5 times (see table B).
Table A
£m 2021 2020 Movement
Bank net borrowings
(139.6)
(165.6) 26.0
Finance leases (IAS17 basis)
(7.8)
(9.4) 1.6
Right-of-use liabilities
(38.2)
(23.1) (14.7)
Net debt (185.6)
(198.1) 12.9
Table C
£m 2022 2023 2024 2025 2026 Total
No extensions 40.0 47.5 200.0 – –
287.5
With extensions 40.0 – 87.5 30.0 130.0
287.5
Table B
£m 2021 2020 Movement
Bank net borrowings
(139.6)
(165.6) 26.0
Finance leases (IAS17 basis)
(7.8)
(9.4) 1.6
Bonds and guarantees
(8.4)
(28.3) 19.9
Net debt – covenants basis (155.8)
(203.6) 47.8
Ebitda – covenants basis 54.3
73.2
Net debt : Ebitda 2.9
2.8
2021 was another
challenging year for
the Group. Despite the
reduction in performance
our businesses have
remained resilient
throughout, which is
testament to the hard
work and dedication
of all employees.
Strategic report
Governance
Financial statements
58 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 59
Strategic report
Principal risks and uncertainties
The Group’s emerging and
principal risks
The Group is subject to macro risks such as
changes in social, political, financial, regulatory
and legislative changes. Our operating
companies are also impacted by individual
risks, often distinct to their operations or
operating environment and location, in light of
the diversity of the Group in these areas. Our
Group risk management process (described
in more detail on page 68 below) provides the
framework for the risk management practices
across all parts of the Group. We use these
practices to evaluate and accept those macro
and business-level risks that we believe we
have the capacity, know-how and experience
to manage, or to understand and tolerate
those risks that we cannot influence, in order
to realise the Group’s potential opportunities
for growth and development.
Changes in 2021/22
We recognise that risks are evolving rapidly in
our changing world. That requires new ways
of thinking and working to identify, assess and
manage risks effectively. We want to improve
and build on the risk management foundations
that we have already established, which
provided a firm base for operating companies
to respond to the COVID pandemic. Following
the material write offs in 2020 and the impacts
of the COVID pandemic, the Group asked PwC
LLP to conduct a detailed review of its risk
management systems and controls. The review
found that the current systems and controls are
supported by significant investment in terms
of documentation, reporting and analysis,
but that they are made more complex by
the diversity and geographic spread of the
Group’s operations. The report recommended
some improvements, in particular potential
enhancements in communication of risk from
the operating companies, in analysis of risk and
in methods for reporting risk to the Board. This
has resulted in some immediate improvements
which have been implemented during 2021,
which are set out below. The Board has
also agreed further improvements in the risk
systems and controls to obtain better quality
output from the corporate planning process
and year-end risk assessments.
2021 changes included:
Tone from the top emphasis of risk
management during operating company
board meetings has improved operating
company analysis and mitigation of risk in
day-to-day activities.
Enhanced templates and guidance for
operating companies to assist with their
recording, reporting and management of
principal and emerging risks.
Most Board meetings in 2021 have included
a risk “deep dive” into the Group’s most
impactful principal risks, supported by
functional specialists: cyber risk, risk of
operating in emerging markets, and risk in
the recruitment and retention of key people
have been covered, with some of these
risks discussed at multiple Board meetings.
Each session considers the nature of the
risk, the mitigating activities, the assurance
methodologies and the Group’s appetite for
that risk.
Further improvements in 2022 will include:
Further risk “deep dives” will provide coverage
of all Group principal risks.
Improved communication and resources
to be put in place to improve the flow of
information between the Risk Committee and
the operating companies.
Enhanced analysis of operating company
risks in management and Risk Committee’s
reporting to the Board, assisted by improved
mapping of assurance activities against
principal risks.
The cycle of risk reporting, analysis and Board
consideration is being built into the strategy
cycle to ensure alignment of risk with strategy
setting and implementation.
Our principal risks and uncertainties are those
that may have the greatest impact on our key
priorities when assessed by considering our
controls and other mitigating factors on a net
risk basis. These risks have been consolidated,
discussed and reported on by the Risk
Committee, and discussed at the Board and
Audit Committee meetings during 2021.
We are monitoring carefully developments in
Ukraine and Russia, and the impacts on the
Group, both direct and indirect. The Group has
well-established sanctions review processes in
place, supported by an international law firm.
We are also providing support to our Ukrainian
employees and contractors.
The Group’s key risks follow similar themes to
those in previous years, but they evolved over
the past year, mainly due to the impacts and
learnings from the COVID pandemic and the
performance challenges experienced by the
Group. Nine principal risks have been identified
in our latest assessment. The key changes
compared to the last report include:
Climate change – the Group’s understanding
of the nature of the climate change risk
continues to develop. Based on the
definition of climate change risk provided by
the Task Force on Climate-related Financial
Disclosures (TCFD), the Group continues
to develop its strategy around the risks
and opportunities related to the transition
to a lower-carbon economy, in particular
around the energy transition. The Group is
developing its understanding of the risks
(and opportunities) related to the physical
impacts of climate change on the Group,
with extreme weather events being a
particular focus in light of the predominance
of the Group’s offshore operations and the
need to keep our people safe.
Project delivery and recruitment/retention
– the Group’s strategic focus on offshore
renewables and oil and gas decommissioning
is reliant on project management and
engineering skills which are in enormous
demand in growing industries. There is an
increasing risk in relation to recruiting and
retaining the talent and skills needed to
deliver on the projects the Group is winning
in a very competitive skills market. The
Group is seeking to address the risk through
improvements in recruitment and retention
processes, and through building the skills
needed through training.
Financial risk – the Group’s financial
risk description has been broadened to
encompass financial governance in addition
to foreign exchange, interest rate and liquidity
risks. The Group’s decentralised operating
model requires robust internal financial
controls, in addition to those that govern
contracting, operating in emerging markets
and project delivery that are specifically
articulated within its principal risks already.
The Board recognises that there are a number
of control enhancements recommended each
year by its Internal Audit department and that
the level of separately disclosed items in each
of the last two reporting years may indicate a
heightened risk associated with its operating
model. A number of enhancements to the
financial control environment are underway,
including the appointment of a Head of
internal controls, the planned outsourcing of
its Internal Audit department and new policies
governing inventory and debt provisioning.
Financial review cont.
Liquidity
The Group has retained good access to
borrowing facilities. A new £130m revolving
credit facility was signed during 2021 with
three of the Group’s existing lenders (replacing
£142.5m of expiring bilateral facilities). Table C
summarises borrowing facilities by year of
maturity, with and without the inclusion of
available “+1” extensions. It is the Board’s
current expectation that extension periods will
be exercised in the normal course (see table C
overleaf).
Balance sheet
The Group’s net assets reduced by £27.3m to
£210.6m (31 December 2020: £237.9m), broadly
in line with the loss for the year of £28.2m.
Non-current assets
Non-current assets reduced by £51.7m in the
year. Goodwill reduced by £33.0m to £133.5m
(31 December 2020: £166.5m) as a result
of impairment charges of £29.2m, disposals
of businesses that had £3.9m of goodwill
allocated to them and foreign exchange
differences of £1.6m. Intangible assets reduced
to £13.3m from £20.1m due to amortisation
and impairment charges of £9.2m offset by
additions of £2.2m, including £0.7m in respect
of the acquisition of Subsea Engenuity.
Within Property, Plant and Equipment the
Group invested £19.4m in additions. This was
offset by disposals with a net book value of
£15.0m (principally the Paladin dive support
vessel), depreciation of £23.6m, impairment
charges of £5.1m against underutilised
assets, the reclassification of the Swordfish
dive support vessel to “held for sale” within
current assets (£10.7m) and foreign exchange
differences of £1.0m.
Right of use assets increased by £9.9m,
principally as a result of movements in the
Group’s Tankships fleet. One new formal vessel
was taken on a long-term operating lease in
the Caribbean to service a newly won, long-
term commercial chartering arrangement, and
seven existing vessel leases were renewed
in the period. Depreciation of £8.4m against
vessels was provided in the normal course and
an impairment provision of £4.2m was booked
to reflect the latest view of the likely residual
values of a number of vessels in the fleet.
Current assets and current liabilities
The Group’s net current assets increased
by £17.7m to £85.5m. Short-term cash
and borrowings increased by £21.1m to
a net position of £34.4m of cash. Assets
held for sale with a value of £10.7m at
31 December 2021 were transferred from
non-current assets, representing the Swordfish
dive support vessel.
Non-current liabilities
Long-term borrowings reduced slightly to
£173.9m (2020: £178.8m). An increase in long-
term lease liabilities of £10.8m represents the
new charters within the Tankships division. Net
pension liabilities, as measured under IAS 19,
reduced to £1.9m compared to £10.3m at
31 December 2020. The Group continues
to make deficit repair payments in line with
agreed profiles.
Duncan Kennedy
Chief Financial Officer
MANAGING RISK AND ENABLING GROWTH
Strategic report
Governance
Financial statements
60 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 61
Strategic report
Strategic report
Governance
Financial statements
62 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 63
Strategic report
3. OPERATING IN EMERGING MARKETS
Nature:
The Group operates in overseas
emerging markets and key growth
economies with fluctuating legislative
restrictions, embargoes, sanctions and
exchange controls, often undertaken
in association with local joint venture
partners.
Potential impact:
Those operations may expose the Group to
increased risk of governance and compliance
issues. Any significant failure to comply with laws
or regulations could lead to penalties and other
financial liabilities, as well as reputational issues.
Where there is a jurisdictional requirement for local
investment or representation, the Group’s ability
to continue business in that jurisdiction could be
adversely impacted from an ethical or
legal perspective.
Mitigation:
Corporate governance framework, including
limits of authority
Risk tracking of JVs, agents and other third party
relationships, including use of bespoke web-
based platform
Policies and training
Corporate structuring of relationships, using
external local legal advice
Internal audit operating overseas using
co-sourced PwC resources to leverage
advantages of working in local language and
consistent with local law/regulation
Context:
Operating in challenging conditions in developing markets remains a key part of our strategy. This continues to be challenging due to worldwide
Government-imposed travel restrictions in response to COVID, complicating control and communications in relation to our operations in developing
markets. The suspension of Subtech Offshore’s projects in Mozambique illustrated how quickly and materially instability in emerging markets can
impact on our operations, and puts increased pressure on contractual risk (see below). The improvements in mitigating controls, along with an
ongoing increase in Group awareness in this area, result in the net risk being unchanged.
Movement:
No change. Commercial and financial controls, project management and risk management, along with increasing Group awareness in this area
continue to mitigate the risk.
Opportunity:
The Group’s ability to operate in emerging markets for global customers offers an increased opportunity to be differentiated from our competitors.
1. HEALTH AND SAFETY RISK
Nature:
Group trading companies may
experience an adverse operational
incident or failure to maintain appropriate
levels of health and safety.
Potential impact:
The health and safety of our workforce and
others could be impacted by our operations
The Group’s reputation could potentially suffer
if there was a major accident or health and safety
issue
Claims and regulatory action may be taken
against the Company or the affected business
Mitigation:
First item on plc and business board agendas
Policy and training
Group Health and Safety Committee
Group safety forum
Insurance
Group-wide safety initiative
Context:
During 2021, although there have been no fatalities, there continue to be incidents, including a number of high potential near misses, which point
at the ongoing need for vigilance and increased focus on health and safety. Executive management continues to increase the level of awareness
and focus on HSE, and the Group safety forum is successfully sharing best practice, improving root cause analysis and sharing incident learnings
amongst the Group’s HSEQ specialists. A new health and safety initiative called “Look, See, Act” is due to be launched imminently to communicate
the level of required focus and the need to avoid complacency in this vital area.
Movement:
No change. On balance the net risk has remained the same, and efforts to bring greater coordination, diligence and awareness in this area
are ongoing.
Opportunity:
Operating in competitive markets there is an increased opportunity to provide differentiation to our customers by our strong commitment to health
and safety, thereby building long-term trust.
2. CYBER SECURITY RISK
Nature:
The Group may experience loss or harm
related to technical infrastructure or the
use of technology within the Group.
Potential impact:
Cyber attacks could result in financial and
reputational damage by way of significant
interruption to business systems. Phishing could
result in financial and reputational damage by way
of theft or fraud.
Mitigation:
Further embedding of new Group-wide operating
system with enhanced security, alongside
infrastructure and software updates to existing
systems
Regular review of IT security issues, including
penetration testing
Enhanced cyber awareness training and regular
briefings
Improved threat detection software and cyber
phishing testing introduced
Context:
The Group has continued to invest in cyber security and awareness during 2021, with improvements in cyber training and awareness, threat
detection software and phishing testing. Despite the increased protections in place at the Group, the external threat continues to increase.
Movement:
Increase. The Group is reliant on its systems in order to operate effectively and has continued to invest to enhance cyber resilience. The external
threat is continually adapting and increasing, notwithstanding the mitigating activities.
Opportunity:
Upgraded IT systems increase security, but also flexibility, facilitating secure working while travelling or from home.
Principal risks and uncertainties cont.
Strategic report
Governance
Financial statements
64 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 65
Strategic report
5. CONTRACTUAL RISK
Nature:
The Group operates in markets where
larger project-based contracts may seek
to pass risk down the supply chain.
Potential impact:
Through its growth and diversification into new
markets and geographies, the Group may be
exposed to increased contractual risks, which
could result in financial impact caused by late
payment, cost overruns, increased claims and
litigation, and/or exposure to non-UK legal
jurisdictional uncertainty.
Mitigation:
Internal contract management governance,
including policy and training
Internal and external specialist legal support
Appropriate balance of risk and reward in
contracts, based on Group principles
Targeting increased contract management skills
Insurance
Context:
The financial challenges of 2020/21 increased the pressure on the Group to secure profitable contracts but we remained focused on managing our
contractual risk and ensuring that our risk continues to be appropriately balanced with reward. Customers continue to push more risk down the
supply chain and reduce the level of financial assurance they give to their contractors. 2021 has seen positive examples of good contractual risk
management in Subtech’s Mozambique project which was impacted significantly by COVID, and there has been an improvement in contractual
management skills across the Group, both through organic training and recruitment of specialists. The limits of authority relevant to each business
are designed to ensure that contracts are reviewed and approved at the appropriate level, and are being reviewed during 2022.
Movement:
Increase. The Group is diversifying its operations to secure a more sustainable future for its energy businesses and that will bring its own challenges
whilst the Group adjusts to new customer expectations and industry developments.
Opportunity:
As the Group pursues its strategy, contracts become a key mechanism for managing risk and also enhancing engagement with our customers and
suppliers.
6. PROJECT DELIVERY
Nature:
Group businesses may fail to meet
customer expectations or contractual
requirements on project delivery.
Potential impact:
This could cause significant adverse financial and
reputational consequences, and/or increased cost
and management time resulting from management
of disputes and litigation
Mitigation:
Increasing the specialist project management
skillset across the Group through training and
recruitment
Implementation of project management best
practices
Focus on post-signature contract management
Salary benchmarking and role banding exercise
Context:
The profile of the work undertaken by the businesses continues to shift more towards project work. Established mitigating processes include
targeting increased project delivery skillsets through external hire and training, ongoing development of project management best practice,
and building post-signature contract management into the project management skillset. We remain focused on improving outcomes across a
fragmented group where resource and skills in certain areas are less mature.
Movement:
Increase. 2021 has seen increased challenges in the recruitment and retention of skilled personnel in a fluid recruitment market where these skills
are highly prized and under-resourced.
Opportunity:
Our customers require suppliers which can manage large projects in demanding environments. The Group is in a key position to support them,
grow our customer engagement, and win new work.
4. CLIMATE CHANGE
Nature:
The Group operates in industries which
may be adversely impacted due to the
change in energy mix. The Group is
committed to minimising the impact of
its operations on climate change.
Potential impact:
The Group may suffer operational impacts of
extreme weather events, as well as potential
changes in technologies, markets and regulation in
response to climate change which could increase
costs, challenge the viability of Group services or
affect asset values. The Group is also conscious
of the need to reduce its impact on the climate,
including its emission of greenhouse gases.
Mitigation:
Continuing the Group’s end markets and
geographical diversity
Focus on oil and gas decommissioning,
and renewables markets
Initiatives to reduce the Group’s emissions
and other impacts on the environment
Context:
Energy markets remain a key source of Group revenue, including both the oil and gas and renewables industries. With the strategic focus of the
Group supporting the macro transition from oil and gas to renewables, with increased investment in oil and gas decommissioning and renewables
markets, the Board continues to consider the impact of climate change on energy markets as one of the Group’s principal risks, as well as one
of the Group’s key strategic opportunities. The 2021 strategic review has clarified the Group’s commitment to renewables and decommissioning,
although the Group’s businesses which operate within them have been impacted by a combination of volatile oil prices and COVID. Oil and gas
remains an important market for the Group and through 2021, the Offshore Oil division continues to be a consistent and important contributor
to Group results, while other Group companies have seen material impacts in their support for oil and gas customers. The risk is mitigated by
the continuing diversification of the Group into new markets which, aligned with focused strategic opportunities, targets the ongoing long-term
sustainability of the Group. The Board believes that the global market for renewable energy will continue to grow, and therefore sees the energy
markets as both a risk (long-term oil and gas, post decommissioning) and an opportunity (renewables).
Movement:
Increase. The Group has built its strategic goals around sustainability, driven in part by the impacts of climate change on the Group and the
markets it serves. External scrutiny continues to increase on all companies in relation to climate change, and the Company has ongoing work
in this area, in particular in understanding the physical risks of climate change on the Group.
Opportunity:
The Board believes that the global market for renewable energy will continue to grow, and therefore sees the energy markets as an opportunity.
Principal risks and uncertainties cont.
Strategic report
Governance
Financial statements
66 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 67
Strategic report
9. PANDEMIC RISK
Nature:
The Group is a global business and
continues to be impacted by the COVID
pandemic. The Group may face a risk
of future pandemics, and in particular
an enhanced international government
response to future potential virus spread
which may lead to quicker triggering
of restrictions on work and travel in
the places where the Group needs to
provide its services.
Potential impact:
The current impact on the Group’s operations
created by the COVID pandemic may continue.
A future pandemic, or governmental response to
a potential virus spread may impact the Group’s
ability to provide services to its customers.
Mitigation:
Tracking and following Government restrictions
and recommendations
Making office locations safe for work
Home working where possible, supported
by improved IT services enabling better
communication
COVID working group providing advice and
support to employees
Enhanced employee assistance programme
Encouraging vaccination where possible
Context:
The ongoing COVID pandemic, and the resulting restrictions imposed by governments in locations where the Group needs to provide its services,
are continuing to impact the Group’s operations. This is seen through customers delaying anticipated work, and projects taking longer to complete,
with increased cost. Governments are likely to have a quicker and more conservative approach to tackling possible future pandemics and variants,
meaning restrictions may be deeper and quicker. However it is anticipated that, due to the material economic impact of the first lockdowns,
governments will be keen to avoid lockdowns where possible.
Movement:
Decrease. It was not anticipated at the start of the COVID pandemic that its impacts would still be felt at the end of 2021. While restrictions
continue to impact on the Group, our businesses have found effective ways to continue to provide products and services to our customers, albeit
with some delays and increased costs. As restrictions lift, the impacts are decreasing.
Opportunity:
Through finding creative ways to continue to deliver for our customers through the pandemic, we are able to build further customer loyalty and
differentiate ourselves through our energy and resilience.
Emerging risks
Our risk management programme includes a
review of emerging risks. We define emerging
risks as those which take the form of a
systemic issue or business practice that has
either not previously been identified, has been
identified but has remained dormant, or has yet
to rise to an area of significant concern. The
Risk Committee is working to develop a more
detailed understanding and better management
of this specific area of risk management, with
support from PwC, following their review of
Group risk management.
The impacts of the COVID pandemic since
2020 have created a heightened awareness
of new and emerging risks that could impact
the Group, its customers and suppliers – this
has come through in the trading company
reporting in relation to the pandemic, although
no specific individual “new” issues or business
practices have been identified; for example,
post-pandemic ways of working and longer-
term skill requirements may emerge as
workforce planning risks, closely associated
with risk in relation to the recruitment and
retention of key people. Furthermore, ongoing
scenario planning work in line with TCFD
guidelines is focusing in on the identification
and assessment of potential short to longer-
term emerging physical risks linked with climate
change, which are already captured in part in
the Group’s principal risks relating to energy
markets, although this will develop in further
directions once the analysis is complete.
The ongoing development with respect to an
energy mix in transition continue to be at the
forefront of the Company’s risk management
and strategic planning, as renewable sources
produce more energy, and environmental
concerns lead to an increased focus on
the decommissioning of oil and gas assets.
Although the Company recognises that oil
and gas will remain part of the energy mix
for some time, we aim to provide services
for the benefit of the production, delivery and
decommissioning industries in a safe and
sustainable way, whilst we support the energy
transition to low carbon sources.
7. RECRUITMENT AND RETENTION OF KEY STAFF
Nature:
The Group may fail to attract, retain
and develop personnel of the requisite
calibre and to plan for succession in key
leadership positions.
Potential impact:
This may result in the Group not being able to
maintain its existing strong and experienced
management teams in its operational businesses,
and/or a risk to the Group’s delivery of its
strategic objectives, which depends on recruiting
and retaining the right people in all areas of our
business to maintain competitive advantage.
Mitigation:
Implementation of employee strategy
Graduate recruitment
Talent identification and management
Management development programmes
Appraisal process
Training plans
Remuneration incentives
Succession planning
Salary benchmarking and role banding exercise
Context:
Progress continues on implementation of the employee strategy to improve recruitment and retention. New senior management positions have been
filled during the course of 2021. Succession and recruitment have improved. Retention has been a challenge and remains a key focus. Unchanged.
Movement:
Increase. The Group’s employee turnover rate has increased through 2021, due to a very competitive and liquid external recruitment market,
although this has not materially impacted key positions and resulting recruitment has been successful.
Opportunity:
Improvements in recruitment and retention will strengthen our teams worldwide, as well as the ability to compete in our chosen markets.
8. FINANCIAL RISK
Nature:
The Group is exposed to interest rate,
foreign exchange and credit risk. The
Group’s decentralised operating model
requires robust and effective financial
controls.
Potential impact:
An increase in interest rates or change in
exchange rates or credit restriction would have
a financial impact on the Group. Poor financial
controls may impact adversely on reporting
accuracy or risk of fraud.
Mitigation:
Formalised Group internal controls and
accounting policy manuals
Documented levels of delegated authority for all
operating companies
Half-yearly self-certifications covering the
effectiveness of financial controls signed by
operating company Finance Directors
Third party whistleblowing hotline available to all
employees (from mid 2022)
Internal Audit reviews on a periodic basis for all
operating companies
Non-syndicated banking relationships plus new
3-bank RCF club
RCFs with spread of maturity profiles
Centralised finance function management of
Group cash and debt, and FX
Forward currency contracts
Interest rate swaps
Context:
The level of separately disclosed items may indicate a heightened risk of ineffective financial controls. The Group has sufficient banking and debt
facilities in place, but a reduction in earnings during 2021 put significant pressure on achieving compliance with banking covenants at the end of
December 2021. The Group continues to sell USD forward to cover about 50% of its exposure to reduce earnings volatility. Interest rates, foreign
exchange and credit risks remain key risks and are reviewed at each Board meeting.
Movement:
Increase, due to separately disclosed items and current covenant compliance risk, albeit the Group remained in compliance with all banking covenants for 2021.
Opportunity:
None.
Principal risks and uncertainties cont.
Strategic report
Governance
Financial statements
68 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 69
Strategic report
Business reporting and
performance reviews
The Group operates an annual budgeting
process and produces quarterly forecasts
which are reviewed and approved by the
Board. Monthly results are compared with
budget and prior year, and individual business
reviews are conducted quarterly, which include
a review of financial results. The operating
companies also compile a three-year strategic
plan. The Executive Directors hold quarterly
board meetings with each business unit to
discuss strategy, financial results and forecasts,
business needs and the management of risks
facing the business.
Regulatory compliance policies
Whistleblowing
As part of its internal control procedures, the
Group maintains a whistleblowing policy which:
encourages the workforce to report any
suspected wrongdoing as soon as possible,
in the knowledge that their concerns will
be taken seriously and investigated as
appropriate;
provides staff with guidance as to how to
raise those concerns; and
reassures staff that they should be able
to raise genuine concerns without fear of
reprisals, even if they turn out to be mistaken.
The policy covers any suspicions of criminal
activity, failure to comply with any legal
obligation, miscarriages of justice, danger to
health and safety, damage to the environment,
bribery under our anti-bribery and corruption
policy, facilitating tax evasion, financial fraud or
mismanagement, and breach of our internal
policies and procedures including our Code of
Ethics. The policy is designed to ensure that
any employee who raises a genuine concern is
protected. Any concerns can be raised in the
first instance with the Chief Financial Officer
or the Group General Counsel and Company
Secretary in confidence. The Group is launching
a new externally-facilitated whistleblowing
hotline in the first quarter of 2022 which will
provide a simple platform for communication
and management of whistleblowing issues, in
the many languages used around the Group.
The Board has overall responsibility for the
policy, its application to individual concerns
raised under the policy and for reviewing and
approving the effectiveness of actions proposed
in response to concerns raised under the policy.
During 2021, there were three whistleblowing
reports raised and investigated.
Anti-bribery and corruption
The Board is committed to ensuring the
highest standards in all of the Group’s business
dealings and condemns corruption in all its
forms. The Group has a formal anti-bribery
and corruption statement and policy and does
not tolerate or condone corruption or bribery
in any of the Group’s business dealings. This
policy has been implemented throughout the
Group and is supported by a Group-wide
training programme (both online and in person,
delivered by the Group legal team) and regular
compliance reviews through Internal Audit. This
policy is reviewed annually by the Board and is
available on the Group’s website. More detail is
provided on page 71.
Modern slavery
The Board has a zero-tolerance approach to
any form of modern slavery and is committed
to acting in an ethical manner and with integrity
and transparency in our Group’s business
dealings. The Group has a formal slavery and
human trafficking statement and policy which
outlines the steps taken by the Group to ensure
that slavery and human trafficking is not taking
place within any part of the Group’s business
or within the Group’s supply chains. Both the
statement and the policy are available on the
Group’s website. More detail is provided on
page 71.
Viability statement
The Group’s business model and strategy are
detailed on pages 12 and 13, and our risk
management framework is described on page
61. Understanding of our business model, our
strategy and our principal risks is a key element
in the assessment of the Group’s prospects, as
well as the formal consideration of viability.
As part of the strategic planning process, the
Directors have assessed the Group’s viability
over a three-year period ending 31 December
2024, being the most relevant time period given
the current uncertainty in global markets and
represents a subset of the Group’s five-year
outlook in its strategy planning process. During
the strategy planning process, the Board
reviews the Group’s strategy and its detailed
financial plan in light of the Group’s current
position and prospects, together with factors
and risks that might affect the future outlook.
The Board carefully assesses the performance
and prospects of each business regarding
entering new markets and geographies,
current and expected growth rates, macro
and individual business risks, prospective new
projects (and their timing), and the robustness
of individual business performance.
The Group’s plan overlays a number of
assumptions and sensitivities which are
reviewed by the Board; this includes a review
of whether additional bank facilities will be
required and available in the plan period,
as well as a robust assessment of the likely
downside sensitivities aligned to the principal
and emerging risks facing the Group as set out
on pages 61 to 69, and the potential impact of
those sensitivities on its business model, future
performance, solvency and liquidity over the
period. The sensitivities which are considered
include the diverse nature of the markets and
geographies in which the Group’s businesses
operate, and their ability to react quickly to
change, as well as:
COVID – assuming no growth from 2021
and a further lockdown between November
2021 and February 2022, profits reduced
accordingly;
contractual risk – winning larger contracts and
operating in more geographies with partners
potentially exposed to increased risk of late
payment or cost overruns. To reflect this the
cash receipts were reduced over the three-
year period to 31 December 2024;
project delivery – risk that a project not
delivered in line with the budgeted profit and
payment terms. To reflect this the profit and
debtor receipts were reduced over the three-
year period to 31 December 2024;
increase in guarantees – risk that the
Group needs to take on significantly more
guarantees to secure long-term projects; and
acquisition/disposal programme delayed –
risk that disposals take longer than planned
or are delayed by six months, and assets held
for sale are not sold.
The analysis further takes into account:
the potential mitigating actions, including the
following possible actions: reduction of capital
expenditure; delay of acquisitions; drawdown
on additional available facilities; not declaring
dividends; outright sale or sale/leaseback of
Group assets; and
the effectiveness of the Group’s risk
management and control systems, as well
as current risk appetite.
More details on the potential impacts of these
scenarios are set out in Note 1 on page 134.
Based on their assessment of the Group’s
prospects and viability, and in accordance with
Provision 31 of the Code, the Directors confirm
they have a reasonable expectation that the
Group will be able to continue to operate and
to meet its liabilities, as they fall due, for the
period to 31 December 2024.
Risk governance framework
The Board is responsible for the management
of risk in the Group, supported by the Risk
Committee and the Group functions, including
internal audit. The internal control and risk
management framework is comprised of a
series of policies, processes, procedures and
organisational structures which are designed to
ensure that the level of risk to which the Group
is exposed is consistent with the Group’s risk
appetite and strategic objectives, as defined
by the Board. The framework is overseen by
the Risk Committee which helps the trading
companies with their risk management and
reporting, consolidates reporting, overlays the
functional and macro-economic view of risk
and reports to the Board on the management
and assessment of risk within the Group. An
assessment of the Company’s risk management
and internal control systems is carried out
annually by the Audit Committee on behalf of
the Board. The results of that assessment are
reported in the Audit Committee report as set
out on pages 89 to 93 and below. The focus for
further improvements to the framework are set
out in more detail on page 61.
Group functions
The Group’s trading companies are supported
by Group functions. Each functional head
reports to an Executive Director. The Board
retains an oversight role and receives regular
reports on key issues: on financial, tax and
treasury matters from the Chief Financial
Officer, on people and HR matters from the
Group Human Resources Director, and on
legal and regulatory matters from the Group
General Counsel and Company Secretary. The
Board conducts a “deep dive” review into the
Group’s most potentially impactful principal
risks at most scheduled Board meetings. The
Board has a schedule of matters specifically
reserved to it for decision, designed to ensure
that it maintains full and effective control over
appropriate strategic, investment, financial,
organisational and compliance issues. This
schedule is subject to review by the Board
on an annual basis.
Internal Audit
The Group’s Internal Audit function is
supported by a co-sourcing arrangement
with PwC, and undertakes regular reviews
of the individual businesses’ operations and
their systems of internal controls. It makes
recommendations to improve controls and
follows up to ensure that management
implements the recommendations made.
The annual Internal Audit plan is determined
on a risk assessment basis and is reviewed
and approved by the Audit Committee.
Internal Audit’s findings are reported to the
individual management team, the Executive
management team, the functional heads, and
the chairman of the Audit Committee. The head
of Internal Audit attends all Audit Committee
meetings and presents a summary of the
Internal Audit findings, recommendations, and
implementation progress on an ongoing basis.
Internal Audit also implements the annual risk
evaluation process and the internal control
and risk management review questionnaire
process with the individual businesses, before
their presentation to the Board. During 2021,
alongside its assistance in overseas locations,
making best use of videoconferencing
technology, the co-source partner was asked
to expand its remit to include internal audits in
certain functional areas within the UK, including
IT implementation and finance, where the
partner’s specialist skills have complemented
the Group’s Internal Audit function. With
effect from April 2022, we will be moving to
a fully out-sourced model for Internal Audit,
supported by PwC.
Risk Committee
The Company has a Risk Committee, which
meets quarterly and is attended by the
Executive Directors and the heads of the
functional teams. Each of the functional teams
provides a report at each Risk Committee
meeting which identifies any matters in their
functional area which relates to the Group’s
principal risks and uncertainties, or to the
individual trading companies’ risk registers.
The minutes of the Risk Committee are
reported to the Board, and any key issues
raised are discussed at meetings of the Board.
The main responsibilities of the Risk Committee
are: to keep under review the effectiveness
of the Group’s overall risk management
framework and processes and ensure
corrective action is taken where necessary; to
make recommendations to the Board/Audit
Committee with respect to the appropriate
risk appetite for the Group; to review the
principal and emerging risks that the Group is
willing to take across all major activities, taking
into account the risk appetite, the long-term
strategy of the Group and the interests of
its stakeholders (shareholders, employees,
customers/suppliers, the environment and
local communities impacted by the Group’s
activities); to review reports from the functional
leads on risks that their teams are encountering
in their interactions with the trading companies;
to review reports from the trading companies
on their principal risks and mitigating activities,
as well as any emerging risks; and to ensure
that a robust assessment of the principal
and emerging risks facing the Group has
been undertaken annually by reference to
risk registers from trading companies and
functions.
Through the Executive Directors and the Group
General Counsel and Company Secretary,
the Risk Committee presents to the Board
its annual assessment of the principal and
emerging risks of the Group, taking into
account the existing principal risks of the
trading companies, and those tracked by the
functional teams, as well as presenting the
emerging macro risks, and those emerging
risks identified by the trading companies, the
impact of which could potentially develop to
impact the Group as a whole. This enables the
Board to carry out its own robust assessment
of the principal and emerging risks of the Group
as a whole. The results of that assessment,
including risk management and mitigating
activities, are set out on pages 61 to 69.
Risk management systems
The key features of the Group’s risk
management systems used to identify and
monitor material risks are as follows:
Each operating business is required to
maintain an up-to-date risk register, which
identifies key and emerging risks, assigns
each a “risk score” based on the likelihood
of it arising, and the potential impact on the
business of an adverse outcome, both before
and after mitigation measures are taken. The
risks and their respective risk scores before
and after mitigation are reviewed by each
business and discussed with the Executive
Directors at each quarterly operating board
meeting.
The risk registers are reviewed by Internal
Audit, the Risk Committee and the Board
twice a year, based on the process outlined
in the “Risk Committee” section above, with
the mid-year review focused on the material
changes to those risks.
The risk registers are supported by an
internal control and risk management review
questionnaire, completed annually by each
trading company managing director. This
is a robust self-assessment of operational
controls and compliance with Group policies,
applicable laws and regulations relating to
their business. This ensures that managing
directors identify risks and relevant mitigating
strategies, and have in place adequate
control systems to identify, mitigate and report
any weaknesses that require management
attention.
The risk registers are used twice a year
by the Board to help to determine the
Group’s principal and emerging risks and
uncertainties, their potential impacts, how
they are being managed and/or mitigated,
and any change in the nature of the risk.
Internal Audit uses them to define its areas
of focus for the forthcoming period.
Principal risks and uncertainties cont.
Non-financial information statement
The information set out below, together with the cross references listed in the table below as to where further information can be found in the
main body of the Strategic report, is in compliance with the Non-Financial Reporting requirements as set out in sections 414CA and 414CB of the
Companies Act 2006:
Reporting requirement Relevant policy Location Page
Business model Business model and Strategy 12-13
Environmental matters Group Health, Safety and Environmental policy Our stakeholders
Planet
Principal risks and uncertainties
TCFD
20-21
36-41
64
52-56
Employees Group Health, Safety and Environmental policy
Code of ethics
Our stakeholders
People
Principal risks and uncertainties
Directors’ report
20-21
42-47
66
111-114
Social matters Code of ethics Our stakeholders
People
20-21
42-47
Respect for human rights Modern slavery and human trafficking policy
Code of ethics
Principal risks and uncertainties
Non-financial information
69
70-71
Anti-bribery and corruption Anti-bribery and corruption policy Principal risks and uncertainties
Non-financial information
63-69
70-71
Principal risks Principal risks and uncertainties 61-69
Non-financial KPIs Sustainability 36-56
Our policies
A combination of online and in-person training on all the key policies is carried out across the Group, and there is also a system of biannual
certification for compliance officers, certifying that the relevant individuals in their businesses have read and understood the policies and are fully
compliant. All employees, contractors and third parties are encouraged to report any circumstances where there is a suspected or actual breach of
any Group policies, applicable laws, or the high standards as set out in the Code of ethics. All reported incidences of actual or suspected breach of
any of the policies are promptly and thoroughly investigated, and reviewed by the Audit Committee. The Audit Committee also considers any high-
risk areas identified by the internal audit function, the Group legal team or the business’s compliance officers.
Key policy Relevant policies
Code of Ethics
James Fisher is committed to ensuring the highest standards in its activities and is particularly concerned that appropriate and
ethical policies and procedures are followed in all business dealings across the Group.
The Group strives for a culture of honesty, openness and accountability, aligned with the Group value of integrity. The Group’s
commitment to the highest level of ethical conduct should be reflected in all our business activities including relationships with
our stakeholders.
All employees and others must conduct themselves according to the language and the spirit of this Code and seek to avoid any
appearance of improper behaviour.
As part of our work on governance, aligned with our sustainability priorities, we are reviewing our Code of Ethics in 2022.
Key policy Relevant policies
Group Health,
Safety and
Environmental
policy
Health and safety is the top priority and the Group actively strives for the continuous improvement of health and safety in the
workplace. We aim to provide a healthy and safe working environment for all our employees and to ensure the safety of others
affected by our operations.
The Group recognises its responsibility to protect the environment for the benefit of all. This policy represents a declaration of
our intent and commitment to minimise the environmental impact of our activities, our consumption of raw materials and our
production of waste.
The ultimate responsibility for health and safety, and the environment rests with the Group Chief Executive Officer, the Board
members, and the Executive team. This responsibility is cascaded through the organisation via divisional/regional managing
directors (MDs) and their leadership teams.
In the case of health and safety, this is supported by the Group Safety Committee, as well as by the Group safety forum
and its individual members, who are the health safety, environment and quality (HSEQ) representatives for each business.
In the case of the environment, this is supported by the Sustainability Committee, and by the environmental working group,
with representation from across the Group.
Anti-bribery
and corruption
policy
James Fisher has zero tolerance for any form of bribery or corruption and is committed to complying with all applicable anti-
bribery and corruption laws. The Group has an established anti-bribery and corruption policy and has introduced a compliance
programme which has the support of the Board and senior management within the Group. This includes communication of the
statement and policy, training, risk assessment and ongoing monitoring. Employees are required to complete the training and to
self-certify that they understand and agree to be bound by its provisions. Ongoing compliance is monitored by local compliance
officers who are required to report to their local boards and to the Audit Committee, via Internal Audit on at least a biannual
basis. The compliance officers are responsible for ensuring that risk assessments, training and awareness are carried out and
are kept up to date.
In addition to ensuring that our people are compliant with the Group’s anti-bribery and corruption policy, we require that all third-
party agents and joint venture partners engaging with any Group entity comply with these policies in order to ensure compliance
with applicable anti-bribery and corruption laws.
The policy is supplemented by mandatory due diligence on all third-party agent and joint venture relationships, enabled by a
bespoke web-based platform available to all Group businesses, supported by due diligence provided by an international risk
consultancy, Control Risks. It provides a robust tool through which our businesses can risk assess agent and joint venture
partners with whom they are considering doing business. It forms part of our internal control procedures and helps mitigate
the business’s compliance risk.
Modern
slavery policy
James Fisher respects fundamental human rights and is committed to acting ethically and with integrity in all our business
dealings and relationships and to implementing and enforcing effective systems and controls to ensure modern slavery is not
taking place anywhere in our business or in any of our supply chains or in the communities in which we operate across our
international businesses.
We have implemented work practices and policies throughout the Group which are designed to ensure that respect for human
rights is integrated into the systems and culture of our businesses. We do not tolerate the use of child or forced labour within
our business and take all steps possible to ensure that our suppliers and customers also uphold internationally recognised
human rights. This is enabled through risk assessments undertaken by our Group businesses which identify parts of their
supply chain which could be susceptible to risk in this area, as well as confirmation from our suppliers of compliance with
our policy and relevant law.
Our progress in modern slavery is set out in our annual Modern Slavery statement which is available on the Group’s website
outlines steps taken by the Group to ensure that there is transparency in the Group and throughout our supply chains. The Group
encourages any concerns relating to modern slavery to be raised using the procedure set out in the whistleblowing policy.
Approval of Strategic report
Our Strategic report on pages 1 to 71 was approved by the Board on 9 March 2022.
Eoghan O’Lionaird
Chief Executive Officer
9 March 2022
Strategic report
Governance
Financial statements
70 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 71
Strategic report
Governance
In this section
Governance at a glance 74
Chairman’s introduction to corporate governance 76
Governance framework
78
Board of Directors 80
Corporate governance report 82
Nominations Committee report 86
Audit Committee report 89
Directors’ remuneration report 94
Directors’ report 111
Statement of Directors’ responsibilities 116
72 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 73
Governance
Governance Financial statements
Strategic report
72 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 73
The Company’s governance framework
provides the foundations of the Board’s
leadership of the Group, in a changing
and challenging environment.
Governance at a glance
HIGHLIGHTS*
Industry knowledge and experience
Finance: 3
PLC Experience: 6
Strategy Development: 5
Relevant Industry Experience: 2
International Experience: 5
ESG: 1
Diversity (all Directors)
Male: 6
Female: 3
Length of Tenure (Chairman
and Non-Executive Directors)
0-2 years: 3
2-5 years: 2
5-9 years: 2
* Includes Claire Hawkings, who joined the Board
on 1 January 2022.
Strategic report
Governance Financial statements
74 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 75
Governance
Board Membership and Meetings
The composition of the Board and the Board Committees meets the requirements of the Code.
The Board and Board Committees held a number of scheduled meetings in 2021 and individual
attendance is set out in the table below. Additional unscheduled meetings were held as and
when required.
Board and Committee scheduled meetings attendance (2021)
Board Audit Remuneration Nominations
Executive Directors
Eoghan O’Lionaird 12/12 N/A N/A N/A
Duncan Kennedy
(1)
5/5 N/A N/A N/A
Non-Executive Directors
Angus Cockburn
(2)
5/5 2/2 3/3 3/3
Aedamar Comiskey 12/12 5/5 5/5 4/4
Michael Salter 12/12 5/5 5/5 4/4
Justin Atkinson 12/12 5/5 5/5 4/4
Inken Braunschmidt 12/12 5/5 5/5 4/4
Kash Pandya
(3)
2/2 0/1 1/1 1/1
Former Directors
Malcolm Paul
(2)
7/7 3/3 2/2 1/1
Stuart Kilpatrick
(1)
7/7 N/A N/A N/A
(1) StuartKilpatrickresignedfromtheBoardon29April2021.DuncanKennedyjoinedtheBoardwitheffect
from 4 May 2021 and has attended 100% of available meetings since joining.
(2) MalcolmPaulresignedfromtheBoardon30April2021.AngusCockburnjoinedtheBoardwitheffectfrom
1 May 2021, and has attended 100% of available meetings since joining.
(3) KashPandyajoinedtheBoardwitheffectfrom1November2021,andhasattendedallavailablemeetings
since joining, except that he was unable to attend a meeting of the Audit Committee, due to a commitment
made prior to him joining the Board.
Where exceptionally, due to other commitments, a Director has been unable to attend a meeting,
they have separately submitted their comments and input on the matters under discussion to the
Chair of the Board or the relevant Board Committee.
The Board
The Corporate governance report on pages 80 to 85.
Audit
Committee
The Audit
Committee report
on pages 89 to 93
describes in detail
the Committee’s
role and activities.
Nominations
Committee
The Nominations
Committee report
on pages 86 to 88
describes in detail
the Committee’s
role and activities.
Remuneration
Committee
The Directors’
remuneration
report on pages 94
to 110 describes
in detail the
Committee’s role
and activities.
Chief Executive
Officer
Operating
divisions
Corporate
functions
Executive
Committee
Group Risk
Committee
Group Health
& Safety
Committee
Sustainability
Committee
Applying the Principles
of the UK Corporate
Governance Code
This governance section of the report
is structured around the Company’s
application of the Principles of the Code:
1 Board leadership and company
purpose
Details about the Company’s
purpose, culture and values are set
out on pages 12 and 13
The key activities of the Board
during the year and key priorities for
2021 are summarised on pages 82
and 83
2 Division of responsibilities
An explanation of our governance
structure is set out on pages 78
and 79
3 Composition, succession, and
evaluation
Details of this year’s Board
evaluation is set out on pages
84 and 85
Report from the chair of the
Nominations Committee is set
out on pages 86 to 88
4 Audit, risk and internal control
Report from the chair of the Audit
Committee is set out on pages
89 to 93
5 Remuneration
Report from the Chair of the
Remuneration Committee is set
out on pages 94 to 110
Details of the Directors’
remuneration policy for 2022 is set
out on pages 97 and 98
Governance structure
Strategic review
The Code provides that a Board should establish
a company’s strategy, purpose and values, and
that its directors should lead by example and
promote the desired culture.
In June 2021, the Company hosted a Capital
Markets Day event at which the Executive team
presented its strategy. The strategy presentation,
which is on our website, addressed the
challenges facing the Group in the short term,
as well as the Company’s longer-term view of
its markets and strategic priorities. An integral
element of this event was a discussion on the
Company’s purpose and values and why they are
important to the delivery of our long-term strategy.
In terms of leading by example, the importance
of the Executive Directors being visible in the
business and reinforcing the messaging about
our purpose and values goes without saying. In
addition, there is a programme of visits organised
for the Non-Executive Directors, a key element
of which is meeting with the workforce for a
two-way dialogue about a wide range of issues,
including purpose and values.
Employee engagement
It is something of a truism to write that
“employees are key to the success of an
organisation” but given the challenges we face,
the importance of having an engaged workforce
cannot be overstated, particularly as they are
often performing their jobs in very challenging
environments. To better understand the views of
ourworkforce,wehavejustcompletedourfirst
externally facilitated engagement survey of all our
employees. Around two thirds of our employees
completed the survey and as the engagement
survey is further embedded, we anticipate this
participation rate will increase. The results of the
engagement survey revealed that we have a
number of challenges to address in areas such
as career planning and employee development.
I am encouraged by the actions being taken to
address the issues arising from the employee
feedback at both a Group and operating
company level, and believe that we will see
engagement improve over the coming years. The
results of the survey and the actions being taken
as a result are set out more fully on page 42.
Stakeholder engagement
TheCodehighlightstheimportanceofeffective
engagement with shareholders and other
stakeholders. From a stakeholder perspective,
wehaveidentifiedshareholders,employees,the
environment, customers and suppliers and local
communities as being our key stakeholders.
During Board and Committee meetings, the
Group’skeystakeholdersandtheirdiffering
perspectivesareidentifiedandconsideredas
part of the decision-making process. These
discussions, assessments and conversations
focus not only on delivering increased value for
shareholders, but also assess the impacts of our
decisions and strategies on the Group’s wider
stakeholders.
The Board recognises the importance of regular,
open and constructive dialogue with shareholders
and other stakeholders, and this has long been
a key aspect of our culture and decision-making.
The Executive Directors meet key shareholders
regularly and other members of the Board are
available to be consulted as appropriate. I have
met with most of our largest shareholders since
starting with the Company and will continue to
engage as appropriate.
The Board is also committed to embedding
sustainability into day-to-day decision making
and making this a central theme of delivering the
Group’s strategy. The Sustainability Committee,
which reports into the Board, monitors progress
on achieving the Group’s ESG priorities. One of
its key roles is overseeing the stakeholder groups,
which include employee representatives from all
around the Group which play an important
role in delivering our sustainability objectives.
Given the nature of the services we provide,
stakeholder engagement is a multi-faceted issue
and is one that is frequently discussed at the
Board. More information about how we consider
and engage with our stakeholders as part of our
Board activities is set out on pages 82 and 83.
Managing risk
The Board, assisted by the Audit Committee,
ensures that our approach to risk management
iseffective,extendingbeyondfinancialrisktoa
wider range of operational risks. There is a full
report on our risk management activities in our
Principal Risks and Uncertainties section of the
Strategic report on pages 61 to 69. Given the
challenges posed by the pandemic as well as
the trading issues that have faced the Group,
the Board engaged external support from PwC
LLP, to carry out an independent review of the
Group’s risk management systems and controls.
This review concluded that the risk framework is
generally appropriate but it also recognised that
the Group’s diversity in terms of its operations
and geographies added an inherent layer of
complexity to risk management. The report
recommended a number of improvements,
which are described in more detail on page
61, and which will be implemented through
the course of 2022.
Board composition and diversity
We are committed to ensuring that the
composition of the Board has the diversity
requiredtobeaseffectiveaspossible.The
Board is currently composed of nine Directors,
each bringing a variety of skills, knowledge
and experience, in addition to diversity of
thought. With two Executive Directors and six
Non-Executive Directors (excluding myself as
Chairman), there is a strong independent element
to the Board, which ensures that the balance of
power rests with the Non-Executive members of
the Board. After the AGM in May 2022 at which
Michael Salter will retire, the Board will comprise
eight Directors, with two Executive Directors
andfiveNon-ExecutiveDirectorsandmyselfas
Non-Executive Chairman, thereby maintaining an
appropriate balance of independence. Diversity
is a matter which we consider regularly, and in
2021 we published a new Board Diversity Policy,
which is available on the Group website and sets
out our aims to ensure an appropriate mix of
skills and experience as well as our commitments
with respect to gender and ethnic diversity. More
details in relation to diversity can be found in the
Nominations Committee report on pages 86
to 88.
Board effectiveness review
As Chairman, I lead an annual evaluation of the
effectivenessoftheBoard,itsCommitteesand
the individual Directors. For 2021, the Board
undertook its triennial externally-facilitated
evaluation. I am pleased to report that the review
highlighted that the Board is committed and
cohesiveduringwhatisaperiodofsignificant
changeinitsmembership.Thereportidentified
some recommended actions with respect to
governance and other improvements to the
operation of the Board. These actions have
included adding an extra Board meeting to the
calendar, scheduling regular Non-Executive
meetings and formalising Board roles and
responsibilities. There is further detail provided on
the process and outcomes on page 85.
Conclusion
Having the right governance structure is vital in
enablingtheGrouptooperateeffectivelyina
rapidly changing political, economic, social and
technological environment, and to make the
most of the resulting opportunities that present
themselves, as well as managing the associated
risks. As this letter sets out, we are undertaking
a number of reviews to improve our governance
structure. I am pleased with the progress we are
making but there is more to do in building the
optimal organisational structure and supporting
governance and control frameworks. In turn,
this will provide a strong foundation from which
the Group can build its turnaround and deliver
sustainable growth and returns, whilst making
apositiveimpactforthebenefitofallour
stakeholders. This governance report outlines the
ongoing actions required to continue this work,
and I look forward to reporting to you on progress
next year.
Angus Cockburn
Independent Non-Executive Chairman
9 March 2022
Chairman’s introduction to corporate governance
Dear Shareholders
On behalf of the Board, I am pleased to introduce
the corporate governance report for 2021. As
we set out elsewhere in this report, 2021 was
a challenging year for the Group. In times of
challenge, a strong governance framework,
overseen by an experienced and engaged Board,
is critical. During 2021, we made a number of
changes to the Board, undertook a detailed
review of the governance structure, as well as an
externally-facilitated review of the operation of the
Board, and are in the process of implementing
the resulting recommendations. Over the course
of 2021, the Board has continued to support the
Executive team in addressing the issues created
by the pandemic and the poor performance of
the Group to ensure that all its decisions and
actions were taken with a clear governance
framework in place.
The Board is focused on turning around our
performance and resetting the Group onto a path
towardssustainableprofitablegrowth,whilst
ensuring that the Group also delivers for all its
stakeholders, especially during a time of great
challengeforourstaff,ourcustomersandthe
communities in which we operate. To achieve
this, the Board has worked on building resilient
governance structures for the long-term, whilst
at the same time supporting the Executive
management team in taking appropriate strategic
decisions in a rapidly changing world. The Group
has previously laid out a clear purpose supported
by a strong values-based framework and the
Board will continue to ensure that the Group is
run in a manner consistent with this framework.
Progress against 2020 governance
priorities
Last year my predecessor, Malcolm Paul,
outlined the Board’s priorities for 2021, which
were focused on navigating the operational
and economic impacts of the pandemic
on our business, our people and our wider
stakeholders; on completing a strategic review
of the Group’s operations; and on embedding
the Group’s purpose and values in line with the
recommendations of the Code. With the support
of colleagues across the Group, the Board
has made good progress on addressing these
priorities. The Group maintained operations
and, critically, a safe working environment
for our people through detailed COVID risk
assessment and mitigation as well as providing
wellbeing support to all those who required it.
The Executive team, supported by the Board,
completed its strategic review, which was
presented to shareholders at a Capital Markets
Day event in June 2021. In terms of embedding
the Group’s purpose and values, the Executive
team created employee representative groups
with the mandate of generating and then
implementing ideas on how best to embed the
Group’s purpose and values into day-to-day
activities. We have also continued to focus
on creating a positive impact, rather than just
words, through our work on Environmental,
Social and Governance (ESG) matters outlined
in the Sustainability report section of this report.
Board and Committee composition
During 2021, there were several changes to the
membership of the Board. I was appointed to
the Board as independent Non-Executive
Chairman on 1 May 2021, following the
retirement of Malcolm Paul as Non-Executive
Chairman on 30 April 2021. Following the
Company’s AGM on 29 April 2021, Stuart
Kilpatrick also stood down as Group Finance
Director. Duncan Kennedy was appointed Chief
FinancialOfficeron4May2021.
BothMalcolmandStuartcontributedsignificantly
to the development of the Group during their
tenure, and I would like to thank them on behalf
of the Board and wish them well for the future.
Since the last report, the Board has also
welcomed two new Non-Executive Directors:
Kash Pandya joined on 1 November 2021, and
Claire Hawkings joined on 1 January 2022.
I welcome them both to the Board and am
confidentthattheircontributionswillhelpto
shape James Fisher’s future in the coming years.
In line with best practice, Michael Salter, who has
served on the Board for almost nine years, will
retire from the Board from the date of the AGM
and will not seek re-election. The Board has
benefitedgreatlyfromMichael’sexperienceinthe
marine and oil and gas industries, and I would
like to thank him on behalf of the Board for his
support and constructive challenge throughout
his tenure.
2022 Governance priorities
Following a challenging 2021, the Board’s focus
in 2022 is on putting in place the governance
structures to support and enable the short-
term business objectives of reducing leverage
through improved operational performance and
the disposal of non-core businesses, as well as
supporting the implementation of the Group’s
long-term strategy. In order to support these
business objectives, the Board’s governance
priorities for 2022 include the review and
refinementofthedelegatedauthoritymatrix,and
the creation of a new Investment Committee
consisting of key members of the Executive team,
with the mandate to oversee capital expenditure,
acquisitions and disposals and the delivery
of key business projects. We are also in the
process of completing a detailed review of our
risk management systems and controls and will
then look to embed the improved risk framework
across the business. I look forward to reporting
on progress on these priorities next year.
UK Corporate Governance Code
The Board understands that good corporate
governance is an important element in helping
to build a successful business in a sustainable
manner. The UK Corporate Governance Code
2018, publicly available at www.frc.org.uk (the
Code) applied to the Company through the year,
and this report explains how the Company has
applied the principles set out in the Code.
During the year ended 31 December 2021 (and
up to the date of this report), the Company has
complied with the relevant provisions of the
Code, except in the instances set out explained
below: these two instances relate to the matters
disclosed in last year’s Annual Report, which are
relevanttothefirstpartofthe2021yearinreview,
but which have now been resolved.
Firstly, as outlined in the Chairman’s statement
in the 2020 Annual Report, by the time of the
Company’s AGM in April 2021, Malcolm Paul
had served as a Director for a period of 10
years. Whilst the Code recommends that
Non-Executive Directors should not serve on
a board for more than nine years, the Board
requested that Malcolm continued to serve
as Chairman whilst the Senior Independent
Non-Executive Director commenced a search
for a new Non-Executive Chairman, for the
reasons set out in the 2020 Annual Report.
As announced on 25 January 2021, and as
described in more detail in the 2020 Annual
Report, I joined the Board as independent
Non-Executive Director and Chairman on
1 May 2021 and Malcolm Paul stepped down
from his role as Non-Executive Director and
Chairman the previous day. Therefore the
Company was compliant with the Code
witheffectfrom30April2021.
Secondly, while the Code recommends that
Executive Director pension provisions should
be aligned with the workforce, and although it
was announced that Stuart Kilpatrick’s pension
provision would step down to 7.5% of salary from
1 January 2023 without compensation, Stuart
Kilpatrick stepped down from the Board with
effectfrom29April2021.Pensioncontribution
rates of both current Executive Directors are
aligned with those available to the workforce. The
Company therefore now complies with the Code.
In addition, the Company has focused recently
on how best to engage with the workforce
on Executive remuneration under one of the
elements of Principle 41. On page 101 of the
Remuneration Committee report, we outline the
steps undertaken so far by the Non-Executive
Directors to engage the workforce to explain
how Executive remuneration aligns with wider
Company pay policy. While the Company is
compliant with Principle 41, this is an area
of ongoing development, and the Company
intends to build on this during 2022 as part
of its engagement activities with employees.
Strategic report
Governance Financial statements
76 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 77
GovernanceGovernance
Governance framework
THE BOARD Chair: Angus Cockburn
Meets regularly, with at least seven scheduled meetings during the
year. During 2022 the Board met outside of the scheduled meetings to
discuss and approve event-driven matters, such as trading updates.
The Board is responsible for steering the Group’s purpose, culture and
values, for setting the Group’s strategic priorities and for overseeing
their delivery in a way that enables sustainable long-term growth, while
maintainingabalancedapproachtoriskwithinaframeworkofeffective
controls. It has a schedule of key matters which are reserved for its own
decision-making, which is reviewed annually and approved by the Board.
BOARD COMMITTEES
ToassistinfulfillingitsoversightresponsibilitiestheBoardhas
established Non-Executive and Management Committees that
provide dedicated focus to particular areas, and management of the
day-to-day operations of the business. Supported by its principal
Non-Executive Committees (Nominations, Audit and Remuneration
Committees), the Board sets the strategic direction of the business.
TheCommitteesoperatewithindefinedtermsofreferenceasdefined
by the Board. Each principal Board Committee is comprised of
independent Non-Executive Directors appointed by the Board. Terms
of reference are available upon request from the Group General
Counsel and Company Secretary and are also published on the
Company’s website. The Group General Counsel and Company
Secretary acts as secretary to each of the Committees. Each
Committee chair reports to the Board on the Committee’s activities
following each Committee meeting.
KEY MANAGEMENT COMMITTEES
Chairman
Leads the Board, sets the agenda and promotes a culture of open
debate between Executive and Non-Executive Directors.
RegularlymeetswiththeChiefExecutiveOfficer,theotherExecutive
Directors and other senior management to stay informed.
Ensureseffectivecommunicationwithourshareholders.
Senior Independent Non-Executive Director
Provides a sounding board to the Chairman and appraises his
performance.
Meets with Directors to review the Chairman’s performance.
This review is then shared with the Chairman.
Acts as intermediary for other Directors, if needed.
Available to respond to shareholder concerns when contact
through the normal channels is inappropriate.
Non-Executive Directors
Contribute to developing our strategy.
Scrutinise and constructively challenge the performance of
management in the execution of our strategy.
Non-Executive Director for Employee Engagement
Responsible for representing the voice of our colleagues in the
boardroom.
Provides a regular platform for the independent element of the
Board to have direct conversations with the employees, individually
and in group settings, to gain insights into their experiences,
concerns and perspectives, and to better understand whether the
cultural change is already underway.
Executive Directors
Responsible for management of the Group as a whole.
Delivers strategic objectives within the Board’s stated risk appetite
and delegated limits of authority.
ResponsibleformanagementofGroupfinancesandrecords.
Nominations Committee
Chair: Angus Cockburn
Meets at least three times a year.
Reviews the structure, size and composition
of the Board (including skills, knowledge,
diversity and experience) and recommends
changes.
Reviews succession planning for Directors
and senior executives.
Identifiesandnominatescandidatesfor
approvalbytheBoard,tofillvacancieswhen
they arise.
The Nominations Committee report on
pages 86 to 88 describes in detail the
Committee’s role and activities.
Corporate Functions
Day-to-day business delivery.
Executive Directors and heads of corporate
functions meet at the Risk Committee on a
quarterly basis.
Special Purposes Board Committee
Consisting of the Chairman and the Executive Directors
Meets according to business requirements.
Empowered,underwrittentermsofreference,totakespecific
actionsrelatingtotheaffairsoftheCompanyinthenormalcourseof
business and of a routine nature, subject to such limits as the Board
in its discretion determines.
Disclosure Committee
Consisting of the Chairman, the Executive Directors and the Group
General Counsel and Company Secretary
Meets when necessary.
Oversees the Company’s compliance with its disclosure obligations.
Audit Committee
Chair: Justin Atkinson
Meets at least three times a year.
Assists the Board in its oversight and
monitoringoffinancialreporting,reviews
theGroup’sinternalfinancialcontrolsand
systems for risk management and internal
controls and assesses independence and
objectivity of external auditor.
The Audit Committee report on pages 89 to
93 describes in detail the Committee’s role
and activities.
The Audit Committee report on
pages 89 to 93 describes in detail
the Committee’s role and activities.
Executive Committee
Chaired by Eoghan O’Lionaird
ConsistingoftheChiefExecutiveOfficer,
ChiefFinancialOfficer,HRDirector,Head
of Corporate Development, Group General
Counsel and Company Secretary, Group
Business Development Director, Group
FinancialControllerandfivedivisional
managing directors. The Head of Corporate
Development is also a divisional managing
director.
Meets monthly.
Responsible for supporting the Executive
Directors in the exercise of their delegated
authority from the Board and the day-to-day
operation of the Group.
Group Health and Safety Committee
Chaired by Group CEO
Meets on a quarterly basis.
Discusses all health and safety issues including incidents, root cause
analysis, mitigating actions and training requirements. Reports
updates on material safety incidents and developments to the Board.
Group Sustainability Committee
Chaired by Group CEO
Meets on a monthly basis.
Identifies,monitorsandcoordinatestheGroup’ssustainability
commitments, includes representation from each of the stakeholder
working groups. Works with sustainability champions from each
operating business. The Sustainability Committee report on pages 36
to 56 describes in detail the Committee’s role and activities.
Group Risk Committee
Chaired by Group CEO
Meets on a quarterly basis.
IdentifiesandmonitorsoperationalrisksthroughouttheGroup,
supports the internal control and risk management strategy and
policy. The Principal Risks section of this report on pages 61 to 69
describes in detail the Committee’s role and activities.
Remuneration Committee
Chair: Aedamar Comiskey
Meets at least three times a year.
Agrees the remuneration policy for Executive
Directors and oversees remuneration
for other senior executives; reviews the
appropriateness and relevance of the
Group’s remuneration policy; and ensures
that the provisions of the Code relating to
remunerationarefulfilled.
Reviews workforce remuneration and related
policies and the alignment of incentives
and rewards with culture, taking these into
account when setting the policy for Executive
remuneration.
The Directors’ remuneration report on
pages 94 to 110 describes in detail
the Committee’s role and activities.
Operating Divisions
Day-to-day business delivery.
Executive Directors meet on at least
a quarterly basis and have monthly
performance management calls with
managing directors of principal businesses.
Matters reserved for the Board
At least once a year the Board reviews the nature and scale of matters
reserved for its decision. These include:
Companystrategyandfinancialperformance
Internal control and risk management systems
ReviewoftheBoard’sowneffectiveness
Strategic report
Governance Financial statements
78 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 79
Governance
Board of Directors
N
A R N
A R N A R N
A R N A R N
A R N
Key
A
Audit Committee
R
Remuneration Committee
N
Nominations Committee
Chair of Committee
Member of Committee
1. Angus Cockburn
Independent Non-Executive
Chairman of the Board
Year of appointment: 2021
Appointment:
Angus was appointed Non-
Executive Chairman to the Board
and the Nominations Committee
on 1 May 2021
Key strengths and experience:
Extensive business leadership
experience.
Strongstrategicandfinancial
knowledge.
Angus joined from Serco Group
plc, where he was Group Chief
FinancialOfficer,apositionhe
held since October 2014. Angus’
previous roles have included
ChiefFinancialOfficerandInterim
Chief Executive of Aggreko plc,
Managing Director of Pringle of
Scotland,andseniorfinance
positions at PepsiCo Inc. He was
also previously a Non-Executive
Director of Howdens Joinery Group
plc and GKN plc.
He is a chartered accountant
with an MBA from the IMD
Business School in Switzerland
and is an Honorary Professor
at the University of Edinburgh
and a member of the Institute
of Chartered Accountants of
Scotland.
External appointments:
Senior Independent Non-Executive
Director of Ashtead Group plc;
Non-Executive Director of the
privately owned Edrington Group
Limited and Non-Executive Director
of Securities Trust of Scotland plc.
2. Eoghan O’Lionaird
Chief Executive Officer
Year of appointment: 2019
Appointment:
Eoghan joined the Group as an
Executive Director of the Board
in September 2019, and was
appointedChiefExecutiveOfficer
on 1 October 2019.
Key strengths and experience:
Strong leadership skills.
Clear strategic mindset.
Extensive international
experience.
Commercial and business
management.
Eoghan joined from Spectris
plc where he was Business
Group Director of the Materials
Analysis and Test & Measurement
segments from February 2014
through June 2019, having
previously been President of the
Leica Microsystems division of
Danaher Corporation in Germany.
Prior to that, he spent eleven
years at Royal Philips Electronics,
latterly as CEO of the Respironics
Sleep business unit in the USA.
He started his career with Mitsui
Kinzoku where he held a number
of engineering, commercial and
general management positions in
Japan, the US and Thailand.
External appointments:
None
3. Duncan Kennedy
Chief Financial Officer
Year of appointment: 2021
Appointment:
Duncan was appointed to the
BoardasChiefFinancialOfficer
on 4 May 2021.
Key strengths and experience:
Significantmanagerialand
financialexperience.
Track record of creating
sustainable stakeholder value
through both organic and
acquisitive strategies.
Duncan joined from BTG plc
(“BTG”), previously a FTSE250
international specialist healthcare
company, where he was Chief
FinancialOfficerfortwoyears
until the company was acquired
in 2019. Duncan joined BTG
in 2005 and held a number of
financeandcommercialleadership
positions from that time. Duncan
is a chartered accountant with a
primary degree in mathematics.
External appointments:
None.
4. Aedamar Comiskey
Senior Independent Non-
Executive Director
Year of appointment: 2014
Appointment:
Aedamar was appointed to
the Board in November 2014.
She was appointed chair of the
Remuneration Committee in May
2018 and Senior Independent Non-
Executive Director in March 2019.
Key strengths and experience:
Extensive global business
experience.
In-depth knowledge of legal,
regulatory and governance
issues for listed companies.
Aedamar is the Senior Partner
of Linklaters LLP, where she
has been a partner since 2001.
Aedamar specialises in mergers
and acquisitions, joint ventures
and fundraisings, and is the lead
relationship partner for many of the
firm’sFTSEclients.
External appointments:
Linklaters LLP and Trustee of
Tommy’s.
5. Justin Atkinson
Independent Non-Executive
Director
Year of appointment: 2018
Appointment:
Justin was appointed to the
Board in February 2018 and was
appointed chairman of the Audit
Committee in May 2018.
Key strengths and experience:
Significantoperationaland
financialexperiencethroughhis
previous and current roles.
Substantial experience on
boards of listed companies
in both executive and non-
executive roles.
Justin was formerly Chief Executive
OfficerofKellerGroupplcbetween
April 2004 and May 2015, having
previously held the position of
Group Finance Director and Chief
OperatingOfficer.Justinwasa
financialmanageratReutersplc,
andtrainedandqualifiedasa
chartered accountant at Deloitte
Haskins & Sells.
External appointments:
Chairman of Forterra plc and
Senior Independent Non-Executive
Director of Kier Group plc.
6. Michael Salter
Independent Non-Executive
Director
Year of appointment: 2013
Appointment:
Michael was appointed to the
Board in August 2013.
Key strengths and experience:
Significantoperationaland
strategic delivery experience
through a number of senior
management roles.
In-depth knowledge of oil and
gas and marine industries.
Michael was formerly Chief
OperatingOfficeratAbbotGroup
plc and earlier in his career, CEO
of Smedvig Limited and Vice
President and General Manager
of Bawden Drilling UK Ltd and
is a Chartered Engineer, Fellow
of the Institution of Mechanical
Engineers, and a Member of the
Institute of Marine Engineering and
Technology.
External appointments:
None.
7. Inken Braunschmidt
Independent Non-Executive
Director and the Non-Executive
Director for Employee
Engagement
Year of appointment: 2019
Appointment:
Inken was appointed to the Board
on 1 March 2019.
Key strengths and experience:
Strategy development.
Digital innovation.
Diversity & Inclusion.
Significantoperational
experience through her previous
and current roles.
Inken is Chief Innovation and
DigitalOfficerandmemberofthe
Executive Board at Halma plc.
Prior to joining Halma plc in 2017,
Inken spent 13 years at RWE
AG, the German energy giant,
and its renewables subsidiary
innogy SE, where she held various
international leadership roles
focusing particularly on strategy,
innovation, digital transformation
and change management. Inken
studied Innovation & Technology
at Kiel University and has a PhD
in Technology Management. Inken
is a committee member of the
Royal Academy of Engineering
Enterprise Hub.
External appointments:
None
8. Kash Pandya
Independent Non-Executive
Director
Year of appointment: 2021
Appointment:
Kash was appointed to the Board
on 1 November 2021.
Key strengths and experience:
Considerable international
leadership experience.
Strong knowledge of
manufacturing and service
businesses.
Kash is CEO of Helios Towers plc
(“HTWS”), a FTSE 250 company, a
post from which he will step down
at its AGM in April 2022 and then
assume the role of non-executive
Deputy Chairman for HTWS. Prior
to joining HTWS in 2015, Kash
spent eight years on the board of
Aggreko plc, with responsibility
for managing its European and
International businesses. Kash
previously worked for various
engineering and manufacturing
companies in a number of senior
roles, including Jaguar, General
Electric Company, Ford Motor
Company, Novar plc (then
Caradon) plc, APW Limited and
Johnston Group.
External appointments:
Helios Towers plc.
9. Claire Hawkings
Independent Non-Executive
Director
Year of appointment: 2022
Appointment:
Claire was appointed to the Board
on 1 January 2022.
Key strengths and experience:
Significantexperienceinthe
energy sector.
ESG/sustainability leadership
and management expertise.
Experience of the development
and delivery of organisational
strategies including business
process transformation,
leadership succession and
diversity and inclusion.
Extensive experience in
portfolio management and
leading complex commercial
transactions.
Claire is a Non-Executive Director
and chair of the ESG committee
of Ibstock plc, a market leading
manufacturer of clay and concrete
building products, as well as
a Non-Executive Director of
Defence Equipment and Support,
a Bespoke Trading Entity and
Arm’s Length Body of the Ministry
of Defence. Claire has over 30
years’ experience in the energy
sector, where she held a variety of
international leadership positions,
most recently with Tullow Oil plc,
and prior to that with BG Group plc
and British Gas plc.
External appointments:
Ibstock plc and Defence
Equipment and Support (a
Bespoke Trading Entity and Arm’s
Length Body of the Ministry of
Defence) and FirstGroup plc.
1
3
5
7
9
2
4
6
8
Strategic report
Governance Financial statements
80 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 81
Governance
Topic
Key activities and
discussions in 2021 Stakeholder considerations
Key priorities
for 2022
Organisational
capacity
Monitored health and safety
performance across the Group.
Health & safety governance and
reporting reviewed and enhanced.
Supported by the Nominations
Committee, monitored senior
executive talent management and
development plans with succession
planning for all key positions in mind.
Oversaw ongoing implementation of
employee strategy.
During 2021, the health and safety of those working
for the Group has been a keen area of focus for
and discussion by the Board, in particular ensuring
for a balance between seeking to continue the
Group’s delivery to its customers and suppliers, while
safeguarding the health and safety of its employees
workingindifficultconditions,madeharderbythe
ongoing impacts of COVID.
The Board has received safety updates from the
CEO at each Board meeting. In addition, Inken
Braunschmidt, in her role as designated Non-Executive
Director for employee engagement, has reported to
the Board on a regular basis on her activities, including
her discussions with employee representatives on the
employee engagement working group.
Members of the senior talent pipeline have been
invited to present to the Board on strategic priorities
and this will continue in 2022.
Continue to monitor
senior executive talent
management and
succession plans for all
key positions.
Continue to enhance
the diversity across the
Group.
Continue to hold
meetings with people in
the senior talent pipeline
to further improve
informationflow.
Monitor key initiatives
under employee strategy.
Improve employee
engagement at all levels.
Board
development
Continued to focus on the
composition, balance and
effectivenessoftheBoard,withthe
appointment of four new Directors.
Reviewed Board composition,
diversity, and discussed and acted
on the recommendations of the
Nominations Committee.
Undertook an external evaluation
of the Board, its Committees and
individual Directors, and developed
an action plan.
The Board has considered the interests of its
stakeholder groups in making changes to the
membership of the Board. In particular the Nominations
Committee has sought to make recommendations
for new Board members who bring expertise and
experience of working with all stakeholder groups, and
who can improve the engagement with those groups
and ensure that stakeholders’ voices are heard clearly in
the Boardroom.
Enhance the Board’s
strategic understanding
of key markets.
Increase the number
of Board site visits to
promote understanding
of markets, and to
promote employee
engagement with Board.
Annual internal
evaluation of Board and
Committee performance.
The Board understands the importance of
making visits to businesses in the Group to
engage with employees and to enhance Non-
Executive Directors’ knowledge of operations,
and to strengthen their individual contribution to
Board debate. Due to the ongoing restrictions
imposed as a result of the pandemic, Non-
Executive Directors’ visits to Group sites have
not been as extensive as originally planned
for 2021. However, as part of his induction
following his appointment as Chairman, Angus
Cockburn conducted a number of site visits
to the material operating sites in the UK. Non-
Executive Directors have also visited Group
sites, including Inken Braunschmidt, who
reported back to the Board on her discussions
with employees, in her role as designated Non-
Executive Director for employee engagement.
Justin Atkinson and Inken Braunschmidt
attended the Company’s senior leadership
conference held in Windsor in September
and talked about the Group’s governance
framework and the roles of the Board and
Committees, including the Remuneration
Committee’s role in aligning Executive pay with
workforce remuneration. The Board has a more
extensive programme of site visits planned for
2022, and operating managing directors and
functional heads continue to attend certain
Board and Committee meetings to talk about
areas of strategic focus. At the end of June
2021, the Company held a Capital Markets
Day at which members of the Board and senior
management team presented on the Group’s
key areas of strategic focus, with a video of the
event made available on the Group’s website.
Governance, risk and
internal controls
The Board is responsible for determining
the nature and extent of the principal risks
it is willing to take in achieving its strategic
objectives and for ensuring that the Company
maintains sound risk management and internal
control procedures. More information in relation
to those principal risks, the Group’s approach
to mitigating them, and the risk management
and internal control procedures within the
Group are set out in the Strategic report on
pages 61 to 69.
On behalf of the Board, the Audit Committee
monitors the Group’s risk management
and internal control process and reviews its
effectivenessonanongoingbasis.Thisispart
of an established process, in accordance with
the Code and the FRC’s associated Guidance
on Risk Management, Internal Control and
Related Financial and Business Reporting, for
theidentification,evaluationandmanagement
ofthesignificantrisksfacingtheGroup,
which operates and is reviewed continually
throughout the year.
Corporate governance report
Board focus in 2021
Through the course of 2021, at the same time
as the regular cycle of annual reporting and
planning processes, the Board has focused on
some key matters, including:
Trading: the Board received regular updates
from the Executive Directors in relation to the
Group’s trading.
Indebtedness:theBoardidentifiedreduction
of debt as a key priority and agreed a
refinancingprogramme,alongwithaplanfor
debt reduction, including a programme of
planned disposals, which is ongoing.
Board composition: the Board approved
a number of Board changes to key roles,
including Chairman, CFO and two Non-
Executive Directors.
Strategy:theBoardcontinuedtorefinethe
Group strategy to deliver sustainable growth
in shareholder value for the future.
Key Board activities
Key activities of the Board during 2021, how
the Board considered the interests of its
stakeholder groups in its decision making and
key priorities for 2022 are set out below:
Topic
Key activities and
discussions in 2021 Stakeholder considerations
Key priorities
for 2022
Trading
Received regular updates from the
Executive Directors on Group trading.
Invited divisional and operating
company MDs to present to the
Board on trading and strategic
delivery.
Carefully managed Group
indebtedness through the approval
ofrefinancing,andenhancedcash
forecasting process and a programme
of disposals.
The Board carefully considered the impacts of trading
updates during the year. The Board also balanced the
decision-making in relation to the dividends against
the Company’s trading, the need to reduce leverage
and the need for equitable treatment of all of the
Company’s stakeholders.
In working to address and reduce the Company’s
leverage, the Board in particular took into account the
views and interests of shareholders and employees.
Continue to maintain a
close review of Group
trading.
Ensure delivery of
disposals programme
and successful
implementation of
enhanced cash
forecasting process.
Strategy
Approved strategic priorities for
sustainableprofitablegrowthand
addressing the energy transition.
Delivered summary of strategy at
Capital Markets Day.
Reviewed implementation plans for
each strategic priority, ensuring they
align with the Group’s sustainability
strategy.
The Board received updates on strategic
implementation from the operating companies.
In reviewing implementation, and agreeing on strategic
priorities, the Board sought to balance the impact
of prioritisation on all stakeholder groups, notably
shareholders, employees and the environment.
Oversee implementation
of strategic priorities.
Ensure reduction of
Group indebtedness.
Building KPIs for
strategic priorities.
Risk
management
Reviewed risks management systems
and controls.
Considered key principal risks in
individual risk “deep dives”.
Agreed actions for improvement of
risks management controls.
The Board has sought to improve the Group’s risk
management systems and controls during 2021, and
discussions on this, including with PwC which has
advised the Company in this regard, took into account
the Group’s principal risks from the point of view of
each stakeholder group, with particular focus in 2021
on risks in relation to cyber, recruitment and retention,
operating in emerging markets and climate change.
Oversee implementation
of risk management
controls improvements.
Ongoing principal risk
“deep dives”.
Improvements in analysis
of emerging risks and
risk appetite.
Governance
Engaged with institutional shareholder
and other stakeholders throughout
the year.
Reviewed and approved the 2021
Annual Report and Accounts.
Approved updated Board Diversity
Policy.
Approved a whistleblowing hotline
platform for individuals to raise
concernsconfidentially.
Approved improvements to the
governance framework.
The Group’s materiality assessment undertaken in
2021 involved input from representatives from both
internal and external stakeholder groups, including
representatives from the Group’s working groups
which have been set up to consider the interests
of the stakeholder groups. The Board reviewed the
results of the assessment and, taking all views into
account, agreed that governance as one of the
most material matters for the Group. The Board
confirmedgovernanceasoneofthekeypillarsof
the Group’s sustainability strategy, with actions (as
set out on page 51), and their potential resulting
impacts on stakeholder groups discussed and
agreed at the Board.
Maintain and enhance
the Group’s culture and
values and key policies
and procedures.
Oversee governance
framework
improvements.
Continue to strengthen
internal controls and
reporting.
Strategic report
Governance Financial statements
82 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 83
Governance
Training and development
Ongoing training and development for Directors
is available as appropriate and is reviewed and
agreedwiththeChairmanannually.Specific
and tailored updates were provided by external
advisers and management to the Audit,
Nominations and Remuneration Committees.
Key themes included trends and changing
disclosurerequirementsregardingfinancial
and narrative reporting, accounting and
auditing standards and remuneration
developments. During the year the Board
also received reports from the Group
General Counsel and Company Secretary
on compliance, as well as current legal and
governanceupdates.TheBoardisconfident
that all its members have the knowledge,
ability, and experience to perform the functions
required of a director of a listed company.
Upon appointment to the Board, Directors
undertake an induction programme, receiving
a broad range of information about the
Group tailored to their previous experience.
This includes information on the operational
performance and business of the Group
and details of Group strategy, corporate
governance and Board procedures. The
programme also includes one-to-one meetings
with all Board and Executive Committee
members, as well as individual site visits to
key Group operating sites to understand
the business and meet management teams.
Assisted by the Group General Counsel
and Company Secretary, the Chairman has
responsibility for these induction programmes,
and for the Board’s training and professional
development.
Stakeholders
The stakeholder voice is brought into the
boardroom throughout the annual cycle
through information provided by the Executive
Directors (as well as representatives from the
Group’s businesses and functions who are
invited to present to the Board), and through
regular updates from Directors on their
engagement activities with the stakeholders
themselves. This includes regular updates:
from the Chairman and the Executive
Directors on their discussions with investors;
from the Company’s brokers on the feedback
received from investors;
from the Executive Directors, HR Director and
Inken Braunschmidt (in her role as designated
Non-Executive Director for employee
engagement) in relation to employee
engagement;
from the Group CEO on feedback from
customers;
from the senior management team on their
engagement with employees, customers,
suppliers, local communities; and
from the Sustainability Committee on
the Group’s approach to reducing its
environmental impacts.
On pages 20 and 21 of our Strategic report,
we set out our principal stakeholders, how
we engage with them, the issues which are
important to them and how we respond. The
relevance of each stakeholder group may
increase or decrease depending on the matter
or issue in question, so the Board seeks to
consider the needs and priorities of each
stakeholder group during its discussions and
as part of its decision-making. On page 82 we
set out how the Board has taken into account
the interests of stakeholders when discussing
and agreeing decisions on key matters in 2021.
Purpose, culture and values
The Board recognises the importance of its
role in building a sustainable business by
setting the tone of James Fisher’s purpose,
culture and valued behaviours, and embedding
them throughout the Group. Our core valued
behaviours and our Code of Ethics (the
behaviours we expect) underpin everything that
we do and set out the type of organisation we
want to be. Everyone who works for and with
us is required to comply with these.
The Executive Directors set the tone of our
organisation and demonstrate our valued
behaviours. Various indicators are used to provide
insight into our culture, including employee
engagement and health and safety. We regularly
assess the state of our culture, through activities
such as employee engagement surveys and
compliance reviews, and we address behaviour
that falls short of our expectations.
Financial and business reporting
The Board considers that the Annual Report
and Accounts taken as a whole present a fair,
balanced and understandable assessment
of the Group and provides the information
necessary for shareholders to assess the
Group’s position, performance, business model
and strategy. More information about how this
assessment was made is set out in the Audit
Committee report on page 90.
The going concern assessment is set out in
the Directors’ report on page 111; the viability
statement is set out in the principal risks
section of the Strategic report on page 69; and
the Strategic report on pages 12 to 13 sets
out an explanation of the Company’s business
model and the strategy for delivering the
Company’s objectives.
BOARD EVALUATION
AGREED ACTIONS
Action
Increased number and regularity of Director
site visits.
Progress in 2021/22
2022 site visit schedule agreed, including
increased number of Non-Executive site
visits.
Action
Notwithstanding all Non-Executive Directors
are on all Committees, enhanced reporting
to the Board from Committees, and a
Non-Executive Director meeting as part of
each set of scheduled Board/Committee
meetings.
Progress in 2021/22
Improved formal reporting from Committees
at each scheduled Board meeting.
Non-Executive Directors meet separately at
each set of scheduled meetings.
Action
Improvements to process for Directors’
feedback on Chairman’s performance.
Progress in 2021/22
Process agreed and implemented in 2021.
Action
Ongoing improvements in Board discussions
on risk management.
Progress in 2021/22
PwCreportonriskmanagementidentifies
improvements which are being implemented
in 2022.
Action
Developments to the structure, management
and documentation for Board and
Committee meetings.
Progress in 2021/22
Complete in 2021.
Action
Improvements to the induction programme,
information and site visits for new Board
members.
Progress in 2021/22
Improvements implemented and used
for inductions of Kash Pandya and Claire
Hawkings.
Corporate governance report cont.
The Group’s governance framework is
described in more detail on pages 78 and
79. The Group’s internal control systems are
designed to provide the Board with reasonable
assuranceastotheeffectiveandefficient
operation of the Group in accordance with
the governance structures, and to ensure
the quality of internal and external reporting
and compliance with all applicable laws and
regulations. However, there are inherent
limitations in any system of internal control
andaccordinglyeventhemosteffective
system can provide only reasonable and not
absolute assurance. During 2022, we will be
implementing improvements to the governance
structure, in particular around the process and
application of delegated limits of authority.
As part of its internal control procedures, the
Group maintains policies and processes for
whistleblowing, anti-bribery and corruption
and to uphold its zero-tolerance approach to
any form of modern slavery. More information
in relation to those policies are included in the
principal risks and uncertainties section of the
Strategic report on page 69 and in the non-
financialinformationstatementonpages
70 and 71.
The Board has carried out a robust
assessmentoftheoveralleffectivenessofthe
Group’s system of internal controls and risk
management procedures; and of the principal
risks facing the Group, including those that
would threaten its business model, future
performance, solvency or liquidity; and of
emerging risks. This included a process of
self-certificationbythemanagementteams
of each trading business in which they were
askedtoconfirmthattheirbusinesseshave
complied with Group policies and procedures.
During 2021, PwC LLP undertook a review
of the Group’s risk management controls and
systems,followingwhichtheBoardconfirmed
that, although the controls and systems are
adequate, further improvement could be
brought, and a programme of enhancements
in risk management controls and systems has
been agreed, for implementation in 2022. More
detail on this is set out on page 61. Details of
thereportonthereviewoftheeffectiveness
of the risk management and internal control
systems is included in the principal risks and
uncertainties section of the Strategic report on
pages 61 to 69.
Board composition
Details about the current composition of the
Board are set out in the biographies of the
Directors on pages 80 and 81.
Board diversity
The Board believes that increasing diversity
at the Board level is important to achieve
its strategic objectives, and to attract and
retain the best people, as well as cultivating
a culture of inclusion and diversity through
clear tone from the top, with Board and
Executive Committee championing diversity
and inclusion in their own membership,
and throughout the Group. Supported by
the Nominations Committee, the Chairman
monitors the composition of the Board to
ensure that it is made up of an appropriate
mix of skills, experience and knowledge
requiredtoeffectivelyoverseeandsupportthe
management of the Group and the delivery
of the strategy, having regard to the interests
of the Group’s stakeholders – shareholders,
customers and suppliers, employees, the
environment and local communities. When
considering candidates for the Board, the
Nominations Committee, on behalf of the
Board, takes into account factors such as:
professional experience, skills, education,
international and industry knowledge, social
mobility, disability, age, ethnicity and gender.
The Nominations Committee report on pages
87 and 88 sets out its progress in this respect,
along with an example of the Nominations
Committee’s work in identifying a new
Non-Executive Director candidate on
behalf of the Board.
In 2021 the Board approved a new Board
Diversity Policy, in which new objectives were
set with regard to gender diversity in line with
the Hampton-Alexander Review and ethnic
diversity in line with the recommendations of
the Parker Report. As at the date of this report,
the Board has three women on the Board
representing 33% of the Directors and one
Director from an ethnic minority background
(11%).
The Executive Committee comprises 12
individuals, four of whom are women (33%).
Board evaluation
Before the end of each year, the Board
undertakes an annual evaluation of the
performance of the Board, the Remuneration,
Nominations and Audit Committees, and the
individual Directors including the Chairman
againsttheframeworkofBoardeffectiveness
produced by the Financial Reporting Council
(“FRC”).
In 2021, the Board appointed the Chartered
Governance Institute (“CGI”) to undertake an
externally facilitated evaluation. The CGI has
no other connection with the Company or any
individual Director. The external evaluation
involved the following:
CGI representatives met the Group General
Counsel and Company Secretary and the
Chairman individually and together to discuss
and agree the format, method and scope of
the evaluation.
CGIundertookconfidential,structured
one-on-one interviews with each of the
Directors and the Group General Counsel and
Company Secretary, at which each person
was asked for their views on the quality of
seven aspects of the Board and Committee’s
performance to ascertain whether they
met their needs and expectations. The
seven topics were: role and responsibilities;
oversight; meetings; support for the Board/
Committees; Board/Committee composition;
effectivenessworkingtogether;andoutcome
and achievements.
The resulting report included an assessment
on each of the topics and summarised any
specificcommentsmade,includingany
suggestions for areas of improvement.
CGI provided an overall “good” assessment
for the Board and Committees, noting that
the Board is committed and cohesive,
notwithstandingthesignificantchangesin
membershipduring2021,andidentifiedsome
areas for improvements. The Board discussed
and approved the suggested improvements
for implementation in 2022, as shown on page
85. The actions agreed following the evaluation
have not resulted in any planned changes to
the composition of the Board.
The annual review of individual Directors’
performance was conducted internally,
based on the process recommended by CGI
as part of their evaluation. The Chairman’s
performance was reviewed by the other
Non-Executive Directors led by the Senior
Independent Non-Executive Director and
taking into account the views of the Executive
Directors. The performance of the Executive
Directors was reviewed by the Non-Executive
Directors with the Chairman in attendance. The
Chairman and the Executive Directors reviewed
the performance of each of the other Non-
Executive Directors. The Board considers that
eachDirectorcontinuestocontributeeffectively
and to demonstrate commitment to the role.
Strategic report
Governance Financial statements
84 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 85
Governance
Lygon Group was instructed to search for
Non-Executive candidates with strong sector
experience. This process resulted in the
appointment of Claire Hawkings.
Hedley May was instructed to search for a
new CFO with proven experience in a listed
and diverse group. This process resulted in
the appointment of Duncan Kennedy.
The graphic below sets out an example of the
selection and appointment process undertaken
by the Nominations Committee, in this case
leading to the appointment of Claire Hawkings
to the Board as a Non-Executive Director.
The process that led to the appointment of
Angus Cockburn as Non-Executive Chairman
is set out on page 64 of the 2020 Annual
Report. Aedamar Comiskey, as the Senior
Independent Director, chaired those meetings
and Malcolm Paul was not involved in the
selection process, nor in the appointment.
The Committee keeps under regular review
succession planning at the Executive Director
level and supports succession planning at
senior management levels to ensure a diverse
pipeline. The Group HR Director has also
briefed the Committee on the talent review and
actions undertaken in relation to the Group’s
top management positions.
Director induction, training and
development
As Non-Executive Chairman, I am responsible
for the formal induction of all new Directors,
assisted by the Group General Counsel and
Company Secretary. Each new Director is
provided with the necessary background
materials to familiarise themselves with the
Group, and meetings are arranged with other
members of the Board, the Group General
Counsel and Company Secretary, and
members of the Executive Committee.
Site visits to businesses around the Group are
arranged to provide a deeper understanding
of the Group’s operations, risks and strategic
priorities. Following my appointment earlier in
the year, I undertook an induction programme,
which included in-person site visits and
management meetings at the Group’s key
sites. Induction programmes for Kash Pandya
and Claire Hawkings are underway, with
in-person site visits in 2022.
Assisted by the Group General Counsel and
Company Secretary, I am also responsible
for the Board’s training and professional
development. Directors were given
presentations during 2021 on topics such
as developments in corporate governance
andfinancialreporting,aswellasDirectors’
remuneration. Directors will continue to receive
regular training updates from appropriate
internal and external specialists on governance
andriskissues,andonfinancialandreporting
standards. In addition, Directors are fully
aware of their own responsibility for identifying
andsatisfyingtheirownspecifictraining
requirements. In 2022, the Board has planned
a schedule of site and vessel visits, including
management and employee engagement
meetings, in order to deepen the Board’s
understanding of the operations of the Group’s
businesses and management teams.
Board composition and time
commitment
There were eight Directors on the Board as at
31 December 2021, comprising the Non-
ExecutiveChairman,ChiefExecutiveOfficer,
ChiefFinancialOfficerandfiveindependent
Non-Executive Directors. The names and
biographical details of the members of the
Board are set out on pages 80 and 81. Claire
Hawkings joined the Board on 1 January 2022.
The Company judged the Non-Executive
Chairman to be independent at the time of his
appointment and considers all other Non-
Executive Directors to be independent under
the terms of the Code. As announced on 17
December 2021, Michael Salter, who has
served on the Board for almost nine years is
stepping down at the date of the AGM.
Under the Code, the reasons for the Board
permittingitsmemberstoenterintosignificant
new external appointments should be explained
in the Annual Report. On 30 April 2021, the
Company announced that Angus Cockburn had
been appointed a Non-Executive Director of
Securities Trust of Scotland Plc. On 24 January
2022, the Company announced that Claire
Hawkings had been appointed Non-Executive
Director of FirstGroup Plc. The Committee
keeps under review the time commitments of
theDirectorstoensurethattheyhavesufficient
timetodischargetheirdutieseffectively.Aspart
of the process of the appointment to the Board
of Angus Cockburn, Duncan Kennedy, Kash
Pandya and Claire Hawkings, the Committee
assessed the time commitments required by
their other roles. In the case of Angus Cockburn,
thevalueofhissignificantexecutiveandnon-
executive experience was taken into account
alongside his existing commitments when
approving his appointment. The Board also
considered Angus’ plans to take on a role at
Securities Trust of Scotland plc before Angus
started his role at the Company, and concluded
thathehadsufficienttimeforbothroles.Inthe
cases of Kash Pandya and Claire Hawkings,
the value of their international, leadership and
operational experience were taken into account
alongside their existing external appointments
when approving his appointments. Duncan
Kennedy has no external appointments.
The Nominations Committee agreed
adetailedcandidateprofilesetting
out the capabilities and experience
required, in particular strong energy
sector experience.
The process to appoint a new
Non-Executive Director was led by the
Non-Executive Chairman.
An external executive search consultant
was appointed by the Committee
to support the process and identify
candidatesfittingtheagreedprofile.
Following the interviews, each person
who had met with the shortlisted
candidates provided feedback to the
Non-Executive Chairman.
The Nominations Committee
discussed the relative merits of
each candidate and agreed that the
Committee would recommend to
the Board that Claire Hawkings be
appointed as Non-Executive Director.
The Board approved the appointment,
totakeeffecton1January2022.
The Non-Executive Chairman
considered a full list of candidates with
the executive search consultants. The
full list was shared with the Nominations
Committee, which agreed a shortlist of
candidates to be invited for interview.
Following initial interviews with the
Non-Executive Chairman and
Nominations Committee members, the
number of candidates was reduced.
TheChiefExecutiveOfficerand
remaining Nominations Committee
members met with the shortlisted
candidates.
Nominations Committee report
The Nominations Committee reviews the
leadership and succession needs of the
Company and ensures that appropriate
procedures are in place for nominating,
training and evaluating Directors.
Overall, our objective is to ensure that the Board
is balanced, with the Directors having a broad
range of knowledge, skills and experience to
ensuretheteamworkstogethereffectively
in discharging its responsibilities, including in
relation to corporate governance. We recognise
thebenefitsofadiverseseniorleadershipteam,
including diversity of skills, sector experience,
background, gender, and ethnicity.
2021 in review
During 2021 there were the following changes
in membership of the Board:
Following the Company’s AGM in April 2021:
‒ Malcolm Paul (Non-Executive Chairman)
retired from the Board. Please refer to the
explanation provided on page 52 of the
2020 Annual Report relating to Malcolm’s
tenure on the Board extending beyond
nine years.
‒ Stuart Kilpatrick (Group Finance Director)
stepped down from the Board.
On 1 May 2021:
‒ Angus Cockburn joined the Board as
Non-Executive Chairman. Angus Cockburn
joined the Group from Serco Group Plc,
where he had been Group Chief Financial
OfficersinceOctober2014.Angusisa
Non-Executive Director of Ashtead Group
plc, the Securities Trust of Scotland Plc,
and the privately owned Edrington Group
Limited. He was previously Non-Executive
Director of Howdens Joinery Group plc and
GKN plc.
On 4 May 2021:
‒ Duncan Kennedy joined the Board as Chief
FinancialOfficer.DuncanKennedyjoined
the Group from BTG plc (“BTG”), previously
a FTSE250 international specialist
healthcare company, where he was Chief
FinancialOfficerfortwoyearsuntilthe
company was acquired in 2019.
On 1 November 2021:
‒ Kash Pandya joined the Board as a new
Independent Non-Executive Director.
Kash is currently CEO of Helios Towers plc
(“HTWS”), a FTSE 250 company, a post
from which he will step down at its AGM in
April 2022. He will then assume the role of
Non-Executive Deputy Chairman for HTWS
from that point.
Also during 2021:
‒ On 17 December 2021, the Company
announced that Claire Hawkings would join
theBoardwitheffectfrom1January2022,
and that Mike Salter would retire from the
Board following the Company’s AGM on 5
May 2022.
‒ the Board approved a new Board Diversity
Policy (more detail below).
On 1 January 2022, Claire Hawkings joined
the Board as a Non-Executive Director. Claire
is currently a non-executive director and
chair of the ESG committee of Ibstock plc, a
non-executive director of Defence Equipment
and Support, a Bespoke Trading Entity and
Arm’s Length Body of the Ministry of Defence,
and a non-executive director and chair of the
responsible business committee of FirstGroup
plc. Claire has over 30 years’ experience in
the energy sector, where she held a variety of
international leadership positions, most recently
with Tullow Oil plc, and prior to that with BG
Group plc and British Gas plc.
Board appointments and
succession planning
The Committee leads the process for Board
appointments and makes recommendations to
the Board within its agreed terms of reference.
Appointments are made having regard to the
balance of skills and experience of current
Directors as well as the diversity on the Board,
including gender and ethnicity. The Committee
adopts a formal, rigorous and transparent
procedure for the appointment of new Directors
to the Board, working with independent
executive search consultants.
During 2021, the Committee has sought
support from a number of specialist executive
search consultants, including Korn Ferry,
Lygon Group and Hedley May, none of which
has any connection with the Company (other
than assisting with recruitment), nor with any
individual Director. This included searches for
a new Non-Executive Chairman, an Executive
Director, as well as for two new Independent
Non-Executive Directors to increase the
diversity of the Board:
Korn Ferry was instructed to focus on Non-
Executive Chairman candidates with strong
operational and non-executive experience.
This resulted in the appointment of Angus
Cockburn.
Korn Ferry was instructed to focus on
Non-Executive candidates with a strong
operational/listed company CEO experience
in related sectors. This resulted in the
appointment of Kash Pandya.
MEMBERSHIP SINCE
Angus Cockburn (Chair, following Malcolm Paul’s departure in May 2021) 2021
Michael Salter 2013
Aedamar Comiskey 2015
Justin Atkinson 2018
Inken Braunschmidt 2019
Kash Pandya 2021
Claire Hawkings 2022
Key objectives
Reviewing the composition of the Board and succession planning.
Key responsibilities:
To regularly review the structure, size and composition of the Board (including skills,
knowledge, independence and experience) and recommend any changes.
Succession planning for Directors and senior executives of both the Company and the
operating businesses, taking into account the challenges and opportunities facing the
Company and the skills and expertise therefore needed in the future.
Identifying and nominating candidates for Board positions, for approval by the Board.
The Committee’s terms of reference are available on the Group’s website.
Meets at least three times a year. During 2021 the Nominations Committee met four times.
Process leading to the appointment of Claire Hawkings
Strategic report
Governance Financial statements
86 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 87
Governance
Audit Committee report
Dear shareholders
I am pleased to present the report of the
Audit Committee for the year ended
31 December 2021.
The Audit Committee supports the Board
in discharging its responsibility for oversight
andmonitoringoffinancialreporting,risk
management and internal control. As Chairman
of the Audit Committee it is my responsibility
toensurethattheAuditCommitteefulfils
its responsibilities in a rigorous and
effectivemanner.
2021 has been a very challenging year for
the Group not only as a result of the ongoing
impacts of the COVID pandemic, including on
the working conditions of all of our employees,
but also due to the market and operational
issues referred to in the Chief Executive’s review
on pages 24 and 25. However, I am pleased to
report that the Group’s established procedures
and systems to identify, mitigate and manage
risksenabledthefinancialreportingprocessto
continue uninterrupted during the year, despite
the many challenges presented by these
issues.Iwouldliketothankthefinanceteam
and the external audit team for their sustained
commitment.
The Audit Committee remains focused on
ensuring compliance with the UK Corporate
Governance Code 2018 (the Code) and is
committed to ensuring the highest standards
of corporate governance. In line with the Code,
thisreportseekstofocusonspecificaspects
considered by the Audit Committee during
the year and aims to provide assurance to
our shareholders that the control environment
of the Group is being properly supervised
and monitored.
IamsatisfiedthattheAuditCommitteeis
properly constituted with written terms of
reference, which include all matters referred to
in the Code and is provided with good quality
information to allow proper consideration to
be given to topics under review. I am also
satisfiedthatmeetingsarescheduledtoallow
sufficienttimefordiscussionandtoensure
that all matters are considered fully. The Audit
Committee’s terms of reference are available
on our website.
Of particular importance is the requirement
toensurethattheGroup’sfinancialreporting
is fair, balanced and understandable. We
thereforereviewalltheGroup’sfinancialreports
before publication, including where necessary
alternative performance measures, and we are
satisfiedthattheyprovideafair,balancedand
understandable assessment of the Group’s
position and performance.
MEMBERSHIP SINCE
Justin Atkinson, Chairman of the Audit Committee 2018
Michael Salter 2013
Aedamar Comiskey 2014
Inken Braunschmidt 2019
Kash Pandya 2021
Claire Hawkings 2022
Key objectives
TomonitortheintegrityoftheGroup’sreportingprocessandfinancialmanagementand
toensurethatrisksarecarefullyidentifiedandassessedandthatsoundsystemsofrisk
management and internal control are in place.
Key responsibilities:
The accounting principles, policies and practices adopted in the Group’s accounts.
Reviewingexternalfinancialreportingandassociatedannouncements.
Managingtheappointment,independence,effectivenessandremunerationoftheGroup’s
external auditor, including the policy on the award of non-audit services.
Initiating and supervising a competitive tender process for the external audit when next
required.
Theresourcing,plansandeffectivenessofInternalAudit.
Theadequacyandeffectivenessoftheinternalcontrolenvironment.
The Group’s risk management processes and performance.
The establishment and oversight of fraud prevention arrangements.
The provision of advice to the Board on whether the Annual Report and Accounts, when
taken as a whole, is fair, balanced and understandable and provides all the necessary
information for shareholders to assess the Company’s position, performance, business
model and strategy.
The Committee holds a minimum of three scheduled meetings during the year.
The experience gained in all these external
roles held by our Board members broadens
and deepens the knowledge and experience
oftheDirectors,whichinturnbenefits
the Company.
Directors standing for election
or re-election
The Committee discussed and unanimously
recommended that each of the Directors should
be put forward for election or re-election by the
shareholders at the AGM scheduled for 5 May
2022, with the exception of Michael Salter who
willnotbeseekingre-electionhavingnotifiedthe
Board of his intention to retire following the AGM
on 5 May 2022, after almost nine years’ service
as an Independent Non-Executive Director. In
making this recommendation the Committee
members (with each Committee member
recusing themselves from the discussion
and recommendation in relation to their own
re-election) have evaluated each Director in
terms of their performance, their commitment
to the role and their capacity to discharge their
responsibilitiesinaneffectivemannergiventheir
other time commitments and responsibilities.
Board evaluation
The Board carries out a Board/Committee
evaluation each year, and in 2021, the Board
appointed the Chartered Governance Institute
(“CGI”) to undertake an external evaluation,
which has no connection to the Company
or any individual Director. Further details of
the 2021 external evaluation are set out on
pages 84 and 85. Following the review of
CGI’s external evaluation, the Committee
believestheBoardfunctionseffectivelyand
efficiently,andisappropriateforaGroup
of its size. The Committee considers that
each Director demonstrates the knowledge,
ability and experience required to perform the
functions of a director of a listed company
and is of the calibre necessary to support and
develop the Company’s long-term strategy
and success. The Committee also considers
that no individual or small group of individuals
dominates discussions or the decision-making
process.
Diversity and inclusion
Diversity is a matter we consider constantly
toensurewebenefitfromtherightbalance
of skills, experience, thought leadership and
knowledge. That balance is derived from
effectivediversitywhichtheBoardconsidersto
be an important factor in its own membership,
and throughout the Group. Diversity arises
from a number of potential sources, including
in respect of professional experience,
skills, education, international and industry
knowledge, social mobility, disability, age,
ethnicity and gender. The Board’s intention
is to maintain diversity in all its senses in its
own constitution, and to encourage the same
throughout the organisation.
In 2021, a new Board Diversity Policy was
approved by the Board, in which new
objectives were set with regard to (i) gender
diversity, in line with the recommendations of
the Hampton-Alexander Review; and (ii) ethnic
diversity, in line with the recommendations of
the Parker Report. The latest Board Diversity
Policy is available on the Company’s website.
The recommendations of the Committee and
decisions by the Board with respect to Board
changes during 2021 took into account the
Board Diversity Policy.
The female representation on the Board at
relevant dates is/will be as follows:
33%, at the date of publication of this report;
37.5%, at 5 May 2022, following the
retirement of Mike Salter from the Board; and
25%, at 31 December 2021, prior to the
1 January 2022 appointment of Claire
Hawkings.
The Board has met its objective to comply with
the recommendations of the Parker Report.
Following the appointment of Kash Pandya
in 2021, the Board has one Director from an
ethnic minority background (11%, currently).
TheChiefExecutiveOfficerchairsan
Executive Committee of 12 people, with
women representing 33% of the Executive
Committee at 31 December 2021. Apart from
creating a forum to bring together a range of
specialist skills and experience it also acts as
a platform for our succession strategy into the
future. Within the wider leadership team, being
the Executive Committee and those reporting
to members of the Executive Committee, there
are 38 women, representing 33%. Further
information about the Company’s approach to
diversity and inclusion is set out in the Strategic
report at page 44.
2022 priorities
The Committee’s priorities for 2022 are:
to consider the key skills, experience and
requirements for succession planning
for the Board;
to keep under review succession planning at
the Executive Director level and to support
succession planning at senior management
level; and
to monitor the Group’s progress towards
increasing the relative diversity in senior
management positions.
Angus Cockburn
Non-Executive Chairman of the Board
and Nominations Committee
9 March 2022
Nominations Committee report cont.
Strategic report
Governance Financial statements
88 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 89
Governance
Significant issues and accounting
judgements
The Audit Committee has a primary
responsibility to review the integrity of the
Annual Report and Accounts and the Interim
Statement of the Company, which includes the
review and discussion of papers prepared by
management and takes account of the views
of the external auditor. The key areas reviewed
inthe2021financialyeararesetoutinthe
graphic below:
The Audit Committee considered these
matters and how they were tested and
reviewed, including the judgements and
disclosures and representations made.
Revenue recognition and contract
disputes
The estimation of contract margin
andthelevelofrevenueandprofitto
recognise in a single accounting period
requires the exercise of management
judgement. In addition the Group has
a number of projects where payments
of amounts invoiced or considered
due under of the contract have yet to
be paid, or were delayed during the
year (for example, Subtech’s project in
Mozambique). The Committee reviewed
key estimates and judgements applied
indeterminingthefinancialstatusofthe
moresignificantprojects.
APMs and separately disclosed items
The Committee gave careful consideration
to the judgements made in the disclosure
of alternative performance measures
as set out in note 2, and of separately
disclosed items set out in note 5. In
particular, the Committee sought to
ensure that the treatment followed
consistent principles and that reporting
in the accounts is suitably clear and
understandable. The Committee
considered the appropriateness of items
included within separately disclosed items
and concluded that the judgements made
are appropriate.
Goodwill valuation
The Audit Committee considered the
Group’s carrying value of goodwill
and impairment reviews based on
underlying assumptions, together with
the achievability of long-term forecasts
and the discount rates applied to forecast
cashflows.Seniormanagementprovided
detailed analysis to determine the
sensitivity of the outcome to changes in
keyassumptionsandwearesatisfiedthat
the judgements made are both reasonable
and appropriate.
Audit Committee report cont.
Audit Committee composition
TheBoardissatisfiedthataschairofthe
AuditCommittee,Ihavesignificantand
relevantfinancialexperiencebeingachartered
accountantwhoformerlyservedasfinance
director of a FTSE company. I have been
attending audit committee meetings for
over 20 years and have chaired three other
FTSE company committees. The members
of the Audit Committee collectively have
broadfinancial,commercial,professional
and technical experience and as a whole are
considered to have competence relevant to
the sectors in which the Group operates. Audit
Committee attendance is shown on page 75.
DetailsoftheAuditCommittee’sspecific
responsibilities and how it exercises those
responsibilities are set out in the remainder
of this report. The performance of the Audit
Committee (alongside the Board and the other
Committees) was externally evaluated during
the year by the Chartered Governance Institute
and, although the Committee continues to
look for continuous improvement, this provided
assurance that the Audit Committee discharges
its duties and responsibilities in accordance
with its terms of reference. Further details in
relation to the evaluation can be found on
pages 84 and 85.
Audit Committee meetings
TheAuditCommitteemetfivetimesduring
the year. The February, March and September
meetings were scheduled on dates to coincide
withthefinancialreportingcycle.TheAudit
Committee’s meeting in January was held to
discuss the role of PwC as co-sourcing partner
for internal audit. The Audit Committee was
attended by the Committee members, the
CompanyChairman,ChiefExecutiveOfficer,
ChiefFinancialOfficer,GroupGeneralCounsel
and Company Secretary, the internal auditor,
andtheGroupfinancialcontroller,togetherwith
representatives of the external auditor, and the
internal audit co-sourcing partner.
At each scheduled meeting the Audit
Committee provides the opportunity to discuss
matters privately with the external auditor and
the internal auditor. In addition, the Chairman
of the Audit Committee holds regular meetings
and phone calls with the reporting partner of
external auditor, KPMG LLP (KPMG) to discuss
matters related to the Group.
Matters of particular focus for the
Audit Committee during 2021
January 2021
The role of PwC LLP as the co-sourced
partner for the internal audit team, looking
at the extension of their remit to cover both
internal audit of overseas Group locations, as
well as to cover specialist items where PwC’s
specialist resources could be of additional
benefittotheGroup.
February and March 2021
Review of the 2020 results, Annual Report
and announcement, including a review to
ensure the report was fair, balanced and
understandable.
Specificdisclosuresandseparatelydisclosed
items.
Going concern and viability statement.
Impairment assessment review.
External Auditor report.
Review of external auditor performance and
remuneration for 2020.
Review of the Group’s principal and
emerging risks.
Review of Internal Audit work during 2020, and
approval of the Internal Audit plan for 2021.
Review of internal auditor performance 2020
(including PwC as co-sourced partner).
August 2021
Review of the 2021 Half Year results, Interim
Statement and announcement.
Going concern review.
External Auditor Half Year report.
Approval of KPMG’s External Audit plan
for 2021.
Review of the Group’s principal and emerging
risks.
Reviewofadequacyandeffectivenessof
Group’s internal control and risk management
systems.
Review of Internal Audit assurance work
to 30 June 2021.
November 2021
Governance review, looking in particular at
the Company’s preparations for additional
reporting obligations following BEIS’s
consultation on Restoring Trust in Audit and
Corporate Governance, and in relation to
guidance published by the Taskforce on
Climate-related Financial Disclosures (TCFD).
Review of risk management controls and
systems, led by PwC.
Review of Internal Audit on their work for
the year, approval of the Internal Audit
programme for 2022.
Financial reporting
The Audit Committee’s primary responsibility
inrelationtotheGroup’sfinancialreporting
is to review and challenge where necessary,
with both senior management and the external
auditor, the appropriateness of the Group’s
Interim Statement and Annual Report and
Accounts, with particular focus on:
whether suitable accounting policies have
been adopted and properly applied;
the clarity of disclosures and compliance
withfinancialreportingstandardsand
relevantfinancialandgovernancereporting
requirements; and
whether management has made appropriate
estimates and judgements in material areas
or where there has been discussion with or
issues raised by the external auditor; and
whether 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.
Fair, balanced and
understandable
In making its assessment in relation to the
assessment on whether the Annual Report and
Accounts is fair, balanced and understandable
and provides the information necessary for
shareholders to assess the performance,
strategy and business model of the Company.
The Board has taken into account its own
knowledge of the Group, its markets, its
strategy and performance in the year, a review
of content of the Annual Report and Accounts
andotherperiodicfinancialstatements
and announcements, together with the
recommendation from the Audit Committee.
Key considerations of the Committee have
included ensuring that there is consistency
between the accounts and the narrative
provided in the front half of the Annual Report
and Accounts, and that there is an appropriate
balance between the reporting of weaknesses,
difficultiesandchallenges(inparticularwith
reference to the Group’s principal risks and
uncertainties, as set out on pages 61 to 69),
as well as successes, in an open and
honest manner.
The Audit Committee reviewed the
appropriateness of the going concern
assumptions on page 111 in preparing the
financialstatements.Thisincludedareview
of papers prepared by senior management,
which were based on the approved budget
and strategic plan for each Group company
and the Group as a whole. The review took into
considerationavailablefinancingfacilitiesand
facility headroom. Taking account of the impact
of the COVID pandemic and other possible
changes that may impact trading performance
and availability, we expect the Group to
maintain the appropriate headroom under its
borrowing facilities for the forthcoming year.
Wearesatisfiedthatthegoingconcernbasis
of preparation continues to be appropriate in
preparingthefinancialstatements.
The Audit Committee reviewed the Company’s
viability statement set out on page 69 and in
particular took care to understand the analysis
which was prepared by management, and
supports the Board’s view that the Company
will be able to continue in operation and meet
its liabilities as they fall due over the period
assessed. The analysis included a review of the
Group’s strategic plan overlaid by a number
of assumptions and sensitivities, including
the need for and availability of additional
bank facilities, an assessment of the likely
downside sensitivities aligned to the Group’s
principal risks, and the potential impact of
those sensitivities on its business model, future
performance, solvency and liquidity over the
period, and taking into account the potential
mitigatingactions,andtheeffectivenessofthe
Group’s risk management and control systems,
as well as current risk appetite.
Going concern and viability
statements
In light of COVID and in common with other
businesses, the imperative of encouraging
an even wider range of sensitivity scenarios
than usual to be developed to enhance the
supporting evidence in relation to the going
concern basis of accounting and viability
statement in the 2021 Annual Report was
recognised and acted upon. This included
detailed review of: contractual risk in winning
larger contracts and operating in more
geographies with partners potentially exposed
to increased risk of late payment or cost
overruns; project delivery risk that a project
may not be delivered in line with the budgeted
profitandpaymentterms;potentialincreasein
the need for guarantees to secure contracts;
andtheongoingavailabilityoffinancing,
following the creation of a new syndicated
RCF during 2021.
Strategic report
Governance Financial statements
90 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 91
Governance
The FRC stated in its letter that its review
was based solely on the Annual Report and
Accountsanddidnotbenefitfromdetailed
knowledge of the James Fisher business or an
understanding of the underlying transactions
entered into and that its letter provided no
assurance that the annual report and accounts
were correct in all material respects; the FRC’s
role was not to verify the information provided
but to consider compliance with reporting
requirements.
BEIS Consultation on Restoring
Trust in Audit and Corporate
Governance
As noted above, the Committee discussed
the Company’s preparedness for the potential
additional reporting obligations in November
2021. In order to strengthen the Company’s
regimeforinternalcontrolsoverfinancial
reporting, which is expected to be one of the
main outcomes following consultation, we have
appointed a senior manager, previously Head
of internal audit, to the post of Head of internal
controlswitheffectfromJanuary2022.
Task Force on Climate-Related
Financial Disclosures (“TCFD”)
In discharging its responsibility for the integrity
of corporate reporting, the Audit Committee
has reviewed the Group’s disclosures in
response to TCFD recommendations,
contained in the TCFD report on page 52 of
this report. The Committee notes that the
Group has made progress in its consideration
and understanding of climate-related impacts
ontheGroupandfinancialreporting,although
there is more work to be done, in particular
around scenario analysis and metrics/targets,
with a roadmap set out for ongoing actions set
outinthereport.TheCommitteeissatisfied
that the disclosures represent a fair, balanced
and understandable assessment of current
progress and looks forward to reporting in
more detail in next year’s report.
Conclusion
The Audit Committee operates in an open
manner, has clear and concise channels of
communication with the Board and, should it
be necessary, I would be available to meet with
investors. I will also be available to answer any
questions at the AGM.
Justin Atkinson
Chairman of the Audit Committee
9 March 2022
The Company has complied throughout the
financialyearunderreview,anduptothe
date of this report, with the provisions of the
Statutory Audit Services for Large Companies
Market Investigation (Mandatory Use of
Competitive Tender Processes and Audit
Committee Responsibilities) Order 2014.
Non-audit services
The Audit Committee accepts that certain
non-prohibited work is best undertaken by the
external auditor and to safeguard the external
auditor’s objectivity and independence the
Audit Committee has a policy on engagement
of the external auditor for non-audit services,
which includes a requirement for Audit
Committee approval if the permitted services
exceed a threshold of £50,000.
The Audit Committee reviews the policy
annually and recommends it to the Board for
approval. In accordance with relevant Audit
Regulations and standards published by the
FRC in June 2016, the Audit Committee has
not engaged the external auditor on matters
restricted by those Regulations and standards,
and fees from permitted work (including the
interim statement) have been pre-approved
by the Audit Committee. KPMG were not
instructed to carry out any prohibited non-audit
services during 2021.
KPMG provided the following non-audit
services to the Group during 2021, all of which
were approved by the Audit Committee:
under the Norwegian Companies Act,
KPMG provided an assurance service on
the control and review procedures over the
tax submissions in relation to Scantech AS.
The work does not result in any accounting
judgements and the fee for this service
was £1.25k.
KPMG carried out the Group’s interim
statement for the period ended 30 June 2021.
The fee amounted to £0.1m.
Internal audit
The Audit Committee is responsible for
reviewing the work carried out by the internal
audit department which considers, reviews
andreportsonkeycommercial,financial
and control risks across the Group. The
internal audit function undertake their work
in accordance with an annual programme
approved by the Audit Committee. The scope
of each internal audit review is agreed by
the Audit Committee in consultation with the
internal auditor to ensure that key areas for
each business are addressed.
As internal audit increased its use of both
remote-working and co-sourced assistance
from PwC, the number of internal audits
increased in the year, following lower 2020
levels impacted by the COVID pandemic. In
total 13 internal audits were undertaken in
2021(2020:10),includingfivecarriedoutby
our co-source partner outside the UK (2020:
none). Reports in relation to the internal
audits carried out were presented to the Audit
Committee for review and shared with senior
managers for action, as well as being provided
to the external auditor for information. There
werenofindingsintheinternalauditreports
which are considered material to the Group.
The internal auditor is responsible to the Audit
Committee for ensuring that all required actions
are followed up and completed in a timely
manner. It is planned that internal audit will
move to a fully outsourced function led by PwC
in early 2022.
Followingthefinal2021review,theAudit
Committee recommended and the Board
concluded that the Group’s internal audit
processwasappropriateandeffectivedespite
the ongoing impact of the COVID pandemic.
TheeffectivenessoftheGroup’sinternalaudit
function is continually reviewed, including an
annual formal review undertaken by the Board
andtheAuditCommittee,withthebenefitof
feedback from Group businesses and functions
which have been subject to internal audit
during the year.
FRC correspondence
During 2021 (and as disclosed in the 2020
Annual Report and Accounts) the Company
concluded its correspondence with the FRC in
relation to certain matters in the 2019 Annual
Report and Accounts, principally relating to
the accounting for the Group’s investment in
Murjan Al-Sharq for Marine Contracting LLC,
and disclosures in relation to provisions and
contingent liabilities.
The FRC acknowledged the Company’s
explanations and closed their enquiries on
the basis that the Company would provide
enhanced disclosure in relation to the points
raised where material, which were included in
the 2020 Annual Report and Accounts. The
Company also agreed to the FRC’s request
for it to publish the Company’s name, together
with the fact of the FRC review into the 2019
Annual Report and Accounts, along with its
summaryofitsfindings.
Audit Committee report cont.
Risk management and internal
controls
The Board has overall responsibility for the
Group’s risk management and internal control
systems,includingfinancial,operationaland
compliance controls. The Audit Committee is
responsible for monitoring and reviewing the
effectivenessofthesesystemsandtheGroup’s
internal audit function.
The Board received regular reports throughout
the year from the Group Risk Committee and
we have reviewed the Group’s systems of risk
management and internal controls, including
financial,operationalandcompliancecontrols.
As part of its review, the Audit Committee
probed the robustness of the Company’s
risk management controls and systems and
the level of engagement at all levels of the
Group with risk management processes.
This resulted in an independent review being
commissioned from PwC in relation to the risk
management controls and systems. The Audit
Committee has concluded that the systems
aresoundandeffective,andfollowingthe
PwC review, the Committee made a number
of recommendations for ongoing improvement
in this area, which the Board approved for
implementation in 2022.
Reports on internal control failings mainly
arising from internal audits are referred to the
Audit Committee for review and oversight to
ensure that appropriate and timely actions are
identifiedandcompleted.Theinternalcontrol
failings are graded based on materiality within
the context of that operating company, and
an action plan with associated timeframes is
agreed with the relevant management team.
Progress against that plan is reported to the
Audit Committee on an ongoing basis until
the actions are complete. During the year
there were no instances of internal control
failure brought to the attention of the Audit
Committee which are considered material to
the Group. A more detailed summary of the
Group’s risk management and internal control
systems is set out in the principal risks and
uncertainties section of the Strategic Report
on pages 61 to 69, along with a description of
some of the actions taken and planned to bring
improvements to those controls.
In order to further increase the emphasis on the
importance of risk management and internal
controls, the Committee will invite to each of its
meetings from February 2022 a management
team of a recently audited operating company
topresentonthefindings,actionsand
progress report.
Anti-bribery and corruption
We have an established anti-bribery and
corruption policy aimed at ensuring adherence
to the associated legal and regulatory
requirements. The policy includes sections
in relation to:
the Group’s zero tolerance approach to
payment of bribes;
the reasonableness and proportionality of
offeringorreceiptofgiftsorhospitality;
the appointment and management of third
parties who are engaged to assist with our
sales and marketing activities, including
approval via procedures which include
appropriate internal and external due diligence
using web-based tools provided by Control
Risks (the international risk consultancy).
The Group tracks its agent and joint venture
relationships and reports them back to the
Board on a regular basis; and
the Group’s condemnation of facilitation
payments.
The Group has anti-bribery and corruption
training in place which is provided on induction,
and each business maintains a training log for
its people which is reported back to the Audit
Committee via internal audit twice annually.
In addition, the Group legal team provides
bespoke anti-bribery and corruption training to
those employees who are working in areas of
higher bribery and corruption risk.
During 2021, the Group legal team presented
to the Board on the management and
mitigation of the key risk relating to operating
in emerging markets, with the Board agreeing
a number of improvements to be implemented
during 2022, including: increasing engagement
with external experts and local representation
to improve visibility and management of local
jurisdictional risks; rationalisation of third
party relationships; ongoing improvements to
training; and introduction of an international,
independently-managed whistleblowing hotline.
External audit performance
The Audit Committee continually assesses
the performance of the external auditor,
KPMG, from the initial planning stage when
they receive and discuss the audit plan and
proposed strategy, approach, objectives,
significantriskareasandotherareasoffocus,
drawing on input from the Group’s senior
management, until conclusion of the audit.
As part of the most recent assessment of
effectiveness,theAuditCommitteehastaken
into consideration the guidance issued by the
FRC. The Audit Committee conducts annually
a formal assessment of the external auditor’s
performance based on its own experience
and that of the Group’s senior management.
The assessment considered the degree
of challenge to management, the issues
identifiedandthequalityofexplanations.
The results of the review are considered by
the Audit Committee and discussed with
KPMG who provide input on the preparedness
oftheGroup’sownfinanceteamsandthe
conclusions are reported to and discussed by
the Board. The Audit Committee recognises
that the quality of an audit is paramount.
Particular note was taken of the current year
audit work, considered against the backdrop
of the COVID pandemic, which has presented
practical process challenges and required
enhanced audit requirements. The Committee
issatisfiedthatKPMGprovidedaneffective
audit and remain independent and objective.
KPMG are recommended for re-appointment
at the Company’s forthcoming AGM.
KPMGwerefirstappointedtoauditthe
Company in 2008. They were re-appointed
external auditor of the Company in 2017,
following a competitive tender process. 2021 is
thelastfinancialyearwhichcanbeundertaken
by lead audit partner, Mike Barradell. During
2021, Mike worked with the Audit Committee
to introduce potential replacements to the
Company,followingwhichAilsaGriffinhas
been appointed as lead audit partner for the
2022financialyear.Totheextentpermittedby
independence rules Ailsa has been shadowing
Mike during 2021 on the Company’s Audit.
Details of the external auditor’s remuneration
for 2021 are set out in note 4 on page 139. In
2021, there has been an increase of 25% in
audit fees from the prior year as a result of the
challenges faced by KPMG in undertaking their
work remotely and reduced materiality following
thereductioninprofits.TheCommitteenotes
thebackdropofsignificantincreasesinaudit
fees over recent years for FTSE companies.
Strategic report
Governance Financial statements
92 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 93
Governance
Annual statement
Introduction by Aedamar
Comiskey, Chair of the
Remuneration Committee
On behalf of the Board, and the Remuneration
Committee (the Committee), I am pleased to
present the Directors’ remuneration report for
the year ended 31 December 2021.
This report is comprised of two parts, namely:
Part 1 – Remuneration policy report – which
provides a summary of the remuneration policy
approved by shareholders at the 2021 AGM, as
context for the Committee’s decision-making in
relation to remuneration in 2021 and 2022; and
Part 2 – Annual report on remuneration –
which sets out payments and awards made
to the Directors and details the link between
Company performance and remuneration for
2021, and how we intend the remuneration
policy will operate for 2022. This part of the
report will be put to an advisory vote at the
2022 AGM.
Work of the Committee
during 2021
During 2021, the Committee addressed the
following main activities, having due regard to
the ongoing impact of COVID on the Group
and the broader performance context:
assessing performance against the targets set
for the 2020 annual bonus awards;
setting the targets for the 2021 annual bonus;
assessing performance against the targets
set for the 2018 LTIP awards and determining
vesting levels;
agreeing the award levels and performance
targets for the 2021 LTIP awards; and
agreeing the Chairman’s fee and Executive
Directors’ base salaries to apply from
1 January 2022.
In addition, the Committee has sought to
ensure that its Policy and practices remain
consistent with the six factors set out in
Provision 40 of the 2018 UK Corporate
Governance Code:
Clarity – The current Policy is understood
by our senior executive team, and we
have sought to articulate it clearly to our
shareholders and representative bodies (both
on an ongoing basis and during consultation
when material changes are being made).
MEMBERSHIP SINCE
Aedamar Comiskey, Chair of the Remuneration Committee since May 2018 2014
Michael Salter 2013
Justin Atkinson 2018
Inken Braunschmidt 2019
Kash Pandya 2021
Claire Hawkings 2022
Key objectives
The Committee’s objectives are to create a fair, equitable and competitive total reward
package that supports the Group vision and strategy; and to ensure that rewards are
performance-based, encourage long-term shareholder value creation and are straightforward
to communicate and operate.
Key responsibilities:
Designing the remuneration policy
Implementing the remuneration policy
Ensuring the competitiveness of reward
Designing the incentive plans
Setting incentive targets and determining award levels
Overseeing all share awards across the Group
The Committee meets at least three times a year
Strategic report
Governance Financial statements
94 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 95
Governance
Simplicity – The Committee is mindful of the
need to avoid overly complex remuneration
structures which can be misunderstood and
deliver unintended outcomes. Therefore, a
key objective of the Committee is to ensure
that our executive remuneration policies and
practices are straightforward to communicate
and operate.
Risk – Our policy has been designed to
ensure that inappropriate risk-taking is
discouraged and will not be rewarded, via:
(i) the balanced use of both short-term
(annual) bonuses and longer-term incentive
plans (LTIPs), which employ a blend of
financial,non-financialandshareholderreturn
targets;(ii)thesignificantroleplayedbyequity
in our incentive plans; and (iii) malus/
clawback provisions.
Predictability – Our incentive plans are
subject to individual caps, with our share
plans also subject to market standard dilution
limits.
Proportionality – There is a clear link
between individual reward, delivery of strategy
and the Group’s long-term performance.
Inaddition,thesignificantroleplayedby
incentive/‘at-risk’ pay, together with the
structure of the Executive Directors’ service
contracts, ensures that poor performance is
not rewarded.
Alignment to culture – Our executive
pay policies are aligned to culture through the
use of metrics in both the annual bonus and
LTIP that measure how we perform against
our KPIs.
Pay and performance in 2021
James Fisher encountered another challenging
year in 2021, with performance outcomes
againstourprimaryfinancialmeasures
as follows:
Underlyingprofitbeforetaxof£19.7m
(2020: £31.5m); and
Underlying diluted earnings per share 20.0p
(2020: 47.9p).
Notwithstanding the ongoing challenging
trading conditions faced during the year,
the Committee notes that the Group did not
furlough any employees during 2021 (nor did
it make further use of the government support
available to it).
Executive Directors’ bonus potential for
2021 was capped at 100% of salary, with
70%basedonmeetingtheGroup’sfinancial
objectives and 30% based on individual
achievement and personal objectives. However,
asaresultoftheGroup’sfinancialperformance
for the year ended 31 December 2021 being
below the thresholds set at the start of the year,
the Remuneration Committee concluded that it
would not be appropriate to award any annual
bonus to the Executive Directors with respect
to 2021, notwithstanding that the personal
objectives were again partially met.
Awards under the LTIP granted in 2019 (a cycle
in which neither Eoghan O’Lionaird nor Duncan
Kennedy participated) are due to vest in April
2022. However, as a result of failing to hit the
threshold earnings per share (EPS) and total
shareholder return (TSR) targets, LTIP awards
are expected to lapse in full.
Further detail of the targets and achievement
against them is set out on pages 102 to 104.
Shareholder feedback
The Committee is grateful for the strong
shareholder support at the 2021 AGM for
both the binding resolution to approve the
remuneration policy, and the advisory
resolution to approve the Annual statement
and Annual Report on Remuneration. We
remaincommittedtoeffectiveandregular
engagement with our shareholders in relation
to remuneration, and hope that we can count
on your continued support.
2022 remuneration
There are no changes proposed for the
remuneration policy. A summary of the
proposed approach to the implementation of
the remuneration policy in 2022 is as follows:
no change to the base salaries of Eoghan
O’Lionaird and Duncan Kennedy (£530,000
and £350,000 respectively);
no change to the pension contributions
received by the Executive Directors (noting
that their pension contributions, at 7.5% of
salary, are aligned with the average of the
wider UK workforce);
no change to the annual bonus opportunity
of 100% of salary which, for 2022, will be
based50%onadjustedoperatingprofit,20%
onoperatingcashflow,and30%onpersonal
objectives (including ESG-related objectives);
and
in respect of 2022 LTIP awards for Executive
Directors, awards will be made as normal
after the announcement of the 2021
preliminary results, with opportunities set
within the normal limit of 125% of salary.
50% of awards will be based on 3-year EPS
growth, 25% of awards will be based on
relative TSR, and the remaining 25% based
on Return on Capital Employed (ROCE)
targets. The Committee agreed this slight
change to the LTIP scorecard to align better
with our stated strategy for sustainable
profitablegrowth,detailsofwhichwere
presented to shareholders at our Capital
Markets Event in June 2021. The 2022 LTIP
scorecarddirectlyalignswiththefinancial
pillars of this strategy (a refocus on returns
and margin improvement to drive sustainable
profitablegrowth)whilsttherelativeweighting
reflectstheimportancetoourshareholdersof
the Group delivering both growth and returns.
At the time of signing this report, the EPS
and ROCE performance targets attaching
to these awards have not yet been agreed
by the Committee. Consistent with previous
cycles, the TSR element will vest subject to
the Group’s relative TSR performance being
at least median (25% vesting) with full vesting
requiring performance to be at least upper
quartile. EPS and ROCE targets will be set
to be appropriately stretching. These will be
disclosed in the RNS announcement at the
time of making the awards; and in next year’s
Directors’ remuneration report.
Witheffectfrom1January2022,thefees
payable to the Chairman and Non-Executive
Directors are unchanged.
I hope you will join me in supporting the
remuneration-related resolution at the AGM
on 5 May 2022.
Aedamar Comiskey
Chair of the Remuneration Committee
9 March 2022
Directors’ remuneration report
Strategic report
Governance Financial statements
96 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 97
Governance
ELEMENT
PURPOSE
AND LINK
TO STRATEGY OPERATION MAXIMUM
PERFORMANCE
TARGETS
Salary
Designed to attract,
retain, motivate and
reward the necessary
high calibre individuals
to the Board.
Basesalariesareafixedannualsum
normallyeffective1Januaryand
payable monthly in cash.
Salaries are reviewed each year,
normallyeffective1January
and recognising the individual’s
performance and experience,
developments in the relevant
employment market and having
regard to the Group’s performance
as well as comparing each
Executive Director’s base salary
to market data.
No prescribed
maximum salary
or salary increase.
Salaries are set for
each Executive Director
within a range around
the market median
for similar positions in
appropriate comparator
companies. The
Committee is also
guided by the general
increase for the
employee population
although increases may
be higher or lower than
this to recognise, for
example, an increase
in the scale, scope
or responsibility of
an individual and/or
performance.
Not applicable.
Pensions
Tooffercompetitive
retirementbenefits
Executive Directors are eligible to
jointheGroup’sdefinedcontribution
scheme, receive a company
contribution into a personal
pension scheme or be paid a cash
supplement in lieu of pension.
Workforce aligned on or
before 1 January 2023.
Not applicable.
Benefits
Tooffercompetitive
benefits
Provision of a company car or
cash alternative, life assurance and
healthcareinsurance.Otherbenefits
may be provided where appropriate.
Thesebenefitsdonotformpartof
pensionable earnings.
No prescribed
maximum.
Not applicable.
Annual bonus
To incentivise and
reward the Executive
Directors to deliver
annualfinancialand
operational targets.
Payable on the achievement of
financialandpersonalobjectives
and non-pensionable.
Thefirst70%ispayableincash.
Bonus in excess of 70% of basic
salary is subject to deferral into
shares, with awards vesting after
three years, subject to normal
good/bad leaver provisions, but
no further performance targets.
Dividend equivalent payments may
be awarded (in cash or shares).
Malus and clawback provisions
operate.
Up to 100% of base
salary.
Majority of the bonus
potential is based
onfinancialtargets
derived from the
annual plan; and a
minority of the bonus
potential based on
individual achievement
and personal
objectives.
Directors’ remuneration report cont.
Remuneration policy report
Overview of Directors’
remuneration policy
James Fisher and Sons plc operates in
a competitive international environment.
To continue to compete successfully, the
Committee considers that it is essential that
the level and structure of remuneration and
benefitsachievetheobjectiveofattracting,
retaining, motivating and rewarding the
necessary high calibre individuals at all levels
of the business. The Company therefore sets
out to provide competitive remuneration to all
of its employees, appropriate to the business
environment in those countries in which
it operates.
Theremunerationstrategy,asasignificant
contributor to competitive advantage, is
designed to support the Company’s corporate
strategy, and to align with the Company’s
valued behaviours of pioneering spirit, integrity,
energy and resilience.
A cohesive reward structure with a timely
pay review process, consistently applied
to all employees and with links to corporate
performance, is seen as critical in ensuring
all employees can associate with, and are
focused on, the attainment of the Company’s
strategic goals. Accordingly, the remuneration
package for the Executive Directors is normally
reviewed annually. Where an Executive
Director’s responsibilities change during the
course of a year, the Committee will consider
whether a review is appropriate, outside
of the annual process.
Executive remuneration reviews are based
upon the following principles:
total rewards should be set at appropriate
levelstoreflectthecompetitivemarketin
which the Company operates, and to provide
a fair and attractive remuneration package;
reward elements should be designed to
reinforce the link between performance and
reward. The majority of the total remuneration
package should be linked to the achievement
of appropriate performance targets; and
Executive Directors’ incentives should be
aligned with the interests of shareholders.
This is achieved through setting performance
targets to reward increase in shareholder
value and through the Committee’s policy
to encourage shareholding by Executive
Directors.
How the Directors’ remuneration
policy relates to the wider Group
The remuneration policy set out within this
report provides an overview of the structure
that operates for the Executive Directors in the
Group. Employees below Executive level have
a lower proportion of their total remuneration
made up of incentive-based remuneration, with
remuneration driven by market comparators
and the impact of the role of the employee in
question. Long-term incentives are reserved
for those judged as having the greatest
potentialtoinfluencetheGroup’sdelivery
of strategy and Group performance. The
Remuneration Committee considers pay
and conditions across the workforce when
reviewing and setting the Executive Director
remuneration policy. During 2021, members of
the Committee engaged with employees on a
number of matters (more detail on page 20),
including in relation to the role and activities
of the Remuneration Committee in overseeing
Executive remuneration. The 2021 employee
engagement survey also sought feedback on
the Group’s approach to remuneration, with
resulting actions planned at both a Group and
business level. Wider engagement on Executive
remuneration is planned in 2022 as part of the
Board’s employee engagement initiatives.
How shareholders’ views are
taken into account
The Committee takes an active interest
in stakeholder views on our executive
remuneration policy and its operation, and
is particularly mindful of the concerns of
shareholders. At the 2021 AGM, both the
proposed remuneration policy and the Annual
report on remuneration were supported by a
significantmajorityofshareholders.Inadvance
of the AGM, the Committee consulted with
the Company’s major shareholders and the
main representative groups in relation to
the proposed changes to the Company’s
remuneration policy, the vast majority of
feedback received on which was supportive.
Directors’ remuneration policy
The table on the following pages summarises
the remuneration policy approved by
shareholders at the 2021 AGM. This policy
tookeffectfromthatdateforaperiodofup
to three years. Minor amendments have been
made to the drafting of this policy from the
version approved by shareholders in 2021
(which can be found in the 2020 Annual
Report) including: (i) the data used in the pay-
for-performance scenarios; (ii) page references;
and (iii) the sections on Executive Director
service contracts and Non-Executive Director
lettersofappointment,toreflectchangesin
Board composition during 2021.
Strategic report
Governance Financial statements
98 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 99
Governance
Malus and clawback provisions
Malus and clawback provisions operate in respect of the annual bonus (cash and deferred shares) and LTIP awards, with Committee discretion to
applythemintheeventofamaterialmisstatementintheCompany’sfinancialresults,miscalculation,seriousreputationaldamagetotheCompany,
in the event it is discovered that the participant committed serious misconduct that could have warranted summary dismissal or a corporate failure/
insolvency.
The Committee may decide to operate the malus and clawback provisions within a three-year period commencing on the date that the cash part of
any annual bonus is paid (for cash and deferred share bonus awards), and within a three-year period of any LTIP vesting date.
Scenario charts
£0
£500
£1,000
£1,500
£2,000
£2,500
Minimum
£596
100.0%
100.0% 49.6% 32.9% 27.8%
22.4%
28.0%
29.8% 25.1%
37.3%
47.1%
50.0% 33.3% 28.1%
22.2%
27.8%
29.6%
37.0%
25.0%
46.9%
£1,192
£1,788
£2,120
Fixed
Annual bonus
LTIP
£387
£781
£1,174
£1,393
On-target
Eoghan O’Lionaird Duncan Kennedy
Maximum Maximum
+ 50% share
price growth
Minimum On-target Maximum Maximum
+ 50% share
price growth
Remuneration (£000)
Approach to recruitment
New Executive Directors will be appointed on remuneration packages with the same structure and elements set out in the Directors’ remuneration
policy table. Ongoing incentive pay/share-based awards will be limited to:
Maximum annual bonus of 100% of salary; and
LTIP award of up to 200% of salary.
Forexternalappointments,theCommitteemayofferadditionalcashorshare-basedelementstoreplacedeferredorincentivepayforfeitedbyan
executive when leaving a previous employer. It would seek to ensure, where possible, that these awards would be consistent with awards forfeited in
terms of vesting periods, expected value and performance conditions. Shareholders will be informed of any such payments as soon as practicable
following the appointment.
For an internal appointment, any variable pay element awarded in respect of the prior role may be allowed to pay out according to its original terms.
In addition, any other ongoing remuneration obligations existing prior to appointment may continue, provided that they are put to shareholders for
approval at the earliest opportunity.
For external and internal appointments, the Committee may agree that the Company will meet certain relocation and incidental expenses as
appropriate.
Directors’ remuneration report cont.
ELEMENT
PURPOSE
AND LINK
TO STRATEGY OPERATION MAXIMUM
PERFORMANCE
TARGETS
LTIP
To align the interests
of the Executive
Directors with the
Group’s long-term
performance, strategy
and the interests of
shareholders.
Annual grant of share awards.
Non pensionable.
A two-year post-vesting holding
period applies to awards granted
to Executive Directors.
Malus and clawback provisions
operate.
Up to 200% of base
salary. Awards above
125% will be subject to
stretch targets.
Sliding scale targets
linkedtofinancial,
share price and/or
strategic metrics.
No more than 25%
of an award vests at
threshold, increasing
to 100% vesting at
maximum.
Share
ownership
To ensure alignment
between the interests of
Executive Directors and
shareholders.
Executive Directors are required
to retain half of the shares vesting
after tax under the LTIP until the
guidelines are met.
Post cessation guidelines apply
to share awards granted following
the 2021 AGM. In determining the
relevant number of shares to be
retained post cessation, shares
acquired from own purchases and
share awards granted prior to the
2021 AGM will not be counted.
In Employment:
200% of base salary for
all Executive Directors.
Post cessation:
100% of the “in
employment”
requirement, until the
second anniversary of
cessation (or the actual
shareholding if the
guideline has not been
met at cessation).
Not applicable.
Sharesave
To encourage share
ownership and align
the interests of all
employees and
shareholders.
An all-employee share plan As per prevailing HMRC
limits.
Not applicable.
Non-
Executive
Directors
To provide fees
toreflectthetime
commitment and
responsibilities of each
role in line with those
provided by similarly
sized companies.
Fixed annual fee, paid quarterly
in cash reviewed annually: the
Committee determines the
Chairman’s fees. The Chairman
and Executive Directors determine
fees for the other Non-Executive
Directors.
No prescribed
maximum fee or fee
increase, although
fees are limited by the
Company’s Articles of
Association. The Board/
Committee is guided
by market rates, time
commitments and
responsibility levels.
Not applicable.
Notes:
(1) ThechoiceoftheperformancemetricsapplicabletotheannualbonusreflecttheCommittee’sbeliefthatanyincentivecompensationshouldbeappropriately
challengingandtiedtothedeliveryofbothfinancialandpersonalobjectives;
(2) LTIPperformanceconditionsareselectedbasedonthedeliveryoflong-termreturnstoshareholdersandtheGroup’sfinancialgrowthandareconsistentwith
theCompany’sstrategy.Whereoperated:(i)TSRperformanceismonitoredbyanindependentadvisor;and(ii)EPSgrowthisderivedfromtheauditedfinancial
statements;
(3) The Committee operates its share plans in accordance with the plan rules and the Listing Rules. The Committee, consistent with market practice, retains discretion
over a number of areas relating to the operation and administration of the plans (e.g. treatment of awards for leavers, change of control, adjustments to performance
targets);
(4) The Committee retains the right to exercise discretion to override formulaic outcomes and ensure that the level of bonus or share awards payable is appropriate. It may
useitsdiscretiontoadjustoutcomestoensurethatanypaymentsmadereflectoverallCompanyperformanceandstakeholderexperiencesmoregenerally.Where
exercised, the rationale for this discretion will be fully disclosed to shareholders in the relevant Directors’ remuneration report;
(5) Consistent with HMRC legislation, the all-employee share plan does not have performance conditions; and
(6) In approving the Directors’ remuneration policy, authority is given to the Company to honour any past commitments entered into with current or former Directors
including the vesting of share awards granted in the past.
Strategic report
Governance Financial statements
100 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 101
Governance
Annual report on remuneration
Remuneration Committee
TheCommitteemembershavenopersonalfinancialinterest,otherthanasshareholders,inthematterstobedecided.
Theyhavenoconflictsofinterestarisingfromcross-directorshipswiththeExecutiveDirectors,norfrombeinginvolvedintheday-to-daybusinessof
the Company.
TheCommitteeoperatesunderclearwrittentermsofreferenceandconfirmsthatitsconstitutionandoperationcomplywiththeapplicableprovisions
of the UK Corporate Governance Code (the Code) (prevailing at the date this report is signed) in relation to Directors’ remuneration policy and
practice and that it has applied the Code throughout the year. As noted on page 76, with respect to Code provision 41, various channels have been
established for the Board’s engagement with employees, including in relation to remuneration. The channels include the employee engagement
survey, the activities of the Designated Non-Executive Director for Employee Engagement (including regular attendance at the employee engagement
working group), and the Non-Executive Directors leading a discussion at the Group’s management conference on the role of the Committee,
including in relation to alignment of executive remuneration with wider Group remuneration policy. The Board is also considering further enhanced
mechanisms for employee engagement in relation to executive remuneration for implementation in 2022.
The Committee’s terms of reference include:
to determine and agree with the Board the framework and policy for Executive Directors and senior managers;
to review the appropriateness and relevance of the remuneration policy;
to agree the measures and targets for any performance related bonus and share schemes of the Executive Directors;
to determine within the terms of the policy the total individual remuneration package of the Executive Directors and selected senior management
immediately below Board; and
to review senior management pay remuneration and workforce remuneration policies and practice.
Advisers to the Remuneration Committee
In undertaking its responsibilities, the Committee seeks independent external advice as necessary. To this end, FIT Remuneration Consultants LLP
(FIT) acted as the principal external advisers to the Committee until August 2021. Following a competitive tender, the Committee appointed Ellason
LLP (Ellason) as its principal external adviser from August 2021.
TheCommitteeconfirmsthatbothFITandEllasonprovidedindependentremunerationadvicetotheCommitteeduring2021,andthatneither
organisation has any other connections with the Company that may impair independence. Both FIT and Ellason are members and signatories of the
Code of Conduct for Remuneration Consultants, details of which can be found at www.remunerationconsultantsgroup.com.
During 2021, FIT provided independent advice on remuneration matters including the remuneration policy review and its implementation for 2021.
FIT provides no other services to the Company. The fees paid to FIT in respect of work carried out for the year under review were £43,209. Ellason
provided independent advice on remuneration matters including the external environment and incentive design for 2022. Ellason provides no other
services to the Company. The fees paid to Ellason in respect of work carried out for the year under review were £16,613.
Directors’ remuneration report cont.
Loss of office
In relation to Executive Directors leaving the Company, the Committee is committed to applying a consistent and equitable approach to ensure the
Companyisequitable,butpaysnomorethannecessary.Thelossofofficepolicyisinlinewithmarketpracticeandwillbedependentonwhetherthe
individual is deemed a ‘good leaver’ or ‘bad leaver’. The ‘good leaver’ policy includes:
payment in lieu of notice equal to one year’s basic salary or, if termination is part way through the notice period, the amount of salary relating to any
unexpirednoticetothedateoftermination.ThereisanobligationonDirectorstomitigateanylosswhichtheymaysufferiftheCompanyterminates
their service contract;
bonus payments for the period worked may be made, subject to the original performance targets, at the discretion of the Committee. Any such
payments would be made on the normal payment date;
vesting of share scheme awards is not automatic and the Committee retains the discretion to prevent awards from lapsing depending on the
circumstances of the departure and the best interests of the Company. For a ‘good leaver’: (i) deferred bonus awards will normally vest in full at the
normal vesting date (although may vest earlier, including at cessation); and (ii) LTIP awards will normally vest at the normal vesting date (although may
vest earlier, including at cessation) subject to performance against the performance targets and LTIP awards will normally be pro-rated;
the ‘good leaver’ reasons are death, injury, illness or disability, redundancy, retirement, transfer of business resulting in cessation of the individual’s
employment within the Group and any other reason at the Committee’s discretion;
no compensation is paid for summary dismissal, save for any statutory entitlements;
Executive Directors will also be entitled to a payment in respect of accrued but untaken annual holiday entitlements on termination; and
Legal fees and outplacement support may be paid by the Company where appropriate.
Duringtheyear,theCommitteeappliedthelossofofficepolicywithrespecttothedepartureoftheformerGroupFinanceDirector,StuartKilpatrick
witheffectfrom29April2021.TheresultsoftheapplicationofthepolicyonStuartKilpatrick’sremunerationaresetoutinmoredetailonpage104.
Service contracts
It is the Board’s policy that Executive Directors are employed on contracts subject to no more than 12 months’ notice from either side. The Board
recogniseshoweverthatitmaybenecessaryinthecaseofnewexecutiveappointmentstoofferaninitiallongernoticeperiod,whichwould
subsequentlyreduceto12monthsaftertheexpiryoftheinitialperiod.Theserviceagreementsdonothaveafixedterm.Ifitbecomesnecessaryto
consider termination of a service contract, the Committee will have regard to all the circumstances of the case, including mitigation, when determining
any compensation to be paid. Details of the current service contracts are as follows:
Contract date Notice period
Eoghan O’Lionaird 1 September 2019 12 months
Duncan Kennedy 1 May 2021 12 months
TheExecutiveDirectorsarepermittedtoserveasnon-executivedirectorsofothercompanies,providedtheappointmentisfirstapprovedbythe
Remuneration and Nominations Committees. Directors are allowed to retain their fees from such appointments. During 2021, the Executive Directors
held no external appointments.
Non-Executive Directors do not have service contracts but have a letter of appointment setting out their terms and conditions. Non-Executive
Directors are appointed each year for up to 12 months (subject to re-election at the AGM) and are entitled to one month’s prior written notice of early
termination for which no compensation is payable. Details of the letters for the currently appointed Non-Executive Directors are set out below:
Date of appointment Letter of appointment
Angus Cockburn 1 May 2021 1 January 2022
Justin Atkinson 1 February 2018 1 January 2022
Inken Braunschmidt 1 March 2019 1 January 2022
Aedamar Comiskey 1 November 2014 1 January 2022
Kash Pandya 1 November 2021 1 January 2022
Michael Salter 1 August 2013 1 January 2022
Claire Hawkings 1 January 2022 1 January 2022
Strategic report
Governance Financial statements
102 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 103
Governance
Annual bonus awards for 2021 (audited)
ThemaximumannualbonusforExecutiveDirectorswas100%ofbasesalary,with70%basedonfinancialobjectives(note1below)and30%based
onindividualachievementandpersonalobjectives(note2below).Thefirst70%ofanybonusawardispaidincashandthebalanceisawardedin
shares and deferred for three years (with dividend equivalents and malus and clawback provisions applying). No bonus was awarded to the Executive
Directors with respect to 2021, as set out below.
Note 1 – Financial objectives (70% of maximum):
Performance measure Performance target Assessment against targets
Adjustedprofitbeforetaxtarget Minimum threshold £34m
Maximum £39m
Threshold starts at 0% and increases to 100% of this element
of the bonus at maximum target performance.
Actual performance £19.7m 0% of this part of the bonus was paid out.
Note 2 – Personal objectives (30% of maximum):
Eoghan O’Lionaird
Objectives
Weighting
(% of bonus)
1 Lead update of and gain Board approval for the Group strategy to be communicated at a capital markets day in 2021 6%
2 Lead the design of and gain Board approval for a Group internal reorganisation aligned with the agreed Group strategy 6%
3 Review and agree action plan with the Board in relation to the 2020 Group-wide engagement survey results linked with the
Group purpose, for implementation during 2021
6%
4 Develop and deploy across the Group a focused global sustainability strategy to meet the current expectations of all our
stakeholders
6%
5 MaintainoperationalandfinancialcontrolovertheGroup’sassets,includingtheexecutionofagreeddisposalsandacquisitions
and agreed strategic health and safety targets in line with the Group strategy
6%
Total 30%
Duncan Kennedy
Objectives
Weighting
(% of bonus)
1 LeadtherefinancingofRCFfacilities,ensuringthattheGroupmaintainssufficientaccesstocapitalfromhighqualitylenders. 5%
2 ObtainBoardapprovalforstrategiescoveringfinance,IRandIT. 5%
3 SupporttheCEOandBoardintheimplementationofagreedGroupstrategy,includingrobustfinancialanalysisofproposed
investments;capitalmarketsday;investorcommunications;budgetsandmid-termfinancialplans.
5%
4 Complete a review of the Group’s governance and risk management frameworks and implement recommendations, having
regard to potential new requirements resulting from the BEIS consultation.
5%
5 EnhanceGroupfinancialreportingtoinclude:appropriatedivisionalandGroupfinancialKPIs;monthlyfinancialreportingto
opcos, divisions, Executive Committee and Board.
5%
6 Reviewcurrentfinanceteam:strengthenwhereappropriate;establishfinanceleadershipteam;ensurecashfocus;forecasting
improvements
5%
Total 30%
Stuart Kilpatrick (former Director)
StuartKilpatricksteppeddownfromtheBoardandlefttheCompanywitheffectfrom29April2021.Asa‘goodleaver’,itwasagreedthatheshould
retain a pro-rated opportunity under the 2021 bonus, and for which personal performance would be assessed by the Committee on a discretionary
basisatthenormaltime(i.e.followingtheendofthefinancialyear).
AstheactualperformanceoftheGroupdidnotmeettheminimumthresholdofunderlyingprofitbeforetaxfigureof£34m,theRemuneration
Committee did not consider that it would be appropriate to award any part of the 2021 bonus to the Executive Directors (including Stuart Kilpatrick)
based on their personal objectives. Therefore, no formal assessment of these targets has been disclosed. The Executive Directors’ personal
objectives have been reset for 2022, and further details are set out in the Implementation of the remuneration policy for 2022 section on page 110
(and will be disclosed fully in the 2022 remuneration report).
Directors’ remuneration report cont.
Non-Executive Directors
The Non-Executive Directors’ fees for 2021 and 2022 are set out below, all of which are payable in cash.
2022
£
2021
£
Chairman
210,12 5
210,125
Other Non-Executive Director fees:
Basic fee
54,632
54,632
Additional fee for the chair of Audit Committee
12,000
12,000
Additional fee for the chair of Remuneration Committee
8,000
8,000
Additional fee for the Senior Independent Director
8,000
8,000
Total remuneration of the Executive Directors (audited)
Eoghan O’Lionaird Duncan Kennedy
(1)
Stuart Kilpatrick
(1)
2021
£000
2020
£000
2021
£000
2020
£000
2021
£000
2020
£000
Base salary
(2)
530
464
232
–
117
333
Benefits
(3)
26
23
7
–
4
12
Pension
(4)
42
35
11
–
10
39
Bonus in cash
–
–
–
–
–
–
Bonus in deferred shares – – – – – –
Total short-term remuneration 598 522 250 – 131 384
LTIP – performance
–
–
–
–
–
–
LTIP – share appreciation
–
–
–
–
–
–
Dividend equivalents
–
–
–
–
–
–
LTIP – total
n/a
n/a
n/a
–
–
–
Other
–
–
–
–
–
–
Total remuneration
598
522
250
–
131
384
Totalfixedremuneration
598
522
250
–
131
71
Total variable remuneration
–
–
–
–
–
–
(1) Theamountsdisclosedabovefor2021reflecttheperiod:
(i) withrespecttoStuartKilpatrick,from1January2021untilhesteppeddownfromtheBoardwitheffectfrom29April2021,althoughStuartKilpatrickcontinuesto
be paid until cessation of employment on 31 March 2022, subject to mitigation. More details can be found on page 104; and
(ii) with respect to Duncan Kennedy, from 1 May 2021, when he took up his role on the Board, until 31 December 2021.
(2) As part of the measures implemented by the Company at the start of the COVID pandemic, Eoghan O’Lionaird’s 2020 salary (£530,000) was reduced by 50% and
Stuart Kilpatrick’s 2020 salary (£350,000) was reduced by 20%, in each case for three months from 1 April 2020, and not repaid.
(3) Benefitscomprisedacashallowanceinlieuofcarandmedicalinsurance.
(4) Pension contributions may be paid into personal pension plans, the Company pension scheme or taken as a separate cash allowance, subject to income tax.
In line with the approach taken across the UK workforce, the Group passes on 75% of the National Insurance cost saving arising from an individual’s election to
jointheGroup’sSMARTpensionschemearrangementthroughsalarysacrifice.During2020and2021,EoghanO’LionairdelectedtoparticipateintheGroup’s
SMARTpensioninthisway,andthevalueofthecostsavingpassedontohimisreflectedabove.
Strategic report
Governance Financial statements
104 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 105
Governance
CEO pay ratio (unaudited)
ThetableshowshowtheCEO’ssinglefigureremunerationfor2021comparestoequivalentsinglefigureremunerationforfull-timeequivalent
UK employees as at 1 December, ranked at the 25th, 50th and 75th percentile (and how this ratio has evolved since 2019):
Method
25th
percentile
pay ratio
Median
pay ratio
75th
percentile
pay ratio
2021 Option A 22 : 1 16 : 1 10 : 1
2020 Option A 19 : 1 14 : 1 9 : 1
2019 Option A 28 : 1 19 : 1 13 : 1
Nocomponentsofpayandbenefitshavebeenomittedforthepurposeoftheabovecalculations.Asin2019and2020,OptionAwasselectedgiven
that this method of calculation was considered to be the most robust approach in respect of gathering the required data for 2021.
The Committee monitors the trend in CEO pay ratio over time. The reduction from 2019 to 2020, and subsequent rebound in 2021, illustrates the
impactofthenon-paymentofbonusin2020and2021(bycontrastto2019)andthevoluntarysacrificebytheCEO(of50%ofhissalaryforthethree
months commencing 1 April 2020) in response to the onset of the COVID pandemic. The Committee will continue to keep under review the trend, in
particulartheimpactofincentivepayoutsinfutureyears.Itisexpectedthatthesewouldbereflectedinahigherratio,duetotherelativeupweighting
of variable remuneration in the CEO’s package, compared with market competitive norms for the wider UK workforce (and consistent with our pay
practices and policies).
Salary Total pay and benefits
25th
percentile Median
75th
percentile
25th
percentile Median
75th
percentile
2021 £25,000 £34,000 £50,000 £ 27,7 70 £ 37,12 0 £59,280
2020 £24,000 £33,127 £50,000 £27,000 £ 37, 5 0 0 £58,963
2019 £24,480 £3 4,150 £52,000 £25,459 £36,541 £55,240
Aligning pay with performance (unaudited)
The following graph shows the total shareholder return compared to the FTSE 250 and the FTSE Small Cap indices excluding investment trusts:
Growth in the value of £100 holding over ten years
31-Dec-11 31-Dec-12 31-Dec-13 31-Dec-14 31-Dec-15 31-Dec-16 31-Dec-17 31-Dec-18 31-Dec-19 31-Dec-20 31-Dec-21
James Fisher and Sons plc
FTSE Mid 250 Excluding Investment Trust Index
FTSE Small Capitalisation Index Ex Investment Trusts
£0
£100
£200
£300
£400
£500
£600
This graph shows the value, by 31 December 2021, of £100 invested in the Company on 31 December 2011, compared with the value of £100
investedintheFTSE250andFTSESmallCapindicesonthesamedate.Theotherpointsplottedarethevaluesatinterveningfinancialyear-ends.
Directors’ remuneration report cont.
Vesting of 2019 LTIP awards (audited)
The LTIP values included in the table below relate to awards granted on 2 April 2019 which vest on 6 April 2022 dependent on EPS and TSR
performance. EPS is measured over the three-year period ended 31 December 2021, while TSR is measured over the three-year period from
4April2019.Therefore,thefiguressetoutbelowfortheLTIPvestingareindicative,basedonanestimateofTSRasat28February2022.
Under the EPS performance target (70% of awards) which uses a sliding scale, 25% of this part of an award vests where growth of diluted
earnings per share of RPI plus 9% is achieved over the three-year performance period, increasing pro-rata to full vesting where growth of RPI plus
18% is achieved.
Performance target Base EPS
EPS
at year end
EPS
growth
Threshold
RPI +9%
Maximum
RPI +18% Vesting %
Underlying diluted EPS 89.5 20.0 None 20.2% 29.2% 0%
Under the TSR performance target (30% of awards) which uses a sliding scale, 25% of this part of an award vests for median TSR increasing
pro-rata to full vesting for upper quartile TSR, measured against the constituents of the FTSE 250 excluding investment trusts. The three-year
performance outturn under the TSR element is expected to be nil vesting.
As a result of EPS and TSR performance, no LTIP share awards are expected to vest on 6 April 2022.
LTIP awards granted in 2021 (audited)
Award
date
Proportion
of salary
Maximum
shares awarded
Face value
at date of grant
(1)
Exercise price
at grant
Eoghan O’Lionaird 9 April 2021 125% 54,197 £662.5k –
Duncan Kennedy 28 May 2021 125% 35,790 £4 37. 5k –
(1) Thesharepriceatdateofawardwasbasedonfive-dayaverageclosingpricefrom11March2021(thedateofthepreliminaryresults)to17March2021,of1,222.4p.
StuartKilpatrickdidnotreceiveanLTIPawardin2021,becausehesteppeddownfromtheBoardwitheffectfrom29April2021.
Vesting of the 2021 LTIP award (in the form of a conditional award) is subject to achievement of performance targets over a three-year period with
70% of the award based on EPS targets and 30% based on TSR targets. EPS target performance is measured over the three-year period ending
on 31 December 2023. The EPS element of the award vests if EPS growth is at least 25% over the period. At the threshold level, 25% of the EPS
element of the award will vest. Full vesting is achieved if EPS growth is greater than or equal to 67% over the performance period. The TSR element
of the award is subject to the Company’s TSR performance relative to the FTSE 250 index excluding investment trusts, over the three-year period
from 4 April 2021. If at the end of the period the Company ranks in the upper quartile, all of the TSR element of the award will vest. If the ranking is at
median level, 25% of TSR element of the award will vest. No element of the TSR part of the award will vest for performance below the median.
For intermediate rankings, a proportionate part of each award will vest reducing on a straight-line basis. Any part of the award that does not vest at
the end of a performance period will lapse immediately.
Deferred bonus awards granted in 2021 in respect of 2020 annual bonus (audited)
No deferred bonus awards were granted in 2021 in respect of the 2020 annual bonus as a result of no bonus being payable.
Payments for loss of office (audited)
Asannouncedon29March2021,StuartKilpatricksteppeddownfromtheBoardandlefttheCompanywitheffectfrom29April2021.Detailsofthe
arrangements in respect of remuneration are as follows:
Contractualentitlementtosalary(basedonsalaryof£350,000)andbenefitsduringaperiodofgardenleave,whichcontinuesuntilhisanticipated
cessation of employment on 31 March 2022, subject to mitigation.
In respect of outstanding share awards: (i) the 2018 deferred bonus awards vested on the normal vesting date; (ii) the 2019 deferred bonus awards
will vest at the normal vesting date; and (iii) unvested LTIP awards will vest on their normal vesting dates, subject to time prorating and performance
conditions. Dividend equivalents may be credited to the extent that awards vest.
The Company will have paid £2,750 plus VAT in respect of legal fees and £50,000 in respect of outplacement support.
Payments to former Directors (audited)
Aspreviouslydisclosed,FergusGrahamsteppeddownfromtheBoardoftheCompanywitheffectfrom19March2020.Assetoutinlastyear’s
Directors’remunerationreport,hecontinuedtoreceivehiscontractualentitlementtosalaryandbenefitsduringaperiodofgardenleavethatended
on 19 March 2021. The contractual entitlement paid to Mr Graham in respect of the 2021 period was £70,000 (2020: £71,000). Mr Graham received
no further payment in lieu of notice or any other termination payments. Mr Graham retains his interest in his 2019 deferred bonus award (due to vest
in April 2022).
Strategic report
Governance Financial statements
106 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 107
Governance
Relative importance of remuneration (unaudited)
2021
£m
2020
£m
Change
£m
Total employee remuneration 136.4 133.7 2.7
Total dividends paid – 4.0 (4.0)
Interests in shares (audited)
The interests of Directors and their connected persons in ordinary shares as at 31 December 2021, including any interests in share options and
shares provisionally awarded under the LTIP and the 2005 Employee Share Option Scheme (ESOS) are as follows:
Beneficial
number
Unvested
LTIP number
(1)
Unvested
deferred
bonus
shares
(1)
Vested but
unexercised
share options
ESOS
number
Exercised
during
the year
number
At
31 December
2020
number
Angus Cockburn 5,000 – – – – n/a
Eoghan O’Lionaird 42,313 96,504 – – – 13,447
Duncan Kennedy 5,000 35,790 – – – n/a
Justin Atkinson 3,15 0 – – – – 3,150
Inken Braunschmidt – – – – – –
Aedamar Comiskey – – – – – –
Kash Pandya – – – – – –
Michael Salter – – – – – –
Former directors
Stuart Kilpatrick 76,720 39,210 3,374 37,15 3 3,527 74,8 51
(1) The unvested LTIP awards are subject to performance conditions. The unvested deferred bonus share awards are not subject to performance conditions;
(2) Between 31 December 2021 and 9 March 2022, there were no changes to the Directors’ shareholdings;
(3) No Director has an interest in the preference shares of the Company, or in the shares of any subsidiary or associated undertaking;
(4) The Directors’ interests stated above include any shares held by their connected persons; and
(5) Stuart Kilpatrick’s interests in shares are shown based on the position on the date he stepped down from the Board (29 April 2021).
Against the 200% of salary ownership guideline and based on the share price and prevailing base salary levels as at 31 December 2021,
Eoghan O’Lionaird held shares equivalent to 29.5% of his base salary, and Duncan Kennedy held shares equivalent to 5.3% of his base salary.
Directors’ remuneration report cont.
Remuneration of CEO compared with growth in underlying diluted earnings per share
Eoghan O’Lionaird Nick Henry
2021 2020
(1)
2019 2019 2018 2017 2016 2015 2014 2013 2012
Annual change – underlying diluted EPS (pence) (58)% (52)% 4% 4% 14% 7% 11% (7)% 13% 18% 15%
Salary,pensionsandbenefits(£000) 598 522 189 421 526 512 492 492 471 439 355
Annual performance bonus (£000) – – – 35 448 392 429 97 287 263 210
Short-term remuneration (£000) 598 522 189 456 1,010 904 921 589 758 702 565
Share schemes (£000) – – – 418 889 109 183 318 728 691 781
CEO total remuneration (£000) 598 522 189 874 1,899 1,013 1,104 907 1,486 1,393 1,346
Actual bonus as a percentage of maximum – – – 17% 91% 88% 100% 23% 100% 100% 100%
LTIP vesting as a percentage of maximum n/a n/a n/a 59% 100% 15% 47% 100% 100% 100% 100%
ESOS vesting as a percentage of maximum n/a n/a n/a – – – 45% – 100% 100% 100%
(1) As part of the measures implemented by the Company at the start of the COVID pandemic, Eoghan O’Lionaird’s 2020 salary (£530,000) was reduced by 50% for three
months from 1 April 2020, and not repaid.
Percentage change in remuneration (unaudited)
Thetablebelowshowstheannualpercentagechangeinearnedsalaryorfees,benefitsandannualbonusfortheBoard,comparedtotheaverage
earnings of all of the Group’s other UK employees. As required by the remuneration reporting regulations with which the Company is required to
comply,theanalysishasbeenexpandedtoincludethisinformationforthefinancialyearunderreview,andwillcontinuetobebuiltupuntilitdisplays
afiveyearhistory.
The Committee chose the Group’s UK employees for the below pay comparison. Our UK employee population represented around 60% of the
Group’s workforce in 2021, and is therefore considered to be the most meaningful comparator group (by comparison, employees of James Fisher
and Sons plc represented less than 5% of the workforce). The Committee monitors this information carefully to ensure that there is consistency in the
fixedpaytrendforBoardDirectorscomparedwiththewiderworkforce.
Base salary/fee
(1)
Benefits Annual bonus
2020
to 2021
2019
to 2020
2020
to 2021
2019
to 2020
2020
to 2021
2019
to 2020
Executive Directors
Eoghan O’Lionaird 14% (12)% 13% – N/A N/A
Duncan Kennedy
(2)
N/A N/A N/A N/A N/A N/A
Stuart Kilpatrick
(3)
5% 5% – 1% N/A (100)%
Non-Executive Directors
Angus Cockburn
(4)
N/A N/A N/A N/A N/A N/A
Malcolm Paul
(3)
5% (3)% N/A N/A N/A N/A
Aedamar Comiskey 5% (3)% N/A N/A N/A N/A
Michael Salter 5% (1)% N/A N/A N/A N/A
Justin Atkinson 5% (3)% N/A N/A N/A N/A
Inken Braunschmidt
(5)
5% N/A N/A N/A N/A N/A
Kash Pandya
(6)
N/A N/A N/A N/A N/A N/A
Employee population 3.4% 5% 2% N/A (88)% (19)%
(1)Reflectsthe20%reductiontobasesalaryvolunteeredbyallBoarddirectorsforthreemonthsfrom1April2020(theCEOvolunteeringa50%reduction),notan
increase in base salaries or Directors’ fees.
(2) Duncan Kennedy joined the Board in May 2021 so a year-on-year comparison is not available.
(3)Forthecomparisonof2021to2020,thepercentagechangesforStuartKilpatrickandMalcolmPaulreflectannualisedvaluesfor2021remuneration.MalcolmPaulleft
the Board in April 2021.
(4) Angus Cockburn joined the Board in May 2021 so a year-on-year comparison is not available.
(5) Inken Braunschmidt joined the Board in March 2019 so a year-on-year comparison from 2019 to 2020 is not available.
(6) Kash Pandya joined the Board in November 2021 so a year-on-year comparison is not available.
Strategic report
Governance Financial statements
108 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 109
Governance
Share price during the financial year
ThemiddlemarketpriceofoneordinaryshareintheCompanyduringthefinancialyearrangedfrom289.5pto1,270pandat31December2021
was 369.5p.
Non-Executive Directors’ remuneration
Total fees
2021
£000
2020
(6)
£000
Angus Cockburn
(1)
140 –
Aedamar Comiskey
(2)
71 67
Michael Salter 55 52
Justin Atkinson
(3)
67 63
Inken Braunschmidt 55 52
Kash Pandya
(4)
9 –
Former directors
Malcolm Paul
(5)
70 199
(1) Angus Cockburn joined the Board on 1 May 2021.
(2) The fees include payment in respect of (i) Chair of the Remuneration Committee fee of £8,000 per annum and (ii) Senior Independent Non-Executive Director fee of
£8,000 per annum.
(3) The fees include a payment in respect of Chairman of the Audit Committee fee of £12,000.
(4) Kash Pandya joined the Board on 1 November 2021.
(5) Malcolm Paul stepped down from the Board on 30 April 2021.
(6) The Non-Executive Directors’ fees were reduced by 20% for three months from 1 April 2020.
Shareholder voting (unaudited)
The Company is committed to ongoing shareholder dialogue and takes an active interest in voting outcomes. Where there are substantial votes
against resolutions including in relation to Directors’ remuneration, the Company seeks to understand the reasons for any such vote and will report
any actions in response to it. Due to government restrictions in response to COVID, the Company was not able to hold its 2021 AGM in Barrow-
in-Furnessasoriginallyplanned,anditwasinsteadheldattheCompany’sLondonoffice,withonlyshareholderDirectorspresent.Votingatthe
2021AGMwasheldbyproxy.Thefollowingtablereflectsthevalidproxyvotinginstructionsreceivedforthe2021AGMinrespectoftheDirectors’
remuneration policy, the Directors’ remuneration report for the year ended 31 December 2020, and the 2021 LTIP rules:
Directors’
remuneration policy
Directors’
remuneration report 2021 LTIP rules
2021 AGM remuneration resolutions
Total number
of votes
% of
votes cast
Total number
of votes
% of
votes cast
Total number
of votes
% of
votes cast
For 37, 4 9 9 ,17 7 97. 6 % 38,196,666 98.6% 37, 4 9 9 , 614 96.8%
Against 938,426 2.4% 543,430 1.4% 1,243,105 3.2%
Total votes cast (excluding withheld votes) 3 8 ,4 37,6 0 3 38,740,096 38,742,719
Total votes withheld 311,16 6 8,673 6,050
Total votes cast (including withheld votes) 38,748,769 38,748,769 38,748,769
Directors’ remuneration report cont.
Executive Directors’ interest in share awards (audited)
1 January
2021
Granted
during year
(no.)
Vested
during year
(no.)
Lapsed
during year
(no.)
Exercise
price
31
December
2021
Vesting
date
Expiry
date
Eoghan O’Lionaird LTIP 42,307 – – – –
42,307
24.07. 23 n/a
LTIP – 54,197 – – –
54,197
09.04.24 n/a
Sharesave 2,935 – – – 10.22p
2,935
01.12.25
(1)
01.06.26
45,242 54,197 – – n/a
99,439
Duncan Kennedy LTIP – 35,790 – – –
35,790
28.05.24 n/a
Sharesave – – – – –
–
– –
– 35,790 – – n/a
35,790
Stuart Kilpatrick
(2)
LTIP 25,669 – – (25,669) –
–
06.04.21 n/a
LTIP 20,584 – – – –
20,584
06.04.22 n/a
LTIP 27, 9 3 8 – – (9,312) –
18,626
24.07. 23 n/a
Deferred
Bonus
3,527 – (3,527) – –
–
04.04.21 n/a
Deferred
Bonus
3,374 – – – –
3,374
02.04.22 n/a
Sharesave 2,935 – – (2,935) 10.22p
–
01.12.25
(1)
01.06.26
84,027 – (3,527) (37,916 ) n/a
42,584
Total 129,269 89,987 (3,527) ( 37,916)
177, 813
(1) EoghanO’LionairdandStuartKilpatrickweregrantedoptionsunderthefiveyearallemployeeSharesaveschemegrantedon21October2020.Theoptionswill
mature on 1 December 2025, at which point the participant may elect to receive shares or the cash saved.
(2) TheinterestsinsharesforStuartKilpatrickareincluded,althoughhesteppeddownfromtheBoardwitheffectfrom29April2021.
A two-year holding period applies to awards granted after the 2018 AGM. The schemes above (other than Sharesave) are not tax-advantaged for HM
Revenue and Customs purposes. As at 9 March 2022, being the last practical date prior to the publication of this report, there were no changes to
the Executive Directors’ interests in LTIP and Deferred Bonus Share awards.
Sourcing of shares and dilution
The Remuneration Committee has regard to the limits on dilution advised by the Investment Association and contained in the relevant share plan rules
and reviews the number of shares committed and headroom available under share incentive schemes in accordance with these dilution limits.
Onvesting,theawardsofsharesundertheLTIParesatisfiedbythesharesheldbytheJamesFisherandSonsplcEmployeeShareTrust(Trust).
During the year the Trust purchased 50,000 ordinary shares on the open market (2020: 50,000) and at 31 December 2021 the Trust held 54,571
ordinary shares (2020: 9,227).
Strategic report
Governance Financial statements
110 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 111
Governance
Directors’ report
This section contains additional information
which the Directors are required by law
and regulation to include within the Annual
Report and Accounts. The Directors’ report
comprises this section as well as the rest of the
Governance section (from pages 74 to 112)
and those sections of the Strategic report or
financialstatementsasreferencedbelow.
We have chosen, in accordance with the Act,
to include certain information in our Strategic
reportorfinancialstatementsthatwould
otherwise be required to be disclosed in the
Directors’ report. This is set out in the table
above.
The Directors’ report and Strategic report
comprise the ‘management reports’ for
the purposes of compliance with Financial
Services Authority’s Disclosure Guidance
and Transparency Rules (DTR) 4.1.8R. The
informationthatfulfilstherequirementsof
the Corporate Governance Statement for
the purposes of DTR 7 can be found in the
governance information on pages 72 to 117
(all of which forms part of this Directors’ report)
and in this Directors’ report. The statement
of Directors’ responsibilities on page 117 is
incorporated into this Directors’ report by
reference.
Going concern
The Group’s business activities, together
withthefactorslikelytoaffectitsfuture
development,thefinancialpositionofthe
Group and a description of the principal risks
and uncertainties are set out in the Strategic
report on pages 1 to 71. The Group’s primary
sources of funding are bilateral and syndicated
revolving credit facilities with a core group of
banks, which totalled £287.5m at
31 December 2021 (2020: £300m). During
theyearbilateralfacilitieswererefinanced
through the execution of a new syndicated
facility of £130m. An existing facility of £40m
is due to expire during 2022, and may not
be renewed if the Board considers that the
Grouphassufficientfinanceavailabletosustain
operations at that point.
Compliance with banking covenants is
tested half yearly for the ratio of net debt:
earnings before interest, tax, depreciation and
amortisation (Ebitda) and interest cover. For
prudence, facility amendments were agreed
to relax the net debt : Ebitda covenant metrics
with respect to the December 2020 and
June 2021 reporting dates, although these
relaxations proved to be unnecessary as actual
leverage at these reporting dates were within
the original unaltered covenants. No breaches
in covenants occurred during 2021. The
covenants reverted to the original requirements
for 31 December 2021.
The Group meets its day-to-day working
capital requirements through operating
cashflows,withborrowingsinplacetofund
acquisitions and capital expenditure. The Group
had £115.5m (2020: £120.2m) of undrawn
committed facilities as at 31 December 2021.
The Group’s forecasts and projections, taking
account of reasonable changes in trading
performance,confirmthattheGroupshould
be able to operate within the level of its current
banking facilities.
TheGroupusescashflowforecastsderived
from budgets, forecasts and medium-term
planning to identify headroom under the
covenant tests. After making enquiries, and
having evaluated the ongoing trading of the
businesses, the Directors have a reasonable
expectation that the Group has adequate
resources to continue to operate for a period
considered to be at least 12 months from the
date of this report. Accordingly, the Directors
consider it appropriate to continue to adopt
the going concern basis of accounting in
preparing the Annual Report and Accounts.
More detail on the going concern review is set
out in Note 1 on page 134.
Dividends
As a result of performance challenges,
combined with the Company’s leverage
position, the Company did not pay an interim
dividend for 2021, and the Board is not
recommendingthepaymentofafinaldividend
for the year. The Board is committed to
reinstating the dividend when appropriate.
Directors’ remuneration report cont.
Implementation of the remuneration policy for 2022 (unaudited)
Witheffectfrom1January2022,EoghanO’Lionaird’sbasesalaryremainedat£530,000,andDuncanKennedy’sbasesalaryremainedat£350,000.
The maximum bonus opportunity continues to be set at 100% of base salary. Financial targets are set to be challenging and appropriately
demanding.For2022,theweightingonprofithasbeenrevisedto50%(2021:70%)withtheremainderofthefinancialelementoftheannualbonus
(20%oftheopportunity)linkedtooperatingcashflow.Inaddition,andtoalignExecutiveincentivesmorecloselywithourstatedstrategy,theprofit
elementwillbebasedonourstatedKPI,underlyingoperatingprofit(2021:PBT).Asinpreviousyears,30%ofthebonusopportunitywillbelinked
to the achievement of personal objectives. Personal objectives for 2022 will include ESG targets focused on employee engagement, customer
satisfaction, and other short-term business priorities. The targets are commercially sensitive but disclosure of the targets and performance against
targets will be set out in the 2022 Directors’ remuneration report.
As described in the Annual statement prefacing this remuneration report, awards in 2022 under the LTIP will be granted to Eoghan O’Lionaird and
Duncan Kennedy with 50% of the award based on EPS growth targets, 25% based on relative TSR targets and 25% based on Return on Capital
Employed(ROCE)targets.Atthetimeofsigningthisreport,theCommitteehadnotfinalisedtheLTIPawardopportunitylevelsfortheExecutive
Directors. These will be within the stated normal limit of 125% of salary, and disclosed in the RNS announcement at the time of making the awards.
The performance period for the EPS and ROCE element of the award will run for three years ending 31 December 2024. For the TSR element,
performance will be measured over three years against the constituents of the FTSE 250 excluding investment trusts, with full vesting if the Company
ranks in the upper quartile and 25% of the TSR element vesting for ranking median with straight-line vesting in between. At the date of signing this
report,theCommitteehasnotfinalisedtheEPSandROCEperformancetargets.Thesewillbesettobeappropriatelystretchinginthecontextofthe
Group’s strategic plan. The Committee intends to disclose the targets in the RNS announcement at the time of making awards.
Aedamar Comiskey
Chair of the Remuneration Committee
9 March 2022
SUBJECT MATTER LOCATION PAGE
Likely future developments in the business Strategic report 12
Research and development Strategic report 22
Employee involvement/engagement Strategic report 20
Relationships with suppliers, customers and others Strategic report 21
Greenhousegasemissions,energyconsumptionandefficiencyaction Strategic report 40
Useoffinancialinstruments Note 29 166
Additional information and statutory disclosures
Strategic report
Governance Financial statements
112 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 113
Governance
Employment of disabled persons
James Fisher is an equal opportunities employer
andisfirmlycommittedtoboththeprincipleand
realisation of equality. The Group is committed
to complying with all applicable laws governing
employment practices and to the prevention
of discrimination on the basis of any unlawful
criteria. In addition to complying with legislative
requirements, the Group strives to ensure that
disabled employees (including anyone who
becomes disabled whilst employed with James
Fisher) are treated fairly and that their training,
career development and promotion needs
are met.
The Group recognises its responsibility
to provide a safe operating environment
for all its employees. Our strong focus on
employee training, regulatory compliance
and accident reduction provides the support
to allow accountability to remain with local
management who are best-placed to ensure
that their businesses comply with local laws
andregulationsandspecificneedsonaday-
to-day basis. The review of health and safety
performanceisfirstitemontheagendaateach
Board and business board meetings.
We recognise that the success of our business
depends on our talented workforce. Employees
throughout the Group are encouraged to
participate in training and development
programmes and to obtain professional
qualificationsrelevanttotheirroles.
Additional information for
shareholders
The Articles can only be amended by
a special resolution at a general meeting
of the shareholders.
No political donations were made during the
year. The Group has made charitable donations
of £48,515 during the year. Details of the
Group’s involvement in charitable initiatives in
set out on pages 45 and 46.
Details of Group subsidiaries can be found
on pages 188 to 191. Companies within
the Group have branches in Chile and
Mozambique.
Significant agreements – change
of control
There are a number of agreements that take
effectafter,orterminateupon,achangeof
control of the Company, such as commercial
contracts. None of these are considered to
besignificantintermsoftheirlikelyimpact
on the business as a whole apart from those
set out below.
The Company is a guarantor of all of the
Group’s bilateral bank facilities which upon a
change of control could be withdrawn.
The Singapore Submarine Rescue Service
Agreement made between James Fisher
Singapore Pte Ltd. and First Response Marine
Pte Ltd. dated 17 October 2008 may terminate
upon a change of control of the Company or
James Fisher Singapore Pte Ltd.
The rules of the Company’s LTIP, ESOS and
Sharesave schemes set out the consequences
of a change of control on the rights of
participants under those schemes. Participants
are generally able to exercise their options on
a change of control, provided that the relevant
performanceconditionshavebeensatisfied.
There are no agreements between the
Company and its Directors or employees
providingforcompensationforlossofoffice
or employment (whether through resignation,
purported redundancy or otherwise) that arise
in the event of a change of control of the
Company.
Disclosure of information to the
Auditor
EachDirectorinofficeatthedateofapproval
ofthisDirectors’reportconfirmsthat:
so far as the Director is aware, there is
no relevant audit information of which the
Company’s auditor is unaware; and
the Director has taken all the steps that he/
she ought to have taken as a director to
make him/herself aware of any relevant
audit information and to establish that
the Company’s auditor is aware of that
information.
Directors’ report cont.
Share capital
Details of the share capital of the Company and
the shares held by the Company’s Employee
Share Trust, including the rights and obligations
attaching to the shares are set out in note 30 on
page 174. The rights and obligations attaching
to the shares are set out in the Company’s
Articles of Association (Articles). There are no
specificrequirementsonthesizeofaholding
nor on the transfer of shares, both of which
are governed by the general provisions of the
Articles and prevailing legislation. The Directors
are not aware of any agreements between the
holders of the Company’s shares that may
result in restrictions on the transfer of securities
or on voting rights. No person has any special
rights of control over the Company’s share
capital. Where shares are held on behalf of the
Company’semployeebenefittrust,thetrustees
have discretion to vote on any shares as they
seefitandhavenotwaivedtheirrighttoreceive
dividends.
At the 2021 AGM, the Company was given
authority to purchase up to 2,518,439 of its
ordinary shares until the date of its next AGM.
No purchases were made during the year and
up to the date of this report by the Company.
The Company has one class of ordinary share
and one class of preference share. As at 31
December 2021, 50,395,519 ordinary shares
of 25p each have been issued, are fully paid up
and are listed on the London Stock Exchange
and 100,000 cumulative preference shares of
£1 each have been issued and fully paid up.
Directors
The biographies of the current Board of
Directors are set out on pages 80 and
81. Details in relation to changes in the
composition of the Board are provided in the
Nominations Committee report on pages 86
to 88.
Powers of Directors
The powers of the Directors are determined
by the Company’s Articles, the Companies Act
2006 and in certain circumstances (including
in relation to the issuing or buying back by the
Company of its shares) the authority given by
the Company in general meeting. The Directors
will be seeking to renew the authorities granted
to them in prior years at the forthcoming
AGM. The Directors are authorised to issue
and allot ordinary shares, to disapply statutory
pre-emption rights and to make market
purchases of the Company’s shares. Any
shares purchased may be cancelled or held as
treasury shares.
Appointment and replacement of
Directors
The rules regarding the appointment and
replacement of Directors are determined by the
Company’s Articles and the Companies Act
2006. The Articles provide that at each AGM
everyDirectorwhohasheldofficeonthedate
seven days before the date of notice of the
AGMshallretirefromofficeandshallbeeligible
for re-election at the AGM.
In accordance with the UK Corporate
Governance Code 2018 (Code), all Directors
willofferthemselvesforre-electionatthe
forthcoming AGM, apart from Mike Salter, who
willretirefromtheBoardwitheffectfromthe
date of the AGM, in accordance with good
practice following his almost nine years as a
Non-Executive Director.
Directors’ and officers’ liability
insurance
The Company maintains an appropriate level
ofdirectors’andofficers’liabilityinsurance.
Pursuant to the Company’s Articles, the
Company may indemnify the Directors of the
Company and its subsidiaries against liability
to third parties and against liability incurred in
connection with the Company’s activities as
trustee of an occupational pension scheme, to
the extent permitted by the Companies
Act 2006.
Directors’ conflict of interest
Under the Companies Act 2006, a director
must avoid a situation where a direct or indirect
conflictofinterestmayoccur.TheBoardhas
adopted established procedures to address the
managementofanypotentialoractualconflicts
ofinterest.Aconflictmustbeauthorisedin
advance by the Board. Directors are asked at
each Board meeting to check the register of
conflictsandconfirmthattheregisterremains
up to date and that it remains appropriate for
the relevant matter to remain authorised.
Substantial shareholders
Information provided to the Company pursuant to the DTRs is published on a Regulatory
Information Service and on the Company’s website. As at 31 December 2021, the Company had
beennotified(inaccordancewithRule5oftheDTRs)ofthefollowingholdingsofvotingrights
attached to the issued Ordinary Share capital of the Company:
Substantial shareholders
Ordinary %
(2)
Nature of
holding
Trustees of the Sir John Fisher Foundation
(1)
11,592,3602 22.98 Direct
Schroders plc 4,970,246 9.89 Indirect
Standard Life Aberdeen plc 3,589,932 7.13 Indirect
NFU Mutual Insurance Society Limited 1,976,768 3.92 Direct/ Indirect
Montanaro Asset Management Limited 1,471,066 2.91 Direct
(1) Mrs Diane Sara Meacock, Mr David Hart Jackson, Mr Michael John Shields and Mr Daniel Purser Tindall.
(2) The percentage of voting rights detailed above was calculated at the time of the relevant disclosures made in
accordance with Rule 5 of the DTRs.
In the period from 31 December 2021 to the date of this report, the Company received no further
notificationsofachangeinshareholdingfromthemajorshareholders.
Energy Efficiency Action
During the reporting period, the Group
appointed a specialist third party consultant
to conduct an extensive emissions footprint
reporting and consolidation exercise across
the Group with a view to establishing a robust
baseline against which we can compare our
energy usage and greenhouse gas emissions
over time.
As part of our commitment to setting net zero
targets in alignment with the Paris Climate
Agreement,effortsarecurrentlyunderwayto
map out our emissions reduction pathways
using 2021 as the base.
As part of this baselining process, James
Fisheridentifiedseveralfacilitieswithinthe
UK that are already acquiring electricity from
100% renewable energy sources. Based on
preliminary calculations, this has reduced
the Scope 2 emissions of our UK facilities by
approximately 42%. As part of our emissions
abatementefforts,wewillplantorolloutthis
best practice across all regions, encouraging
purchase of all energy from renewable sources,
where available.
Further details on how we plan to deliver
againsttargetonenergyefficiencyand
progress made in 2021 can be found in our
sustainability report in the Strategic report on
page 40.
2020 data
Due to a change in reporting calendar and
operational boundaries, and the additional
capture of additional assets under Group
control, the energy usage and greenhouse
gas emissions (as well as the resulting energy
intensity and emissions intensity ratios)
reported in 2021 are not directly comparable to
values reported in 2020. The 2020 calculations
also exclude fuel consumption where James
Fisher was not directly responsible for the
purchase of fuels, this has now been included
in the 2021 reporting, including (for example)
the fuel used in planes, hire cars, trains, and
ferries.The2021figuresandmethodologywill
be used as base year going forward.
Annual General Meeting (AGM)
The AGM is to be held at 11.00am on 5 May
2022 at Abbey House Hotel and Gardens
in Barrow-in-Furness. Further details will be
provided in the Notice of AGM.
The Directors’ report was approved by
the Board of Directors and is signed on its
behalf by:
Jim Marsh
Group General Counsel and Company
Secretary
9 March 2022
Directors’ report cont.
Streamlined Energy & Carbon
Reporting (SECR)
Annual Energy Use
In 2021, the Group’s total energy usage was
calculated to be 316,751,190 kWh. The
Group’s non-UK facilities accounted for most of
the energy usage (63%), with the UK facilities
accounting for the remaining 37%.
Fuel consumption accounted for most of the
energy usage (94.5%), followed by electricity
consumption (3.5%), and gas consumption
(2%). With respect to the non-UK facilities, fuel
consumption accounted for most of the energy
usage (98.5%), with a minor contribution
from electricity consumption (1.2%), and gas
consumption (0.3%).
Fuel consumption includes liquid fuels,
namely diesel, petrol, burning oil, fuel oil, and
gas oil, used for stationary (e.g., generator
sets) and mobile combustion (e.g., vessels
andcompanyfleetvehicles)activities.Gas
consumption includes gaseous fuels, namely
natural gas and liquid petroleum gas, used for
stationary (e.g., boilers) and mobile combustion
(e.g., forklifts) activities.
Greenhouse Gas Emissions
In 2021, the Group’s total Scope 1 and 2
greenhouse gas emissions was calculated
to be 114,374,tCO
2
e. As with energy
consumption, the Group’s non-UK facilities
accounted for most of the greenhouse
gas emissions (69%), with the UK facilities
accounting for the remaining 31%.
Fuel consumption accounted for most
of the greenhouse gas emissions (97.1%),
followed by electricity consumption (1.6%),
gas consumption (1.2%), and refrigerants
(0.1%). With respect to the non-UK facilities,
fuel consumption also accounted for most
of the greenhouse gas emissions (98.9%),
with a minor contribution from electricity
consumption (1%), gas consumption (0.1%),
and refrigerants (0.1%).
We have not reported all Scope 3 emissions that
are the result of activities from assets not owned
or controlled by the Group. This is a complex
and long-term exercise given the diverse and
fragmented nature of the Group’s businesses,
and we are currently quantifying each category
and putting in place the necessary framework
and tooling to accurately measure and report.
However, we have included in our sustainability
report certain Scope 3 emissions: business
travelemissions,Scope3category6–ourfirst
step in determining our Scope 3 footprint and
baseline for later reporting years.
Further details on our scope 3 mapping criteria
and commitments made can be found in the
sustainability report in the Strategic report on
page 41.
Emissions Intensity Ratio
Due to the diverse and fragmented nature of
our Group businesses, the Group has selected
greenhouse gas emissions per unit of revenue
(£ million) as the metric to measure and track
our emissions intensity.
Methodology
TheGroupusedverifiableactivitydata,namely
meter data and invoices, where reasonable
andpracticable.Whereverifiabledatawas
not available, estimates based on data from
previous comparable time periods was used to
close the gaps. The activity data was reported
at an operational company level and collated
and analysed at the Group level.
Our Scope 1 and 2 greenhouse emissions were
calculated in accordance with the requirements
of the GHG Protocol Corporate Accounting
and Reporting Standard.
The Group is diverse, made up of lots of
operating companies which independently
collate and report on their own company
emissions data. The work in consolidating
our combined emissions data involved an
internalverificationexercisetoensureaccuracy,
whichtakesasignificantperiodoftime.
Therefore, to mitigate the risk of reduced data
integrity, the Group changed for 2021 onwards
thereportingperiodfromacalendar/financial
year (ending 31 December) to 1 October to
30September.Thisallowssufficienttime
beforethefinancialyearendtoverifyand
report on the data. We will be using the same
methodology going forward as we have for
our2021figuresallowingdatatobedirectly
comparable.
Emission conversion factors from the
UK Department for Business, Energy &
Industrial Strategy (2021) and International
Energy Agency (2021) were used in the
calculation of the energy usage and
greenhouse gas emissions.
Strategic report
Governance Financial statements
114 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 115
Governance
Greenhouse gas emissions
2021
Emissions source UK Non-UK Total
Fuel consumption (tCO
2
e) 34,155 78,354 112,509
Gas consumption (tCO
2
e) 439 111 550
Electricity consumption (tCO
2
e) 558 645 1,203
Refrigerants (tCO
2
e) 33 78 111
Total (tCO
2
e) 35,185 79,18 8 114,374
Emissions intensity (tCO
2
e/£m) 231
2020 Energy usage
Emissions source
UK
(kWh)
Non-UK
(kWh)
Total
(kWh)
Emissions
intensity
Total 207,5 3 8 77,692 285,230 550
2020 Greenhouse gas emissions
Emissions source Total
Fuel consumption (tCO
2
e) 79,600
Electricity consumption (tCO
2
e) 1,600
Refrigerants (tCO
2
e) –
Total (tCO
2
e) 81,200
Emissions intensity (tCO
2
e/£m) 157
Annual energy use
Emissions source
UK
(kWh)
Non-UK
(kWh)
Total
(kWh)
Fuel consumption 111,79 0,610 195,513,844 307,304,454
Gas consumption 2,369,049 601,791 2,970,840
Electricity consumption 4,079,675 2,396,222 6,475,896
Total (F Y20 21) 118,239,334 198,511,857 316,751,19 0
Total (FY2020) 207,53 8 77,69 2 285,230
Strategic report
Governance Financial statements
116 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 117
Governance
Statement of Directors’ responsibilities
inrespectoftheAnnualReportandthefinancialstatements
Responsibility statement of the Directors in respect of the annual financial report
EachoftheDirectorsconfirmsthattothebestofhisorherknowledge:
thefinancialstatements,preparedinaccordancewiththeapplicablesetofaccountingstandards,giveatrueandfairviewoftheassets,liabilities,
financialpositionandprofitorlossoftheCompanyandtheundertakingsincludedintheconsolidationtakenasawhole;and
the Strategic report and Directors’ report includes a fair review of the development and performance of the business and the position of the Company
and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face.
The Directors 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, performance, business model and strategy.
Signed on behalf of the Board of Directors
E P O’Lionaird
Chief Executive Officer
9 March 2022
D Kennedy
Chief Financial Officer
9 March 2022
TheDirectorsareresponsibleforpreparingtheAnnualReportandtheGroupandparentCompanyfinancialstatementsinaccordancewithapplicable
law and regulations.
CompanylawrequirestheDirectorstoprepareGroupandparentCompanyfinancialstatementsforeachfinancialyear.Underthatlawtheyare
requiredtopreparetheGroupfinancialstatementsinaccordancewithinternationalaccountingstandardsinconformitywiththerequirementsofthe
UK–adoptedinternationalaccountingstandardsandapplicablelawandhaveelectedtopreparetheparentcompanyfinancialstatementsonthe
samebasis.Inaddition,theGroupfinancialstatementsarerequiredundertheUKDisclosureGuidanceandTransparencyRulestobepreparedin
accordance with International Financial Reporting Standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union
(IFRSs as adopted by the EU).
UndercompanylawtheDirectorsmustnotapprovethefinancialstatementsunlesstheyaresatisfiedthattheygiveatrueandfairviewofthestate
ofaffairsoftheGroupandparentCompanyandoftheGroup’sprofitorlossforthatperiod.InpreparingeachoftheGroupandparentCompany
financialstatements,theDirectorsarerequiredto:
select suitable accounting policies and then apply them consistently;
make judgements and estimates that are reasonable, relevant and reliable;
state whether they have been prepared in accordance with UK – adopted international accounting standards;
assess the Group and parent Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and
use the going concern basis of accounting unless they either intend to liquidate the Group or the parent Company or to cease operations, or have no
realistic alternative but to do so.
TheDirectorsareresponsibleforkeepingadequateaccountingrecordsthataresufficienttoshowandexplaintheparentCompany’stransactions
anddisclosewithreasonableaccuracyatanytimethefinancialpositionoftheparentCompanyandenablethemtoensurethatitsfinancial
statements comply with the Companies Act 2006. They are responsible for such internal control as they determine is necessary to enable the
preparationoffinancialstatementsthatarefreefrommaterialmisstatement,whetherduetofraudorerror,andhavegeneralresponsibilityfor
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.
TheDirectorsareresponsibleforthemaintenanceandintegrityofthecorporateandfinancialinformationincludedontheCompany’swebsite.
LegislationintheUKgoverningthepreparationanddisseminationoffinancialstatementsmaydifferfromlegislationinotherjurisdictions.
Financial statements
In this section
Independent auditor’s report 120
Consolidated income statement 128
Consolidated statement of other
comprehensive income 129
Consolidated and Company statement
offinancialposition 130
ConsolidatedandCompanycashflowstatement 131
Consolidated statement of changes in equity 132
Company statement of changes in equity 133
Notestothefinancialstatements 134
Subsidiaries and associated undertakings 188
Groupfinancialrecord 192
Investor information 193
In June 2021, we outlined a roadmap to achieve
our objective of greater than 10% operating profit
margin and greater than 15% return on capital employed.
This roadmap is based on three phases: “Reset, Reinforce
and Realise”. Throughout the year we continued to execute
the Reset and Reinforce phases to create the foundations
for sustainable profitable growth.
Financial statements Financial statements
Strategic report Governance
118 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 119
Independent auditor’s report
1 Our opinion is unmodified
WehaveauditedthefinancialstatementsofJamesFisherandSonsplc(“theCompany”)fortheyearended31December2021whichcomprise
the Consolidated Income Statement, the Consolidated Statement of Other Comprehensive Income, the Consolidated and Company Statement of
Financial Position, the Consolidated and Company Cash Flow Statement, the Consolidated Statement of Changes in Equity, the Company Statement
of Changes in Equity and the related notes, including the accounting policies in note 33.
In our opinion:
thefinancialstatementsgiveatrueandfairviewofthestateoftheGroup’sandoftheparentCompany’saffairsasat31December2021andofthe
Group’s loss for the year then ended;
theGroupfinancialstatementshavebeenproperlypreparedinaccordancewithUK-adoptedinternationalaccountingstandards;
theparentCompanyfinancialstatementshavebeenproperlypreparedinaccordancewithUK-adoptedinternationalaccountingstandardsandas
applied in accordance with the provisions of the Companies Act 2006; and
thefinancialstatementshavebeenpreparedinaccordancewiththerequirementsoftheCompaniesAct2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities are
describedbelow.Webelievethattheauditevidencewehaveobtainedisasufficientandappropriatebasisforouropinion.Ourauditopinionis
consistent with our report to the audit committee.
Wewerefirstappointedasauditorbythedirectorson30June2008.Theperiodoftotaluninterruptedengagementisforthe14financialyearsended
31December2021.Wehavefulfilledourethicalresponsibilitiesunder,andweremainindependentoftheGroupinaccordancewith,UKethical
requirements including the FRC Ethical Standard as applied to listed public interest entities.
No non-audit services prohibited to that standard were provided.
2 Key audit matters: our assessment of risks of material misstatement
Keyauditmattersarethosemattersthat,inourprofessionaljudgement,wereofmostsignificanceintheauditofthefinancialstatementsandinclude
themostsignificantassessedrisksofmaterialmisstatement(whetherornotduetofraud)identifiedbyus,includingthosewhichhadthegreatest
effecton:theoverallauditstrategy;theallocationofresourcesintheaudit;anddirectingtheeffortsoftheengagementteam.Wesummarisebelow
thekeyauditmatters,indecreasingorderofauditsignificance,inarrivingatourauditopinionabove,togetherwithourkeyauditproceduresto
address those matters and, as required for public interest entities, our results from those procedures. These matters were addressed, and our results
arebasedonproceduresundertaken,inthecontextof,andsolelyforthepurposeof,ourauditofthefinancialstatementsasawhole,andinforming
our opinion thereon, and consequently are incidental to that opinion, and we do not provide a separate opinion on these matters.
Impairment of goodwill related to specific CGUs, included in impairment charge of £27.5m (2020: £17.0m) and carrying amount of
goodwill £133.5m (2020: £166.5m) and Parent Company impairment of investment in subsidiaries, £nil (2020: £40.6m), carrying value
£486.3m (2020: £505.7m) Risk vs 2020:
Refertopage91(AuditCommitteereport),page181(accountingpolicy)andpages146and151(financialdisclosures)
The risks: Forecast based assessment
The recoverability of goodwill in the Group and Parent Company investment in subsidiaries is subjective due to the inherent uncertainty involved in
forecastinganddiscountingfuturecashflows,particularlyinlightoftheongoingimpactsofCOVIDontradingperformanceinthecurrentandprior
years,operationaldifficultiesandchangesintheexternaloilmarket.Climateriskmeansthereisuncertaintyparticularlyaroundtheusefullifeofassets
and appropriate forecast periods. The risk has increased from prior year due to increased uncertainties around the trading performance of CGUs and
subsidiaries.
Theeffectofthesemattersisthat,aspartofourriskassessment,wedeterminedthattherecoverableamountofgoodwillandinvestmentin
subsidiarieshasahighdegreeofestimationuncertainty,withapotentialrangeofreasonableoutcomesgreaterthanourmaterialityforthefinancial
statementsasawholeandpossiblymanytimesthatamount.Thefinancialstatementsnote12disclosesthesensitivityestimatedbytheGroupfor
goodwill.
For goodwill, we have isolated the risk of material impairment to the following CGUs as these have the lowest headroom within both the Group’s
discountedcashflowworkingsandourownsensitivities:JamesFisherOffshore,JamesFisherMarineServices,DDSandStrainstall.
We continue to perform procedures over presentation appropriateness of goodwill impairment as a separately disclosed item. However, given a
recurringnatureofthisitem,wehavenotassessedthisasoneofthemostsignificantrisksinourcurrentyearauditand,therefore,itisnotseparately
identifiedinourreportthisyear.
Our response: We performed the tests below rather than seeking to rely on any of the group’s controls because the nature of the balance is such
thatdetailedtestingisinherentlythemosteffectivemeansofobtainingauditevidence.
Our audit procedures included
1. Historical comparisons: assessing the reasonableness of management’s budgets by considering the historical accuracy of previous forecasts.
2. Our sector experience:assessingtheassumptionsused,inparticularthoserelatingtoanticipatedgrowth,forecastedoperatingprofitmargins
and expected new business including assessing the likelihood of new contract wins. We have considered market conditions in the procedures
performedandreflectedourknowledgeofthebusinessandindustries,includingknownorprobablechangesinthebusinessenvironment.
We assessed the key inputs to the Group’s forecasts, drawing on historical data and our own research and sector experience.
3. Benchmarking assumptions: Comparing the Group’s assumptions to externally derived data in relation to key inputs such as terminal growth
value,discountrate(usingourownvaluationspecialist),andtheperiodofcashflowsincludedwithinthemodel.ForCGUsimpactedbyclimate
risk,suchasthoseoperatingintheoilmarket,wehaveconsideredtheperiodofcashflowsincludedintheforecasts,byreferencetocontract
terms,andhavechallengedtheappropriatenessofaterminalvalueassuchoperationsarelikelytohaveafinitelife.Wehavealsocompared
the value-in-use for all CGUs in aggregate to the Group’s own market capitalisation.
4. Enquiries: enquiry of directors as to the nature of the capital expenditure projects included in the budget and considering whether such items
areallowableinthevalue-in-usecashflowforecastsundertheaccountingstandards.
5. Sensitivity analysis: performing sensitivity analysis on the key assumptions noted above either in isolation or in aggregate. This included
reperforming management’s sensitivities within their goodwill model.
6. Assessing transparency: assessing whether the Group’s disclosures about the sensitivity of the outcome of the impairment assessment
tochangesinkeyassumptionsreflectedtherisksinherentintherecoverableamountsofgoodwill.
Our results: We found the Group goodwill and Parent Company investments in subsidiaries balance, the related impairment charges,
to be acceptable (2020: acceptable).
Revenue recognition £494.1m (2020: £518.2m), Contract assets £66.3m (2020: £65.3m) and Contract Liabilities £9.0m (2020: £12.7m)
Risk vs 2020: Stable
Refertopage185(accountingpolicy)andpages137and138(financialdisclosures)
The risk: Subjective estimates
The contractual arrangements that underpin the measurement and recognition of revenue by the Group can be complex, with subjective estimates
involved in the assessment of current and future contract performance. In particular, where services rendered are provided through long-term
contracts and are not completed at the balance sheet date and output measures cannot be estimated reliably, revenue is recognised in proportion to
the measure of progress of the transaction measured by reference to an input measure, such as physical progress, attributable man hours and costs
incurred measured against the expected outcome which leads to contract asset or liabilities at the period end. The measure of progress is estimated
by the Group and includes certain judgements as contracts may run over a number of accounting periods and include forecasts in relation to future
costsincludinglabourandmaterialswhicharenotyetknown.Inaddition,forbothlong-termandothercontracts,contractmodifications,disputes
withcustomerscontractdelaysandvariableconsiderationcanleadtouncertaintyoverthetotalcontractprice.Theeffectofthesemattersisthat,as
part of our risk assessment, we determined that revenue recognition has a high degree of estimation uncertainty, with a potential range of reasonable
outcomesgreaterthanourmaterialityforthefinancialstatementsasawhole,andpossiblymanytimesthatamount.
Our response: We performed the tests below rather than seeking to rely on any of the group’s controls because the nature of the balance is such
thatdetailedtestingisinherentlythemosteffectivemeansofobtainingauditevidence.
Our audit procedures included:
1. Test of details: for long term contracts, selecting the contracts for substantive audit procedures based on qualitative factors, such as commercial
complexityandlifeofcontract,andquantitativefactors,suchasfinancialsignificanceandprofitabilitythatweconsideredtobeindicativeof
risk. For the selected contracts, agreeing observable inputs used in the calculations of costs incurred to date to be able to assess the stage of
completion. Costs incurred are those such as direct costs and labour charges; we agreed a sample of these to source data, including customer
acceptance documentation and countersigned agreements. Our testing included agreeing the allocation of costs incurred to contracts, and
assessing the impact of delays to timetable and additional costs incurred as a result of the continued impacts of COVID.
2. Historical comparisons: assessing the reliability of the Group’s forecasts of costs to complete by considering historical accuracy of their forecasts
on completed contracts.
3. Personnel enquiries: discussing with operational management for the sample above their expectations for contracts, and comparing these to the
forecasts used for the accounting.
4. Our sector experience: assessing, for the sample above, whether the subjective estimates made by the Group over the measure of progress
and estimates over cost to complete are consistent with our understanding of contract activities and performance. This involved comparing
assumptions such as the estimate over costs to complete to a variety of information as appropriate, including correspondence with customers,
historicaloutcomesandoperationalmanagementviews.Forcontractsinthesampleabovethathavesignificantestimationinthetotalcontract
priceduetocontractmodificationsandvariableconsideration,weassessedtheassumptionsmadebythedirectorsinlightoftheGroup’s
historical experience on similar contracts and correspondence with customers.
Financial statements
Strategic report
Governance
Financial statements
120 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 121
Independent auditor’s report cont.
5. Our industry expertise: Utilising internal industry specialists who has particular skills in contracting for a sample of contracts to review the risks
associated with the contract and challenge the stage of completion, costs to complete and provisions held in relation to these contracts.
6. Applying judgement:assessingwhetheranoverstatementofrevenuefromlongtermcontractsandcontractassetsidentifiedthroughthese
procedures was material.
7. Assessing transparency: assessing the appropriateness of the Group’s disclosures in respect of revenue recognition, contract assets and
liabilities.
Our results: We found revenue recognition and associated contract assets and liabilities, to be acceptable (2020: acceptable).
We continue to perform procedures over impairment of vessels and Group operations in overseas jurisdictions. However, following disposal of a
diving support vessel and following resolution of a number of legacy matters in overseas jurisdictions, we have not assessed these as being the most
significantrisksinourcurrentyearauditand,therefore,theyarenotseparatelyidentifiedinourreportthisyear.
3 Our application of materiality and an overview of the scope of our audit
MaterialityfortheGroupfinancialstatementsasawholewassetat£1.1mdeterminedwithreferencetoabenchmarkofGroupoperatingprofit,
normalisedtoexcludeitemsdisclosedinNote5,of£28.0m,ofwhichitrepresents3.9%.In2020materialityfortheGroupfinancialstatementsasa
wholewassetat£2.3mdeterminedwithreferencetoabenchmarkofGroupprofitbeforetax,normalisedtoexcludeitemsdisclosedinNote5and
averaged over 5 years, of £49.1m, of which it represents 4.7%.
MaterialityfortheParentcompanyfinancialstatementsasawholewassetat£0.3m(2020:£0.7m),determinedwithreferencetocomponent
materiality. This is lower than the materiality we would otherwise have determined by reference to the parent company’s total assets of £5.1m (2020:
£5.3m), of which it represents 1% (2020: 1%).
In line with our audit methodology, our procedures on individual account balances and disclosures were performed to a lower threshold, performance
materiality, so as to reduce to an acceptable level the risk that individually immaterial misstatements in individual account balances add up to a
materialamountacrossthefinancialstatementsasawhole.
PerformancematerialityfortheGroupwassetat65%(2020:65%)ofmaterialityforthefinancialstatementsasawhole,whichequatesto£0.7m
(2020: £1.5m).
PerformancematerialityfortheParentCompanywassetat75%(2020:65%)ofmaterialityforthefinancialstatementsasawhole,whichequatesto
£0.2m (2020: £0.5m).
Weappliedthesepercentagesinourdeterminationofperformancematerialitybasedonthelevelofidentifiedmisstatementsduringthepriorperiod.
WeagreedtoreporttotheAuditCommitteeanycorrectedoruncorrectedidentifiedmisstatementsexceeding£55k(2020:£120k),inadditionto
otheridentifiedmisstatementsthatwarrantedreportingonqualitativegrounds.
Of the Group’s 146 (2020: 146) reporting components, we subjected 15 (2020: 17) to full scope audits for Group purposes and 2 (2020: 0) to
specifiedriskfocusedauditproceduresovervessels.Thelatterwerenotindividuallyfinanciallysignificantenoughtorequireafullscopeauditfor
Grouppurposesbutdidpresentspecificindividualrisksthatneededtobeaddressed.Thegroupteamperformedproceduresontheitemsexcluded
fromnormalisedGroupoperatingprofit.
Weconductedreviewsoffinancialinformation(includingenquiry)atafurther11(2019:9)non-significantcomponentstoobtainfurthercoverage.
ThesecomponentswerenotindividuallyfinanciallysignificantenoughtorequireanauditforGroupreportingpurposesanddidnotpresentspecific
risks that needed to be addressed.
The components within the scope of our work accounted for the following percentages of the Group’s results:
Number of
components Group Revenue
Group profit
before tax
Group total
assets
Audit for group reporting purposes 15 (2020: 17) 85% (2020: 86%) 75% (2020: 76%) 83% (2020: 75%)
Specifiedproceduresforgroupreportingpurposes 2 (2020: 0) 2% (2020: 0%) 1% (2020: 0%) 2% (2020: 0%)
Reviewsoffinancialinformation(includingenquiry) 11 (2020: 9) 8% (2020: 10%) 5% (2020: 6%) 5% (2020: 8%)
Total
28 (2020: 26) 95% (2020: 96%) 71% (2020: 82%) 93% (2020: 83%)
Theremaining5%(2020:4%)oftotalGrouprevenue,7%(2020:17%)ofGroupprofitbeforetaxand29%(2020:18%)oftotalGroupassetsis
representedby118reportingcomponents,noneofwhichindividuallyrepresentedmorethan1%ofanyoftotalGrouprevenue,3%Groupprofit
before tax and 1% total Group assets.
Fortheseresidualcomponents,weperformedanalysisatanaggregatedGroupleveltore-examineourassessmentthattherewerenosignificant
risks of material misstatement within these.
TheGroupauditteaminstructedcomponentauditorsastothesignificantareastobecovered,includingtherelevantrisksdetailedaboveandthe
information to be reported back. The Group audit team approved the component materialities, which ranged from £0.1m to £0.66m (2020: £0.1m
to£1.25m),havingregardtothemixofsizeandriskprofileoftheGroupacrossthecomponents.
The work on 13 (2020: 15) of the 28 (2020: 26) components was performed by component auditors and the rest, including the audit of the Parent
Company, was performed by the Group audit team. The scope of the audit work performed was predominantly substantive as we placed limited
relianceupontheGroup’sinternalcontroloverfinancialreporting.
The Group audit team had video and telephone meetings with all component auditors to oversee their work and had video discussions with
management of the components in scope for the group audit. The Group audit team also evaluated the audit work of the component auditors
throughdiscussionswith,andremotereviewof,theauditworkingpapersofcomponentteams.ThefindingsreportedtotheGroupteamwere
discussed in detail with the component audit teams, and any further work required by the Group team was then performed by the component
auditor.
4 The impact of climate change on our audit
Inplanningouraudit,wehaveconsideredthepotentialimpactofclimatechangeonthegroup’sbusinessoperationsanditsfinancialstatements
takingintoaccountthedifferentdivisions.Werecognisegiventhediversenatureofthegroup’soperationstherearepotentiallybothrisksand
opportunities arising as a result of climate change.
Thepotentialeffectsofclimatechangevaryfordifferentactivitiesofthegroup,withthosedivisionsthataremorelinkedtofossilfuelactivitypotentially
beingmoreaffected.
Uncertaintiesandpotentialchangestothelonger-termactivityofthegroupcouldaffecttheelementsoffinancialstatementswithforward-looking
assessments such as impairment of, or reassessment of the life of, long-term assets.
As part of our risk assessment we made enquiries of management and reviewed board minutes and related risk and internal audit documents. We
have held discussions with our own climate change professionals to challenge our risk assessment. Our risk assessment took into account the nature
of the group’s long-term assets and the relative size of assets related to the divisions with most exposure to climate change uncertainty.
OurGoodwillKeyAuditMatterdescribestheriskandresponseinrelationtouncertaintiesincashflowprojectionsforsignificantCGUs.Inthecourse
of our audit work, we also took climate change factors into account in evaluating the directors’ assessment of the useful life of vessels.
Wehavereadthedisclosureofclimaterelatedinformationinthefronthalfoftheannualreportandconsideredconsistencywiththefinancial
statements and our audit knowledge.
5 Going concern
ThedirectorshavepreparedthefinancialstatementsonthegoingconcernbasisastheydonotintendtoliquidatetheGrouportheCompanyorto
ceasetheiroperations,andastheyhaveconcludedthattheGroup’sandtheCompany’sfinancialpositionmeansthatthisisrealistic.Theyhavealso
concludedthattherearenomaterialuncertaintiesthatcouldhavecastsignificantdoubtovertheirabilitytocontinueasagoingconcernforatleasta
yearfromthedateofapprovalofthefinancialstatements(“thegoingconcernperiod”).
We used our knowledge of the Group, its industry, and the general economic environment to identify the inherent risks to its business model and
analysedhowthoserisksmightaffecttheGroup’sandCompany’sfinancialresourcesorabilitytocontinueoperationsoverthegoingconcern
period.TheriskthatweconsideredmostlikelytoadverselyaffecttheGroup’sandCompany’savailablefinancialresourcesandmetricsrelevantto
debtcovenantsoverthisperiodwerethesignificantincreaseincosttodeliverlongtermcontracts,challengingmarketconditionsandwithdelaysto
currentandfuturecontracts.WealsonotethedeclineintradeinthecurrentperiodmayalsoadverselyaffecttheGroup’saccesstofinance.
Weconsideredwhethertheseriskscouldplausiblyaffecttheliquidityorcovenantcomplianceinthegoingconcernperiodbyassessingthedirectors’
sensitivitiesoverthelevelofavailablefinancialresourcesandcovenantthresholdsindicatedbytheGroup’sfinancialforecaststakingaccountof
severe,butplausible,adverseeffectsthatcouldarisefromtheserisksindividuallyandcollectively.
Our procedures also included:
1. Assessing key assumptions in the forecasts - critically assessing assumptions in base case and downside scenarios relevant to liquidity and
covenant metrics. This included assessing whether downside scenarios applied are mutually consistent, using our assessment of the possible
range of each key assumption and our knowledge of inter-dependencies, and assessing the working capital assumptions inherent in the forecasts
to actual recent experience and existing supplier/customer arrangements.
2. Assessing the directors’ track record of forecast vs actual cash flows - comparing past budgets to actual results to assess the directors’
track record of budgeting accurately.
3. Assessing the completeness and accuracy of the matters covered in the going concern disclosure – evaluating the completeness of the
goingconcerndisclosurebyconsideringwhetherthegoingconcerndisclosureinnote1tothefinancialstatementsgivesafullandaccurate
descriptionofthedirectors’assessmentofgoingconcern,includingtheidentifiedrisksandrelatedsensitivities.
Financial statements
Strategic report
Governance
Financial statements
122 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 123
Independent auditor’s report cont.
Our conclusions based on this work:
weconsiderthatthedirectors’useofthegoingconcernbasisofaccountinginthepreparationofthefinancialstatementsisappropriate;
wehavenotidentified,andconcurwiththedirectors’assessmentthatthereisnot,amaterialuncertaintyrelatedtoeventsorconditionsthat,
individuallyorcollectively,maycastsignificantdoubtontheGroup’sorCompany’sabilitytocontinueasagoingconcernforthegoingconcernperiod;
wehavenothingmaterialtoaddordrawattentiontoinrelationtothedirectors’statementinnote1tothefinancialstatementsontheuseofthegoing
concernbasisofaccountingwithnomaterialuncertaintiesthatmaycastsignificantdoubtovertheGroupandCompany’suseofthatbasisforthe
going concern period, and we found the going concern disclosure in note 1 to be acceptable; and
therelatedstatementundertheListingRulessetoutonpage69ismateriallyconsistentwiththefinancialstatementsandourauditknowledge.
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 above conclusions are not a guarantee that the Group or the Company will
continue in operation.
6 Fraud and breaches of laws and regulations – ability to detect
Identifying and responding to risks of material misstatement due to fraud
To identify risks of material misstatement due to fraud (“fraud risks”) we assessed events or conditions that could indicate an incentive or pressure to
commit fraud or provide an opportunity to commit fraud. Our risk assessment procedures included:
Enquiring of directors , the audit committee, internal audit, the Company Secretary 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, the Group’s channel for “whistleblowing”, as well as whether
they have knowledge of any actual, suspected or alleged fraud.
Reading Board/ audit committee/ risk committee minutes.
Considering remuneration incentive schemes and performance targets for management and directors.
Using analytical procedures to identify any unusual or unexpected relationships.
Consultationwithourownforensicprofessionalsregardingtheidentifiedfraudrisksandthedesignoftheauditproceduresplannedinresponseto
these. This involved discussion between the engagement partner, the Group audit team and the forensic professional.
Wecommunicatedidentifiedfraudrisksthroughouttheauditteamandremainedalerttoanyindicationsoffraudthroughouttheaudit.Thisincluded
communicationfromtheGroupauditteamtofullscopecomponentauditteamsofrelevantfraudrisksidentifiedattheGrouplevelandrequesttofull
scope component audit teams to report to the Group audit team any instances of fraud that could give rise to a material misstatement at the Group
level.
Asrequiredbyauditingstandardsandtakingintoaccountpossiblepressurestomeetprofittargetsandouroverallknowledgeofthecontrol
environment, we perform procedures to address the risk of management override of controls and the risk of fraudulent revenue recognition in
particular:
the risk that Group and component management may be in a position to make inappropriate accounting entries;
the risk of bias in accounting estimates and judgements such as provisions for contract disputes;
the risk of bias in accounting for judgements in relation to variable consideration; and
the risk that revenues are over or understated through recording revenues in the wrong period.
Further detail in respect of revenue recognition is set out in the key audit matter disclosure in section 2 of this report.
We also performed procedures including:
Identifyingjournalentriestotestforallfullscopecomponentsbasedonriskcriteriaandcomparingtheidentifiedentriestosupportingdocumentation.
Theseincludedunexpectedjournalspostedtocashaccounts,commissionspaidtoagentsandseparatelydisclosedfinancialstatementcaptions.
Evaluatingthebusinesspurposeofsignificantunusualtransactions.
Assessing whether the judgements made in making accounting estimates are indicative of a potential bias.
Identifying and responding to risks of material misstatement due to non-compliance with laws and regulations
Weidentifiedareasoflawsandregulationsthatcouldreasonablybeexpectedtohaveamaterialeffectonthefinancialstatementsfromourgeneral
commercial and sector experience, through discussion with the directors, the Company Secretary and other management (as required by auditing
standards) and from inspection of the Group’s regulatory and legal correspondence and discussed with the directors, the Company Secretary and
other management the policies and procedures regarding compliance with laws and regulations.
As the Group is regulated, our assessment of risks involved gaining an understanding of the control environment including the entity’s procedures for
complying with regulatory requirements.
Wecommunicatedidentifiedlawsandregulationsthroughoutourteamandremainedalerttoanyindicationsofnon-compliancethroughouttheaudit.
Thisincludedcommunicationfromthegrouptofull-scopecomponentauditteamsofrelevantlawsandregulationsidentifiedattheGrouplevel,anda
request for full scope component auditors to report to the group team any instances of non-compliance with laws and regulations that could give rise
to a material misstatement at the Group level.
Thepotentialeffectoftheselawsandregulationsonthefinancialstatementsvariesconsiderably.
Firstly,theGroupissubjecttolawsandregulationsthatdirectlyaffectthefinancialstatementsincludingfinancialreportinglegislation(includingrelated
companieslegislation),distributableprofitslegislation,taxationlegislationandpensionlegislationandweassessedtheextentofcompliancewith
theselawsandregulationsaspartofourproceduresontherelatedfinancialstatementitems.
Secondly,theGroupissubjecttomanyotherlawsandregulationswheretheconsequencesofnon-compliancecouldhaveamaterialeffecton
amountsordisclosuresinthefinancialstatements,forinstancethroughtheimpositionoffinesorlitigationorthelossoftheGroup’slicenseto
operate.Weidentifiedthefollowingareasasthosemostlikelytohavesuchaneffect:healthandsafety,anti-bribery,foreigncorruptpracticesact,
employment law, maritime law and certain aspects of company legislation recognising the nature of the Group’s activities.
Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the directors, the
Company Secretary and other management and inspection of regulatory and legal correspondence, if any. Therefore if a breach of operational
regulations is not disclosed to us or evident from relevant correspondence, an audit will not detect that breach.
Context of the ability of the audit to detect fraud or breaches of law or regulation
Owingtotheinherentlimitationsofanaudit,thereisanunavoidableriskthatwemaynothavedetectedsomematerialmisstatementsinthefinancial
statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further
removednon-compliancewithlawsandregulationsisfromtheeventsandtransactionsreflectedinthefinancialstatements,thelesslikelythe
inherently limited procedures required by auditing standards would identify it.
In addition, as with any audit, there remained a higher risk of non-detection of fraud, as these may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal controls. Our audit procedures are designed to detect material misstatement. We are not responsible
for preventing non-compliance or fraud and cannot be expected to detect non-compliance with all laws and regulations.
7 We have nothing to report on the other information in the Annual Report
ThedirectorsareresponsiblefortheotherinformationpresentedintheAnnualReporttogetherwiththefinancialstatements.Ouropiniononthe
financialstatementsdoesnotcovertheotherinformationand,accordingly,wedonotexpressanauditopinionor,exceptasexplicitlystatedbelow,
any form of assurance conclusion thereon.
Ourresponsibilityistoreadtheotherinformationand,indoingso,considerwhether,basedonourfinancialstatementsauditwork,theinformation
thereinismateriallymisstatedorinconsistentwiththefinancialstatementsorourauditknowledge.Basedsolelyonthatworkwehavenotidentified
material misstatements in the other information.
Strategic report and directors’ report
Based solely on our work on the other information:
wehavenotidentifiedmaterialmisstatementsinthestrategicreportandthedirectors’report;
inouropiniontheinformationgiveninthosereportsforthefinancialyearisconsistentwiththefinancialstatements;and
in our opinion those reports 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.
Disclosures of emerging and principal risks and longer-term viability
We are required to perform procedures to identify whether there is a material inconsistency between the directors’ disclosures in respect of emerging
andprincipalrisksandtheviabilitystatement,andthefinancialstatementsandourauditknowledge.
Based on those procedures, we have nothing material to add or draw attention to in relation to:
thedirectors’confirmationwithintheviabilitystatementonpage69thattheyhavecarriedoutarobustassessmentoftheemergingandprincipalrisks
facing the Group, including those that would threaten its business model, future performance, solvency and liquidity;
thePrincipalRisksdisclosuresdescribingtheserisksandhowemergingrisksareidentified,andexplaininghowtheyarebeingmanagedand
mitigated; and
the directors’ explanation in the viability statement of how they have assessed the prospects of the Group, over what period they have done so and
why they considered that period to be appropriate, and their statement as to whether they have a reasonable expectation that the Group will be able
to continue in operation and meet its liabilities as they fall due over the period of their assessment, including any related disclosures drawing attention
toanynecessaryqualificationsorassumptions.
Financial statements
Strategic report
Governance
Financial statements
124 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 125
Independent auditor’s report cont.
We are also required to review the viability statement, set out on page 69 under the Listing Rules. Based on the above procedures, we have
concludedthattheabovedisclosuresaremateriallyconsistentwiththefinancialstatementsandourauditknowledge.
Ourworkislimitedtoassessingthesemattersinthecontextofonlytheknowledgeacquiredduringourfinancialstatementsaudit.Aswecannot
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 anything to report on these statements is not a guarantee as to the Group’s and Company’s longer-term
viability.
Corporate governance disclosures
We are required to perform procedures to identify whether there is a material inconsistency between the directors’ corporate governance disclosures
andthefinancialstatementsandourauditknowledge.
Basedonthoseprocedures,wehaveconcludedthateachofthefollowingismateriallyconsistentwiththefinancialstatementsandouraudit
knowledge:
thedirectors’statementthattheyconsiderthattheannualreportandfinancialstatementstakenasawholeisfair,balancedandunderstandable,and
provides the information necessary for shareholders to assess the Group’s position and performance, business model and strategy;
thesectionoftheannualreportdescribingtheworkoftheAuditCommittee,includingthesignificantissuesthattheauditcommitteeconsideredin
relationtothefinancialstatements,andhowtheseissueswereaddressed;and
thesectionoftheannualreportthatdescribesthereviewoftheeffectivenessoftheGroup’sriskmanagementandinternalcontrolsystems.
We are required to review the part of the Corporate Governance Statement relating to the Group’s compliance with the provisions of the UK
CorporateGovernanceCodespecifiedbytheListingRulesforourreviewandtoreporttoyouifacorporategovernancestatementhasnotbeen
prepared by the company. We have nothing to report in these respects.
Based solely on our work on the other information described above:
withrespecttotheCorporateGovernanceStatementdisclosuresaboutinternalcontrolandriskmanagementsystemsinrelationtofinancialreporting
processes and about share capital structures:
wehavenotidentifiedmaterialmisstatementstherein;and
theinformationthereinisconsistentwiththefinancialstatements;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.
8 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 parent Company, or returns adequate for our audit have not been received from branches not
visited by us; or
theparentCompanyfinancialstatementsandthepartoftheDirectors’RemunerationReporttobeauditedarenotinagreementwiththeaccounting
records and returns; or
certaindisclosuresofdirectors’remunerationspecifiedbylawarenotmade;or
we have not received all the information and explanations we require for our audit.
We have nothing to report in these respects.
9 Respective responsibilities
Directors’ responsibilities
Asexplainedmorefullyintheirstatementsetoutonpages116and117,thedirectorsareresponsiblefor:thepreparationofthefinancialstatements
includingbeingsatisfiedthattheygiveatrueandfairview;suchinternalcontrolastheydetermineisnecessarytoenablethepreparationoffinancial
statements that are free from material misstatement, whether due to fraud or error; assessing the Group and parent 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 parent Company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities
Ourobjectivesaretoobtainreasonableassuranceaboutwhetherthefinancialstatementsasawholearefreefrommaterialmisstatement,whether
due to fraud or error, and to issue our opinion in an auditor’s report. Reasonable assurance is a high level of assurance, but does not guarantee that
an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or
errorandareconsideredmaterialif,individuallyorinaggregate,theycouldreasonablybeexpectedtoinfluencetheeconomicdecisionsofusers
takenonthebasisofthefinancialstatements.
A fuller description of our responsibilities is provided on the FRC’s website at www.frc.org.uk/auditorsresponsibilities.
10 The purpose of our audit work and to whom we owe our responsibilities
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.
Mike Barradell (Senior Statutory Auditor)
for and on behalf of KPMG LLP, Statutory Auditor
Chartered Accountants
15 Canada Square
Canary Wharf
London
E14 5GL
10 March 2022
Financial statements
Strategic report
Governance
Financial statements
126 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 127
Consolidated statement of other comprehensive income
for the year ended 31 December 2021
Notes
Year ended
31 December
2021
£m
Year ended
31 December
2020
£m
Loss for the year (28 .2 )
(5 7. 3 )
Items that will not be classified to the income statement
Actuarialgain/(loss)indefinedbenefitpensionschemes 23
(9.3 )
Taxonitemsthatwillnotbereclassified
(0.5 )
(8. 2 )
Items that may be reclassified to the income statement
Exchangedifferencesonforeigncurrencynetinvestments
(2.6 )
( 7. 8 )
Effectiveportionofchangesinfairvalueofcashflowhedges 29
(2.6 )
Effectiveportionofchangesinfairvalueofcashflowhedgesinjointventures 16
(0. 2 )
Netchangesinfairvalueofcashflowhedgestransferredtoincomestatement
(0 .1 )
Deferredtaxonitemsthatmaybereclassified 8
(4. 2 )
(6 .4 )
Total comprehensive income for the year (26.6 )
(71. 9 )
Attributable to:
Owners of the Company
(2 6 .1 )
(72.0 )
Non-controlling interests
(0.5 )
(26.6 )
(71. 9 )
Year ended 31 December 2021 Year ended 31 December 2020
Notes
Before
separately
disclosed
items
£m
Separately
disclosed
items
£m
Total
£m
Before
separately
disclosed
items
£m
Separately
disclosed
items
£m
Total
£m
Revenue
3
Cost of sales
(373. 6 ) (11 . 0 ) (38 4.6 )
(38 0.6 ) (4 3 . 2 ) (4 23.8 )
Gross profit 12 0 . 5 (11 . 0 ) 10 9. 5
Administrative expenses
(94.5 ) (3 7. 7 ) (13 2 . 2 )
(9 8 .7 ) (40 .8 ) (13 9 . 5 )
Share of post-tax results of associates 16
Operating profit/(loss) 28 .0 (4 8 .7 ) (20.7 )
Netfinanceexpense 7
(8.3 ) – (8.3 )
(9.0 ) – (9.0 )
Profit/(loss) before taxation 19.7 (4 8 .7 ) (2 9.0 )
Income tax 8
(1 0 .1 ) 10 . 9 0.8
( 7. 2 ) 2.4 (4.8 )
Profit/(loss) for the year 9.6 (3 7. 8 ) (2 8. 2 )
Attributable to:
Owners of the Company
Non-controlling interests
(0.4 ) – (0.4 )
Loss per share Pence Pence
Basic
10
(55. 2 )
(114 . 2 )
Diluted
10
(55. 2 )
(114 . 2 )
Consolidated income statement
for the year ended 31 December 2021
Financial statements
Strategic report
Governance
Financial statements
128 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 129
Group Company
Notes
31 December
2021
£m
31 December
2020
restated
£m
31 December
2021
£m
31 December
2020
£m
(Loss)/profitbeforetax
(29. 0 )
(5 2.5 )
12.0
(15.9)
Adjustmentstoreconcile(loss)/profitbeforetaxtonetcashflows
Depreciation and amortisation
1.0
1.1
Separately disclosed items (excluding amortisation) 5
2.7
41.7
Other non-cash items
(5.1)
(1.7)
(Increase)/decrease in inventories
(2 .7 )
–
–
(Increase)/decrease in trade and other receivables
(15 . 4 )
(1.7)
1.8
Increase/(decrease) in trade and other payables
(13 . 0 )
8.4
0.2
Definedbenefitpensioncashcontributionslessservicecost
(2. 2 )
(4.8 )
(1.9)
(4.7)
Cash generated from operations 58.5
15.4
22.5
Cashoutflowfromseparatelydiscloseditems
(1.7 )
(3.9 )
–
(0.6)
Income tax (payments)/receipts
(7. 9 )
( 7. 9 )
(0.1)
0.9
Cash flow from operating activities 4 8.9
15.3
22.8
Investing activities
Dividends from joint venture undertakings
–
–
Proceeds from the disposal of a subsidiary, net of cash disposed 26
–
–
Proceeds from the disposal of property, plant and equipment
–
–
Finance income
11.4
11.6
Acquisition of subsidiaries, net of cash acquired 25
(1 .1 )
( 7. 9 )
–
–
Net loans advanced to subsidiaries
19.4
(51.2)
Investment in joint ventures and other investments
(0.5 )
–
–
Acquisition of property, plant and equipment
(2 2 .1 )
(18 . 9 )
(0.3)
(0.1)
Development expenditure
(1. 5 )
(2. 9 )
–
–
Cash flows (used in)/from investing activities (1. 9 )
(24. 2 )
30.5
(39.7)
Financing activities
Proceeds from the issue of share capital
0.1
0.2
Finance costs
(5.6 )
( 7. 0 )
(4.7)
(6.3)
Net purchase of own shares by Employee Share Ownership Trust
(0.5 )
(0.9 )
(0.5)
(0.9)
Notional purchase of own shares for LTIP vesting
(0.5 )
(1. 0 )
(0.5)
(1.0)
Capital element of lease repayments
(13 .7 )
(13 . 0 )
(0.2)
(0.3)
Proceeds from borrowings
–
–
Repayment of borrowings
(8 9.9 )
(6 4. 5 )
(5.7)
(29.7)
Dividends paid 11
(4.0 )
–
(4.0)
Dividends paid to non-controlling interest
(0. 2 )
–
–
Cash flows used in financing activities (2 6 .1 )
(5 6 .1 )
(11.5)
(42.0)
Net increase/(decrease) in cash and cash equivalents 28
34.3
(58.9)
Cash and cash equivalents at 1 January 27
(42.9)
16.1
Netforeignexchangedifferences
(1.7 )
–
(0.1)
Cash and cash equivalents at 31 December
27
(8.6)
(42.9)
Consolidated and Company cash flow statement
for the year ended 31 December 2021
Group Company
Notes
31 December
2021
£m
31 December
2020
restated*
£m
31 December
2021
£m
31 December
2020
restated*
£m
Non-current assets
Goodwill 12
–
–
Other intangible assets 13
–
–
Property, plant and equipment 14
1.4
3.9
Right-of-use assets 15
1.3
1.5
Investment in joint ventures 16
–
–
Investments in subsidiaries 17
486.3
505.7
Other investments 17
1.4
1.4
Other receivables 19
–
–
Deferred tax assets 9
1.0
2.8
491.4
515.3
Current assets
Inventories 18
–
–
Trade and other receivables 19
6.9
6.3
Assets held for sale 20
–
–
Cash and cash equivalents 27
11.7
11. 5
18.6
17.8
Current liabilities
Trade and other payables 21
(149 .5 )
(13 9 . 3 )
(19.5)
(11.0)
Provisions 22
(2.0 )
–
–
Current tax 8
(4. 5 )
( 7. 6 )
–
(0.1)
Borrowings 27
(33 .6 )
(79 .8 )
(20.3)
(54.4)
Lease liabilities 27
(9.9 )
( 7. 2 )
(0.2)
(0.2)
(19 9 . 5 )
(233. 9 )
(40.0)
(65.7)
Net current assets 85.5
(21.4)
(47. 9 )
Total assets less current liabilities 425.4
470.0
467.4
Non-current liabilities
Other payables 21
(1. 3 )
(3.6 )
–
–
Provisions 22
(1 .1 )
(1. 6 )
–
–
Retirementbenefitobligations 23
(1. 9 )
(10 . 3 )
(1.4)
(9.5)
Cumulative preference shares 30
(0 .1 )
(0 .1 )
(0.1)
(0.1)
Borrowings 27
(17 3 . 9 )
(1 78.8 )
(173.9)
(178.6)
Lease liabilities 27
(3 6 .1 )
(25. 3 )
(1.4)
(1.5)
Deferred tax liabilities 9
(0.4 )
(1. 8 )
–
–
(214.8 )
(22 1 .5 )
(176.8)
(189.7)
Net assets 2 10 .6
293.2
27 7.7
Equity
Called up share capital 30
12.6
12.6
Share premium
26.8
26.7
Treasury shares
(0.6 )
(0. 2 )
(0.6)
(0.2)
Other reserves
(20.4 )
(16 . 5 )
–
1.9
Retained earnings
254.4
236.7
Total shareholders equity 20 9.9
293.2
27 7.7
Non-controlling interests
–
–
Total equity 210 . 6
293.2
27 7.7
* Cashandcashequivalentsandborrowings(current)havebeenrestatedforthe2020comparativeperiodtoreflectagrossupofcashatbankandinhandand
overdraft balances (see note 27).
** Right-of-useassets,tradeandotherpayables(current)andretainedearningshavebeenrestatedforthe2020comparativetoreflectachangeinaccountingpolicy
in respect of dry dock overhauls (see note 1).
ThefinancialstatementswereapprovedbytheBoardofDirectorson9March2022andsignedonitsbehalfby:
Duncan Kennedy
Chief Financial Officer
Company number: 00211475
Consolidated and Company statement of financial position
at 31 December 2021
Financial statements
Strategic report
Governance
Financial statements
130 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 131
Share
capital
£m
Share
premium
£m
Retained
earnings
£m
Hedging
reserves
£m
Treasury
shares
£m
Total
shareholders
equity
£m
At 1 January 2020 12.6 26.5 267.3 0.9 – 3 07. 3
Loss for the year – – (15.9) – – (15.9)
Other comprehensive income – – (8.8) 1.0 – (7. 8 )
Contributions by and distributions
to owners:
Ordinary dividends paid – – (4.0) – – (4.0)
Share based compensation – – 0.1 – – 0.1
Taxeffectofsharebasedcompensation – – (0.3) – – (0.3)
Purchase of shares by ESOT – – – – (0.9) (0.9)
Notional purchase of own shares – – (1.0) – – (1.0)
Arising on the issue of shares – 0.2 – – – 0.2
Transfer on disposal of shares – – (0.7) – 0.7 –
At 31 December 2020 12.6 26.7 236.7 1.9 (0.2) 27 7.7
Profitfortheyear – – 12.2 – – 12.2
Other comprehensive income – – 5.9 (1.9) – 4.0
Contributions by and distributions
to owners:
Share based compensation – – 0.3 – – 0.3
Taxeffectofsharebasedcompensation – – ( 0.1) – – (0.1)
Purchase of shares by ESOT – – – – (0.5) (0.5)
Notional purchase of own shares – – (0.5) – – (0.5)
Arising on the issue of shares – 0.1 – – – 0.1
Transfer on disposal of shares – – (0.1) – 0.1 –
At 31 December 2021 12.6 26.8 254.4 – (0.6) 293.2
Company statement of changes in equity
for the year ended 31 December 2021
Share
capital
£m
Share
premium
£m
Retained
earnings
£m
Other
reserves
£m
Treasury
shares
£m
Total
shareholders’
equity
£m
Non-
controlling
interests
£m
Total
equity
£m
At 1 January 2020 as reported 12 . 6 26.5 2 8 4 .7 (1 0.6 ) – 3 13 . 2 0.8 314 . 0
Accounting policy change – Right-of-use
Refitcapitalisation – – 2.0 – – 2.0 – 2.0
At 1 January 2020 12 . 6 26.5 2 8 6 .7 (10.6 ) – 315 . 2 0.8 3 16 . 0
Loss for the year – – ( 5 7. 5 ) – – (5 7. 5 ) 0. 2 (5 7. 3 )
Other comprehensive income – – (8 .7 ) (5.8 ) – (14 . 5 ) (0 .1 ) (14 . 6 )
Contributions by and distributions
to owners:
Ordinary dividends paid – – (4 .0 ) – – (4.0 ) – (4. 0 )
Dividend paid to minority interest – – – – – – (0 .2 ) (0.2 )
Remeasurement of non-controlling
interest put option – – – ( 0 .1 ) – (0 .1 ) – (0 .1 )
Share based payments – – 0 .1 – – 0 .1 – 0 .1
Taxeffectofsharebasedpayments – – (0 .3 ) – – (0.3 ) – (0.3 )
Purchase of shares by ESOT – – – – (0.9 ) (0. 9 ) – (0.9 )
Notional purchase of own shares – – (1. 0 ) – – (1. 0 ) – (1. 0 )
Arising on the issue of shares – 0.2 – – – 0. 2 – 0. 2
Transfer – – (0 .7 ) – 0.7 – – –
At 31 December 2020 12. 6 2 6 .7 2 14 . 6 (16 . 5 ) (0. 2 ) 2 3 7. 2 0 .7 2 3 7. 9
Loss for the year – – (2 7. 8 ) – – ( 2 7. 8 ) (0.4 ) (28 .2 )
Other comprehensive income – – 5. 8 (4 .1 ) – 1.7 (0 .1 ) 1. 6
Contributions by and distributions
to owners:
Remeasurement of non-controlling
interest put option – – – 0.2 – 0. 2 – 0. 2
Changes in ownership interest without a
change in control – – (0 .7 ) – – (0 .7 ) 0.5 (0. 2 )
Share based payments – – 0.3 – – 0.3 – 0. 3
Taxeffectofsharebasedpayments – – (0 .1 ) – – (0 .1 ) – ( 0 .1 )
Purchase of shares by ESOT – – – – (0.5 ) (0.5 ) – (0.5 )
Notional purchase of own shares – – (0.5 ) – – (0.5 ) – (0.5 )
Arising on the issue of shares – 0 .1 – – – 0 .1 – 0 .1
Transfer – – (0 .1 ) – 0 .1 – – –
At 31 December 2021 12 . 6 26.8 191. 5 (20.4 ) (0.6 ) 2 0 9.9 0.7 2 10. 6
Other reserve movements
Other reserves
Translation
reserve
£m
Hedging
reserve
£m
Put option
liability
£m
Total
£m
At 1 January 2020 ( 7. 8 ) (0. 2 ) (2.6 ) (1 0.6 )
Other comprehensive income (6.5 ) 0 .7 – (5.8 )
Remeasurement of non-controlling interest put option – – ( 0 .1 ) ( 0 .1 )
At 31 December 2020 (14 . 3 ) 0. 5 (2.7 ) (16 . 5 )
Other comprehensive income (2. 6 ) (1. 5 ) – (4 .1 )
Remeasurement of non-controlling interest put option – – 0. 2 0. 2
At 31 December 2021 (1 6.9 ) (1.0 ) (2 .5 ) (20.4 )
Consolidated statement of changes in equity
for the year ended 31 December 2021
Financial statements
Strategic report
Governance
Financial statements
132 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 133
2 Alternative performance measures cont.
2.1 Underlying operating profit and underlying profit before taxation
Underlyingoperatingprofitisdefinedasoperatingprofitbeforeseparatelydiscloseditems,whichcomprise:acquisitionrelatedincomeandexpense
(amortisation or impairment of acquired intangible assets, acquisition expenses, adjustments to contingent consideration), the costs of a material
restructuring,litigation,orassetimpairmentandtheprofitorlossrelatingtothesaleofbusinesses.Asacquisitionrelatedincomeandexpense
fluctuateswithactivityandtoprovideabettercomparisontobusinessesthatarenotacquisitive,theDirectorsconsiderthattheseitemsshouldbe
separatelydisclosedtogiveabetterunderstandingofoperatingperformance.Underlyingprofitbeforetaxationisdefinedasunderlyingoperating
profitlessnetfinanceexpense.
2021
£m
2020
£m
Operating loss
(20.7)
(43.5)
Separately disclosed items before taxation
48.7
84.0
Underlyingoperatingprofit
28.0
40.5
Netfinanceexpense
(8.3)
(9.0)
Underlyingprofitbeforetaxation
19.7
31.5
2.2 Underlying earnings per share
Underlyingearningspershare(EPS)iscalculatedasthetotalofunderlyingprofitbeforetax,lessincometax,butexcludingthetaximpacton
separatelydiscloseditemslessprofitattributabletonon-controllinginterests,dividedbytheweightedaveragenumberofordinarysharesinissue
during the year. The Directors believe that underlying EPS provides a better understanding of the underlying earnings capability of the Group.
Underlying earnings per share is set out in note 10.
2.3 Underlying capital employed and Return on Capital Employed (ROCE)
Capitalemployedisdefinedasnetassetslessright-of-useassets,lesscashandcashequivalentsandafteraddingbackborrowings.Averagecapital
employed is adjusted for the timing of businesses acquired and after adding back cumulative amortisation of customer relationships. Segmental
ROCEisdefinedastheunderlyingoperatingprofit,dividedbyaveragecapitalemployed.Thekeyperformanceindicator,Grouppost-taxROCE,is
definedasunderlyingoperatingprofit,lessnotionaltax,calculatedbymultiplyingtheeffectivetaxratebytheunderlyingoperatingprofit,dividedby
average capital employed.
2021
£m
2020
£m
Net assets
210.6
237. 9
Less right-of-use assets
(41.8)
(31.9)
Plus net borrowings
185.6
198.1
Capital employed
354.4
404.1
Underlyingoperatingprofit
28.0
40.5
Notionaltaxattheunderlyingeffectivetaxrate
(14.3)
(9.2)
13.7
31.3
Average capital employed
377.4
467.6
Return on average capital employed
3.6%
6.7%
1 General information
StockExchange.TheconsolidatedfinancialstatementscomprisethefinancialstatementsoftheCompany,itssubsidiaryundertakingsanditsinterest
in associates and jointly controlled entities (together the Group), for the year ended 31 December 2021. The Company’s shares are listed on the
LondonStockExchange.TheCompanyandconsolidatedfinancialstatementswereapprovedforpublicationbytheDirectorson9March2022.
TheGroupfinancialstatementshavebeenpreparedinaccordancewithUK-adoptedinternationalaccountingstandards.TheCompanyfinancial
statements have been prepared in accordance with UK-adopted international accounting standards and as applied in accordance with the provisions
oftheCompaniesAct2006.Thefinancialstatementsarepreparedonagoingconcernbasisandonahistoricalcostbasis,modifiedtoinclude
revaluationtofairvalueofcertainfinancialinstruments.Aspermittedbysection408oftheCompaniesAct2006,aseparateincomestatementand
relatednotesfortheholdingcompanyhavenotbeenpresentedinthesefinancialstatements.TheprofitaftertaxationintheCompanywas£12.2m
(2020:£15.9mloss).TheGroupandCompanyfinancialstatementsarepresentedinSterlingandallvaluesareroundedtothenearestmillionpounds
(£m) except when otherwise indicated.
Change in accounting policy
The accounting policy in respect of dry dock overhauls on leased vessels has been changed to defer the overhaul costs as a component of the
relatedtangiblefixedassetanddepreciateovertheirusefuleconomiclivesuntilthenextestimatedoverhaulratherthanbuildupaprovisionin
preparationforthenextestimatedoverhaul.Theprioryearcomparativeshavebeenrestatedtoreflectthischange.Thechangeinaccountingpolicy
is considered to provide more relevant and reliable information as the dry docks are directly attributable to the use of the vessel and this change
aligns the accounting policy for both owned and leased vessels. As a result previous dry dock overhaul provisions (recognised in trade and other
payables) of £0.8m have been reversed and the right-of-use assets has increased by £1.2m. The impact on consolidated total equity is an increase
from £235.9m to £237.9m. There is no impact on the company only total equity.
Going concern
The Directors have, at the time of approving these Financial Statements, a reasonable expectation that the Group and Company have adequate
resources to continue in operational existence for at least 12 months from this reporting date and have therefore continued to adopt the going
concern basis of preparation.
In light of the continuing COVID global pandemic and subsequent uncertainty, the Group has undertaken a detailed viability review and taken
appropriate mitigating actions to protect the business and liquidity. Operations have been impacted by travel restrictions, supply chain logistics and
actionstoprotectemployeestoensuresafeworkingconditions.TheGroup’squickresponsetoCOVIDhasmitigatedsomeoftheimpactonfinancial
performance,howeverthepotentialimpactofapostpandemicrecessiongivesongoingrisktofuturefinancialperformance.Liquidityismonitored
throughdailybalancereporting,weeklyforecastingand12monthcashflowforecasting.
TheGrouphad£111.5mofundrawncommittedfacilitiesat31December2021(2020:£120.2m).TheGrouprefinanced£130mofrevolvingcredit
facilities during the year. At 31 December, the Group had £287.5m of committed facilities, a small decrease from the £300m at 31 December 2020.
£40m revolving credit facilities are due for renewal within 12 months from the date of this report. Forecasts have been prepared which continue to
show headroom should they not be renewed. All revolving credit facilities are linked to covenant compliance requirements, being a net debt to EBITDA
ratio and interest cover. The Group has been in compliance with covenant requirements in the year, post year end, and is forecasting to be compliant
foratleast12monthsfromthedateofapprovalofthesefinancialstatements.Postyearend,asatthedateofapprovalofthefinancialstatements,the
Group has approximately £102m of undrawn credit facilities available.
TheDirectors’basecaseforecastreflectsfinancialperformanceintheyearended31December2021andtheassociatedimpactsofCOVID.A
numberofseverebutplausibledownsidescenarioswerecalculatedcomparedtothebasecaseforecastofprofitandcashflowtoassessheadroom
againstfacilitiesforthenext12months.Againstthesenegativescenarios,whichreducedoperatingprofitby£5min2022and£1min2023,adjusted
projections showed no breach of covenants. Additional sensitivities which reduced cash receipts by £10m in 2022 and £20m in 2023 and delayed
projectdeliveryreducingprofitby£10min2022and£20min2023anddeferringdebtorallocationby£3min2022andby£6min2023werealsorun
separately in combination with the severe but plausible downside and adjusted projections showed no breach of covenants. Further mitigating actions
could also be taken in such scenarios should it be required, including reducing capital expenditure, continuing to sell non-core, underperforming
businesses and reducing forecast dividend payments and not carrying out any acquisitions.
Taking into account the level of cash and available facilities outlined above and having undertaken rigorous assessment, the Directors consider that the
GroupandCompanyhavesufficientfundstoallowthemtomeettheirliabilitiesastheyfalldueforatleast12monthsfromthedateofapprovalofthe
financialstatementsandthereforecontinuetoadoptthegoingconcernbasisofaccountinginpreparingtheseFinancialStatements.
2 Alternative performance measures
TheGroupusesanumberofalternative(non-GenerallyAcceptedAccountingPractice(non-GAAP))performancemeasureswhicharenotdefined
within IFRS. The Directors use these measures in order to assess the underlying operational performance of the Group and, as such, these measures
are important and should be considered alongside the IFRS measures. The adjustments are separately disclosed and are usually items that are
significantinsizeand/ornon-recurringinnature.Thefollowingnon-GAAPmeasuresarereferredtointheAnnualReportandAccounts.
Notes to the financial statements
Financial statements
Strategic report
Governance
Financial statements
134 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 135
Notes to the financial statements cont.
3 Segmental information
TheGrouphasfouroperatingsegmentsreviewedbytheBoard:MarineSupport,SpecialistTechnical,OffshoreOilandTankships.Theirprincipal
activities are set out in the Strategic report on pages 28 to 35. The Board assess the performance of the segments based on underlying operating
profit,underlyingoperatingmarginandreturnoncapitalemployed.Itconsidersthatthisinformationisthemostrelevantinevaluatingtheperformance
of its segments relative to other entities which operate in similar markets. Inter-segmental sales are made using prices determined on an arms length
basis. Sector assets exclude cash, short-term deposits and corporate assets that cannot reasonably be allocated to operating segments. Sector
liabilitiesexcludeborrowings,retirementbenefitobligationsandcorporateliabilitiesthatcannotreasonablybeallocatedtooperatingsegments.
Year ended 31 December 2021
Marine
Support
£m
Specialist
Technical
£m
Offshore
Oil
£m
Tankships
£m
Corporate
£m
Total
£m
Segmental revenue
– point in time
173.7 46.3 86.5 – – 306.5
– over time
41.0 88.3 – 6 0.1 – 189.4
Inter-segmental sales
(0.2) (1.4) (0.2) – – (1.8)
Revenue 214.5 133.2 86.3 60.1 – 49 4.1
Underlying operating profit/(loss) 5.0 9.9 11.1 4.8 (2.8) 28.0
Separately disclosed items
(26.0 (2.9) (16.3) (3.5) – (48.7)
Operating (loss)/profit (21.0) 7.0 (5.2) 1.3 (2.8) (20.7)
Netfinanceexpense
(8.3)
Loss before tax
(29.0)
Income tax
0.8
Loss for the year (28.2)
Assets and liabilities
Segmental assets
189.7 154.8 124.2 75.1 73.4 617.2
Investment in joint ventures
2.6 3.2 2.2 – – 8.0
Total assets
192.3 158.0 126.4 75.1 73.4 625.2
Segmental liabilities
(77.4) (60.3) (26.4) (39.2) (211.3) (414.6)
114.9 97.7 100.0 35.9 (137.9) 210.6
Other segmental information
Capital expenditure
6.1 2.7 6.3 4.3 – 19.4
Depreciation and amortisation
12.3 6.9 12 .1 12.4 0.5 44.2
Revenue disclosed in the income statement is comprised of goods and services of £370.0m (2020: £398.9m), equipment hire of £68.5m
(2020: £40.2m) and construction contract income of £55.6m (2020: £79.1m).
2 Alternative performance measures cont.
2.4 Underlying cash conversion
Cashconversionisdefinedastheratioofoperatingcashflowtounderlyingoperatingprofit.Operatingcashflowcomprises:
2021
£m
2020
£m
Cash generated from operations
58.5
99.8
Dividends from joint venture undertakings
1.6
1.8
Capital element of lease repayments
(13.7)
(13.0)
Other
0.7
0.5
Operatingcashflow
47.1
89.1
Underlyingoperatingprofit
28.0
40.5
Cash conversion
168%
220%
2.5 Underlying earnings before interest, tax, depreciation and amortisation (Underlying Ebitda Covenant basis)
UnderlyingEbitda,inlinewiththeGroup’sbankingcovenants,isdefinedastheunderlyingoperatingprofitbeforeinterest,tax,depreciation
and amortisation.
2021
£m
2020
£m
Underlyingoperatingprofit
28.0
40.5
Depreciation and amortisation
44.2
49.0
Less: Deprecation on right-of-use assets
(13.2)
(11.9)
Amortisation of acquired intangibles (note 5)
(2.9)
(2.9)
IFRS 16 impact removed
(1.8)
(1.5)
Underlying Ebitda
54.3
73.2
2.6 Underlying dividend cover
Underlying dividend cover is the ratio of underlying diluted earnings per share to the total dividend per share.
2021
Pence
2020
Pence
Underlying earnings per share
20.0
47.9
Total dividends per share
–
8.0
Underlying dividend cover (times)
–
6.0
2.7 Underlying net borrowings
Underlying net borrowings is net borrowings as set out in note 28, excluding right-of-use operating leases.The Group’s banking arrangements are
based on underlying net borrowings.
2021
£m
2020
£m
Net borrowings (note 28)
185.6
198.1
Less: right-of-use operating leases
(38.2)
(23.1)
147.4
175.0
2.8 Organic constant currency
Organic constant currency growth represents absolute growth, adjusted for current and prior year acquisitions and for constant currency. Constant
currency takes the non-sterling results of the prior year and retranslates them at the average exchange rate of the current year.
Financial statements
Strategic report
Governance
Financial statements
136 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 137
Notes to the financial statements cont.
3 Segmental information cont.
Geographic information
Geographical revenue is determined by the location in which the product or service is provided. Where customers receive the product or service in
one geographical location for use or shipment to another it is not practicable for the Group to identify this and the revenue is attributed to the location
of the initial shipment. The geographical allocation of segmental assets and liabilities is determined by the location of the attributable business unit.
United Kingdom Rest of Europe
Middle East,
Africa & the
Americas Asia Pacific Tot al
2021
£m
2020
£m
2021
£m
2020
£m
2021
£m
2020
£m
2021
£m
2020
£m
2021
£m
2020
£m
Revenue
Segmental revenue
– point in time
97.4
85.3
48.2
59.3
93.6
122.6
66.8
80.4
306.0
3 47. 6
– over time
101.4
97. 6
6.5
8.4
42.7
25.7
39.3
42.4
189.9
174.1
Inter-segmental sales
(1.5)
(1.7)
–
–
(0.3)
–
–
(1.8)
(1.8)
(3.5)
Group revenue 197.3
181.2
54.7
67.7
136.0
148.3
106.1
121.0
494.1
518.2
Segmental non current assets
228.5
233.4
44.0
49.3
26.6
66.9
33.0
34.5
332 .1
384.1
Segmental current assets
204.7
225.3
5.1
5.0
44.9
36.1
30.4
35.3
285.1
301.7
Segmental assets
433.2
458.7
49.1
54.3
71.5
103.0
63.4
69.8
617.2
685.8
Investment in joint ventures
0.1
0.1
2.4
2.6
0.3
0.2
5.2
4.6
8.0
7.5
Segmental liabilities
(344.3)
(377.3)
(8.0)
(9.1)
(46.0)
(49.3)
(16.3)
(19.7)
(414.6)
(455.4)
89.0
81.5
43.5
47.8
25.8
53.9
52.3
54.7
210.6
237. 9
4 Auditor’s remuneration
Auditor’s remuneration comprises the following:
2021
£m
2020
£m
Auditofthefinancialstatementsoftheparent
0.5
0.5
Half year review
0.1
0.1
Local statutory audits of subsidiaries
1.4
1.0
Total fees payable to Group auditor 2.0
1.6
3 Segmental information cont.
Year ended 31 December 2020
Marine
Support
£m
Specialist
Technical
£m
OffshoreOil
£m
Tankships
£m
Corporate
£m
Total
£m
Segmental revenue
– point in time 225.3 42.2 80.1 – – 3 47.6
– over time 24.5 89.2 – 60.4 – 174.1
Inter-segmental sales (0.4) (1.0) (2.1) – – (3.5)
Revenue
249.4 130.4 78.0 60.4 – 518.2
Underlying operating profit/(loss)
10.1 14.0 11. 2 8.0 (2.8) 40.5
Separately disclosed items (79.6) (1.6) (2.8) – – (84.0)
Operating (loss)/profit
(69.5) 12.4 8.4 8.0 (2.8) (43.5)
Netfinanceexpense (9.0)
Loss before tax
(52.5)
Income tax (4.8)
Loss for the year
(57.3)
Assets and liabilities
Segmental assets 246.7 156.0 139.4 54.7 89.0 685.8
Investment in joint ventures 2.1 3.0 2.4 – – 7. 5
Total assets 248.8 159.0 141.8 54.7 89.0 693.3
Segmental liabilities (90.5) ( 5 7. 6 ) (24.9) (21.4) (261.0) (455.4)
158.3 101.4 116.9 33.3 (172.0) 2 37. 9
Other segmental information
Capital expenditure 7.1 1.9 5.4 3 .1 – 17. 5
Depreciation and amortisation 17.8 6.7 12.7 11.5 0.3 49.0
Financial statements
Strategic report
Governance
Financial statements
138 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 139
Notes to the financial statements cont.
5 Separately disclosed items cont.
In 2020 separately disclosed items were in relation to the following matters:
(i) Acquisition related income and expense comprises costs incurred on the acquisition of businesses including external due diligence costs,
amortisationofacquiredintangiblesandanyadjustmentforcontingentconsideration.Assetoutinnote2theseitemsfluctuatewithacquisition
activity and are disclosed separately to provide a better comparison to businesses that are not acquisitive.
(ii) Due to the deferral of subsea projects in oil and gas and renewables, a material restructure of marine support activities was completed during
2020. The charge of £3.9m related to redundancy and notice costs in relation to 202 employees.
(iii) Disposal of businesses relates to the disposal in 2020 of JF Nuclear GmbH for proceeds of £1.6m which resulted in a loss of £1.2m.
The balance includes £2.0m in respect of the exchange of interests set out in note 16 and £0.3m relating to cost adjustments in respect
of businesses disposed of in previous years.
(iv) Impairment charges
(a) Intangible assets comprise goodwill of £17.0m and other intangible asset impairments of £2.4m in relation to development expenditure and
intellectualpropertywhereexpectedfuturecashflowsnolongerjustifycarryingvalue.Thegoodwillimpairmentin2020relatedtotheSubtech
(£10.0m) and James Fisher Testing Services (£7.0m) cash generating units.
(b) Dive support vessels: In 2019, the Group acquired two dive support vessels with the strategic aim of targeting the market of subsea projects
intheoilandgassectorinWestAfricaandtheMiddleEast.Thecombinationofchangesinenergypricesinthefirsthalfof2020andtheonset
of the global pandemic resulted in lower utilisation of these vessels than expected and gave rise to an impairment charge of £31.6m based on
their recoverable amount.
(c)thetangiblefixedassetimpairmentin2020relatestocertainassetsinMarineSupportandOffshoreOilwherelatestforecastsoffuturecash
flowsinrespectoftheseassetsislessthancarryingnetbookvalue.
(d) the 2020 impairment in respect of receivables relates to a number of projects commenced by the Group during 2019 where payment for
amounts invoiced or considered due under the contract have yet to be paid and for part of what the Board considers it appropriate to make
provision. As referred to in note 34, a number of these issues are subject to legal process and the outcome is uncertain.
6 Group employee costs
(a) Staff costs including Directors’ remuneration were as follows:
2021
£m
2020
£m
Wages and salaries
119.8
117.1
Social security costs
11.6
11.7
Pension costs
4.7
4.8
Share based compensation
0.3
0.1
136.4
133.7
The average number of persons including Executive Directors employed by the Group was 2,662 (2020: 2,680), and 2,704 persons were employed
at 31 December 2021 (2020: 2,484 persons).
The Directors’ remuneration and their interest in shares of the Company are set out in the Directors’ remuneration report on pages 94 to 110.
TheamountchargedagainstoperatingprofitintheyearinrespectofDirectors’short-termremunerationwas£1.0m(2020:£1.0m)inrespect
ofemolumentsand£0.1m(2020:£0.1m)inrespectofpensioncontributionstodefinedcontributionschemes.ThenumberofDirectorsaccruing
retirementbenefitswere2(2020:2).ThechargeforsharebasedpaymentsinrespectofDirectorswas£0.1m(2020:£0.1m)andaggregategains
under the exercise of options was £nil (2020: £0.2m).
(b) Compensation of key management to the Group
2021
£m
2020
£m
Short-termemployeebenefits
2.4
1.8
Share based payments
0.2
0.1
2.6
1.9
Key management personnel include the Board of Directors of the Company and other senior members of the management team.
During the year, the CEO has expanded the Executive Committee by including the divisional managing directors, thereby increasing the focus on
operational management.
5 Separately disclosed items
In order for a better understanding of the underlying performance of the Group certain items are disclosed separately (note 2). Separately disclosed
items are as follows:
2021
£m
2020
£m
Acquisition related income and (expense):
Costs incurred in acquiring/disposing of businesses
(0.5)
(1.0)
Amortisation of acquired intangibles (note 2)
(2.9)
(2.9)
(3.4)
(3.9)
Marine support restructure
–
(3.9)
Gain/(loss) on disposal of businesses
0.3
(3.5)
Gain on disposal of Dive support vessel
0.3
–
Costs of material litigation
(3.1)
–
Impairment charges:
Intangible assets
(29.2)
(19.4)
Dive support vessels
–
(31.6)
Tangiblefixedassets
(9.3)
(2.4)
Receivables
(4.3)
(19.3)
Separately disclosed items before taxation
(48.7)
(84.0)
Tax on separately disclosed items
10.9
2.4
(37.8)
(81.6)
During the year, separately disclosed items were in relation to the following matters:
Acquisition related income and expense comprises costs incurred on the acquisition/disposal of businesses including external due diligence costs,
amortisationofacquiredintangiblesandanyadjustmentforcontingentconsideration.Assetoutinnote2theseitemsfluctuatewithacquisition
activity and are disclosed separately to provide a better comparison to businesses that are not acquisitive.
Disposal of businesses relates to the disposal during 2021 of James Fisher Testing Services Ltd which was sold for proceeds of £5.7m and resulted
in a gain of £0.8m. Also, the sale of James Fisher NDT Ltd for which proceeds were £1.2m and loss on disposal of £0.5m.
Disposal of DSV is the sale of the Paladin vessel for $17.3m proceeds and a £0.3m gain.
Costs of material litigation relates to various matters as described in note 31: Commitment and contingencies.
Impairmentcharges:Intangibleassetscomprisegoodwillof£27.5mand£1.7mdevelopmentcosts.Tangiblefixedassetscompriseassetsinthe
Marine support, Specialist technical and Tankship divisions where fair value is less than carrying net book value. The 2021 impairment in respect of
receivablesrelatestoaspecificcounterpartyriskandreceivablesbilledover12monthsagoinrelationtocertainprojects.
Taxonseparatelydiscloseditemsincludesacreditof£7.9m,whichrepresentsdeferredtaxrecognisedonthetimingdifferencescreated
following the impairment of dive support vessels during the year ended 31 December 2020 and the Group’s current expectations regarding
Dive Support operations.
Financial statements
Strategic report
Governance
Financial statements
140 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 141
Notes to the financial statements cont.
8 Taxation cont.
(b) Tax included within other comprehensive income:
2021
£m
2020
£m
Current tax:
Foreign exchange losses on internal loans
–
1.1
Contributionstodefinedbenefitpensionschemes
0.5
–
Deferred tax:
Contributionstodefinedbenefitpensionschemes
–
0.9
Actuariallossondefinedbenefitpensionschemes
(1.0)
0.3
Relating to derivatives
0.4
(0.1)
(0.1)
2.2
In addition, deferred tax of £0.1m (2020: £0.3m) was charged and £0.1m current tax (2020: £nil) was credited to the consolidated statement of
changes in equity in respect of share based payments.
(c) Reconciliation of effective tax rate
The Group falls under the UK tonnage tax regime on its tanker owning and operating activities and a charge is based on the net tonnage of vessels
operated.Profitsfortheseactivitiesarenotsubjecttocorporationtax.ThetaxontheGroup’sprofitbeforetaxdiffersfromthetheoreticalamountthat
would arise using the rate applicable under UK corporation tax rules as follows:
2021
£m
2020
£m
Loss before tax
(29.0)
(52.5)
Tax arising from interests in joint ventures
0.3
0.1
(28.7)
(52.4)
Tax on loss at UK statutory tax rate of 19% (2020: 19%)
(5.5)
(10.0)
Tonnage tax relief/(expense) on vessel activities
0.6
(0.7)
Expenses not deductible for tax purposes
Separately disclosed items
4.2
3.6
Other
–
0.3
(Over)/under provision In previous years:
Current tax
(1.0)
(1.6)
Deferred tax
1.8
0.4
Higher tax rates on overseas income
1.9
2.0
Research and development relief
–
(0.6)
Non-taxable income
(0.3)
–
Impact of change of rate
1.1
0.5
Movement on unrecognised deferred tax
(3.3)
11.0
(0.5)
4.9
Theeffectiverateonthe(loss)/profitbeforeincometaxfromcontinuingoperationsis2.6%(2020:9.1%).Theeffectiveincometaxrateonthe
underlyingprofitbeforetaxis51.2%(2020:22.8%).Overprovisioninpreviousyearsaroseduetothetiminginwhichcertaintransactionshavebeen
accounted for, rather than any correction. At 31 December 2021, the Group had unrecognised tax losses of £37.3m (2020: £30.3m). Deferred tax
assets are recognised in respect of these losses based on expected future recovery.
Inthe3March2021Budget,itwasannouncedthattheUKtaxratewillincreaseto25%from1April2023.Thiswillhaveaconsequentialeffecton
the Group’s future tax charge.
7 Net finance expense
2021
£m
2020
£m
Finance income:
Interest receivable on short-term deposits
0.3
0.2
Finance expense:
Bank loans and overdrafts
(6.3)
( 7. 2)
Net interest on pension obligations
(0.1)
(0.1)
Unwind of discount on right-of-use lease liability
(2.2)
(1.8)
Unwind of discount on contingent consideration
–
(0.1)
(8.6)
(9.2)
Netfinanceexpense
(8.3)
(9.0)
8 Taxation
(a) The tax charge is based on profit for the year and comprises:
2021
£m
2020
£m
Current tax:
UK corporation tax
(0.7)
(1.1)
Overseas tax
(6.0)
( 7. 9 )
Adjustment in respect of prior years:
UK corporation tax
1.3
2.7
Overseas tax
(0.3)
(1.1)
Total current tax
(5.7)
( 7. 4)
Deferred tax:
Origination and reversal of temporary differences:
Current year
UK corporation tax
8.3
1.9
Overseas tax
–
1.1
Prior year
UK corporation tax
(0.6)
(0.3)
Overseas tax
(1.2)
(0.1)
Totaltaxonprofitfortheyear
0.8
(4.8)
The total tax charge in the income statement includes a further £0.3m (2020: £0.1m) which is stated within the share of post-tax results of joint
ventures.
CurrentyearUKtaxincludesacreditof£7.9m,whichrepresentsdeferredtaxrecognisedonthetimingdifferencescreatedfollowingtheimpairment
of dive support vessels during the year ended 31 December 2020 and the Group’s current expectations regarding Dive Support operations.
Financial statements
Strategic report
Governance
Financial statements
142 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 143
Notes to the financial statements cont.
10 Earnings per share
Basicearningspershareiscalculatedbydividingtheprofitattributabletoshareholdersbytheweightedaveragenumberofordinaryshares
in issue during the year, after excluding 54,571 (2020: 9,227) ordinary shares held by the James Fisher and Sons plc Employee Share Ownership
Trust(ESOT),astreasuryshares.Dilutedearningspersharearecalculatedbydividingthenetprofitattributabletoshareholdersbytheweighted
average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares.
At 31 December 2021, 650,513 options (2020: 386,317) were excluded from the diluted weighted average number of ordinary shares calculation
astheireffectwouldbeanti-dilutive.TheaveragemarketvalueoftheCompany’ssharesforpurposesofcalculatingthedilutiveeffectofshare
options was based on quoted market prices for the period during which the options were outstanding.
Weighted average number of shares
2021
Number of
shares
2020
Number of
shares
Basic weighted average number of shares
50,345,477
50,342,732
Potential exercise of share based payment schemes
10,560
85,973
Diluted weighted average number of shares
50,356,037
50,428,705
Underlying earnings per share
To provide a better understanding of the underlying performance of the Group, underlying earnings per share on continuing activities is reported as an
alternative performance measure (note 2).
2021
£m
2020
£m
Loss attributable to owners of the Company
(27.8)
(57.5)
Separately disclosed items
48.7
84.0
Tax on separately disclosed items
(10.9)
(2.4)
UnderlyingprofitattributabletoownersoftheCompany
10.0
24.1
Earnings per share pence pence
Basic earnings per share
(55.2)
(114. 2)
Diluted earnings per share
(55.2)
(114. 2)
Underlying basic earnings per share
20.0
48.0
Underlying diluted earnings per share
20.0
47.9
11 Dividends paid and proposed
2021
pence
per share
2020
pence
per share
2021
£m
2020
£m
Equity dividends on ordinary shares declared and paid:
Interim dividend for 2020
–
8.0
–
4.0
–
4.0
Nofinaldividendisproposedinrespectoftheyearended31December2021(2020:nil).
9 Deferred tax
Deferred tax at 31 December relates to the following:
Group Company
2021
£m
2020
£m
2021
£m
2020
£m
Assets
Retirementbenefits
0.5
1.4
0.4
1.4
Property, plant and equipment
4.0
–
–
–
Share-based payments
–
0.1
–
0.1
Derivativefinancialinstruments
0.1
–
0.1
–
Losses carried forward
3.4
7. 2
–
1.2
Temporarydifferences
1.6
2.4
0.5
0.3
9.6
11.1
1.0
3.0
Offsetagainstdeferredtaxliabilities
–
(5.9)
–
(0.2)
9.6
5.2
1.0
2.8
Liabilities
Property, plant and equipment
–
(3.5)
–
0.1
Intangible assets
(0.4)
(4.0)
–
–
Derivativefinancialinstruments
–
(0.2)
–
(0.3)
(0.4)
( 7.7 )
–
(0.2)
Offsetagainstdeferredtaxassets
–
5.9
–
0.2
(0.4)
(1.8)
–
–
Deferred tax assets and liabilities included in the consolidated balance sheet have been stated according to the net exposures in each tax jurisdiction.
The gross movement on the deferred income tax account is as follows:
Group Company
2021
£m
2020
£m
2021
£m
2020
£m
Balance at 1 January
3.4
(0.2)
2.8
2.0
Charged to comprehensive income
(0.6)
1.1
(0.5)
1.4
Charged to equity
(0.1)
(0.3)
(0.1)
(0.6)
Credited to income statement
6.5
2.6
(1.2)
–
Exchange adjustments
–
0.2
–
–
Balance at 31 December
9.2
3.4
1.0
2.8
At 31 December 2021, the Group has no deferred income tax liability (2020: £nil) in respect of taxes that would be payable on the unremitted
earningsofcertainoftheCompany’ssubsidiaries.Nodeferredincometaxliabilityhasbeenrecognisedinrespectofthistemporarytimingdifference
duetotheforeignprofitsexemption,theavailabilityofdoubletaxationreliefandtheabilitytocontroltheremittanceofearnings.
Deferred tax credited to the income statement in the year ending 31 December 2021 relates to the following:
Group
2021
£m
2020
£m
Deferred tax assets
4.6
(2.0)
Deferred tax liabilities:
Property, plant and equipment
(7.5)
0.1
Intangible assets
(3.6)
(0.7)
Deferred income tax credit
(6.5)
(2.6)
Financial statements
Strategic report
Governance
Financial statements
144 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 145
Notes to the financial statements cont.
13 Other intangible assets
Group
Development
costs
£m
Intellectual
property
£m
Customer
relationships
£m
Total
£m
Cost
At 1 January 2020 28.4 10.4 19.4 58.2
Additions 2.9 – – 2.9
Acquisitions 0.7 – – 0.7
Disposals (2.8) (0.6) – (3.4)
Exchangedifferences – – (0.7) (0.7)
At 31 December 2020 29.2 9.8 18.7 57.7
Additions 1.5 – – 1.5
Acquisitions – 0.7 – 0.7
Disposals (1.6) – (1.0) (2.6)
Exchangedifferences 0.1 (0.1) (0.2) (0.2)
At 31 December 2021 29.2 10.4 17. 5 57.1
Amortisation
At 1 January 2020 13.6 3.7 11. 2 28.5
Charge for the period 3.7 1.5 2.4 7. 6
Impairment 1.8 0.6 – 2.4
Disposals (0.2) (0.6) – (0.8)
Exchangedifferences (0.1) – – (0.1)
At 31 December 2020 18.8 5.2 13.6 37.6
Charge for the period 3.9 1.1 2.4 7. 4
Impairment 1.7 – – 1.7
Disposals (1.6) – (1.0) (2.6)
Exchangedifferences (0.1) – (0.2) (0.3)
At 31 December 2021 22.7 6.3 14.8 43.8
Net book value at 31 December 2021 6.5 4.1 2.7 13.3
Net book value at 31 December 2020 10.4 4.6 5.1 20.1
Net book value at 31 December 2019 14.8 6.7 8.2 29.7
Customer relationships relate to items acquired through business combinations which are amortised over their estimated useful economic life.
Development costs relate to new products developed by the Group and intellectual property represents amounts purchased or acquired relating to
technology in the Group’s activities. Based on an assessment of the recoverable amount, an impairment charge of £1.7m (2020: £2.4m) has been
recognised in the year in respect of development costs and intellectual property (note 5).
2021
£m
2020
£m
Researchanddevelopmentchargedtooperatingprofit
–
0.1
12 Goodwill
Group
Marine
Support
£m
Specialist
Technical
£m
Offshore
Oil
£m
Tankships
£m
Total
£m
At 1 January 2020 88.2 40.6 46.4 10.3 185.5
Impairment (17.0 ) – – – (17. 0 )
Exchangedifferences (2.2) 0.2 – – (2.0)
At 31 December 2020 69.0 40.8 46.4 10.3 166.5
Impairment (13.6) – (13.9) – ( 27. 5 )
Disposals (3.9) – – – (3.9)
Exchangedifferences (0.6) (0.5) (0.5) – (1.6)
At 31 December 2021 50.9 40.3 32.0 10.3 133.5
During the year, due to the continuing impact of COVID which resulted in projects in our subsea operations being deferred or cancelled led to
areductioninprofitability.Basedonthevalueinusecalculationssetoutabove,impairmentswereidentifiedinrespectofthreeCGUswithinthe
division and charges of £13.9m, £12.6m and £1.0m have been recognised respectively, resulting in a zero recoverable amount for one CGU and
recoverable values of £7.4m and £3.0m respectively for the remaining CGUs based on their value in use.
A summary of the recoverable amount of all CGUs by sector, post impairment and discount rates used in respect of the CGUs is detailed below.
ThePost-taxdiscountrateisbasedontheGroup’sweightedaveragecostofcapital(WACC)adjustedforspecificcountryriskandbusinessrisk.
Recoverable
amount
£m
2021
Discount
rate range
%
2020
Discount
rate range
%
Marine Support
240.0 8.6% to 11.5%
6.3% to 10.0%
Specialist Technical
104.1 10.5%
7.8%
OffshoreOil
76.4 10% to 11.5%
7.3% to 8.2%
Tankships
47.6 9.5%
5.8%
Therecoverableamountoftheseunitshasbeenassessedbasedonvalueinusecalculationsusingcashprojectionsbasedonfive-yearstrategic
plans,whichconsidertheimpactofclimatechangeandareapprovedbytheBoard.ForallCGUsaterminalvalueofcashflowsbeyondthatdate
has been calculated at a growth rate in line with management’s long-term expectations for the relevant market, using a growth rate of 1.8%. The key
assumptionsusedinthevalueinusecalculationsincludegrossmargin,discountrate,inflationofoverheads,payrollandgrowthrates.
Growth estimates are based on the levels achieved in current and historic periods adjusted for the expected impact of management actions and
thefuturedevelopmentoftherelevantmarket.Short-termgrowthratesofturnoverarebasedonthefive-yearstrategicplan.Growthratesvary
dependent on the market conditions in which the CGU operates and range between 0.0% and 21.0% (2020: between 1.0% and 15.0%). Direct
costs are expected to increase in line with revenue.
Sensitivity to impairment
Sensitivities carried out across all CGUs included increasing the discount rate by 2.0% and reducing the terminal growth to zero and reducing
operatingprofitby25.0%.Inallofthescenariosanalysedheadroomremainedpositive.
TwoCGUswithintheMarineSupportdivisionwereidentifiedashavingahigherriskofimpairment.Thesensitivitiesidentifiedthattheheadroomis
most sensitive to changes in the discount rate, which would need to be increased by 1.0% to give rise to a goodwill impairment in respect of these
CGUs, which is considered to be unlikely. For the two CGUs where an impairment charge has been recognised, the sensitivities above showed an
additional impairment in only one of £1.8m.
NoCGUswithintheSpecialistTechnicaldivisionwereidentifiedashavingahighriskofimpairment,allthescenariosheadroomremainedpositive.
Thesensitivitiesidentifiedthattheheadroomismostsensitivetochangesinthediscountrate,whichwouldneedtobeincreasedby8.0%togiverise
to a goodwill impairment in these CGUs and this is not considered a reasonably possible change.
OneCGUwithintheOffshoreOildivisionwasidentifiedashavingahighriskofimpairment.Thesensitivitiesidentifiedthattheheadroomismostsensitive
to changes in the discount rate, which would need to be increased by 3.0% to give rise to a goodwill impairment in these CGUs and this is considered to
be unlikely.
NoCGUswithintheTankshipsdivisionwereidentifiedashavingahighriskofimpairment.Inallthescenariosheadroomremainedpositive.
Thesensitivitiesidentifiedthattheheadroomismostsensitivetochangesinthediscountrate,whichwouldneedtobeincreasedby32.0%
to give rise to a goodwill impairment in these CGUs and this is not considered a reasonably possible change.
Financial statements
Strategic report
Governance
Financial statements
146 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 147
Notes to the financial statements cont.
14 Property, plant and equipment cont.
Company
Vessels
£m
Freehold
and leasehold
property
£m
Plant and
equipment
£m
Total
£m
Cost:
At 1 January 2020 10.3 2.3 3.5 16.1
Additions 0.2 – – 0.2
At 31 December 2020 10.5 2.3 3.5 16.3
Additions 0.1 – 0.2 0.3
At 31 December 2021 10.6 2.3 3.7 16.6
Depreciation:
At 1 January 2020 7.3 1.5 2.8 11.6
Provided during the year 0.5 0.1 0.2 0.8
At 31 December 2020 7.8 1.6 3.0 12.4
Provided during the year 0.5 0.1 0.2 0.8
Provision 2.0 – – 2.0
At 31 December 2021 10.3 1.7 3.2 15.2
Net book value at 31 December 2021 0.3 0.6 0.5 1.4
Net book value at 31 December 2020 2.7 0.7 0.5 3.9
Net book value at 31 December 2019 3.0 0.8 0.7 4.5
As a result of challenging market conditions and lower than expected utilisation an impairment review was conducted which resulted in an impairment
charge of £2.0m.
14 Property, plant and equipment
Group
Vessels
£m
Assets
under
construction
£m
Freehold
and leasehold
property
£m
Plant and
equipment
£m
Total
£m
Cost:
At 1 January 2020 154.1 5.8 35.5 211.6 4 07. 0
Additions 3.1 5.9 0.6 6.6 16.2
Reclassifications 1.9 (6.9) – 4.6 (0.4)
Acquisitions – – – 0.1 0.1
Disposals (19.9) – (0.2) (6.8) (26.9)
Exchangedifferences (1.3) (0.7) (0.2) (0.9) (3.1)
At 31 December 2020 13 7. 9 4.1 35.7 215.2 392.9
Additions 5.4 3.0 0.3 10.7 19.4
Reclassifications (28.8) (2.3) 1.2 1.1 (28.8)
Disposals (31.9) (1.1) (1.7) (11.5) (46.2)
Exchangedifferences (0.9) (0.1) (0.1) (2.4) (3.5)
At 31 December 2021 81.7 3.6 35.4 213.1 333.8
Depreciation:
At 1 January 2020 59.0 – 12.0 125.4 196.4
Provided during the year 8.9 – 1.8 18.8 29.5
Provision for impairment 33.0 – – 1.0 34.0
Disposals (18.0) – (0.2) (6.0) (24.2)
Exchangedifferences (0.3) – – (0.7) (1.0)
At 31 December 2020 82.6 – 13.6 138.5 234.7
Provided during the year 5.1 – 1.7 16.8 23.6
Provision for impairment 3.5 – 1.6 – 5.1
Reclassifications (18.1) – – – (18.1)
Disposals (20.1) – (1.3) (9.8) (31.2)
Exchangedifferences (0.6) – (0.1) (1.8) (2.5)
At 31 December 2021 52.4 – 15.5 143.7 211.6
Net book value at 31 December 2021 29.3 3.6 19.9 69.4 122.2
Net book value at 31 December 2020 55.3 4.1 22.1 76.7 158.2
Net book value at 31 December 2019 95.1 5.8 23.5 86.2 210.6
Includedwithinreclassificationsis£10.7mvesseltransferstoAssetsheldforsale(note20).
As a result of challenging market conditions and lower than expected utilisation an impairment review was conducted which resulted in an impairment
charge of £3.5m. The impairment charge in 2020 comprised £31.6m for two dive support vessels within Marine Support (see note 5) and a further
£1.4m vessel impairment. The recoverable amount was based on the fair value less costs of disposal for the vessels concerned.
Financial statements
Strategic report
Governance
Financial statements
148 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 149
Notes to the financial statements cont.
16 Investment in subsidiaries, associates and joint arrangements
Details of the Group’s joint ventures and associated undertakings are set out on page 191.
2021
£m
2020
£m
Investment in joint ventures
6.0
5.5
Loans to associate
2.0
2.0
8.0
7.5
Loans to associate relate to First Response Marine and further information is set out in note 32.
The Group’s share of the assets, liabilities and trading results of joint ventures and associates, which are accounted for under the equity accounting
method, are as follows:
2021
£m
2020
£m
Current assets
9.8
11.7
Non-current assets
17.5
21.3
Current liabilities
(1.7)
(1.6)
Non-current liabilities
(19.6)
(25.9)
6.0
5.5
Revenue
11.4
11.9
Cost of sales
(8.4)
(9.4)
Administrative expenses
(1.0)
(0.9)
Profitfromoperations
2.0
1.6
Netfinanceexpense
0.3
0.2
Profitbeforetax
2.3
1.8
Tax
(0.3)
(0.2)
Profitaftertax
2.0
1.6
Segmental analysis of profit after tax:
Marine Support
1.4
0.8
Specialist Technical
0.6
0.8
2.0
1.6
Movement on investment in joint ventures:
At 1 January
5.5
6.5
Acquisitions
–
0.5
Profitfortheyear
2.0
1.6
Transfer*
–
(1.1)
Dividends received
(1.6)
(1.8)
Shareoffairvaluelossesoncashflowhedges
0.3
(0.2)
Exchange adjustments
(0.2)
–
At 31 December 6.0
5.5
There are no capital commitments or contingent liabilities in respect of the Group’s interests in joint ventures.
15 Right-of-use assets
Group
Vessels
£m
Freehold
and leasehold
property
£m
Plant and
equipment
£m
Total
£m
Cost:
At 1 January as reported 13.6 22.6 0.9 37.1
Accountingpolicychange–Right-of-useRefitcapitalisation 1.2 – – 1.2
At 1 January 2020 14.8 22.6 0.9 38.3
Additions 12.3 3.1 1.3 16.7
Disposals – (1.0) (0.2) (1.2)
Exchangedifferences (0.5) (0.1) – (0.6)
At 31 December 2020 26.6 24.6 2.0 53.2
Additions 25.4 2.6 0.2 28.2
Disposals – (2.1) (0.5) (2.6)
Exchangedifferences (0.1) (0.3) – (0.4)
At 31 December 2021 51.9 24.8 1.7 78.4
Depreciation:
At 1 January as reported 5.6 4.1 0.3 10.0
Accountingpolicychange–Right-of-useRefitcapitalisation 0.4 – – 0.4
At 1 January 2020 6.0 4.1 0.3 10.4
Provided during the year 7.1 4.3 0.5 11.9
Disposals – (0.9) (0.2) (1.1)
Exchangedifferences – 0.1 – 0.1
At 31 December 2020 13.1 7.6 0.6 21.3
Provided during the year 8.4 4.4 0.4 13.2
Provision for Impairment 4.2 – – 4.2
Reclassifications – – – –
Disposals – (1.5) (0.5) (2.0)
Exchangedifferences – (0.1) – ( 0.1)
At 31 December 2021 25.7 10.4 0.5 36.6
Net book value at 31 December 2021 26.2 14.4 1.2 41.8
Net book value at 31 December 2020 13.5 17.0 1.4 31.9
Net book value at 31 December 2019 8.8 18.5 0.6 27. 9
Additions during the year included renewal of leases within the Tankships division.
As a result of challenging market conditions and lower than expected utilisation an impairment review was conducted which resulted in an impairment
charge of £4.2m.
The Company had right-of-use assets in respect of leasehold property with a cost of £2.1m (2020: £2.1m), accumulated depreciation of £0.8m
(2020: £0.6m). Depreciation charged in the year amounted to £0.2m (2020: £0.3m).
Financial statements
Strategic report
Governance
Financial statements
150 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 151
Notes to the financial statements cont.
18 Inventories
Group
2021
£m
2020
£m
Work in progress
6.5
7.0
Raw materials and consumables
12.5
12.3
Finished goods
30.0
27. 3
49.0
46.6
Inventories are stated net of impairment provisions of £6.9m (2020: £4.2m). The cost of inventories recognised as an expense was £72.7m
(2020: £81.8m).
19 Trade and other receivables
Group Company
2021
£m
2020
£m
2021
£m
2020
£m
Trade receivables
64.3
65.5
–
–
Amounts owed by group undertakings
–
–
0.9
1.4
Amounts owed by joint venture undertakings
1.8
1.6
–
–
Other non-trade receivables
21.1
21.3
5.4
4.1
Contract assets
60.3
65.3
–
–
Prepayments
9.8
8.3
0.6
0.8
Current trade and other receivables 157.3
162.0
6.9
6.3
Group Company
2021
£m
2020
£m
2021
£m
2020
£m
Contract assets
6.0
–
–
–
Other non-trade receivables
4.1
0.8
–
–
Non current other receivables 10.1
0.8
–
–
Contract assets includes contract costs of £6m at 31 December 2021 (2020: £nil) representing commission fees on obtaining new contracts.
The contract costs are amortised over the life of the contract. Amortisation charged during the year was £0.1m (2020: £nil).
20 Assets held for sale
InJune2021,managementagreedaplantoselltheDiveSupportVessel(DSV)knownastheSwordfishwithintheMarineSupportdivisionand
consequently£10.7mofvesselshavebeenreclassifiedfrompropertyplantandequipment.Thevesselisbeingactivelymarketedbyathirdparty
ship broker.
16 Investment in subsidiaries, associates and joint arrangements cont.
* On 17 September 2020, the Group received statutory approval for a transaction agreed and signed on 25 February 2020 to exchange the Group’s 60% interest in
Murjan Al-Sharq for Marine Contracting LLC (Murjan), which was accounted for as an associate with net book value of £nil, for a 50% share in the legal entity Deep
Sea Operation and Maintenance Company Limited (Deep Sea) in which the Group previously held a 50% share. In addition, as part of the transaction the Group
agreed to settle £0.8m of the liabilities of Murjan. The carrying amount of the Group’s 50% investment in Deep Sea was £1.1m at the transaction date and this has
been transferred from the investment in joint ventures during the year. As Deep Sea is an entity that leases a number of vessels and does not have its own business
process or employees, the acquisition of the remaining 50% interest was accounted for as an asset purchase. The assets and liabilities of Deep Sea included in the
Groupfinancialstatementsasaresultofthetransactionare£9.2mrightofuseassets,£7.5mofleaseliabilities,and£0.9mofotherpayables.Aftertakingaccountof
an impairment of the original 50% Deep Sea investment of £0.9m, the transaction resulted in a charge of £2.0m, included within disposal of businesses as set out in
separately disclosed items in note 5.
In January 2019, the Group entered into a joint venture with Abdullah Natheer through the acquisition of 60% of Murjan Al Sharq for Marine Contracting. The parties
mutuallyagreedtoexitthatrelationship.TheGroupandAbdullahNatheercontinuetoworktogetherinpursuitofmutuallybeneficialcommercialopportunitiesinthe
region, as independent parties.
17 Financial assets
Group
Other investments
Other investments with a net book value of £1.4m (2020: £1.4m) in the Group and Company balance sheets are in unquoted entities, held at fair
value and subject to annual impairment review. They comprise a 17.2% (2020: 17.2%) equity interest in ordinary shares in SEML De Co-operation
Transmanche, an unlisted company incorporated in France, whose main activity is a port and ferry operator. In addition, the Group has a 50% interest
in JFD Domeyer GmbH, a company incorporated in Germany which provides in-service support and aftermarket services to the local customer base.
Subsidiary undertakings
Company
Shares
£m
Loans
£m
Total
£m
Cost:
At 1 January 2020 143.9 352.0 495.9
Additions – 5 7. 5 57. 5
Disposal (6.8) – (6.8)
At 31 December 2020 13 7.1 409.5 546.6
Additions 3.2 – 3.2
Disposal – (22.6) (22.6)
At 31 December 2021 140.3 386.9 527. 2
Amount provided:
At 1 January 2020 0.4 – 0.4
Provided in the year – 40.5 40.5
At 31 December 2020 0.4 40.5 40.9
Provided in the year – – –
At 31 December 2021 0.4 40.5 40.9
Net book value at 31 December 2021 139.9 346.4 486.3
Net book value at 31 December 2020 136.7 369.0 505.7
The provision in 2020 of £40.5m relates to the subsidiary where a vessel impairment has been made in the year following a value in use review.
A 1% change in the discount rate would have increased the impairment by £4m. In respect of the loans to subsidiaries, there is no material expected
credit loss.
A list of subsidiary undertakings is included on pages 188 to 191.
Financial statements
Strategic report
Governance
Financial statements
152 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 153
Notes to the financial statements cont.
23 Retirement benefit obligations cont.
Shore staff
The assets of this scheme are held in a separate trustee administered account and do not include any of the Group’s assets. The scheme was closed
to new members in October 2001 and closed to future accrual on 31 December 2010. The most recent actuarial valuation was as at 31 July 2019.
ItisvaluedeverythreeyearsfollowingwhichdeficitcontributionsandtherepaymentperiodaresubjecttoagreementbetweentheCompanyandthe
Trustees.Estimatedcontributionstotheschemein2022are£1.6m.TheweightedaveragedurationoftheShorestaffschemeis13years.
MNOPF
TheMNOPFisanindustry-widepensionschemewhichisaccountedforasadefinedbenefitscheme.Itisvaluedeverythreeyearsanddeficitshave
typically been funded over a ten year period. The most recent triennial actuarial valuation of the scheme was as at 31 March 2021 and no additional
deficitfundingwasrequestedbytheTrustees.TherespectiveshareoftheGroupandCompanyinthenetretirementbenefitobligationoftheMNOPF
are 3.0% (2020: 3.0%) and 1.5% (2020: 1.5%) respectively. Disclosures relating to this scheme are based on these allocations. In accordance with
IFRIC14,thedefinedpensionliabilityhasbeencalculatedbyadjustingtheCompanyandGroup’sshareoftheScheme’sassetsfortheNPVof
theagreeddeficitrecoverycontributions.InformationsuppliedbythetrusteesoftheMNOPFhasbeenreviewedbytheCompany’sactuaries.The
principal assumption in the review is the discount rate on the scheme’s liabilities which was 1.85% (2020: 1.25%). The disclosures below relate to the
Group’s share of the assets and liabilities within the MNOPF. Estimated contributions to this scheme in 2022 are £0.5m.
MNRPF
TheMNRPFisanindustry-widepensionschemewhichisaccountedforasadefinedbenefitscheme.Themostrecentactuarialvaluationofthe
MNRPFwasat31March2020.InaccordancewithIFRIC14,thedefinedpensionliabilityhasbeencalculatedbyadjustingtheCompanyandGroup’s
shareoftheScheme’sassetsfortheNPVoftheagreeddeficitrecoverycontributions.InformationsuppliedbythetrusteesoftheMNOPFhasbeen
reviewedbytheCompany’sactuaries.TheshareoftheGroupandtheCompanyinthenetretirementbenefitobligationoftheMNRPFare2.19%and
0.79% respectively. The principal assumption in the MNRPF valuation is the discount rate on the schemes liabilities which was 1.85% (2020: 1.25%).
Estimated contributions to this scheme are £nil in 2022.
In2018,theTrusteesbecameawareofhistoriclegaluncertaintiesrelatingtochangestoill-healthearlyretirementbenefitspayablefromtheMerchant
NavyRatingsPensionFund(MNRPF).ThemostrecentformalactuarialvaluationfortheFundwascarriedoutasat31March2020andthedeficit
included an estimate of the additional liability calculated on a technical provisions basis, there was no equivalent IAS 19 valuation. The estimated sum
was determined before any detailed work was undertaken by the Trustees it is therefore not considered a reliable basis for the purposes of estimating
the Group and Company’s share of the obligation under IAS 19.
In order to resolve the issue the Trustee sought directions from the Court, and in February 2022, the High Court approved a settlement in principle.
Any additional liability is expected to be accounted for at the point that additional contributions are determined by the Trustees in respect of the
Group and Company’s share as it is only at this point that the Group’s share of any additional liabilities will be able to be reliably estimated. No
additional accounting liability is recorded as at the balance sheet date.
Newissueswereidentifiedin2021inrelationtoFund’sadministrativeandbenefitpracticesaspartofthebenefitreviewcarriedoutbytheFund’s
lawyers. The Trustee is undertaking further investigations and the potential quantum of these issues at the moment is uncertain.
Actuarial assumptions
Theschemes’assetsarestatedattheirmarketvaluesontherespectivebalancesheetdates.Theoverallexpectedratesofreturnonassetsreflect
the risk free rate of return plus an appropriate risk premium based on the nature of the relevant asset category. The principal assumptions used in
updating the latest valuations for each of the schemes were:
2021 2020
Inflation(%)
3.40
2.95
Rateofincreaseofpensionsinpayment–Shorestaff(%)
3.25
2.90
Discount rate for scheme liabilities (%)
1.85
1.25
Expected rates of return on assets (%)
1.85
1.25
Post-retirement mortality: (years)
Shorestaffscheme
Current pensioner at 65 male
21.8
21.8
Current pensioner at 65 female
23.4
23.4
Future pensioner at 65 male
23.3
23.3
Future pensioner at 65 female
25.1
25.0
21 Trade and other payables
Current liabilities
Group Company
2021
£m
2020
£m
2021
£m
2020
£m
Trade payables
45.0
43.7
4.4
1.8
Amounts owed to group undertakings
–
–
11.6
3.6
Taxation and social security
6.7
12.3
0.3
1.1
Other payables
15.2
10.9
3.2
4.1
Accruals
72.0
59.7
–
–
Deferred consideration
1.6
–
–
–
Contract liabilities
9.0
12.7
–
–
149.5
139.3
19.5
10.6
Non-current liabilities
2021
£m
2020
£m
2021
£m
2020
£m
Other payables
1.3
1.9
–
–
Deferred consideration
–
1.7
–
–
1.3
3.6
–
–
Revenue recognised in the year of £3.5m was included in the contract liabilities at 31 December 2020.
22 Provisions
Cost of material
litigation
£m
Warranty
£m
Group
£m
At 1 January 2020 – 0.7 0.7
Paid – (0.1) (0.1)
Charged to income statement – 1.0 1.0
At 31 December 2020 – 1.6 1.6
Provided/(released) to income statement 2.0 (0.5) (1.5)
At 31 December 2021 2.0 1.1 3.1
Provisions are in respect of warranties and are based on managements assessment of the previous history of claims, expenses incurred and an
estimate of future obligations on goods supplied where a warranty has been provided to the customer. Provisions due within one year were £2.0m
(2020: £nil) and provisions due greater than one year were £1.1m (2020: £1.6m).
23 Retirement benefit obligations
TheGroupandCompanydefinedbenefitpensionschemeobligationsrelatetotheJamesFisherandSonsplcPensionFundforShoreStaff(Shore
Staff),theMerchantNavyOfficersPensionFund(MNOPF)andtheMerchantNavyRatingsPensionFund(MNRPF).Thefinancialstatements
incorporatethelatestfullactuarialvaluationsoftheschemeswhichhavebeenupdatedto31December2021byqualifiedactuariesusing
assumptions set out in the table below. The Group’s obligations in respect of its pension schemes at 31 December 2021 were as follows:
Group Company
2021
£m
2020
£m
2021
£m
2020
£m
Shorestaff
(1.0)
(8.8)
(1.0)
(8.8)
MNOPF
(0.9)
(1.3)
(0.4)
(0.6)
MNRPF
–
(0.2)
–
(0.1)
(1.9)
(10.3)
(1.4)
(9.5)
Financial statements
Strategic report
Governance
Financial statements
154 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 155
Notes to the financial statements cont.
23 Retirement benefit obligations cont.
(b) Expense recognised in the income statement
Group Company
Shore
staff
£m
MNOPF
£m
MNRPF
£m
Total
£m
Shore
staff
£m
MNOPF
£m
MNRPF
£m
Total
£m
At 31 December 2021
Expenses 0.1 – – 0.1 0.1 – – 0.1
Interestcostonbenefitobligation 0.9 1.3 0.4 2.6 0.9 0.6 0.1 1.6
Return on scheme assets (0.8) (1.3) (0.4) (2.5) (0.8) (0.6) (0.1) (1.5)
0.2 – – 0.2 0.2 – – 0.2
At 31 December 2020
Expenses 0.1 – – 0.1 0.1 – – 0.1
Interestcostonbenefitobligation 1.1 2.1 0.6 3.8 1.1 1.0 0.2 2.3
Return on scheme assets (1.1) (2.0) (0.6) (3.7) (1.1) (1.0) (0.2) (2.3)
0.1 0.1 – 0.2 0.1 – – 0.1
Theactualreturnontheshorestaffplanassetsis£4.2m(2020:£6.3m).
(c) Movements in the net defined benefit liability
Group Company
Shore
staff
£m
MNOPF
£m
MNRPF
£m
Total
£m
Shore
staff
£m
MNOPF
£m
MNRPF
£m
Total
£m
At 1 January 2021 8.8 1.3 0.2 10.3 8.8 0.6 0.1 9.5
Expense recognised in the income
statement 0.2 – – 0.2 0.2 – – 0.2
Contributions paid to scheme (1.6) (0.5) (0.2) (2.3) (1.6) (0.2) (0.1) (1.9)
Remeasurement gains and losses (6.4) 0.1 – (6.3) (6.4) – – (6.4)
At 31 December 2021 1.0 0.9 – 1.9 1.0 0.4 – 1.4
At 1 January 2020 0.4 3.4 2.0 5.8 0.4 2.2 1.1 3.7
Expense recognised in the income
statement 0.1 0.1 – 0.2 0.1 – – 0.1
Contributions paid to scheme (1.2) (2.0) (1.8) (5.0) (1.2) (1.9) (1.1) (4.2)
Remeasurement gains and losses 9.5 (0.2) – 9.3 9.5 0.3 0.1 9.9
At 31 December 2020 8.8 1.3 0.2 10.3 8.8 0.6 0.1 9.5
23 Retirement benefit obligations cont.
Actuarial assumptions cont.
The post-retirement mortality assumptions allow for the expected increase in longevity. The “current” disclosures above relate to assumptions based
on longevity (in years) following retirement at the balance sheet date, with “future” being that relating to a member who is currently 45 years old.
No adjustments have been made to the mortality assumptions to account for the impact of COVID as the actual Plan experience from the period
of the pandemic is not yet available and it is too soon to make a credit judgement on the impact of the pandemic on future mortality improvements.
The key sensitivities on the major schemes may be summarised as follows:
Key measure
Change in
assumption
Change in
deficit
Shore staff scheme
Discount rate Decrease of 0.25% Increase by 3.1%
Rateofinflation Increase by 0.25% Increase by 1.8%
Rate of mortality Increase in life
expectancy of 1 year Increase by 4.5%
MNOPF
Discount rate Decrease of 0.25% Increase by 0.01%
MNRPF
Discount rate Decrease of 0.25% Increase by 0%
In determining the discount rate, assumptions have been made in relation to corporate bond yields and the expected term of liabilities. As noted
above,achangeindiscountrateappliedhasasignificantimpactonthevalueofliabilities.
(a) The assets and liabilities of the schemes at 31 December are:
Group Company
At 31 December 2021
Shore
staff
£m
MNOPF
£m
MNRPF
£m
Total
£m
Shore
staff
£m
MNOPF
£m
MNRPF
£m
Total
£m
Gilts/corporate bonds
– 18.8 14.4 33.2 – 9.4 5.2 14.6
Other investments
64.8 76.9 14.3 156.0 64.8 38.5 5.1 108.4
Cash or liquid assets
1.0 1.5 0.3 2.8 1.0 0.7 0.1 1.8
Fair value of scheme assets
65.8 97. 2 29.0 192.0 65.8 48.6 10.4 124.8
Present value of scheme liabilities
(66.8) (87. 5) (2 6.1) (180.4) (66.8) (43.8) (9.4) (120.0)
Effectofassetceiling
– (10.6) (2.9) (13.5) – (5.2) (1.0) (6.2)
Net pension liabilities
(1.0) (0.9) – (1.9) (1.0) (0.4) – (1.4)
Group Company
At 31 December 2020
Shore
staff
£m
MNOPF
£m
MNRPF
£m
Total
£m
Shore
staff
£m
MNOPF
£m
MNRPF
£m
Total
£m
Gilts/corporate bonds – 13.8 16.1 29.9 – 6.9 5.6 12.5
Other investments 60.7 84.9 13.8 159.4 60.7 42.5 4.7 107. 9
Cash or liquid assets 2.2 0.5 1.0 3.7 2.2 0.3 0.3 2.8
Fair value of scheme assets 62.9 99.2 30.9 193.0 62.9 49.7 10.6 123.2
Present value of scheme liabilities (71.7) (92.8) (28.5) (193.0) (71.7) (46.5) (9.8) (128.0)
Effectofassetceiling – ( 7.7 ) (2.6) (10.3) – (3.8) (0.9) (4.7)
Net pension liabilities (8.8) (1.3) (0.2) (10.3) (8.8) (0.6) (0.1) (9.5)
OtherinvestmentsfortheShorestaffschemeareunquotedinvestments.
TheMNRPFandMNOPFcontributionspaidbytheGrouparenotrefundableinanycircumstancesandthebalancesheetliabilityreflectsan
adjustmentforanyagreeddeficitrecoverycontributionsinexcessofdeficitdeterminedusingtheGroup’sassumptions.Otherinvestmentsinthe
Shorestaffschemecomprisediversifiedgrowthfunds,liabilitydriveninvestments,absolutereturnandprivatemarketfunds.
Financial statements
Strategic report
Governance
Financial statements
156 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 157
Notes to the financial statements cont.
23 Retirement benefit obligations cont.
(e) Changes in the fair value of the plan assets are analysed as follows:
Group Company
Shore
staff
£m
MNOPF
£m
MNRPF
£m
Total
£m
Shore
staff
£m
MNOPF
£m
MNRPF
£m
Total
£m
At 1 January 2021
62.9 99.2 30.9 193.0 62.9 49.7 10.6 123.2
Return on scheme assets recorded in interest
0.8 1.3 0.4 2.5 0.8 0.6 0.1 1.5
Remeasurement loss/(gain):
Return on plan assets excluding interest income
3.7 (3.3) (2.3) (1.9) 3.7 (1.7) (0.4) 1.6
Contributions by employer
1.6 0.5 0.2 2.3 1.6 0.2 0.1 1.9
Netbenefitspaidout
(3.2) (0.5) (0.2) (3.9) (3.2) (0.2) – (3.4)
At 31 December 2021 65.8 97.2 29.0 192.0 65.8 48.6 10.4 124.8
At 1 January 2020 58.9 103.8 28.7 191.4 58.9 52.0 9.6 120.5
Return on scheme assets recorded in interest 1.1 2.0 0.6 3.7 1.1 1.0 0.2 2.3
Remeasurement loss/(gain):
Return on plan assets excluding interest income 5.2 (6.6) 1.6 0.2 5.2 (3.3) 0.4 2.3
Contributions by employer 1.2 2.0 1.8 5.0 1.2 1.9 1.1 4.2
Netbenefitspaidout (3.5) (2.0) (1.8) ( 7.3) (3.5) (1.9) (0.7) (6.1)
At 31 December 2020 62.9 99.2 30.9 193.0 62.9 49.7 10.6 123.2
(f) History of experience gains and losses
Shore staff
2021
£m
2020
£m
2019
£m
2018
£m
2017
£m
Fair value of scheme assets
65.8
62.9 58.9 53.3 56.1
Definedbenefitobligation
(66.8)
(71.7) (59.3) ( 5 7. 9 ) (61.9)
Deficitinscheme
(1.0)
(8.8) (0.4) (4.6) (5.8)
Remeasurement gain/(loss):
Return on plan assets excluding interest income
3.7
5.7 6.5 (1.7) 2.4
Remeasurement (loss)/gain on scheme liabilities
(2.7)
14.7 2.2 (0.3) 1.4
MNOPF
Group
2021
£m
2020
£m
2019
£m
2018
£m
2017
£m
Fair value of scheme assets
97.2
99.2 103.8 103.7 108.8
Definedbenefitobligation
(98 .1)
(100.5) (107.2) (108.8) (115.6)
Deficitinscheme
(0.9)
(1.3) (3.4) (5.1) (6.8)
MNOPF
Company
2021
£m
2020
£m
2019
£m
2018
£m
2017
£m
Fair value of scheme assets
48.6
49.7 52.0 52.5 55.0
Definedbenefitobligation
(49.0)
(50.3) (54.2) (56.1) (60.0)
Deficitinscheme
(0.4)
(0.6) (2.2) (3.6) (5.0)
23 Retirement benefit obligations cont.
(d) Changes in the present value of the defined benefit obligation are analysed as follows:
Group Company
Shore
staff
£m
MNOPF
£m
MNRPF
£m
Total
£m
Shore
staff
£m
MNOPF
£m
MNRPF
£m
Total
£m
At 1 January 2021 71.7 100.5 31.1 203.3 71.7 50.3 10.7 132.7
Expenses 0.1 – – 0.1 0.1 – – 0.1
Interest cost 0.9 1.3 0.4 2.6 0.9 0.6 0.1 1.6
Remeasurement loss/(gain):
Actuarial loss/(gain) arising from scheme
experience – (3.2) (2.3) (5.5) – (1.7) (0.4) (2.1)
Actuarial (gain)/loss arising from changes
in demographic assumptions (0.1) – – (0.1) (0.1) – – (0.1)
Actuarial loss arising from changes in
financialassumptions (2.6) – – (2.6) (2.6) – – (2.6)
Netbenefitspaidout (3.2) (0.5) (0.2) (3.9) (3.2) (0.2) – (3.4)
At 31 December 2021 66.8 9 8.1 29.0 193.9 66.8 49.0 10.4 126.2
At 1 January 2020 59.3 107. 2 30.7 197. 2 59.3 54.2 10.7 124.2
Expenses 0.1 – – 0.1 0.1 – – 0.1
Interest cost 1.1 2.1 0.6 3.8 1.1 1.0 0.2 2.3
Remeasurement (gain)/loss:
Actuarial loss/(gain) arising from scheme
experience 4.1 (6.8) 1.6 (1.1) 4.1 (3.0) 0.5 1.6
Actuarial (gain)/loss arising from changes
in demographic assumptions 4.0 – – 4.0 4.0 – – 4.0
Actuarial loss arising from changes in
financialassumptions 6.6 – – 6.6 6.6 – – 6.6
Netbenefitspaidout (3.5) (2.0) (1.8) ( 7.3) (3.5) (1.9) (0.7) (6.1)
At 31 December 2020 71.7 100.5 31.1 203.3 71.7 50.3 10.7 132.7
Financial statements
Strategic report
Governance
Financial statements
158 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 159
Notes to the financial statements cont.
24 Share-based payments cont.
The weighted average share price at the date of exercise for the options exercised was £11.25 (2020:£13.18). For the share options outstanding at
31 December 2021, the weighted average remaining contractual life is 1 year and 11 months (2020: 2 years and 1 month). The weighted average
fair value of options granted during the year was £7.58 (2020: £6.45). The range of exercise prices for options outstanding at the end of the year was
£5.67 – £20.98 (2020: £5.22 – £20.98).
nil options
Company
2021
Number WAEP
2020
Number WAEP
2021
Number
2020
Number
Outstanding at 1 January
166,276 £7.03
239,898 £6.01
196,441
202,553
Granted during the year
5,952 £11.06
21,791 £10.22
121,253
94,506
Forfeited during the year
(8,718) £11.4 9
(5,852) £15.68
(71,244)
(58,878)
Exercised
(97,410) £5.44
(89,561) £4.51
–
(41,740)
Outstanding at 31 December
66,10 0 £9.15
166,276 £ 7. 0 3
246,450
196,441
Exercisable at 31 December
44,428 £ 8.19
141,838 £6.30
–
–
The weighted average share price at the date of exercise for the options exercised was £11.25 (2020: £13.12). For the share options outstanding
at 31 December 2021, the weighted average remaining contractual life is 1 year and 11 months (2020: 1 year and 6 months). The weighted average
fair value of options granted during the year was £8.71 (2020: £9.26). The range of exercise prices for options outstanding at the end of the year
was £5.67 – £20.98 (2020: £5.22 – £20.98). The fair value of share based payments has been estimated using the Black-Scholes model for the
Sharesave and the earnings per share element of the LTIP. The fair value of share based payments relating to the total shareholder return element
of the LTIP has been estimated using the Monte Carlo model.
The inputs to the models used to determine the valuations fell within the following ranges:
2021 2020
Dividend yield (%)
1.6%
1.6%
Expected life of option (years)
3 – 7
3 – 7
Share price at date of grant
£10.74 – £11.04
£12.18 – £12.66
Expected share price volatility (%)
40.0%
35.0%
Risk-free interest rate (%)
0.14% – 0.39%
(0.13%) – (0.03%)
Sharesave
All employees, subject to the discretion of the Remuneration Committee, may apply for share options under an employee save as you earn plan
whichmayfromtimetotimebeofferedbytheCompany.Anindividual’sparticipationislimitedsothattheaggregatepricepayableforsharesunder
option at any time does not exceed the statutory limit. Options granted under the plans will normally be exercisable if the employee remains in
employmentandanyotherconditionssetbytheRemunerationCommitteehavebeensatisfied.Optionsarenormallyexercisableattheendofthe
related savings contract but early exercise is permitted in certain limited circumstances. The performance period will not normally be less than three
and a half years or greater than seven and a half years. Awards were made of 70,868 options under this scheme on 8 April 2021.
23 Retirement benefit obligations cont.
(f) History of experience gains and losses cont.
MNRPF
Group
2021
£m
2020
£m
2019
£m
2018
£m
2017
£m
Fair value of scheme assets
29.0
30.9 28.7 24.9 29.2
Definedbenefitobligation
(29.0)
(31.1) (30.7) (31.3) (36.4)
Deficitinscheme
–
(0.2) (2.0) (6.4) ( 7. 2)
MNRPF
Company
2021
£m
2020
£m
2019
£m
2018
£m
2017
£m
Fair value of scheme assets
10.4
10.6 9.6 8.6 10.2
Definedbenefitobligation
(10.4)
(10.7) (10.4) (10.9) (13.1)
Deficitinscheme
–
(0.1) (0.8) (2.3) (2.9)
The cumulative amount of actuarial gains and losses relating to all schemes recognised since 1 January 2004 in the Group and Company statement
of comprehensive income is a loss of £52.2m (2020: £58.5m).
(g) Defined contribution schemes
TheGroupoperatesanumberofdefinedcontributionschemes.Thepensionchargefortheyearforthesearrangementsisequaltothecontributions
paid and was £4.7m (2020: £4.8m).
DuringtheyeartheCompanycontributed£0.5m(2020:£0.3m)intodefinedcontributionschemes.
24 Share-based payments
The Group operates a Long-Term Incentive Plan (LTIP) in respect of Executive Directors and certain senior employees and details are set out in the
Director’s remuneration report on pages 94 to 110. It also operates a Sharesave scheme (Sharesave) for eligible employees which is HM Revenue
and Customs approved.
Long-Term Incentive Plan (LTIP)
The Group recognised an expense in respect of equity-settled share based payments of £0.3m (2020: £0.1m) (Company £0.3m (2020: £0.1m) during
the year. Conditional awards, in the form of options over shares or conditional rights to have shares transferred to certain employees were granted
under the LTIP scheme over 386,413 (2020: 309,021) ordinary shares of 25p each.
The weighted average exercise prices (WAEP) and movements in share options during the year are as follows:
nil options
Group
2021
Number WAEP
2020
Number WAEP
2021
Number
2020
Number
Outstanding at 1 January
449,898 £9.86
354,805 £9.62
309,021
304,784
Granted during the year
70,868 £11.06
254,341 £10.22
193,115
146,813
Forfeited during the year
(138,703) £11.91
(69,687) £16.83
(115,723)
(81,485)
Exercised
(97,410) £5.44
(89,561) £4.51
–
(61,091)
Outstanding at 31 December
284,653 £10.67
449,898 £9.86
386,413
309,021
Exercisable at 31 December
44,428 £ 8.19
142,297 £6.33
–
–
Financial statements
Strategic report
Governance
Financial statements
160 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 161
Notes to the financial statements cont.
26 Disposal of business
Year ended 31 December 2021
On 2 November 2021, the Group disposed of its 100% shareholding in James Fisher Testing Services Ltd from its Marine Support division to
Phenna Group for £5.7m cash consideration. The assets and liabilities disposed were as follows:
£m
Consideration received
5.7
Less net assets disposed:
Goodwill
(3.9)
Property, plant and equipment
(0.2)
Right of use assets
(0.2)
Trade and other receivables
(1.1)
Cash and cash equivalents
(0.2)
Trade and other payables
0.5
Lease liabilities
0.2
Net assets disposed
(4.9)
Gain on disposal
0.8
Cash flow from the disposal of businesses
Cash received
5.7
Cash and cash equivalents disposed
(0.2)
Costs in relation to businesses sold
(0.3)
5.2
On 31 December 2021, the Group disposed of it’s 100% shareholding in James Fisher NDT Ltd from it’s Marine Support division to Irisndt Ltd for
£1.2m cash consideration. The assets and liabilities disposed were as follows:
£m
Consideration received
1.2
Less net assets disposed:
Property, plant and equipment
(1.0)
Right of use assets
(0.6)
Trade and other receivables
(1.2)
Cash and cash equivalents
(0.1)
Trade and other payables
0.5
Lease liabilities
0.7
Net assets disposed
(1.7)
Loss on disposal
(0.5)
Cash flow from the disposal of businesses
Cash received
1.2
Cash and cash equivalents disposed
(0.1)
Costs in relation to businesses sold
(0.2)
0.9
On 16 November 2021, Subtech Group Holdings Pty Ltd sold 51% of its 100% shareholding in Subtech South Africa Pty to Thembani Shipping Pty
Ltd (21%) and Tacenda Consulting Pty Ltd (30%). Cash proceeds were £0.2m and costs of disposal were £0.1m.
25 Business combinations
Year ended 31 December 2021
On 2 June, the Group purchased Subsea Engenuity Ltd for a consideration of up to £0.7m. £0.4m was paid on completion with a further £0.3m of
deferredconsideration.SubseaEngenuity’sinnovativetechnologysignificantlyreducesriskinwellabandonmentoperationsandisexpectedtobe
launched commercially in 2022. The acquired assets includes £0.7m intangible assets.
On 7 July, JF Overseas Ltd purchased an additional 51% shares in James Fisher Nigeria Ltd, thereby increasing its ownership to 100%. This
transaction did not result in a change of control and is recorded within equity.
Year ended 31 December 2020
On 12 March 2020, the Group acquired 100% of the share capital of Fathom Systems Group Limited (Fathom), for a total cash consideration of
£1.0m. Fathom is a leading supplier in the commercial diving industry for diver communications, gas analysis, diver monitoring and integrated diving
control systems. Costs of £0.2m were incurred in relation to the acquisition of Fathom.
The fair values of the assets and liabilities acquired are set out below:
Fathom
Book
value
£m
Intangible assets
0.8
Property, plant and equipment
0.1
Inventories
0.4
Trade and other receivables
0.4
Overdrafts
(0.2)
Trade and other payables
(0.5)
Fair value of net assets acquired
1.0
Cash consideration
1.0
There were no goodwill adjustments in the year (2020: £nil).
Cash flow in respect of business combinations
Total
£m
Cash paid
1.0
Overdrafts acquired
0.2
Acquisition of business net of overdrafts acquired
1.2
Deferred consideration paid
6.0
Acquisition costs paid
0.7
7.9
Contribution to Group results
The businesses acquired during the period contributed £0.2m loss to the Group’s loss after tax and £1.3m of revenues. If these businesses had been
acquiredatthestartofthefinancialyear,thecontributiontoGrouplossaftertaxwouldhavebeen£0.3mlosswithrevenueof£1.7m.
Financial statements
Strategic report
Governance
Financial statements
162 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 163
Notes to the financial statements cont.
27 Loans and borrowings cont.
At 31 December 2020
Group Company
Currency
As restated
GBP BRL Total GBP
Due within one year 79.6 0.2 79.8 54.4
Due between one and two years 114.4 0.2 114.6 114.4
Duebetweentwoandfiveyears 64.2 – 64.2 64.2
258.2 0.4 258.6 233.0
The interest rates charged during the year ranged from 1.7% to 2.3% (2020: 1.7% to 3.8%). There were no loans secured against the assets of the
Group or Company in the current or prior period.
Cash and cash equivalents
Forthepurposesofthecashflowstatement,cashandcashequivalentscomprise:
Group Company
2021
£m
As restated
2020
£m
2021
£m
As restated
2020
£m
Cash at bank and in hand
68.0
93.1
11.7
11. 5
Overdrafts
(33.5)
(79.6)
(20.3)
(54.4)
34.5
13.5
(8.6)
(42.9)
The Group operates a notional pooling and net overdraft facility whereby cash and overdraft balances held with the same bank have a legal right of
offset.Wherethereisnointentiontosettleamountsnet,IAS32requiresgrossbalancesheetpresentationtoseparateoverdraftsandcashbalances.
The Group has restated both the cash at bank and in hand and overdraft balances for 2020 to show these amounts gross.
Group
2020
£m
Adjustment
£m
As
Restated
2020
£m
Cash at bank and in hand 23.9 69.2 93.1
Overdrafts (10.4) (69.2) (79.6)
13.5 – 13.5
Company
2020
£m
Adjustment
£m
As
Restated
2020
£m
Cash at bank and in hand 3.1 8.4 11. 5
Overdrafts (46.0) (8.4) (54.4)
(42.9) – (42.9)
ThisadjustmenthasnoimpactontheGroup’snetprofitorloss,netassetsorcashflowstatementsin2020.
26 Disposal of business cont.
Year ended 31 December 2020
On 20 October 2020, the Group disposed of its 80% shareholding in James Fisher Nuclear GmbH for cash consideration of £1.6m. The assets and
liabilities disposed were as follows:
£m
Consideration received 1.6
Less net assets disposed:
Intangible assets (2.7)
Trade and other receivables (0.3)
Trade and other payables 0.2
Net assets disposed (2.8)
Loss on disposal (1.2)
Cashflowfromthedisposalofbusinesses
Total
£m
Cash received 1.6
Costs in relation to businesses sold in the prior year (0.3)
1.3
27 Loans and borrowings
Current liabilities
Group Company
2021
£m
As restated
2020
£m
2021
£m
As restated
2020
£m
Overdrafts
33.5
79.6
20.3
54.4
Bank loans
0.1
0.2
–
–
Lease liabilities
9.9
7. 2
0.2
0.2
43.5
87. 0
20.5
54.6
Non-current liabilities
Group Company
2021
£m
As restated
2020
£m
2021
£m
As restated
2020
£m
Bank loans
173.9
178.8
173.9
178.6
Lease liabilities
36.1
25.3
1.4
1.5
210.0
20 4.1
175.3
180.1
Bank loans
Loans analysed by currency are repayable as follows:
At 31 December 2021
Group Company
Currency GBP BRL Total GBP
Due within one year
33.5
0.1
33.6
20.3
Due between one and two years
39.0
–
39.0
39.0
Duebetweentwoandfiveyears
134.9
–
134.9
134.9
207.4
0.1
207.5
194.2
Financial statements
Strategic report
Governance
Financial statements
164 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 165
Notes to the financial statements cont.
29 Financial instruments cont.
Capital management cont.
(a) Credit risk cont.
The maximum exposure to credit risk at the reporting date was:
Group Company
2021
£m
As restated
2020
£m
2021
£m
As restated
2020
£m
Receivables
147.3
154.5
6.1
5.5
Cash at bank and in hand
68.0
93.1
11.7
11. 5
Interest rate swaps used for hedging:
Assets
0.1
–
0.1
–
Forward exchange contracts used for hedging:
Assets
0.1
3.2
0.1
3.2
215.5
250.8
18.0
20.2
Trade receivables are non-interest bearing and are generally on 30 to 60 days terms. At 31 December the value of trade debtors outstanding was:
Group
2021 2020
Gross
£m
Allowance
£m
Gross
£m
Allowance
£m
Not past due
40.6 –
38.7 –
Past due
42.4 (19.0)
46.3 (19.5)
83.0 (19.0)
85.0 (19.5)
Gross trade receivables are analysed:
Group Company
2021
£m
2020
£m
2021
£m
2020
£m
Not yet due
40.6
38.7
–
–
Overdue 1 to 30 days
12.5
14.2
–
–
Overdue 31 to 60 days
5.8
7.6
–
–
Overdue 61 to 90 days
2.2
3.8
–
–
Overdue 91 to 180 days
4.3
3.2
–
–
Overdue more than 180 days
17.6
17. 5
–
–
83.0
85.0
–
–
The movement in the provision for impairment of trade receivables is as follows:
Group Company
2021
£m
2020
£m
2021
£m
2020
£m
Balance at 1 January
19.5
5.4
–
–
Provided in the year
7.3
17.0
–
–
Writtenoff
(7.8)
(2.2)
–
–
Exchangedifferences
–
(0.7)
–
–
19.0
19.5
–
–
28 Reconciliation of net borrowings
Net debt comprises interest bearing loans and borrowings less cash and cash equivalents.
31 December
2020
£m
Cash
flow
£m
Other
non cash
£m
Exchange
movement
£m
31 December
2021
£m
Cash and cash equivalents*
13.5 20.9 – 0.1 34.5
Debt due within one year
(0.2) 0.1 – – (0.1)
Debt due after one year
(178.9) 5.8 (0.9) – (174.0)
(179.1) 5.9 (0.9) – (174.1)
Lease liabilities
(32.5) 13.7 (27.0) (0.2) (46.0)
Net borrowings
(198.1) 40.5 (27.9) (0.1) (185.6)
31 December
2019
£m
Cash
flow
£m
Other
non cash
£m
Exchange
movement
£m
31 December
2020
£m
Cash and cash equivalents* 7.5 7.7 – (1.7) 13.5
Debt due within one year (0.3) 0.1 – – (0.2)
Debt due after one year (207. 4) 30.1 (0.7) (0.9) (178.9)
(207.7 ) 30.2 (0.7) (0.9) (179.1)
Lease liabilities (30.2) 13.0 (15.4) 0.1 (32.5)
Net borrowings (230.4) 50.9 (16.1) (2.5) (19 8.1)
* Asdefinedinnote27.
29 Financial instruments
Capital management
The primary objective of the Group’s capital management policy is to maintain a strong credit rating and covenant ratios in order to be able to support
the continued growth of its trading businesses and to increase shareholder value. The Group meets its day-to-day working capital requirements
throughoperatingcashflows,withborrowingsinplacetofundacquisitionsandcapitalexpenditure.At31December2021,theGrouphad£111.5m
(2020: £120.2m) of undrawn committed facilities.
The Group is required under the terms of its loan agreements to maintain covenant ratios in respect of net debt to Ebitda and net interest costs
to underlying earnings before interest. The Group met its covenant ratios for the year ended 31 December 2021. The Directors have prepared
forecastsofthecashflowsforthesubsequent18-monthperiodwhichindicatesthat,takingintoaccountthefactorsnotedabove,theGroup
will meet its covenant requirements for this period. The total amount that it is able to borrow under existing revolving credit facilities was reduced
to a maximum of £287.5m (2020: £300m).
TheGroupmanagesitscapitalstructuresoastomaintaininvestor,supplierandmarketconfidenceandtoprovidereturnstoshareholdersthatwill
support the future development of the business. The Group’s dividend policy is based on the expected growth in sustainable income streams after
making provision for the retention of capital to invest in growth and acquisitions. In evaluating growth investment opportunities the Group applies a
hurdlerateofa15%pre-taxreturnoncapitalinvested.CapitalefficiencyismonitoredbyreferencetoReturnonCapitalEmployed(UnderlyingROCE
– see note 2.3).
TheGrouphasexposuretothefollowingfinancialrisks:
(a) Credit risk
CreditriskistheriskoffinanciallosstotheGroupifacustomerorcounterpartytoafinancialinstrumentfailstomeetitscontractualobligations.
TheseariseprincipallyfromtheGroup’sreceivablesfromcustomersandfromcashbalancesheldwithfinancialinstitutions.Thecarryingamount
offinancialassetsrepresentsthemaximumcreditexposure.TherearenosignificantconcentrationsofcreditriskwithintheGroup.TheGroup’s
exposuretocreditriskisinfluencedmainlybytheindividualcharacteristicsofeachcustomerandtheindustryandcountryinwhicheachcustomer
operates. The Group has a number of large customers including Government agencies in the UK and overseas, major oil companies and other
multinational corporations. The ten largest customers of the Group accounted for approximately 22% of Group revenue (2020: 22%). No customer
accounted for more than 5% (2020: 5%) of Group revenue. New customers are subject to creditworthiness checks and credit limits are subject to
approval by senior management. Goods are sold subject to retention of title clauses so that in the event of non-payment the Group may have a
secured claim.
Financial statements
Strategic report
Governance
Financial statements
166 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 167
Notes to the financial statements cont.
29 Financial instruments cont.
Capital management cont.
(b) Liquidity risk cont.
At 31 December 2021
Company
Carrying
amount
£m
Contractual
cash flows
£m
Within 1
year
£m
1 – 2
years
£m
2 – 3
years
£m
3 – 4
years
£m
4 – 5
years
£m
Greater
than
5 years
£m
Non-derivative financial liabilities
Unsecured bank loans and overdrafts
194.2 (198.4) (16.3) (44.2) (137.9) – – –
Lease liabilities
1.6 (2.6) (0.3) (0.3) (0.3) (0.3) (0.3) (0.9)
Trade and other payables
7.4 (7.4) (7.4) – – – – –
Derivative financial liabilities
Interest rate swaps used for hedging
0.1 (0.3) (0.3) – – – – –
Outflowonforwardexchangecontracts
used for hedging: 0.5 (33.0) (33.0) – – – – –
203.8 (241.7) (57.3) (44.5) (138.2) (0.3) (0.3) (0.9)
At 31 December 2020
As restated
£m
As restated
£m
As restated
£m £m £m £m £m £m
Non-derivative financial liabilities
Unsecured bank loans and overdrafts 233.0 (244.2) (60.0) (118.4) (25.4) (40.4) – –
Lease liabilities 1.7 (2.1) (0.4) (0.3) (0.3) (0.3) (0.3) (0.5)
Trade and other payables 6.0 (6.0) (6.0) – – – – –
Derivative financial liabilities
Interest rate swaps used for hedging 1.0 (0.9) (0.5) (0.4) – – – –
Outflowonforwardexchangecontracts
used for hedging: (3.2) (38.6) (38.4) (0.2) – – – –
238.5 (291.8) (105.3) (119. 3) (25.7) (40.7) (0.3) (0.5)
(c) Foreign exchange risk
The Group is exposed to foreign currency risks on sales, purchases, cash and borrowings denominated in currencies other than Sterling. These
transactional exposures are mainly to movement in the US Dollar and the Euro. The Group uses forward exchange contracts to hedge its
transactional exposures. Most forward exchange contracts have maturities of less than one year after the balance sheet date. Forward exchange
contractswhichqualifyaseffectivecashflowhedgesarestatedatfairvalue.TheprincipaltranslationexposuresrelatetotheUSDollar,Norwegian
Kroner, Singapore Dollar, and Australian Dollar.
The Group’s exposure to foreign currency transactional risk in its principal currencies was as follows based on notional amounts:
31 December 2021
USD
m
EUR
m
NOK
m
SGD
m
AUD
m
NGN
m
Trade receivables
54.0 1.8 – – 0.3 107.1
Cash at bank and in hand
2.8 1.5 0.1 0.7 – 9.4
Trade payables
(8.2) (2.9) (10.8) (0.2) (0.3) (12.3)
Gross balance sheet exposure
48.6 0.4 (10.7) 0.5 – 104.2
Forecast sales
145.4 9.7 0.7 – – 333.0
Forecast purchases
(55.1) (15.0) – – – (83.0)
Gross exposure
138.9 (4.9) (10.0) 0.5 – 354.2
Forward exchange contracts
(44.7) 0.2 – – – –
Net exposure
94.2 (4.7) (10.0) 0.5 – 354.2
29 Financial instruments cont.
Capital management cont.
(a) Credit risk cont.
The Group considers that the trade receivables that have not been provided against and are past due by more than 30 days are collectable based
on historic payment behaviour and extensive analysis of underlying customers’ credit ratings. Based on historic default rates, used to inform our view
of future expected credit losses, the Group believes that apart from the amounts included in the table above, no impairment allowance is necessary
in respect of trade receivables. For debts overdue by more than 180 days and where the evidence suggests non-recoverability, the Company makes
provision for impairment.
Loss allowances for trade receivables and contract assets are measured at an amount equal to lifetime expected credit losses (ECL) based on
thesimplifiedapproach.Whendeterminingwhetherthecreditriskofafinancialassethasincreasedsignificantlysinceinitialrecognitionandwhen
estimating ECLs, the Group considers reasonable and supportable information (both qualitative and quantitative) that is relevant and available without
unduecostoreffort.TheGroupassumesthatthecreditriskonafinancialassethasincreasedsignificantlyifitismorethan90daysoverdue.
Forcontractassets,intheeventofacontractissue,specificprovisionismadewhereappropriate.
(b) Liquidity risk
LiquidityriskistheriskthattheGroupwillnotbeabletomeetitsfinancialobligationsastheyfalldue.TheGroupmanagesitscashresourcesand
borrowingstoensurethatitwillhavesufficientliquiditytomeetitsliabilitiesastheyfallduebutinamannerdesignedtomaximisethebenefitofthose
resourceswhilstensuringthesecurityofinvestmentresources.TheGroupforecaststheprofileofitscashrequirementsonamonthlybasisand
ensuresthatsufficientfacilitiesareavailabletomeetpeakrequirementswhichoccuratpredictabletimesintheyear.TheGroupmanagesthematurity
profileofitsborrowingsbymaintainingaregulardialoguewithitslendersandensuringthatitcommencestherenegotiationoffacilitiessufficiently
early to allow a comprehensive review of its requirements before completion.
TheGroup’srevolvingcreditfacilitiesextendoverseveralaccountingperiodsandfalldueforrenewalindifferentaccountingperiodsensuringthatthe
GroupnegotiationswithindividuallendersfollowanorderlyprocesswhichdoesnotexposetheGrouptothepossibilityofasignificantreductionin
available facilities in any single period.
Thefollowingarethecontractualmaturitiesoffinancialliabilities,includinginterestpayments:
At 31 December 2021
Group
Carrying
amount
£m
Contractual
cash flows
£m
Within 1
year
£m
1 – 2
years
£m
2 – 3
years
£m
3 – 4
years
£m
4 – 5
years
£m
Greater
than
5 years
£m
Non-derivative financial liabilities
Unsecured bank loans and overdrafts
207.5 (221.0) (38.9) (44.2) (137.9) – – –
Lease liabilities
46.0 (53.1) (12.5) (10.6) (8.5) (7.4) (3.9) (10.2)
Trade and other payables
150.8 (150.8) (150.8) – – – – –
Derivative financial liabilities
Interest rate swaps used for hedging
0.1 (0.3) (0.3) – – – – –
Outflowonforwardexchangecontracts
used for hedging: 0.5 (33.0) (33.0) – – – – –
404.9 (458.2) (235.5) (54.8) (146.4) ( 7.4) (3.9) (10.2)
At 31 December 2020
As restated
£m
As restated
£m
As restated
£m £m £m £m £m £m
Non-derivative financial liabilities
Unsecured bank loans and overdrafts 258.5 (269.6) (85.2) (118.6) (25.4) (40.4) – –
Lease liabilities 32.5 (34.1) (8.6) (6.7) (5.9) (4.3) (3.3) (5.3)
Trade and other payables 143.7 (143.7) (143.7) – – – – –
Derivative financial liabilities
Interest rate swaps used for hedging 1.0 (0.9) (0.5) (0.4) – – – –
Outflowonforwardexchangecontracts
used for hedging: (3.2) (38.6) (38.4) (0.2) – – – –
432.5 (486.9) (276.4) (125.9) (31.3) (44.7) (3.3) (5.3)
Financial statements
Strategic report
Governance
Financial statements
168 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 169
Notes to the financial statements cont.
29 Financial instruments cont.
Capital management cont.
(e) Fair values
Therearenomaterialdifferencesbetweenthebookvalueoffinancialassetsandliabilitiesandtheirfairvalueotherthansetoutbelow:
2021 2020
Group Note
Carrying
value
£m
Fair
value
£m
As restated
Carrying
value
£m
As restated
Fair
value
£m
Liabilities carried at amortised cost
Unsecured bank loans and overdrafts 27
(207. 5) (202.8)
(258.5) (251.6)
Trade and other payables 21
(150.8) (150.8)
(143.7) (143.7)
Leases 27
(46.0) (46.0)
(32.5) (32.5)
Preference shares 30
(0.1) (0.1)
(0.1) (0.1)
(404.4) (399.7)
(434.8) (427.9)
2021 2020
Company Note
Carrying
value
£m
Fair
value
£m
As restated
Carrying
value
£m
As restated
Fair
value
£m
Liabilities carried at amortised cost
Unsecured bank loans and overdrafts 27
(194.2) (189.6)
(233.0) (225.9)
Trade and other payables 21
(7.4) (7.4)
(6.0) (6.0)
Leases 27
(1.6) (1.6)
(1.7) (1.7)
Preference shares 30
(0.1) (0.1)
(0.1) (0.1)
(203.3) (198.7)
(240.8) (233.7)
Fairvaluehasbeendeterminedbyreferencetothemarketvalueatthebalancesheetdateorbydiscountingtherelevantcashflowsusingcurrent
interestratesforsimilarinstruments.ThefairvalueofthefinancialassetshasbeenassessedbytheDirectorswithreferencetothecurrentprospects
of the investments and associated risks.
Fair value hierarchy
TheGroupclassifiesfairvaluemeasurementusingafairvaluehierarchythatreflectsthesignificanceofinputsusedinmakingmeasurementsoffair
value. The fair value hierarchy has the following levels:
Level 1 Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly
(i.e. as prices) or indirectly (i.e. derived from prices); and
Level 3 Inputs for the asset or liability that are not based on observable market data (unobservable inputs).
29 Financial instruments cont.
Capital management cont.
(c) Foreign exchange risk cont.
31 December 2020
USD
m
EUR
m
NOK
m
SGD
m
AUD
m
NGN
m
Trade receivables 28.3 0.7 – – 0.3 94.4
Cash at bank and in hand 6.9 2.0 1.8 1.4 4.8 11.2
Trade payables ( 7. 5) (2.6) (8.3) (0.2) (0.1) (21.1)
Gross balance sheet exposure 27.7 0.1 (6.5) 1.2 5.0 84.5
Forecast sales 166.0 9.4 – 0.2 – 200.0
Forecast purchases (68.5) (16.0) – (0.6) – (50.0)
Gross exposure 125.2 (6.5) (6.5) 0.8 5.0 234.5
Forward exchange contracts (50.0) 2.3 – – – –
Net exposure 75.2 (4.2) (6.5) 0.8 5.0 234.5
Changes in the level of exchange rates will have an impact on consolidated earnings. The following table shows the impact on earnings of a 5%
strengthening in the exchange rate in the Group’s key currencies against Sterling. The obverse movements would be of the same magnitude. These
amountshavebeencalculatedbyapplyingchangesinexchangeratestotheGroup’sforeigncurrencyprofitsandlossesandtofinancialinstruments
denominated in foreign currency.
2021 2020
Equity
£m
Income
statement
£m
Equity
£m
Income
statement
£m
US Dollar
(2.4) (3.4)
(4.0) (3.1)
Other
(0.4) –
(0.3) (0.3)
(2.8) (3.4)
(4.3) (3.4)
Includedwithinoperatingprofitareforeigncurrencygainsof£3.3m(2020:gainsof£0.1m).
(d) Interest rate risk
TheGroupusesinterestrateswapstoconvertinterestratesoncertainborrowingsfromfloatingratestofixedhedgeexposuretofluctuationsin
interestrates.TheinterestrateprofileoftheGroup’sfinancialassetsandliabilitiesaresetoutinthetablebelow:
Group Company
2021
£m
As restated
2020
£m
2021
£m
As restated
2020
£m
Fixed rate instruments
Financial liabilities
(0.1)
(0.1)
(0.1)
(0.1)
Variable rate instruments
Financial assets
68.0
93.1
11.7
11. 5
Financial liabilities
(207. 5)
(258.5)
(194.2)
(224.6)
(139.5)
(165.4)
(182.5)
(213.1)
WherehedgingcriteriaaremettheGroupclassifiesinterestrateswapsascashflowhedgesandstatesthematfairvalue.Overthelongerterm
permanent changes in interest rates would have an impact on consolidated earnings. At 31 December 2021, a one per cent change in the interest
rate would have had the following impact:
2021
Income
statement
£m
2020
Income
statement
£m
Variable rate instruments
(1.4)
(1.7)
Interest rate swap
0.7
0.8
Cashflowsensitivity
(0.7)
(0.9)
Financial statements
Strategic report
Governance
Financial statements
170 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 171
Notes to the financial statements cont.
29 Financial instruments cont.
Capital management cont.
(e) Fair values cont.
Cash flow hedges – Group and Company
Forwardcontractsandinterestrateswapsareincludedwithin“tradeandotherpayables/tradeandotherreceivables”intheStatementoffinancial
position;in“effectiveportionofchangesinfairvalueofcashflowhedges”intheConsolidatedstatementofothercomprehensiveincome(OCI),
and in “administrative expenses” within the Income statement.
At 31 December 2021, the Group and Company held forward currency contracts designated to hedge future commitments in US Dollars and Euro.
The terms of the contracts are as follows:
Maturity
Exchange
rate
Fair value
£m
Sell
US$44.7m
January 2022 – December 2022 1.37 (0.4)
Buy
Euro 0.2m
January 2022 – December 2022 1.10 –
At 31 December 2020, the Group and Company held forward currency contracts designated to hedge future commitments in US Dollars and
Swedish Krona. The terms of the contracts are as follows:
Maturity
Exchange
rate
Fair value
£m
Sell
US$50m January 2021 – December 2021 1.26 3.2
Buy
Euro 2.3m January 2021 – December 2021 1.10 –
Theforeignexchangecontractshavebeennegotiatedtomatchtheexpectedprofileofreceipts.At31December2021,thesehedgeswereassessed
tobehighlyeffectiveandanunrealisedlossof£3.3m(2020:gainof£0.4m)relatingtothehedginginstrumentsisincludedinequity.
In respect of the Forward contracts, a loss of £0.3m (2020: £0.1m gain) was recognised in the income statement and a loss of £2.9m (2020: £1.7m
gain) in the consolidated statement of other comprehensive income relating to forward contracts.
Interest rate swaps
TheGroupandCompanyenteredintointerestrateswapcontractsinrespectofSterlingdenominateddebttoswapavariablerateliabilityforafixed
rate liability. These instruments have been allocated against the Group and Company debt in the tables shown above. Details of the contracts and
their fair values at 31 December are set out below:
Amount Fair value
2021
£m
2020
£m Maturity
Fixed rate
%
2021
£m
2020
£m
Sterling interest rate swaps
75.0
75.0
30 October 2022 0.5% – 1.2% –
(1.0)
In respect of the Interest rate swaps, an expense of £0.5m (2020: expense of £0.2m) was recognised in the income statement, and a gain of £1.0m
(2020: £1.2m loss) was recognised in the Consolidated statement of other comprehensive income.
29 Financial instruments cont.
Capital management cont.
(e) Fair values cont.
Fair value hierarchy cont.
Financial instruments carried at fair value as set out below:
Level 2
Group
2021
£m
As restated
2020
£m
Financial assets measured at fair value
Forwardexchangecontracts–cashflowhedges
0.1
3.2
Interestrateswaps–cashflowhedges
0.1
–
0.2
3.2
Financial liabilities measured at fair value
Forwardexchangecontracts–cashflowhedges
(0.5)
–
Interestrateswaps–cashflowhedges
(0.1)
(1.0)
Financial liabilities not measured at fair value
Unsecured bank loans and overdrafts
(202.8)
(251.6)
Leases
(46.0)
(32.5)
(249.4)
(28 5.1)
(249.2)
(281.9)
Level 2
Company
2021
£m
As restated
2020
£m
Financial assets measured at fair value
Forwardexchangecontracts–cashflowhedges
0.1
3.2
Interestrateswaps–cashflowhedges
0.1
–
0.2
3.2
Financial liabilities measured at fair value
Forwardexchangecontracts–cashflowhedges
(0.5)
–
Interestrateswaps–cashflowhedges
(0.1)
(1.0)
Financial liabilities not measured at fair value
Unsecured bank loans and overdrafts
(189.6)
(225.9)
(190.2)
(226.9)
(190.0)
(223.7)
There have been no transfers between categories during the period. The fair value of interest rate swap contracts and forward exchange contracts
are calculated by management based on external valuations received from the Group’s bankers and is based on forward exchange rates and
anticipated future interest yields respectively.
Fair value hedges – Group and Company
At 31 December 2021 and 31 December 2020 the Group did not have any outstanding fair value hedges.
Financial statements
Strategic report
Governance
Financial statements
172 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 173
Notes to the financial statements cont.
31 Commitments and contingencies
Capital commitments
At 31 December, capital commitments for which no provision has been made in these accounts amounted to:
Group Company
2021
£m
2020
£m
2021
£m
2020
£m
Capital commitments
1.6
–
–
–
Contingent liabilities
(a) In the ordinary course of the Company’s business, counter indemnities have been given to banks in respect of custom bonds, foreign exchange
commitments and bank guarantees.
(b) A Group VAT registration is operated by the Company and six Group undertakings in respect of which the Company is jointly and severally liable
for all amounts due to HM Revenue & Customs under the arrangement.
(c) A guarantee has been issued by the Group and Company to charter parties in respect of obligations of a subsidiary, James Fisher Everard
Limited, in respect of charters relating to nine vessels. The charters expire between 2022 and 2024.
(d) Subsidiaries of the Group have issued performance and payment guarantees to third parties with a total value of £33.5m (2020: £48.2m).
(e)TheGroupisliableforfurthercontributionsinthefuturetotheMNOPFandMNRPFifadditionalactuarialdeficitsariseorifotheremployersliable
for contributions are not able to pay their share. The Group and Company remains jointly and severally liable for any future shortfall in recovery of
theMNOPFdeficit.
(f) The Group has given an unlimited guarantee to the Singapore Navy in respect of the performance of First Response Marine Pte Ltd, its Singapore
joint venture, in relation to the provision of submarine rescue and related activities.
(g) In the normal course of business, the Company and certain subsidiaries have given parental and subsidiary guarantees in support of loan and
banking arrangements.
(h) The Company and its subsidiaries may be parties to legal proceedings and claims which arise in the ordinary course of business, and can
be material in value. Disclosure of contingent liabilities or appropriate provision has been made in these accounts where, in the opinion of the
Directors, liabilities may materialise. Provisions made against certain receivables and claims are described in note 34 (b) estimates. Note 5
includes‘Costsofmateriallitigation’arisingfromtheprocessofexitinganumberofhistoricjointventurecompanies.Therearenoothersignificant
provisionsandnoindividuallysignificantcontingentliabilitiesthatrequiredspecificdisclosure.
29 Financial instruments cont.
Capital management cont.
(f) Market risk
TheGrouphasthefollowingderivativefinancialinstrumentsinthefollowinglineitemsinthestatementoffinancialposition:
Group Company
Current assets
2021
£m
2020
£m
2021
£m
2020
£m
Foreigncurrencyforwards–cashflowhedges
0.1
3.2
0.1
3.2
Interestrateswaps–cashflowhedges
0.1
–
0.1
–
Totalcurrentderivativefinancialinstrumentassets
0.2
3.2
0.2
3.2
Group Company
Current liabilities
2021
£m
2020
£m
2021
£m
2020
£m
Foreigncurrencyforwards–cashflowhedges
(0.5)
–
(0.5)
–
Interestrateswaps–cashflowhedges
(0.1)
(1.0)
(0.1)
(1.0)
Totalcurrentderivativefinancialinstrumentliabilities
(0.6)
(1.0)
(0.6)
(1.0)
30 Share capital
Allotted, called up and fully paid
25p Ordinary shares
£1 Cumulative
Preference shares
In millions of shares 2021 2020 2021 2020
In issue at 1 January
50.4
50.3
0.1
0.1
Exercise of share options
–
0.1
–
–
In issue at 31 December
50.4
50.4
0.1
0.1
2021
£m
2020
£m
2021
£m
2020
£m
Issued share capital
12.6
12.6
0.1
0.1
The preference shareholders are entitled to receive 3.5% cumulatively per annum, payable in priority to any dividend on the ordinary shares. The ordinary
shareholders are entitled to receive dividends as declared from time to time by the Directors.
Shares all carry equal voting rights of one vote per share held. They also have the right to attend and speak at general meetings, exercise voting
rights and appoint proxies. Neither type of share is redeemable. In the event of a winding-up order the amount receivable in respect of the cumulative
preference shares is limited to their nominal value. The ordinary shareholders are entitled to an unlimited share of the surplus after distribution to the
cumulative preference shareholders.
Treasury shares
2021
£m
2020
£m
54,571 (2020: 9,227) ordinary shares of 25p
0.6
0.2
The Company has an established Employee Share Ownership Trust, the James Fisher and Sons plc Employee Share Ownership Trust, to meet
potential obligations under share option and long-term incentive schemes awarded to employees. The historic cost of these shares at 31 December
2021 was £0.6m (2020: £0.2m). The trust has not waived its right to receive dividends.
In the year ended 31 December 2021, 26,738 (2020: 34,670) ordinary shares with an aggregate nominal value of £6,685 (2020: £8,668) were issued
to satisfy awards made under the Company’s Executive Share Option Scheme at option prices of 521.67p and 567p (2020: 410p and 522p) per
share giving rise to total consideration of £530,055 (2020: £404,024).
During the year the Trust purchased 50,000 (2020: 50,000) of its own shares in the market at an average cost per share of £9.87 (2020: £17.82)
and a total cost of £0.5m (2020: £0.9m).
Financial statements
Strategic report
Governance
Financial statements
174 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 175
Notes to the financial statements cont.
33 Significant accounting policies
The principal accounting policies, which have been applied consistently throughout the year and the preceding year, are set out below.
33.1 Basis of preparation of the consolidated financial statements
The results of subsidiaries are consolidated for the periods from or to the date on which control has passed. Control exists when the Company
controlsaninvesteewhentheinvestorisexposed,orhasrights,tovariablereturnsfromitsinvolvementwiththeinvesteesandhastheabilitytoaffect
those returns through its power over the investee. Acquisitions are accounted for under the purchase method of accounting from the acquisition
date,whichisthedateonwhichcontrolispassedtotheGroup.Thefinancialstatementsofsubsidiariesarepreparedforthesamereportingperiod
as the Parent company, using consistent accounting policies. All intra-group balances, transactions, income and expenses are eliminated in the
consolidatedfinancialstatements.
Payment for the future services from employees or former owners are expensed. Any payments to employees or former owners in respect of the
acquisition of the business are capitalised. This is carefully managed during the acquisition process so that former owners and/or employees do not
receive any incentive payments during an earn-out period.
Joint arrangements
A joint arrangement is an arrangement over which the Group and one or more third parties have joint control. These joint arrangements are in turn
classifiedas:
Joint ventures whereby the Group has rights to the net assets of the arrangement, rather than rights to its assets and obligations for its liabilities; and
Joint operations whereby the Group has rights to the assets and obligations for the liabilities relating to the arrangement.
Any investment in joint ventures is carried in the balance sheet at cost plus the Group’s post acquisition share in the change in net assets of the joint
ventures,lessanyimpairmentprovision.TheincomestatementreflectstheGroup’sshareofthepost-taxresultofthejointventures.TheGroup’s
share of any changes recognised by the joint venture in other comprehensive income are also recognised in other comprehensive income.
Non-controlling interests
Non-controllinginterestsrepresenttheproportionofprofitorlossandnetassetsnotheldbytheGroupandarepresentedseparatelyintheincome
statementandintheconsolidatedstatementoffinancialposition.Lossesapplicabletothenon-controllinginterestsinasubsidiaryareallocatedtothe
non-controllinginterestsevenifdoingsocausesthenon-controllingintereststohaveadeficitbalance.
Put options upon non-controlling interests are sometimes recognised arising from business combinations. An initial option price estimate is recorded
within payables and a corresponding entry made to other reserves.
Ontheacquisitionofnon-controllinginterests,thedifferencebetweentheconsiderationpaidandthefairvalueoftheshareofnetassetsacquiredis
recognised in equity. Changes to the carrying value of the Put option are similarly recorded within equity.
Company investments in subsidiaries and joint ventures
InitsseparatefinancialstatementstheCompanyrecognisesitsinvestmentsinsubsidiariesandjointventuresatcost.Incomeisrecognisedfrom
these investments when its right to receive the dividend is established.
33.2 Foreign currency
Group
Thefinancialstatementsofsubsidiaryundertakingsarepreparedintheirfunctionalcurrencywhichisthecurrencyoftheprimaryeconomic
environmentinwhichtheyoperate.Forthepurposeoftheconsolidatedfinancialstatements,theresultsandfinancialpositionofeachentityare
translated into UK Sterling, which is the Group’s presentational currency.
(i) Foreign currency transactions in functional currency
Transactions in currencies other than the entities functional currency are initially recorded at rates of exchange prevailing on the date of the
transaction. At each subsequent balance sheet date:
(a) Foreigncurrencymonetaryitemsareretranslatedatratesprevailingonthebalancesheetdateandanyexchangedifferencesrecognisedinthe
income statement;
(b) Non-monetary items measured at historical cost are not retranslated; and
(c) Non-monetary items measured at fair value are retranslated using exchange rates at the date the fair value was determined. Where a gain or loss
is recognised directly in equity, any exchange component is also recognised in equity and conversely where a gain or loss is recognised in the
income statement, any exchange component is recognised in the income statement.
(ii) Net investment in foreign operations
ExchangedifferencesarisingonmonetaryitemsformingpartoftheGroup’snetinvestmentinoverseassubsidiaryundertakingswhichare
denominated in the functional currency of the subsidiary undertaking are taken directly to the translation reserve and subsequently recognised in the
consolidatedincomestatementondisposalofthenetinvestment.Exchangedifferencesonforeigncurrencyborrowingstotheextentthattheyare
usedtoprovideaneffectivehedgeagainstGroupequityinvestmentsinforeigncurrencyaretakendirectlytothetranslationreserve.
32 Related party transactions
Transactions with related parties
FCM businesses
The Group has interests of between 40% and 50% in several joint ventures providing ship-to-ship transfer services in Northern Europe and Asia
through its wholly owned subsidiary, Fendercare Marine Services Limited.
First Response Marine
The Group holds through James Fisher Marine Services Limited (JFMS) a 50% interest in First Response Marine Pte Ltd (FRM). FRM provides
submarine rescue services to the Singapore government under a 20-year service contract which commenced in March 2009. FRM subcontracts the
provision of the submarine rescue service to James Fisher Singapore Pte Ltd. JFMS has also provided a loan to FRM of £2.0m to support its day-to-
day operations. The loan which is included in the Group balance sheet as part of the investment in joint ventures is interest bearing and is repayable
at the end of the project. Interest charged in the period amounted to £0.1m (2020: £0.1m). Dividends received or receivable during the period
included in the results of the Group are £0.5m (2020: £0.5m).
JFD Domeyer
The Group has a 50% stake in JFD Domeyer, an entity which provides in-service support and after-market services to customers in Germany.
Pleat Mud Coolers AS
TheGrouphasa50.1%stakeinPleatMudCoolersAS,anentitywhichsuppliesmudcoolingsystemstotheoffshoreoilandgasmarket.
Wuhu Divex Diving Systems
The Group has a 49% stake in Wuhu Divex Diving System Ltd, an entity which manufactures advanced diving systems for the Chinese market.
JF Technologies LLC
The Group has a 49% stake in James Fisher Technologies LLC, an entity which provides specialist design and engineering services including the
provision of remote control equipment to the North American nuclear decommissioning market.
Details of the transactions carried out with related parties are shown in the table below:
Services to
related
parties
£m
Sales to
related
parties
£m
Purchases
from related
parties
£m
Amounts
owed by
parties
£m
Amounts
owed to
parties
£m
FCM businesses
2021 – 0.6 0.7 0.1 0.7
2020 – 1.2 1.2 0.1 0.7
First Response Marine
2021 – – – 1.0 –
2020 3.6 – – 1.0 –
JFD Domeyer
2021 – 0.6 – 2 .1 –
2020 – 0.6 – 2.1 –
Pleat Mud Coolers
2021 – 0.3 0.2 0.9 –
2020 – 0.5 – 0.6 –
Wuhu Divex Diving Systems
2021 0.5 3.9 – 0.2 –
2020 – 0.2 – 0.3 –
JF Technologies LLC
2021 – – – – –
2020 – – 0.1 – –
Company
TheCompanyhasenteredintotransactionswithitssubsidiaryundertakingsprimarilyinrespectoftheprovisionofaccountingservices,financeand
the provision of share options to employees of subsidiaries.
The amount outstanding from subsidiary undertakings to the Company at 31 December 2021 was £343.9m (2020: £369.0m). Amounts owed to
subsidiary undertakings by the Company at 31 December 2021 totalled £11.6m (2020: £3.6m).
The Company has had no expense in respect of bad or doubtful debts of subsidiary undertakings in the year (2020: £nil).
Financial statements
Strategic report
Governance
Financial statements
176 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 177
Notes to the financial statements cont.
33 Significant accounting policies cont.
33.3 Financial instruments cont.
(b) Financial liabilities
FinancialliabilitiesareclassifiedasmeasuredatamortisedcostorFVTPL.AfinancialliabilityisclassifiedasatFVTPLifitisclassifiedasheldfor
trading, it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and
losses,includinganyinterestexpense,arerecognisedinprofitorloss.
ContingentconsiderationisconsideredtobeafinancialliabilitymeasuredatFVTPL.
Otherfinancialliabilitiesaresubsequentlymeasuredatamortisedcostusingtheeffectiveinterestmethod.Interestexpense,foreignexchangegains
andlosses,andanygainorlossonde-recognitionarerecognisedinprofitorloss.
(c) De-recognition
TheGroupde-recognisesafinancialassetwhenthecontractualrightstothecashflowsfromthatassetexpire,orittransferstherightstoreceivethe
contractualcashflowsinatransactioninwhichsubstantiallyalloftherisksandrewardsofownershipofthefinancialassetaretransferred.
TheGroupde-recognisesafinancialliabilitywhenitscontractualobligationsaredischargedorcancelled,orexpire.Onde-recognitionofafinancial
liability,thedifferencebetweenthecarryingamountextinguishedandtheconsiderationpaidisrecognisedinprofitorloss.
(d) Derivative financial instruments and hedge accounting
TheGroupholdsderivativefinancialinstrumentstohedgeitsforeigncurrencyandinterestrateriskexposures.Derivativesareinitiallymeasuredat
fairvalue.Subsequenttoinitialrecognition,derivativesaremeasuredatfairvalue,andchangesthereinaregenerallyrecognisedinprofitorloss.
TheGroupdesignatescertainderivativesashedginginstrumentstohedgethevariabilityincashflowsassociatedwithhighlyprobableforecast
transactionsarisingfromchangesinforeignexchangeratesandinterestratesandcertainderivativesandnonderivativefinancialliabilitiesashedges
of foreign exchange risk on a net investment in a foreign operation.
At inception of designated hedging relationships, the Group documents the risk management objective and strategy for undertaking the hedge and
theeconomicrelationshipbetweenthehedgeditemandthehedginginstrument,includingwhetherthechangesincashflowsofthehedgeditem
andhedginginstrumentareexpectedtooffseteachother.
The appropriate level of hedging is monitored by Group Treasury and the Group Board. As part of this review process the following are assessed:
thehedgingeffectivenesstodeterminethatthereisaneconomicrelationshipbetweenthehedgeditemandthehedginginstrument;
the hedge ratio; and
thatthehedgeditemandinstrumentarenotintentionallyweightedtocreatehedgeineffectiveness.
Cash flow hedges
Whenaderivativeisdesignatedasacashflowhedginginstrument,theeffectiveportionofchangesinthefairvalueofthederivativeisrecognised
inOCIandaccumulatedinthehedgingreserve.Anyineffectiveportionofchangesinthefairvalueofthederivativeisrecognisedimmediatelyinprofit
or loss.
TheGroupdesignatesonlythechangeinfairvalueofthespotelementofforwardexchangecontractsasthehedginginstrumentincashflow
hedging relationships.
Forallhedgedforecasttransactions,theamountaccumulatedinthehedgingreserveisreclassifiedtoprofitorlossinthesameperiodorperiods
duringwhichthehedgedexpectedfuturecashflowsaffectprofitorloss.
Cashandshort-termdepositsincludedinthestatementoffinancialpositioncomprisecashatbankandinhandandshort-termdepositswithan
originalmaturityofthreemonthsorlessfromtheoriginalacquisitiondate.Cashandcashequivalentsincludedinthecashflowstatementcomprise
cash and short-term deposits, net of bank overdrafts.
Ifthehedgedfuturecashflowsarenolongerexpectedtooccur,thentheamountsthathavebeenaccumulatedinthehedgingreserveandthecost
ofhedgingreserveareimmediatelyreclassifiedtoprofitorloss.
Net investment hedges
Whenaderivativeinstrumentoranonderivativefinancialliabilityisdesignatedasthehedginginstrumentinahedgeofanetinvestmentinaforeign
operation,theeffectiveportionof,foraderivative,changesinthefairvalueofthehedginginstrumentor,foranonderivative,foreignexchangegains
and losses is recognised in OCI and presented in the translation reserve within equity.
Anyineffectiveportionofthechangesinthefairvalueofthederivativeorforeignexchangegainsandlossesonthenonderivativeisrecognised
immediatelyinprofitorloss.TheamountrecognisedinOCIisreclassifiedtoprofitorlossasareclassificationadjustmentondisposalofthe
foreign operation.
33 Significant accounting policies cont.
33.2 Foreign currency cont.
Group cont.
(iii) Translation from functional currency to presentational currency
Theassetsandliabilitiesofoperations,wherethefunctionalcurrencyisdifferentfromtheGroup’spresentationalcurrencyaretranslatedattheperiod
endexchangerates.Incomeandexpensesaretranslatedattheaverageexchangerateforthereportingperiod.Allotherexchangedifferenceson
transactions in foreign currencies are recorded at the rate ruling at the date of the transaction.
Resultingexchangedifferencesarerecognisedintheconsolidatedstatementofothercomprehensiveincome.Taxchargesandcreditsattributable
toexchangedifferencesincludedinthereservearealsodealtwithinthetranslationreserve.
Company
Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign
currenciesareretranslatedattherateofexchangerulingatthebalancesheetdate.Exchangedifferencesarisingonsettlementofmonetaryitemsor
ontheretranslationofmonetaryitemsatratesdifferentfromthoseatwhichtheywereinitiallyrecognisedaretakentotheincomestatement.
Allexchangedifferencesonassetsandliabilitiesdenominatedinforeigncurrenciesaretakentotheincomestatement,otherthaninvestmentsin
foreignoperationsandforeigncurrencyborrowingsusedtohedgethoseinvestments,whereexchangedifferencesaretakentothetranslation
reserve.
33.3 Financial instruments
IFRS9FinancialInstrumentsbecameeffectiveon1January2018.ThisstandardreplacesIAS39andintroducednewrequirementsforclassifying
andmeasuringfinancialinstrumentsandputinplaceanewhedgeaccountingmodelthatisdesignedtobemorecloselyalignedwithhowentities
undertakeriskmanagementactivitieswhenhedgingfinancialandnon-financialriskexposures.IFRS9hasbeenimplementedprospectivelyfrom
1 January 2018 and the impact on the Group has not been material. The key areas of focus for the Group under IFRS 9 are:
Expected credit losses being recognised on trade debtors and contract assets recognised under IFRS 15;
Hedge accounting and related hedge documentation; and
ReclassificationofassetsheldforsaleasOtherInvestments,withthesebeingfairvaluedateachreportingperiod.
(a) Financial assets
Tradereceivablesanddebtsecuritiesissuedareinitiallyrecognisedwhentheyareoriginated.Allotherfinancialassetsandfinancialliabilitiesare
initially recognised when the Group becomes a party to the contractual provisions of the instrument.
Afinancialasset,otherthanatradereceivablewithoutasignificantfinancingcomponent,orfinancialliabilityisinitiallymeasuredatfairvalueplus
transactioncoststhataredirectlyattributabletoitsacquisitionorissue.Atradereceivablewithoutasignificantfinancingcomponentisinitially
measured at the transaction price.
Policy applicable from 1 January 2018
Afinancialassetismeasuredatamortisedcostifitisnotdesignatedasfairvaluethroughtheprofitandlossaccount(FVTPL)anditisheldtocollect
contractualcashflowswithcontractualtermsthatgiveriseonspecifieddatestocashflowsthataresolelypaymentsofprincipalandinterestonthe
principal amount outstanding.
A debt investment is measured at fair value through other comprehensive income (FVOCI) if it is not designated as at FVTPL, and it is held with the
objectiveofcollectingcontractualcashflowsandsellingfinancialassetswithcontractualtermsthatgiveriseonspecifieddatestocashflowsthatare
solely payments of principal and interest on the principal amount outstanding.
On initial recognition of an equity investment not held for trading, the Group can irrevocably elect, on an investment by investment basis, to present
subsequent changes in the investment’s fair value in OCI.
AllfinancialassetsnotclassifiedasmeasuredatamortisedcostorFVOCI,asdescribedabove,includingderivativefinancialinstrumentsare
measuredatfairvaluethroughprofitandloss.
Financialassetsatfairvaluethroughprofitandloss,includinganyinterestordividendincome,arerecognisedintheprofitandloss.
Financialassetsatamortisedcostarevaluedusingtheeffectiveinterestmethodwiththeamortisedcostreducedbyanyimpairmentlosses,with
interestincome,foreignexchangegainsorlosses,impairmentandde-recognitiongainsorlossesrecognisedinprofitorloss.
Debtinvestmentsaremeasuredatfairvaluewithinterestincomecalculatedusingtheeffectiveinterestmethodwithanyforeignexchangegainsand
losses,orimpairments,takenthroughtheprofitandloss.Othernetgainsorlosses,andthoseonde-recognitionaccumulatedthroughtheOCI,are
reclassifiedintheprofitorloss.
Equityinvestmentsaremeasuredatfairvaluewithdividendsrecognisedthroughtheprofitandloss.Othernetgainsorlosses,arerecognisedinthe
OCI,andareneverreclassifiedintheprofitorloss.
Financial statements
Strategic report
Governance
Financial statements
178 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 179
Notes to the financial statements cont.
33 Significant accounting policies cont.
33.6 Impairment of tangible and intangible assets
At each reporting date the Group asseses whether there are any indications that an asset has been impaired. If any indication exists, an estimate
of the recoverable amount of the asset is made which is determined as the higher of its fair value less costs to sell and its value in use. These
calculationsaredeterminedforanindividualassetunlessthatassetdoesnotgeneratecashinflowsindependentlyfromotherassets,inwhichcase
itsvalueisdeterminedaspartofthatgroupofassets.Toassessthevalueinuse,estimatedfuturecashflowsrelatingtotheassetarediscountedto
theirpresentvalueusingapre-taxdiscountratethatreflectscurrentmarketassessmentofthetimevalueofmoneyandrisksspecifictotheasset.
Where the carrying amount of the asset exceeds its recoverable amount, the asset is considered to be impaired and is written down to its recoverable
amount. Impairment losses are recognised in the income statement.
(a) Impairment of goodwill
Goodwill acquired in a business combination is allocated against the appropriate combination of business units deemed to obtain advantage from
thebenefitsacquiredwiththegoodwill.Thesearedesignatedascashgeneratingunits(CGU).Impairmentisthenassessedbycomparingthe
recoverable amount of the relevant CGU with the carrying value of the CGU’s goodwill. Recoverable amount is measured as the higher of the CGU’s
fair value less cost to sell and the value in use. Where the recoverable amount of the CGU is less than its carrying amount including goodwill, an
impairment loss is recognised in the income statement. An impairment loss for goodwill is not reversed in a subsequent period.
(b) Impairment of tangible and other intangible assets
If any indiction of a potential impairment exists, the recoverable amount is estimated to determine the extent of any impairment loss. Assets are
groupedtogetherforthispurposeatthelowestlevelforwhichthereareseparatelyidentifiablecashflows.
(c) Research and development costs
Research expenditure is expensed in the income statement as incurred.
Expenditure on development which represents the application of research to the development of new products or processes is capitalised provided
thatspecificprojectsareidentifiable,technicallyfeasible,andtheGrouphassufficientresourcestocompletedevelopment.Theusefullifeofprojects
meeting the criteria for capitalisation is determined on a project by project basis. Capitalised development expenditure is measured at cost and
amortised over its expected useful life on a straight-line basis. Other development costs are recognised in the income statement as incurred.
If an event occurs after the recognition of an impairment that leads to a decrease in the amount of the impairment loss previously recognised the
impairment loss is reversed. The reversal is recognised in the income statement to the extent that the carrying value of the asset does not exceed its
amortised cost at the reversal date.
33.7 Inventories
Inventories are stated at the lower of cost and net realisable value. Cost includes all costs incurred in bringing each product to its present location and
condition.Rawmaterials,consumablesstoresandfinishedgoodsforsalearestatedatpurchasecostonafirstin,firstoutbasis.Workinprogress
andfinishedgoodsarestatedatthecostofdirectmaterialsandlabourplusattributableoverheadsallocatedonasystematicbasisbasedona
normal level of activity. Net realisable value is based on estimated selling price less the estimated costs of completion and sale or disposal.
33.8 Taxation
Corporationtaxisprovidedontaxableprofitsfromactivitiesnotqualifyingfortonnagetaxreliefandisrecognisedintheincomestatementexcept
to the extent that it relates to items recognised directly in equity or in other comprehensive income.
Currenttaxistheexpectedcorporationtaxpayableorreceivableinrespectofthetaxableprofitfortheyearusingtaxratesenactedorsubstantively
enacted at the balance sheet date, less any adjustments to tax payable or receivable in respect of previous years.
Deferredtaxisrecognisedinrespectofalltemporarydifferencesbetweenthecarryingamountsofassetsandliabilitiesincludedinthefinancial
statements and the amounts used for tax purposes, that will result in an obligation to pay more, a right to pay less or to receive more tax, with the
following exceptions:
No provision is made where a deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction which is not
abusinesscombinationthatatthetimeofthetransactionaffectneitheraccountingnortaxableprofit;and
Noprovisionismadefordeferredtaxthatwouldariseonalltaxabletemporarydifferencesassociatedwithinvestmentsinsubsidiariesandinterests
injointventureswherethetimingofthereversalofthetemporarydifferencescanbecontrolledanditisprobablethatthetemporarydifferencewillnot
reverse in the foreseeable future.
DeferredtaxassetsarerecognisedonlytotheextentthattheDirectorsconsiderthatitisprobablethattherewillbesuitabletaxableprofitsfrom
whichthefuturereversaloftheunderlyingtemporarydifferencesandunusedtaxlossesandcreditscanbededucted.
Deferred tax is measured on an undiscounted basis at the tax rates that are expected to apply in the periods in which the asset is expected to be
realised or liability settled, based on tax rates and laws enacted or substantively enacted at the balance sheet date.
Deferredtaxarisingonactuarialgainsandlossesrelatingtodefinedbenefitpensionfundsisrecordedinothercomprehensiveincome.Wherethe
cash contributions made to the schemes exceed the service costs recognised in the income statement the current tax arising is recorded in other
comprehensive income.
33 Significant accounting policies cont.
33.3 Financial instruments cont.
(e) Expected credit losses
IFRS 9 introduced a new model for the recognition of impairment losses – the Expected Credit Loss (ECL) model. ECL is the expected value
decreaseinanasset.TheexpectedcreditlossmodelconstitutesachangefromthepreviousIAS39incurredlossmodel.Thekeydifferencebetween
incurredandexpectedistherequirementtoconsiderforwardlookingscenarios.CreditriskistheriskoffinanciallossoftheGroupifacustomeror
counterpartytoafinancialinstrumentfailstomeetitscontractualobligations,andarisesprincipallyfromtheGroup’sreceivablesfromcustomersand
investments in debt securities. The Group recognises a loss allowance of 100% on trade receivables which are more than 180 days overdue. The
carryingamountsoffinancialassetsandcontractassetsrepresentthemaximumcreditexposure.
33.4 Intangible assets
Intangible assets, excluding goodwill arising on a business combination, are stated at cost or fair value less any provision for impairment.
Intangibleassetsassessedashavingfinitelivesareamortisedovertheirestimatedusefuleconomiclifeandareassessedforimpairmentwhenever
there is an indication that they are impaired. Amortisation charges are on a straight-line basis and recognised in the income statement. Estimated
useful lives are as follows:
Development costs 5 years or over the expected period of product sales, if less
Intellectual property 3 to 20 years
Patents and licences 5 years or over the period of the licence, if less
Other intangibles 5 years
(a) Goodwill arising on a business combination
Goodwill arising on the acquisition of a subsidiary represents the excess of the aggregate of the fair value of the consideration over the aggregate fair
valueoftheidentifiableassets,liabilitiesandcontingentliabilitiesacquired.Goodwillisinitiallyrecognisedatcostandissubsequentlymeasuredat
cost less any accumulated impairment losses.
Costs related to an acquisition, other than those associated with the issue of debt or equity securities incurred in connection with a business
combination, are expensed to the income statement. The carrying value of goodwill is reviewed annually for impairment but more regularly if events
or changes in circumstances indicate that it may be impaired. When an impairment loss is recognised it is not reversed in a subsequent accounting
period, even if the circumstances which led to the impairment cease to exist.
(b) Acquired intangible assets
Intangible assets that are acquired as a result of a business combination including but not limited to customer relationships, supplier lists, patents and
technology and that can be separately measured at fair value on a reliable basis are recorded initially at fair value and amortised over their expected
useful life. Amortisation is expensed to the consolidated income statement.
33.5 Property, plant and equipment
Property, plant and equipment is stated at cost, less accumulated depreciation and any provision for impairment losses. Cost comprises expenditure
incurredduringconstruction,deliveryandmodification.Whereasubstantialperiodoftimeisrequiredtobringanassetintouse,attributablefinance
costs are capitalised and included in the cost of the relevant asset.
Dry dock overhaul
Drydockcostsforownedandleasedvesselsaredeferredasacomponentoftherelatedtangiblefixedassetanddepreciatedovertheiruseful
economic lives until the next estimated overhaul.
Depreciationisprovidedtowriteoffthecostofproperty,plantandequipmenttotheirresidualvalueinequalannualinstalmentsovertheirestimated
useful lives, as follows:
Freehold property 40 years
Leasehold improvements 25 years or the period of the lease, if shorter
Plant and equipment Between 5 and 20 years
Vessels Between 10 and 25 years
No depreciation is charged on assets under construction.
Residual values of vessels are set initially at 20% of purchase cost or fair value at acquisition, which the Directors believe to be an approximation of
currentresidualvalues.ResidualvaluesandestimatedremaininglivesarereviewedannuallybytheDirectorsandadjustedifappropriatetoreflectthe
relevant market conditions and expectations, obsolescence and normal wear and tear.
Financial statements
Strategic report
Governance
Financial statements
180 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 181
Notes to the financial statements cont.
33 Significant accounting policies cont.
33.9 Leases cont.
Short-term leases and leases of low-value assets
The Group has elected not to recognise right-of-use assets and lease liabilities for short-term leases of machinery that have a lease term of 12 months
or less at inception and leases of low-value assets, including IT equipment. The Group recognises the lease payments associated with these leases
as an expense on a straight-line basis over the lease term.
WhentheGroupactsasalessor,itdeterminesatleaseinceptionwhethereachleaseisafinanceoranoperatinglease,makinganoverall
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,
thentheleaseistreatedasafinancelease,otherwiseasanoperatinglease.
WhentheGroupisanintermediatelessor,itaccountsforitsinterestsintheheadleaseandsub-leaseseparately,assessingtheclassificationofthe
sub-lease with reference to the right-of-use asset arising from the head lease.
The Group recognises lease payments received under operating leases as income on a straight-line basis over the lease term as part of “other
income”.
32.10 Pension plans
(i) Defined contribution schemes
Pre-determined contributions paid to a separate privately administered pension plan are recognised as an expense in the income statement
in the period in which they arise. Other than this contribution the Group has no further legal or constructive obligation to make further contributions
to the scheme.
(ii) Defined benefit schemes
Adefinedbenefitschemeisapensionplanunderwhichtheamountofpensionbenefitthatanemployeereceivesonretirementisdefinedby
reference to factors including age, years of service and compensation. The schemes are funded by payments determined by periodic actuarial
calculations agreed between the Group and the trustees of trustee-administered funds.
Thecostofprovidingbenefitsisdeterminedusingtheprojectedunitcreditmethod,whichattributesentitlementtobenefitstothecurrentperiod
(currentservicecost)andtocurrentandpriorperiods(todeterminethepresentvalueofthedefinedbenefitobligation).Currentservicecostsare
recognised in the income statement in the current year. Past service costs are recognised in the income statement immediately. When a settlement
(whicheliminatesallobligationsforbenefitsalreadyaccrued)oracurtailment(whichreducesfutureobligationsasaresultofareductioninfuture
entitlement) occurs, the obligation and related plan assets are re-measured using current actuarial assumptions and any gain or loss is recognised
in the income statement.
Theinterestelementofthedefinedbenefitchargeisdeterminedbyapplyingthediscountratetothenetdefinedbenefitliabilityatthestartofthe
periodandisrecognisedintheincomestatement.Aliabilityisrecognisedinthestatementoffinancialpositionwhichrepresentsthepresentvalue
ofthedefinedbenefitobligationsatthebalancesheetdate,lessthefairvalueoftheschemeassetsandiscalculatedseparatelyforeachscheme.
Thedefinedbenefitobligationsrepresenttheestimatedamountoffuturebenefitsthatemployeeshaveearnedinreturnfortheirservicesincurrent
and prior periods, discounted at a rate representing the yield on a high quality corporate bond at the balance sheet date, denominated in the same
currencyastheobligations,andhavingthesametermstomaturityastherelatedpensionliability,appliedtotheestimatedfuturecashoutflows
arisingfromtheseobligations.WhenthecalculationresultsinabenefittotheGroup,therecognisedassetislimitedtothetotalofanyunrecognised
pastservicecostsandthepresentvalueofeconomicbenefitsavailablefromanyfuturerefundsfromtheplanorreductionsinfuturecontributions
to the plan.
Actuarial gains and losses on experience adjustments and changes in actuarial assumptions are recognised in the statement of other
comprehensive income.
33 Significant accounting policies cont.
33.9 Leases
TheGroupleaseslandandbuildingsforsomeofitsoffices,warehousesandfactoryfacilities.Thelengthoftheseleasescantypicallyrunforupto
25 years, with most less than 10 years. Some leases include an option to renew the lease for an additional period after the end of the contract term.
Some leases provide for additional rent payments that are based on changes in local price indices.
Some of the buildings contain extension options that are exercisable by the Group before the end of the non-cancellable contract period. Where
practicable,theGroupincludesextensionoptionsinnewleasestoprovideoperationalflexibility,thatareexercisablebytheGroupbutnotbythe
lessors. The Group assesses at lease commencement whether it is reasonably certain to exercise the extension option, and then reassesses this in
theeventthatthereisasignificanteventorchangeincircumstanceswithinitscontrol.
TheGroupalsoleasesvessels,withleasetermstypicallyofuptofiveyearsandITequipmentandmachinery,typicallyforadurationoflessthan
10 years.
TheGrouphasappliedIFRS16usingthemodifiedretrospectiveapproach.
At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains a lease if the contract conveys
therighttocontroltheuseofanidentifiedassetforaperiodoftimeinexchangeforconsideration.Toassesswhetheracontractconveystherightto
controltheuseofanidentifiedasset,theGroupusesthedefinitionofaleaseinIFRS16.
At inception or on reassessment of a contract that contains a lease component, the Group allocated the consideration in the contract to each lease
component on the basis of their relative stand-alone prices. However, for the leases of land and buildings in which it is a lessee, the Group has
elected not to separate non-lease components and account for the lease and non-lease components as a single lease component.
The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost,
which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial
direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it
is located less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful
life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use asset is periodically reduced by impairment losses,
if any, and adjusted for certain re-measurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the
interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s incremental borrowing rate. Generally, the Group uses its
incremental borrowing rates as the discount rate.
Lease payments included in the measurement of the lease liability comprise the following:
fixedpayments,includingin-substancefixedpayments;
variable lease payments that depend on an index or a rate, initially measured using the index rate at the commencement date;
amounts expected to be payable under a residual guarantee; and
the exercise price under a purchase option that the Group is reasonably certain to exercise, lease payments in an optional renewal period if the Group
is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the Group is reasonably certain not to
terminate early.
Theleaseliabilityismeasuredatamortisedcostusingtheeffectiveinterestmethod.Itisremeasuredwhenthereisachangeinfutureleasepayments
arising from a change in an index or rate if there is a change in the Group’s estimate of the amount expected to be payable under a residual value
guarantee, or if the Group changes its assessment of whether it will exercise a purchase, extension or termination option.
When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use assets, or it is
recordedinprofitorlossifthecarryingamountoftheright-of-useassetisreducedtozero.
TheGrouppresentsright-of-useassetsandleaseliabilities(within“borrowings”)inthestatementoffinancialposition.
Financial statements
Strategic report
Governance
Financial statements
182 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 183
Notes to the financial statements cont.
33 Significant accounting policies cont.
33.14 Revenue recognition
Revenue represents income derived from contracts for the provision of goods and services by the Company and its subsidiary undertakings
to customers in exchange for consideration in the ordinary course of the Group’s activities.
Performance obligations
Upon approval by the parties to a contract, the contract is assessed to identify each promise to transfer either a distinct good or service or a series of
distinct goods or services that are substantially the same and have the same pattern of transfer to the customer. Goods and services are distinct and
accountedforasseparateperformanceobligationsinthecontractifthecustomercanbenefitfromthemeitherontheirownortogetherwithother
resourcesthatarereadilyavailabletothecustomerandtheyareseparatelyidentifiableinthecontract.
Transaction price
At the start of the contract, the total transaction price is estimated as the amount of consideration to which the Group expects to be entitled in
exchange for transferring the promised goods and services to the customer, excluding sales taxes. Variable consideration, such as price escalation,
is included based on the expected value or most likely amount only to the extent that it is highly probable that there will not be a reversal in the
amountofcumulativerevenuerecognised.Thetransactionpricedoesnotincludeestimatesofconsiderationresultingfromcontractmodifications,
such as change orders, until they have been approved by the parties to the contract. The total transaction price is allocated to the performance
obligationsidentifiedinthecontractinproportiontotheirrelativestand-alonesellingpriceswhereappropriate.Giventhebespokenatureofmany
oftheGroup’sproductsandservices,whicharedesignedand/ormanufacturedundercontracttothecustomer’sindividualspecifications,thereare
typically no observable stand-alone selling prices. In such cases, stand-alone selling prices are typically estimated based on expected costs plus
contract margin consistent with the Group’s pricing principles.
Revenue and profit recognition
Revenueisrecognisedasperformanceobligationsaresatisfiedascontrolofthegoodsandservicesistransferredtothecustomer.
Foreachperformanceobligationwithinacontract,theGroupdetermineswhetheritissatisfiedovertimeoratapointintime.Performance
obligationsaresatisfiedovertimeifoneofthefollowingcriteriaissatisfied:
thecustomersimultaneouslyreceivesandconsumesthebenefitsprovidedbytheGroup’sperformanceasitperforms;
the Group’s performance creates or enhances an asset that the customer controls as the asset is created or enhanced; or
the Group’s performance does not create an asset with an alternative use to the Group and it has an enforceable right to payment for performance
completed to date.
Point in time revenue includes services provided over periods of up to seven days.
Contracts that satisfy the over time criteria primarily occur in the Group’s Specialist Technical business, either because the customer simultaneously
receivesandconsumesthebenefitsprovidedbytheGroup’sperformanceasitperforms(typicallyservicesorsupportcontracts)ortheGroup’s
performance does not create an asset with an alternative use and it has an enforceable right to payment for performance completed to date (typically
production contracts).
For each performance obligation to be recognised over time, the Group typically recognises revenue using an input method, based on costs incurred
in the period. Revenue and attributable margin are calculated by reference to reliable estimates of transaction price and total expected costs, after
making suitable allowances for technical and other risks. Revenue and associated margin are therefore recognised progressively as costs are
incurred.
If the over time criteria for revenue recognition are not met, revenue is recognised at the point in time that control is transferred to the customer,
which is usually when legal title passes to the customer and the business has the right to payment, for example, on delivery.
When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised immediately as an expense.
Bid costs
All pre-contract bidding costs which are incurred irrespective of whether the contract is awarded relating to the design, manufacture or operation
of assets or the provision of services are expensed when incurred.
In some circumstances, the Company incurs costs to obtain a contract with a customer, for example commission fees. These costs are recognised
initially as an asset within debtors: contract assets and amortised on a systematic basis as the goods and services are transferred to the customer.
Warranty costs
Provisionismadeforwarrantiesofferedwithproductswhereitisprobablethatanobligationtotransfereconomicbenefitstothecustomer
in future will arise. This provision is based on management’s assessment of the previous history of claims and probability of future obligations
arising on a product-by-product basis. Provisions for warranty costs are set out in note 22.
Revenue – operating lease rental income
Revenue is measured at the fair value of consideration received or receivable, net of returns, trade discounts and volume rebates. Revenue
is recognised in the income statement on a straight line basis over the period of the hire.
33 Significant accounting policies cont.
33.11 Share based payments
Executive savings related share option schemes are operated under which options are granted to employees of the Group. An expense is recognised
in the income statement with a corresponding credit to equity in respect of the fair value of employee services rendered in exchange for options
granted,whichisdeterminedbythefairvalueoftheoptionatthedateofgrant.Theamountisexpensedoveraspecifiedperioduntiltheoptions
can be exercised (the vesting period).
The fair value of an option is determined by the use of mathematical modelling techniques, including the Black-Scholes option pricing model and the
Binomialmodel.Non-marketvestingconditions(suchasprofitabilityandgrowthtargets)areexcludedfromthefairvaluecalculationbutincludedin
assumptions about the number of options that are expected to become exercisable.
An estimate is made of the number of options that are expected to become exercisable at each balance sheet date. Any adjustments to the original
estimates are recognised in the income statement (and equity) over the remaining vesting period with any element of any adjustments relating to
prior periods recognised in the current period. No expense is recognised for awards that do not ultimately vest except for awards where vesting is
conditional upon a market condition (such as total shareholder return of the Group relative to an index). These are treated as vested irrespective of
whetherornotthemarketconditionissatisfied,providedthatallotherperformanceconditionsaresatisfied.
In addition to failure by the employee to exercise an option in accordance with the exercise period allowed by the scheme, an award made to an
employee under a share option scheme is deemed to lapse when either the scheme is cancelled by the Company, or when an employee, who
continues to qualify for membership of a scheme, ceases to pay contributions to that scheme. In these circumstances the full remaining unexpired
cost of the award is expensed in the period in which the option lapses.
WheretheexerciseofoptionsissatisfiedbytheissueofsharesbytheCompanythenominalvalueofanysharesissuedfromtheexerciseofoptions
is credited to share capital with the balance of the proceeds received, net of transaction costs, credited to share premium.
33.12 Short-term employee benefits
TheGrouprecognisesaliabilityandanexpenseforshort-termemployeebenefits,includingbonuses,onlywhencontractuallyorconstructively
obliged.
33.13 Share capital and reserves
Ordinarysharesareclassifiedasequity.Costsattributabletotheissueofnewsharesaredeductedfromequityfromtheproceeds.
(a) Treasury shares
Shares issued by the Company which are held by the Company or its subsidiary entities (including the Employee Share Ownership Trust (ESOT)),
are designated as treasury shares. The cost of these shares is deducted from equity. No gains or losses are recognised on the purchase, sale,
cancellation or issue of treasury shares. Consideration paid or received is recognised directly in equity.
(b) Employee Share Ownership Plan (ESOP)
CompanysharesareheldinanESOP.ThefinancecostsandadministrationcostsrelatingtotheESOParechargedtotheincomestatement.
Dividendincomearisingonownsharesisexcludedinarrivingatprofitbeforetaxationanddeductedfromaggregatedividendspaid.
The Group maintains the following reserves:
Translation reserve
Thetranslationreservecomprisesallforeigncurrencydifferencesarisingfromthetranslationofoperationswhosefinancialstatementsare
denominated in foreign currencies as well as from the translation of liabilities that hedge the Company’s net investment in a foreign subsidiary.
Hedging reserve
Thehedgingreservecomprisestheeffectiveportionofthecumulativenetchangeinthefairvalueofcashflowhedginginstrumentsrelatedtohedged
transactions that have not yet occurred.
Financial statements
Strategic report
Governance
Financial statements
184 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 185
Notes to the financial statements cont.
34 Significant accounting judgements and estimates cont.
(b) Estimates cont.
Provision for impairment of trade receivables
As detailed in note 29, the Group has made doubtful debt provisions of £19.0m (2020: £19.5m) for certain of its receivables that are overdue for
more than 180 days, which at 31 December 2021 amounted to £17.6m (2020: £17.5m). Due to the period of time elapsed full recovery is uncertain.
In addition, some of these issues are subject to a contractual process of arbitration or standard legal process and may take some time to resolve.
Provisionsreflectcurrentbestestimatesofthelikelynetproceedsthatwillbereceivedbutaresubjecttouncertaintywheretheoutcomemaydiffer
materially from current best estimates.
Insurance claims
At any point in time, the Group has a number of insurance claims awaiting resolution and make appropriate best estimates within other debtors of
recoverableamounts.InApril2018,twovesselscollidedoffthecoastofSingaporewhichresultedinagassplashwhichenvelopedavesselowned
andoperatedbytheGroupandresultedinsevereenginedamage.WhilsttheGroup’sfinancialpositionreflectsabestestimateofitstheinsurance
claim, the overall outcome is awaiting resolution between the two vessel owners and a 10% change in estimate would impact the income statement
by £0.2m.
Impairment of vessels
During the year, impairments totalling £7.7m has been charged in respect of vessels based on the recoverable amount which is the fair market value
of these assets. The fair market valuation was made with reference to third party valuations and management experience. This fair market valuation
is based on an orderly transaction between market participants.
(c) Assumptions and estimation uncertainties
Informationaboutassumptionsandestimationuncertaintiesthathaveasignificantriskofresultinginamaterialadjustmenttothecarryingamounts
of assets and liabilities within the year ending 31 December 2021 is included in the following notes:
notes 12 and 13 – impairment test of intangible assets and goodwill: key assumptions underlying recoverable amounts, including the recoverability
of development costs; and
notes 14 and 15 – impairment test of vessels: key assumptions underlying recoverable amounts.
33 Significant accounting policies cont.
33.15 Other Investments
Other investments which are in unquoted entities are held at fair value and subject to an annual review. The Group elects on an asset by asset basis
whether fair value movements are posted to the income statement or directly to reserves.
33.16 Intra-group financial instruments
WheretheCompanyentersintofinancialguaranteecontractstoguaranteetheindebtnessofothercompanieswithintheGroup,theCompany
considers these to be insurance arrangements and accounts for them as such. In this respect the Company treats the guarantee contract as a
contingent liability until such time as it becomes probable that the Company will be required to make a payment under the guarantee.
33.17 Government grants
During 2020, some employees across the Group were placed on furlough under the Coronavirus Jobs Retention Scheme. Furlough income of £nil
(2020: £2.3m) in relation to a maximum of 400 employees was recognised during 2020 and as such the Group adopted IAS 20 in accounting for this
government income. The grant has been recognised as income and matched with the associated payroll costs over the same period.
34 Significant accounting judgements and estimates
Inpreparingtheseconsolidatedfinancialstatements,managementhasmadejudgements,estimatesandassumptionsthataffecttheapplicationof
theGroup’saccountingpoliciesandthereportedamountofassets,liabilities,incomeandexpenses.Theoutcomemaydifferfromtheseestimates.
Estimates and underlying assumptions are reviewed and revised on an ongoing basis.
(a) Judgements
Informationaboutjudgementsmadeinapplyingaccountingpoliciesthathavethemostsignificanteffectsontheamountsrecognisedinthe
consolidatedfinancialstatementsisincludedbelow:
Revenue
Revenueissetoutinnotes3and33.14.Revenueisrecognisedasperformanceobligationsaresatisfiedascontrolofthegoodsandservicesare
transferred to the customer. The timing of the performance obligations will vary depending on the terms of the sales agreement, the evaluation of the
specificrisksassociatedwiththeperformanceofthecontract(forexampledesign,constructionandtesting)orgenerallyacceptedpracticewhere
therearenospecificarrangementsinthecontract.Areasofjudgementrelatetoconstructioncontractaccountingandspecificallyestimatingthe
stage of completion and forecast outturn of the contract which are reliant on the knowledge and expertise of project managers, engineers and other
professionals.
(b) Estimates
Impairment of goodwill
Goodwill, which is set out in note 12, of £135.5m (2020: £166.5m) is tested annually for any permanent impairment in accordance with the
accounting policy in note 33.6. The value in use of the Group’s cash generating units (CGU) requires assumptions about future levels of demand,
grossmarginsandcostinflation.Inherentuncertaintyinvolvedinforecastinganddiscountingfuturecashflowsisakeyareaofjudgement.If
indicators of impairment exist the carrying value of goodwill is compared to its recoverable amount which represents the higher of the net present
valueoftheCGU’sforecastcashflowanditscarryingvalue.Theassessmentalsoincludessensitivityanalysistoidentifytherangeofoutcomesand
the validity of underlying assumptions.
Income taxes
Taxationissetoutinnotes8,9and33.8.TheGroupissubjecttoincometaxesinseveraljurisdictions.Significantjudgementisrequiredin
determining the provision for income taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain during
the ordinary course of business. The Group recognises liabilities for anticipated tax risk issues based on estimates of whether additional taxes will be
due.Wherethefinaltaxoutcomeofthesemattersisdifferentfromtheamountsthatwereinitiallyrecorded,suchdifferencewillimpacttheincometax
and deferred tax provisions in the period in which such determination is made.
The Group has entered the UK tonnage tax regime under which tax on its ship-owning and operating activities is based on the net tonnage of vessels
operated.Incomeandprofitsoutsidethisregimearetaxedundernormaltaxrules.Thismeansthatitisnecessarytomakeestimatesoftheallocation
of some income and expenses between tonnage and non-tonnage tax activities. These estimates are subject to agreement with the relevant tax
authorities and may be revised in future periods.
Taxonseparatelydiscloseditemsincludesacreditof£7.9m,whichrepresentsdeferredtaxrecognisedonthetimingdifferencescreatedfollowing
the impairment of dive support vessels during the year ended 31 December 2020. The associated deferred tax asset will be utilised gradually over
future accounting periods as the tax value of the vessels is amortised in line with rates set by HM Revenue & Customs.
Financial statements
Strategic report
Governance
Financial statements
186 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 187
Financial statements
Strategic report
Governance
Financial statements
188 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 189
NAME OF COMPANY ADDRESS
GROUP
PERCENTAGE OF
EQUITY CAPITAL
Marine Support
Deep Sea Operation &
Maintenance Co. Ltd
Al Khobar City, PO Box
2716, Al Olaya, 34447,
Saudi Arabia
100%
Fender Care (Changshu)
Limited
Room 1211, Building 4,
Huifeng Times Plaza, No 22
Huanghe Road, Changshu
City, Jiangsu, 215500,
China
100%
Fender Care Limited Barrow-in-Furness
(1)
100%
Fender Care Marine (Asia
Pacific)PteLtd
Singapore
(6)
100%
Fender Care Marine
(Gibraltar) Limited
28 Irish Town, Gibraltar 100%
Fender Care Marine Ltd Barrow-in-Furness
(1)
100%
Fender Care Marine
Products(AsiaPacific)Pte
Limited
Singapore
(6)
100%
Fender Care Marine Sohar
LLC
Al Batinah Region, PO Box
37, Sohar, 327
70%
Fendercare Australia Pty Ltd 8D Sparks Road,
Henderson WA 6166,
Australia
100%
Fendercare Servicos
Marinhos do Brasil Ltda
Avenida Feliciano Sodre
325, Centro, Niteroi, Rio De
Janeiro, CEP: 24030-012,
Brazil
100%
Hughes Marine Engineering
Limited
Barrow-in-Furness
(1)
100%
Hughes Sub Surface
Engineering Limited
Barrow-in-Furness
(1)
100%
James Fisher Asset
Information Services Limited
Barrow-in-Furness
(1)
100%
James Fisher Marine
Services Limited
Barrow-in-Furness
(1)
100%
James Fisher Maritime
Deutschland GmbH
Stadthausbrucke 8, 20355
Hamburg, Germany
100%
James Fisher MIMIC Limited Barrow-in-Furness
(1)
100%
James Fisher Rumic Limited Barrow-in-Furness
(1)
100%*
JCM Scotload Ltd Barrow-in-Furness
(1)
100%
JF STS (Guernsey) Ltd St Peter Port4 100%***
Maritime Engineers (Asia
Pacific)PteLtd
Singapore, 508929
(11)
100%
Maritime Engineers Pty Ltd Henderson, Australia
(10)
100%
Martek Marine Limited Barrow-in-Furness
(1)
100%
NAME OF COMPANY ADDRESS
GROUP
PERCENTAGE OF
EQUITY CAPITAL
Specialist Technical
Cowan Manufacturing Pty
Limited
BDO Tax (WA) Pty Ltd,
‘BDO’, 38 Station Street,
Subiaco, WA6008, Australia
100%
DivexAsiaPacificPtyLtd Bibra Lake, Australia
(12)
100%
Divex FZE PO Box 261749, Jebel Ali
Free Zone, Dubai,
United Arab Emirates
100%
Divex Limited Westhill
(3)
100%
High Technology Sources
Limited
Barrow-in-Furness
(1)
100%
James Fisher Defence Italy Via Montevideo, No.27,
Rome, Italy
100%
James Fisher Defence
Limited
Barrow-in-Furness
(1)
100%
James Fisher Defence North
America Limited
Suite 808, 1220 North
Market Street, Wilmington
DE 19801, United States
100%
James Fisher Nuclear
Limited
Oldmeldrum
(2)
100%
James Fisher Singapore
Pte Ltd
Singapore 508929
(11)
100%
JF Nuclear Limited Barrow-in-Furness
(1)
100%
JFD Australia Pty Ltd BDO, 38 Station Street,
Subiaco WA 6008, Australia
100%
JFD Limited Westhill
(3)
100%
JFD Ortega B.V. Vliegveldstraat 100,
B515, Technology Base,
Enschede, Netherlands
100%
JFD Singapore Pte Ltd Singapore, 508929
(11)
100%
JFD South Africa (Pty)
Limited
c/o Mazars, Mazars
House, Rialto Road, Grand
Moorings Precinct, Century
City, Cape Town, SA 7441,
South Africa
100%
JFD Sweden AB Rindovagen, Rindo Vastra,
185 41 Vaxholm, Sweden
100%
Subsidiaries and associated undertakings
NAME OF COMPANY ADDRESS
GROUP
PERCENTAGE OF
EQUITY CAPITAL
Martek-Marine(AsiaPacific)
Pte Ltd
3 Church Street, #08-00,
Samsung Hub, Singapore,
049483
100%
James Fisher Renouvelables 3 rue de France Comte,
CS50311, Hauts de
Quimpcanpoix, 5103,
Cherbourg, France
100%
Namibia Subtech Diving and
Marine (Proprietary) Limited
Shop 48, Second Floor,
Old Power Station
Complex, Armstrong Street,
Windhoek, Namibia
100%
Prolec Limited Barrow-in-Furness
(1)
100%
Rotos 360 Limited Barrow-in-Furness
(1)
100%
Servicos Maritimos
Continental S.A.
Rio de Janeiro, Brazil
(9)
60%
Strainstall Malaysia Sdn Bhd Ground Floor, 8, Lorong
Universiti B, Section 16,
46350 Petaling Jaya
Selangor Darul Ehsan,
Malaysia
100%
Strainstall Middle East
Limited
Vistra (Cayman), Grand
Pavilion, Hibiscus Way,
802 West Bay Road, PO
Box 31119, Grand Cayman,
KY1-1205, Cayman Islands
100%
Strainstall Singapore Pte Ltd 50RafflesPlace,#06-00
Singapore Land Tower,
Singapore, 048623
100%
Strainstall UK Limited Barrow-in-Furness
(1)
100%
Subtech (Pty) Ltd Durban, South Africa
(8)
100%
Subtech Diving & Marine
Tanzania Limited
The Slipway Road, Msasani
Peninsula, Dar Es Salaam,
United Republic of Tanzania
100%
Subtech Marine (Pty) Limited PO Box 90757, Shop
48, Old Power Station
Complex, Armstrong Street,
Windhoek, Namibia
70%
Subtech Middle East Saudi
Company
Office102,AlJazira
Building, Al Khobar, Saudi
Arabia
100%
Subtech Norte Lda Rua de Se no 114, Distrito
Urbano 1, Bairro Central,
Maputo City, Mozambique
100%
SubtechOffshore Ocra (Mauritius) Limited,
Level 2, Max City Building,
Remy Ollier Street, Port
Louis, Mauritius
100%
Subtech South Africa (Pty)
Ltd
Durban, South Africa
(8)
90%
Testconsult Limited Barrow-in-Furness
(1)
100%
NAME OF COMPANY ADDRESS
GROUP
PERCENTAGE OF
EQUITY CAPITAL
Offshore Oil
Buchan Technical Services
Limited
Barrow-in-Furness
(1)
100%
James Fisher Marine
Services Malaysia Ltd
Level 1, Lot 7, Block F,
Sanguking Commercial
Building Jalan Patau-Patau,
87000 Labuan FT, Malaysia
100%
James Fisher Marine
Services Middle East Limited
FZCO
PO Box 371072, Dubai,
United Arab Emirates
100%
James Fisher MFE Limited Barrow-in-Furness
(1)
100%
James Fisher Ocean Team
Limited
Suites 4404-10, 44/F, One
Island East, 18 Westlands
Road, Taikoo Place, Hong
Kong
60%
JamesFisherOffshore
Limited
Oldmeldrum
(2)
100%*
JamesFisherOffshore
Malaysia Sdn Bhd
Room A, Ground Floor,
Lot 7, Block F, Saguking
Commercial Building Jalan
Patau-Patau, 87000 Labuan
FT, Malaysia
100%
James Fisher Personnel S.A.
de C.V.
Ciudad de Mexico, D.F.,
Mexico
(13)
100%
James Fisher Subsea
Excavation Incorporated
21559 Provincial Boulevard,
Katy TX 77450, United
States
100%
James Fisher Subsea
Excavation Mexico S.A.
de C.V.
Ciudad de Mexico, D.F.,
Mexico
(13)
100%
James Fisher Subsea
Excavation Pte Limited
133 Cecil Street, #16-01,
Keck Seng Tower,
Singapore, 069535
100%
JF Singapore Holdings
PTE Ltd
9RafflesPlace,#27-00
Republic Plaza, Singapore
048619
100%
RMSPumptools FZE 1-153, THUB, Dubai Silicon
Oasis, Dubai,
United Arab Emirates
100%
RMSPumptools Limited Barrow-in-Furness
(1)
100%
RMSPumptools Saudi
Industrial Company
Khobar, Saudi Arabia 100%
Scan Tech AS Stavanger
(5)
100%
Scan Tech Personell AS Stavanger
(5)
100%
Scan Tech Produckt
Personell AS
Stavanger
(5)
100%
ScantechOffshoredoBrasil
Comercio E Servicos Ltda
R 01 223, Lote 146 Quadra
02, Balneario das Garcas,
Rio das Ostras, 28.898-
268, Brazil
100%
ScantechOffshoreLimited Barrow-in-Furness
(1)
100%*
ScantechOffshorePtyLtd Henderson, Australia
(10)
100%
Financial statements
Strategic report
Governance
Financial statements
190 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 191
Subsidiaries and associated undertakings cont.
NAME OF COMPANY ADDRESS
GROUP
PERCENTAGE OF
EQUITY CAPITAL
Tankships
Cattedown Wharves Limited Barrow-in-Furness
(1)
100%
Everard (Guernsey) Ltd St Peter Port
(4)
100%
F.T. Everard Shipping Limited Barrow-in-Furness
(1)
100%
F.T.Everard & Sons Limited Barrow-in-Furness
(1)
100%*
James Fisher (Crewing
Services) Limited
Barrow-in-Furness
(1)
100%*
James Fisher (Guernsey)
Limited
St Peter Port
(4)
100%***
James Fisher (Shipping
Services) Limited
Barrow-in-Furness
(1)
100%*
James Fisher Crewing (CY)
Limited
115 Griva Digeni, Trident
Centre, Limassol, 3101,
Cyprus
100%
James Fisher Everard
Limited
Barrow-in-Furness
(1)
100%
Onesimus Dorey
(Shipowners) Ltd
St Peter Port
(4)
100%*
Scottish Navigation
Company Limited
Oldmeldrum
(2)
100%
NAME OF COMPANY ADDRESS
GROUP
PERCENTAGE OF
EQUITY CAPITAL
Marine Support
Eurotestconsult Limited County Laois, Ireland
(7)
50%
Eurotestconsult UK
Limited
Barrow-in-Furness
(1)
50%
FC Viking Sdn.Bhd Suite 6.01, 6th Floor, Plaza
See Hoy Chan Jalan Raja
Chulan, 50200, Kuala Lumpur,
Malaysia
49%
Fender Care Benelux B.V. Torontostraat 20, 3197 KN ,
Rotterdam Botlek, Netherlands
50%
Fender Care Marine LLC Fujairah Port, PO Box 5198,
Fujairah, United Arab Emirates
49%**
Fender Care Marine SA
(Pty) Ltd
Unit 4, Thembani House,
41 Brand Road, Glenwood,
Durban, 4001, South Africa
49%**
Fender Care Marine
Services LLC
G013, GH-1, Industrial City of
Abu Dhabi (ICAD-1), Mussafeh,
PO Box 45628, Abu Dhabi,
United Arab Emirates
49%**
Fender Care Middle
East LLC
P.O Box 25896, Plot 146/16,
Emirates Industrial City,
Sajja Industrial Area, PO Box
25896, Sharjah,
United Arab Emirates
49%**
Fender Care Omega
(Middle East) FZC
E-LOBOfficeNo.E-69G-20,
PO Box 51602,
Hamriyah Free Zone – Sharjah,
United Arab Emirates
50%
Fendercare Marine
Ghana Limited
11 Aduemi Close, North
Kaneshie, Accra, Ghana
50%
Fendercare Marine
Omega India Private
Limited
JA 1104 – 1106, DLF Tower –
A, Jasole District Centre, New
Delhi, 11044, India
50%
James Fisher (Angola)
Limitada
67 Rua Damiao de Gois,
Alvalade, Borough, District
of Maianga, Ingombota
Municipality, Angola
49%*
James Fisher Angola UK
Limited
Barrow-in-Furness
(1)
50%
James Fisher Nigeria
Limited
34 Awolowo Road, Ikoyi,
Lagos, Nigeria
49%
Nuclear
Decommissioning Limited
3 Sovereign Square, Sovereign
Street, Leeds, LS1 4ER
25%
Strainstall Laboratories
WLL
POBox2255,OfficeNo.70,
Barwa Commercial Avenue,
Doha, Qatar
49%**
Strainstall Middle East
LLC
PO Box 111007Jebel Ali
Industrial Area 1, Dubai,
United Arab Emirates
49%**
NAME OF COMPANY ADDRESS
GROUP
PERCENTAGE OF
EQUITY CAPITAL
Holding Companies
EDS HV Group Limited Barrow-in-Furness
(1)
100%
Fender Care Marine
Solutions Limited
Barrow-in-Furness
(1)
100%
James Fisher (Aberdeen)
Limited
Barrow-in-Furness
(1)
100%*
James Fisher and Sons
Nigeria Limited
7th Floor, 1 Kingsway Road,
Falomo, Ikoyi, Lagos,
Lagos State, Nigeria
99%*
James Fisher Holdings UK
Limited
Barrow-in-Furness
(1)
100%*
James Fisher Hong Kong
Limited
Level 17, Silvercord Tower
2, 30 Canton Road,
Tsim Sha Tsui, Kowloon,
Hong Kong
100%
James Fisher Norway AS Stavanger
(5)
100%*
James Fisher Nuclear
Holdings Limited
Barrow-in-Furness
(1)
100%*
James Fisher Properties
Limited
Oldmeldrum
(2)
100%
James Fisher Servicos
Empresariais Ltda
Rua 01 No 223, Quadra 02,
Lote 146-part,
Balneario das Garcas, Brazil
100%
James Fisher Subtech
Group Limited
Barrow-in-Furness
(1)
100%*
James Fisher Tankships
Holdings Limited
Barrow-in-Furness
(1)
100%*
JF Australia Holding Pty Ltd Bibra Lake, Australia
(12)
100%
JF Overseas Ghana Limited The Octogon Building, 7th
Floor Suite B701,
Accra Central, Accra,
Ghana
100%
JF Overseas Limited Barrow-in-Furness
(1)
100%*
Martek Holdings Limited Barrow-in-Furness
(1)
100%
Strainstall Group Limited Barrow-in-Furness
(1)
100%*
Subtech Group Holdings
(Pty) Ltd
Briardene, South Africa
(14)
100%
NAME OF COMPANY ADDRESS
GROUP
PERCENTAGE OF
EQUITY CAPITAL
Strainstall Saudi Arabia
Limited
PO Box 30124, Riyadh 11372,
Saudi Arabia
49%**
Strainstall Testing Lab
LLC
PO Box 62579, Abu Dhabi,
United Arab Emirates
49%**
SubtechOffshore
Services Nigeria Limited
Plot 15, Block 110, Henry
OjoghoCrescent,OffRoad69,
Lekki Phase 1, Lagos, Nigeria
49%
Specialist Technical
First Response Marine
Pte Ltd
16 Benoi Road, 629889,
Singapore
50%
James Fisher
Technologies LLC
Units 1 and 2, 1234 Sherman
Drive,
Longmont CO 80501,
Colorado
49%
JFD Domeyer GmbH Konsul-Smidt-Str. 15, 28217,
Bremen, Germany
50%
Wuhu Divex Diving
System Limited
No.58 Yongchang Road,
Jiujiang District, Wuhu City,
Anhui Province, PR China
49%
(1) Fisher House, PO Box 4, Barrow-in-Furness, Cumbria, LA14 1HR
(2) North Meadows, Oldmeldrum, Aberdeenshire, AB51 0GQ
(3) JFD, Westhill Industrial Estate, Enterprise Drive, Westhill, Aberdeen, AB32 6TQ
(4) 4th Floor, West Wing, Trafalgar Court, Admiral Park, St Peter Port, Guernsey, GY1 2JA
(5) Finnestadsvingen 23, 4029 Stavanger, Norway
(6) 6 Pioneer Place, 627705, Singapore
(7) Unit D, Zone 5, Clonminam Business Park, Portlaoise, County Laois, Ireland
(8) Warehouse 1, 20 Rustic Close, Briardene, Durban, 4051, South Africa
(9) Rua Tenente Celio, No.150, Bairro Granja Caveleiros, Macae, State of Rio de Janeiro,
27.930-120, Brazil
(10) 23 Sparks Road, Henderson, WA 6166, Australia
(11) 19 Loyang Lane, Singapore 508929
(12) 54 Bushland Ridge, Bibra Lake WA 6163, Australia
(13) Gabriel Mancera 1041 Del Valle, Benito Juarez, 03100, Ciudad de Mexico, D.F., Mexico
(14) 20 Rustic Close, Briardene, KwaZulu-Natal, 4051, South Africa
* held by the Parent Company (all other subsidiaries are held by an intermediate subsidiary)
** consolidated as subsidiary undertakings
*** held by nominee shareholders
Associated undertakings and significant holdings in undertakings other than subsidiary undertakings
Group financial record
Forthefiveyearsended31December
2021
£m
2020
£m
2019
£m
2018
£m
2017
£m
Revenue
restated* restated*
Marine Support
214.5
249.4 311.6 274.3 235.6
Specialist Technical
133.2
130.4 149.4 156.5 146.0
OffshoreOil
86.3
78.0 88.2 70.0 60.7
Tankships
60.1
60.4 6 7. 9 60.7 57.0
494.1
518.2 617.1 561.5 499.3
Underlying operating profit
Marine Support
5.0
10.1 24.5 26.8 25.3
Specialist Technical
9.9
14.0 18.4 21.4 19.2
OffshoreOil
11.1
11. 2 14.2 6.8 3.2
Tankships
4.8
8.0 12.0 9.9 8.8
Common costs
(2.8)
(2.8) (2.8) (2.8) (2.4)
28.0
40.5 66.3 6 2.1 5 4.1
Netfinancecosts
(8.3)
(9.0) ( 7.8 ) (6.0) (5.5)
Underlying profit before taxation 19.7
31.5 58.5 5 6.1 48.6
Separately disclosed items
(48.7)
(84.0) (10.7) (0.7) (1.3)
(Loss)/profitbeforetaxation
(29.0)
(52.5) 47. 8 55.4 47. 3
Taxation
0.8
(4.8) (11.1) (10.1) ( 7. 9)
(Loss)/profitaftertaxation
(28.2)
(57.3) 36.7 45.3 39.4
Intangible assets
146.8
186.6 215.2 197. 5 199.2
Property, plant and equipment
122.2
158.2 210.6 145.4 132.5
Right-of-use assets
41.8
31.9 27. 9 – –
Investment in associates and joint ventures
9.4
8.9 9.9 9.6 9.4
Working capital
62.5
66.6 107. 5 96.3 109.5
Assets held for sale
10.7
– – – –
Contingent consideration
–
(1.7) (8.2) (6.0) (12.8)
Pension obligations
(1.9)
(10.3) (5.8) (16.1) (19.8)
Taxation
4.7
(4.2) (10.7) (6.7) (6.5)
Capital employed 396.2
436.0 544.4 420.0 411.5
Net borrowings
147.4
175.0 203.0 113.6 132.5
Lease liabilities
38.2
23.1 27.4 – –
Equity
210.6
237. 9 316.0 306.4 279.0
396.2
436.0 546.4 420.0 411.5
Earnings per share Pence Pence Pence Pence Pence
Basic
(55.2)
(114. 2) 73.1 89.5 77. 5
Diluted
(55.2)
(114. 2) 72.7 88.9 76.9
Underlying basic
20.0
48.0 93.2 90.0 79.3
Underlying diluted
20.0
47.9 92.8 89.5 78.7
Dividends declared per share
8.0
8.0 11.3 31.6 28.7
Other key performance indicators
Operating margin (%)
5.7%
7.8% 10.7% 11.0% 10.8%
Return on capital employed (post tax) (%)
3.6%
6.7% 11.3% 12.2% 12.0%
Underlying net gearing (%)
70.1%
74.4% 64.8% 37.2% 47.7%
Dividend cover (times)
–
6.0 8.2 2.5 2.7
Financial statements
Strategic report
Governance
Financial statements
192 James Fisher and Sons plc // Annual Report 2021 Annual Report 2021 \\ James Fisher and Sons plc 193
Investor information
Company Secretary
Jim Marsh
Registered office
Incorporated in England under Company no.
211475
www.james-fisher.com
Registrar
Link Group
10th Floor
Central Square
29 Wellington Street
Leeds LS1 4DL
Auditor
KPMG LLP
1 St Peters Square
Manchester M2 3AE
Bankers
Bank of Ireland
4th Floor
Bow Bells House
1 Bread Street
London EC4M 9BE
Barclays Bank PLC
1st Floor
3 Hardman Street
Spinningfields
Manchester M3 3HF
DBS Bank Ltd
London Branch
One London Wall
London
EC2Y 5EA
Handelsbanken
First Floor East
Bridge Mills
Stramongate
Kendal LA9 4BD
HSBC UK Bank PLC
2nd Floor
Landmark
St Peters Square
1 Oxford Street
Manchester M1 4BP
Lloyds Bank PLC
Lovell Park
1 Lovell Park Road
Leeds LS1 1NS
Santander UK plc
298 Deansgate
Manchester M3 4HH
Debt advisors
N.M.Rothschild & Sons Limited
82 King Street
Manchester M2 4WQ
Merchant Bankers
E C Hambro Rabben and Partners Ltd
32-33 St James’s Place
London SW1A 1NR
Brokers
Investec Bank (UK) Limited
30 Gresham Street
London EC2V 7QP
Jefferies International Limited
100 Bishopsgate
London EC2N 4JL
Financial calendar
5 May 2022
Annual General Meeting
1 September 2022*
Announcement of 2022 Half Year results
* Provisional
Disclaimer
This Annual Report has been prepared for the members of the Company only. The Company, its Directors, employees and agents do not accept or
assume responsibility to any other person in connection with this document and any such responsibility or liability is expressly disclaimed. This Annual
Report contains certain forward-looking statements that are subject to future events including, amongst other matters, the economic and business
circumstancesoccurringfromtimetotimeinthecountriesandmarketsinwhichtheGroupoperatesandtheavailabilityoffinancingtotheGroup.
Assuchtheforward-lookingstatementsinvolveriskanduncertainty.Accordingly,whilstitisbelievedtheexpectationsreflectedinthesestatements
arereasonableatthedateofpublicationofthisAnnualReporttheymaybeaffectedbyawiderangeofmatterswhichcouldcauseactualresultsto
differmateriallyfromthoseanticipated.Theforward-lookingstatementswillnotbeupdatedduringtheyear.NothinginthisAnnualReportshouldbe
construedasaprofitforecast.
Design and Production
www.carrkamasa.co.uk