Inmarsat Global Limited
(Registered Number: 3675885)
Annual Report and Financial Statements
For the year ended 31 December 2021
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Inmarsat Global Limited
Strategic Report
For the year ended 31 December 2021
Review of business
Inmarsat Global Limited (the ‘Company’) made a profit for the year of $245.2m (2020: $218.4m) from the supply of
global mobile satellite communications services. The Company’s revenue has increased to $1,191.7m (2020:
$1,137.3m) following growth in all the Company’s business units. The Company’s net assets were $4,126.7m (2020:
$3,882.3m). The increase in net assets in the year has been driven by the profits generated in the period. Current trade
and other receivables increased to $3,246.3m (2020: $2,650.5m) due to an increase in amounts and loans due from
group undertakings. Non-current other receivable represents loan due from undertaking which has increase from
$2,317.9m to $3,200.7m. Trade and other payables were $3,166.3m (2020: $2,507.2m) due to an increase in accruals
and deferred income and amounts due to group undertakings. Profit for the financial year of $245.2m (2020: $218.4m)
will be transferred to reserves.
The Directors are of the opinion that the current level of activity and the year-end financial position are satisfactory and
will remain so in the foreseeable future.
The ultimate controlling party of the Company is Connect Topco Limited which is an entity based in Guernsey. The results
of the Company are consolidated into Connect Topco Limited (the ‘Group’).
Our Business Model
Our purpose is to enable the connected world by placing our customers at the centre of everything we do. Our
competitive advantage comes from our networks, our innovative technology, the expertise of our people and the strength
and breadth of our partnership ecosystem.
• Elera (L-band): Our resilient L-band networks, currently through our Inmarsat-3 and Inmarsat-4
satellite constellations, will continue to support the evolving mobile communications requirements in
our key customer segments.
reliable global satellite
communications infrastructure delivering vital connectivity services to millions worldwide.
is recognised as the world’s most
It
Market leading
networks
Supported by
Delivering value
for our
stakeholders
• Dual payload: Our Inmarsat-6 satellites, the first (I-6 F1) of which was launched in December 2021,
comprise a dual payload (L-band and Ka-band). I-6 F1 is due to enter commercial service in 2022.
This will support the reorientation of our L-band capabilities towards new growth opportunities, as
well as providing additional capacity to our existing GX network.
• Global Xpress (GX) (Ka-band): GX, is the world’s first globally available bandwidth satellite network
with five Inmarsat-5 satellites currently in orbit. It is the world’s first global, mobile, high bandwidth
network, designed to support our customers’ high bandwidth connectivity requirements. A further six
GX payloads will launch into GEO orbit by 2024.
• S-band: The integrated S-band satellite and air-to-ground network, the EAN, is a compelling and
unique proposition for commercial aviation customers in Europe.
• ORCHESTRA: ORCHESTRA is the development of a unified network, utilising the existing and
evolving ELERA and GX layers, and seamlessly intergrating future terrestrial mesh and LEO layers.
ORCHESTRA is a true network of networks.
• Our technology: We continue to invest in innovation to deliver market-winning solutions to our
customers and differentiate our propositions.
• Best-in-class partner ecosystem: Our relationships with our partners, from suppliers to distributors,
help us to strengthen our service offering.
• Highly skilled workforce: Our people have the skills, competencies and experience to deliver our
business objectives and create value. Our culture and values are focused on innocation and
performance excellence.
• Our financial resources: We use our balance sheet to support the organic and inorganic investment
needed to deliver our strategic imperatives.
• Our market-leading distribution partnerships: Our products, services and solutions enable our
customers to operate safely, securely and efficiently and to deliver innovative communications
services to their users across our customer-focused business segments.
• Shareholders and Lenders: we aim to drive profitable growth to help deliver value for our
shareholders and lenders.
• Customers and partners: We focus on key drivers of value for our partners and customers such as
security, reliability and seamless delivery with global coverage and mobility.
• Employees: We have a strong culture, underpinned by our values and our commitment to diversify,
and we are focused on our employees' career development, making internal promotions where
possible.
• Communities: We are proud of our public service ethos and the part we play in providing safety
services, particularly to mariners and the aviation industry and our long-term support of the charity
Telecoms Sans Frontieres.
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Inmarsat Global Limited
Strategic Report
For the year ended 31 December 2021
Our Strategy
A leading satellite operator focused on global mobility.
Inmarsat is a leading satellite operator focused on global mobility. We are the only operator fully focused on broadband
and narrowband mobility and government services. We have unique global networks solely designed and optimised for
mobile satcom services rather than fixed or consumer applications.
Our strategic framework is clear. Centred around our market and customer focus, we have defined four main strategic
pillars. Our strategy guides our decisions and enables us to generate sustainable value and create growth for the
benefit of all our stakeholders.
Strategic priorities:
1. Maintain and grow the core
We are focused on our core markets and have built up leading positions. The revenue pools in our core markets are
material at a projected revenue Total Addressable Market of c. $9bn and are growing at high single digit numbers,
due to an increased demand for connectivity and digital applications. We enable our customers to deliver productivity
gains and to serve new ecosystems including IoT that requires reliable connectivity services. Growing and
maintaining our position in our core markets offers further strong growth opportunities.
2. Extend into near adjacent markets
Our market positions allow us to also serve adjacent markets. This helps us to leverage our deep sector expertise
and to bring value added propositions to new customer segments in mobility. The adjacent markets create new
opportunities for us to deliver further profitable growth.
3. Drive innovation and differentiation
Inmarsat’s unique satellite operations with narrowband (L-band) and broadband (Ka-band) services with global
coverage differentiates Inmarsat from our competitors. We have a proven track record of innovation underpinned by
our world leading technology capabilities. Our distinctive proposition allows us to bring value to our customers.
4. Sharpen customer and distribution focus
We work closely in partnership with world-leading customers. We understand our customers’ needs, and how we can
help them deliver value. We have a balanced model of direct and indirect distribution. Our experienced distribution
channel and partnerships provide extensive market access, supporting our global service proposition.
5. Our strategic pillars are underpinned by three core capabilities:
The first is technology leadership. Inmarsat has a proud heritage in this area and world-class people who make our
innovation possible. We have world-class GEO satellites operating in L-band, S-band and Ka-band. And our recently
announced ORCHESTRA network will further advance our position as a leading satellite operator.
Secondly, we are purpose driven with a clear vision and brand that reflects our ambition. Our purpose and values
guide our decisions and how we do business. Our purpose is to enable the connected world by placing the customer
at the centre of everything we do.
Thirdly, our high-performance culture supports us to execute our strategy and deliver our growth targets. Our
employees are empowered and accountable to make decisions with a relentless focus on our customers.
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Inmarsat Global Limited
Strategic Report
For the year ended 31 December 2021
Engaging with our stakeholders: s172 statement
Section 172 of the Companies Act 2006 requires the Directors to take into consideration the interests of stakeholders in
their decision making. The Directors have regard to the interests of our Company employees and other stakeholders,
including our impact in the community, the environment, and our reputation, when making their decisions. The Directors
consider what is likely to promote the success of the Company for our members in the long-term and all their decision
making. This statement should be read in conjunction with the stakeholder statement on page 18.
Stakeholder
Employees
Why we engage
We rely on the know-how, creativity and
entrepreneurial spirit of all our people.
New and existing talent is attracted and
retained by organisations that share
insight and provide development
opportunities within an inclusive culture.
We recognise we need the best teams
to be engaged and to collaborate if we
are to achieve our purpose together.
We recognise we want to have a
culture that fosters strong values and
an environment of support for them as
individuals and where we encourage
our employees to bring their ‘whole self
to work’
How we engage
The Board engages with employees, through our Global Workforce
Advisory Panel (GWAP) – a body set up in line with requirements
outlined in the updated Financial Reporting Council’s UK Corporate
Governance Code. The GWAP is made up of 12 employee
representatives from across our global footprint, supported by
additional ‘Voice Champions’ in smaller offices. The primary purpose
of the group is to promote an effective two-way communications
mechanism between the workforce and the management team, by
capturing the views of employees on proposals and issues which
affect our people, recognising barriers and enablers and helping to
address them.
The GWAP have been instrumental in developing our new flexible
ways of working as we move to a new hybrid working model, and in
engaging employees regarding some key changes to the way we
work globally. They have also continued to provide invaluable
feedback about workforce morale and wellbeing as we navigate the
challenge of the pandemic and the gradual return to a more normal
environment when and where circumstances permit.
The GWAP promotes a culture of collaboration and high
performance, and consults on and provides advice, support and
feedback during the implementation of programmes and policies. We
have formally consulted employee bodies who are regularly engaged
on consultative requirements and best practice.
In terms of wider employee engagement programmes the Board has
delegated responsibility for all other activity through the Chief People
Officer, who through the People Strategy, oversees a proactive
communications and engagement programme, supporting open and
honest dialogue with the global workforce and other formal global
staff bodies. Regular Board papers concerning employee
engagement were prepared for the Board, and more frequently during
the pandemic period.
The CEO, through the Chief People Officer continued to make our
people a focus in 2021, there was a global programme of
engagement and support as we navigated a number of significant
business changes: the announcement of a new CEO and resulting
changes to operating model and strategic focus, the transition to a
hybrid working model and ongoing internal transformation. Later in
the year this also included the announcement of the plan to combine
with Viasat.
Our employee engagement scores have decreased slightly during
2021, owing to the sustained challenges of the pandemic and
organisational changes during the year. However, the score still
remains robust and close to the score in December 2019, and is still
ahead of previous years.
We continue to actively consider the outcome of engagement surveys
and adjust our actions accordingly. We are currently focused on
ensuring alignment to our new business strategy, adjustment to a new
hybrid way of working and leveraging our culture to drive our focus
on customer centricity and simplification.
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Inmarsat Global Limited
Strategic Report
For the year ended 31 December 2021
Customers
By working collaboratively with our
customers we develop innovative
solutions to meet customer needs.
By sharing market insight with
customers we identify further
opportunities together to increase
revenues.
We recognise that our service is
mission critical to our customers and
the reliability of our service is essential
for them.
The Board engages with customers
the Executive
Management team and receives regular information about customers
in Board reports and other business reports. All significant or material
contracts that are classed as Principal Decisions are approved at
Board level.
through
We seek customer feedback on a range of issues such as customer
service, new products and pricing. This is done through various
methods such as surveys and focus groups.
We launched the first of our annual market wide customer satisfaction
surveys in 2019 to initiate what we expected to be a productive and
ongoing dialogue about our customers’ experience of working with us.
The feedback they share allows us to focus on the improvements that
are most important to them and also, understand if the improvements
we have implemented have been well received.
Our customer satisfaction score this rear remained the same as in
2020 whilst our Net Promotor Score dropped slightly. In 2019 and
2020 we saw an improvement in satisfaction scores, however despite
efforts made since our last survey in October 2020, the 2021 scores
have remained flat. Customers told us that our network coverage,
service reliability and portfolio of products are valued and that we
could further enhance our self service and billing experiences.
We analyse the feedback in detail to help us better understand what
our customers value most from our products and services along with
which aspects make them happier and more loyal. This year we were
fortunate that 50 % more respondents left a comment which helps us
to better understand the scores given. This analysis shapes the
improvement initiatives we invest in and how we drive differentiation
between ourselves and our competitors.
Customers feedback is key to help us to drive targeted improvement.
Continued regular insights through customer interviews and advisors
boards will enable us to further enhance customer experience.
Being a customer centric organisation not only delivers a world class
customer experience but also supports our growth
the
marketplace, ensuring that Inmarsat continues to be world leading.
in
Partners
We recognise that a collaborative
approach to innovation and the use and
capabilities of our technology can often
accelerate time to market, reduce costs
and create differentiation.
We recognise that our service is
mission critical to our partners and the
reliability of our service is essential for
them and their customers.
The Board engages with our partners
the Executive
Management team and receives regular information about partners in
Board reports and other business reports.
through
We engage with all our partners through our virtual and hybrid
conferences. We held three virtual conferences last year which were
attended by over 1,500 Partners. The conferences provide us with a
platform to share key information without Partners and to answer their
questions.
During 2021 we updated the partner portal to make it easier for partners
to access key marketing material.
Shareholders,
lenders and
our Investors
We have a clear responsibility to
engage with shareholders and lenders
to our business and our shareholders’
views are an important element of our
strategy.
regularly
informed
We keep our shareholders
through our
Governance frameworks while lenders receive quarterly updates and
a presentation on the performance of the organisation from the CFO.
There is an opportunity for lenders to ask questions on the financial
performance of the business at the end of each presentation. Lender
consensus is fed back directly to the Board as part of the routine
financial update agenda item.
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Inmarsat Global Limited
Strategic Report
For the year ended 31 December 2021
Suppliers
Supply chain integrity is a critical part of
our business as we rely on our
suppliers to help meet our customers’
needs as well as drive some of our
strategic longer term initiatives that
deliver competitive advantage.
Local
communities
Communities rightly expect local
employers to operate safely, effectively
and sustainably and to give back to
society.
Our education activities support local
schools, give our people new skills,
help us recruit new talent in the future
and create a positive societal impact.
We engage with our suppliers via our procurement teams as well as
through other functions such as legal and compliance.
During Covid-19 times, just like most other companies that use
technical components in their supply chains, we have experienced
component and labour shortages with our suppliers and their supply
chains. Our Procurement and Supply Chain teams have worked
tirelessly with suppliers to find extra raw materials and components,
source alternative components and re-engineer existing terminals,
which has largely mitigated risks and protected revenue.
The Supplier Relationship Management programme
is now
established with our top seven strategic suppliers. This enhanced
management strategic focus has already seen real value both in
holding suppliers to account on delivery as well as helping our
technical and strategic advancement to deliver customer value and
market share. In addition, we continue our focus on the financial
stability of suppliers ensuring compliance to our supplier code of
conduct and a re-invigorated focus on sustainability.
The Board receives information through Board reports and annually
reviews our strategy and performance in respect of the requirements
of the Modern Slavery Act.
The Board reviews the payment practices of the Group as part of
routine financial updates. For the full year 2021, 83% of suppliers
were paid on time (2020: 87%). The 4% decrease may be attributed
to issues with new automation technology, which is expected to be
fully resolved during 2022.
We engage with local communities through our local offices and sites.
The Board delegates oversight to the Chief People Officer, receives
regular information in the Board reports.
The Chief People Officer oversees a comprehensive global outreach
programme of promoting STEM careers to women and girls and
tackling social mobility through partnerships with schools and
targeted organisations. As in 2020, Covid-19 has challenged the
execution of this programme, however our STEM outreach remains
very important to us We continue to partner with the Maiden outreach
programme (www.themaidenfactor.org) supporting them to help drive
awareness and understanding of STEM subjects with
the
communities they work with, however this project was suspended in
February 2020 due to Covid-19. It has resumed in 2022 and we will
provide further details in next year’s report
In April 2020 all educational engagement activity was suspended due
to Covid-19. We continued to liaise with schools but were unable to
offer work experience placements or STEM initiatives.
Whilst we were not able to have the impact we had planned in 2021,
Covid-19 provided us with the opportunity to rethink how we engage
with young people and we developed a range of offerings to enable
greater geographical reach and a broader range of initiatives that can
be delivered virtually as well as in person when appropriate. The
impact of this will mean our programmes are more inclusive (more
access to young people from across the globe, particularly benefiting
those from disadvantaged backgrounds) with stronger links to the
STEM national curriculum.
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Inmarsat Global Limited
Strategic Report
For the year ended 31 December 2021
Risk Management
Risk Framework
Effective risk management is fundamental to our ability to meet both our short-term and longer-term strategic
objectives.
Risk comes hand-in-hand with business opportunity. Risk is not something that should be driven out of the business
but rather something to be identified, intelligently assessed and managed. The aim is not to eliminate all risks, but to
foster a culture supportive of effective risk management by encouraging appropriate risk-taking to achieve our
objectives. The Group’s approach to risk is bought together in an overarching risk management policy. This policy,
together with the risk management framework for assessment and mitigation, have been implemented to focus risk
management on strategic and business objectives, mitigation of the largest risks, and to comply with and support our
compliance with the ISO 27001 standard and accreditation. The policy sets out our risk appetite as well as roles and
responsibilities of risk team members.
Principal Risks
Principal risk
Sub Risks
Mergers &
Acquisition
Link to Strategy:
1, 2, 3, 4
-
-
Failure of due
diligence process
in acquisitions
leading to
discrepancies in
revenue
generation and
expected return
Integration and
operation post
acquisition is poorly
managed
Geopolitical
Link to Strategy:
1, 2, 3, 4
- Restricted access
to key regional
markets
- Restrictions on
licences being
approved for
regional markets
Impact of global
government
actions affect how
we provide
our service
-
Background and
impact
-
This risk is
subject to the
availability of
suitable M&A
opportunities
and considers
our failure to
acquire targets
at a sensible
price and/or
failure to
integrate and
operate them
successfully
post
deal completion
-
-
Failure to
identify large
downturns in the
world economy
and/or
restrictions on
accessing key
markets,
resulting in a
negative impact
to the business
and the
execution of our
strategy
Failure to be
able to operate
across global
markets due to
political
restrictions
6
Mitigation
Trend
- We are focused on professional due
Increase
Increase
diligence during the acquisition process
- We ensure we develop, resource and
execute comprehensive transaction
processes, integration and synergy
delivery plan
- We include appropriate liability
protection in transaction documents.
- We use third party specialist advisors
when required
- We develop integration plans for use on
and post the acquisition completion and
ensure periodic review of lessons
learned
- We prioritise workload to meet the
requirements and also look at bringing in
external experts when required
- We assess and manage new risks which
arise from political decisions including
protectionism that potentially could
impact our business
- We build strong relationships with in-
country partners to understand how to
work with them to manage business
uncertainty and how to develop revenue
opportunities
- Geopolitical factors are considered
-
alongside other PESTLE factors as part
of management reviews
The Proxy arrangements for Inmarsat
Government allows the company to
manage its business in accordance
with U.S. requirements allowing it to
compete for U.S. government business
- We look at light touch product
development opportunities to support a
“made local” requirement which supports
overall relationship building
- We have built into our internal practices
the gathering of insights covering the
different geographical regions we trade
in
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Inmarsat Global Limited
Strategic Report
For the year ended 31 December 2021
Business
Optimisation
Link to Strategy:
1, 3, 4
- Optimal exit
-
-
strategy is not
achieved
Business planning
and continuity
is not executed
effectively
Short termism is
preferred over
long term position
-
-
Failure to have a
plan to deliver
the optimal
outcome for all
stakeholders
Failure to
execute the
agreed plan to
time and budget
Unchanged
- We have in-house experts who
understand sanctions and their
implementation
- We continuously review and adapt our
strategy in reaction to developing
political or economic situations
- We prioritise focus areas and align all
company activities to support agreed
priorities
- We have an annual strategic planning
process in place which includes
development of budget and long range
business plans and ensures headroom
vs the debt covenants over the 5-year
planning period
- We maintain an ongoing dialogue with
our relationship banks, the credit
agencies and the investment community
to ensure that internal and external
expectations are aligned. This includes
holding investor
calls to communicate our quarterly
results
The organisation continuously reviews
and adapts its business focus in reaction
to developing political or
economic situations
-
- We are putting in place the simplification
of operating
processes and project delivery in line
with industry best practices and a
standard operating framework
- We critically review our business cases
before we proceed and assess our
progress against the original
business case
- We evaluate performance against the
budget, financial covenants and banking
headroom each month and
update the current year forecast monthly
Environmental
Social &
Governance
Link to Strategy:
1, 2, 3, 4
- Disruption to
-
infrastructure /
operations as a
result of adverse
weather events and
climate
change
Political and
regulatory
environment
Brand Reputation is
damaged by
company actions
-
-
- Our Crisis
Management
response
is not effective
-
Failure to run
our operations in
a sustainable
way by
assessing the
environmental
impact of our
operations,
which may result
in damage to our
corporate
reputation or
investor
confidence
Failure of having
poor governance
processes in
place which
impact business
outcomes
7
- We have ‘severe’ weather action plans
Unchanged
and procedures to manage the impact of
our operations
- Our Science Based Targets have been
-
approved by the Board and submitted
for validation to the Science Based
Target Initiative.
The Group has a formal, documented
and externally verified approach for
reporting on carbon emissions and
energy
- We have set our Science Based Targets
to reduce emissions by 2030 and
implement ISO 20400 sustainable
procurement diagnostic to target
emission reductions in
the supply chain
TCFD Gap analysis has been completed
and we are working to identify
opportunities and mitigations of climate
related risks
-
- We have policies and annual training on
areas covering anti-bribery and
corruption, export control and
whistleblowing
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Inmarsat Global Limited
Strategic Report
For the year ended 31 December 2021
- We regularly seek feedback from
customers and our professional advisors
on our activities
- We have an ongoing review of our
business continuity and crisis
management plans
- We document lessons learned
processes through exercises in crisis
management or incidents to improve
prevention, business continuity and
recovery procedures
- We have identified lessons learned from
the Covid Crisis Management Group
and improvements have been put in
place
- We have an appropriate insurance
programme in place to mitigate the
financial consequences of events where
practicable
- We have a sound control framework and
experienced Treasury capability in place
and maintain close
relationships with the credit rating
agencies
- We are implementing a software tool
(Blackline) to track controls and increase
visibility
- We have natural long term currency
hedges in place to ensure that the
majority of revenues, costs, capital
expenditure and debt funding are USD
denominated
Unchanged
-
- Multiple reviewers verify bank details for
standard and non-standard requests
The majority of payments are processed
via BACs with no
manual intervention
There are robust notification plans in
place if we are unable to bill/invoice
customers or pay suppliers.
Customers remain contractually liable
even if billing/ invoicing is delayed
- We have a robust revenue assurance
-
Failure to have
sufficient funds
available to
support the
growth agenda
(opex, capex,
M&A)
at an
appropriate cost
and on an
acceptable
timeline,
affecting our
ability to meet
the
company’s
strategic
objectives
Increase
Failure of a
critical supplier
or channel
partner to deliver
their services
which may affect
our ability to
generate
revenues. A
failure of one
could also
impact the
availability of
technology
platforms,
equipment
supply or
support
capability
process
- We maintain contractual options with
multiple launch vehicle providers and
keep several launch options
available to maintain launch vehicle
flexibility until late into the spacecraft
manufacture process
- We are continuously looking to widen
the scope and number of manufacturers
of terminals
- We implemented a Supplier Relationship
Management
framework to drive best financial and
technical performance and to provide
early insights of divergence in joint
strategic goals
- We promote fair play in our distribution
channel
- We will implement a new channel
strategy to drive greater engagement
with all partners
8
Financing,
Liquidity &
Investment
Link to Strategy:
1, 3, 4
Major
Supplier/Channel
Partner Failure
Link to Strategy:
1, 2, 3, 4
- Capital
-
-
-
-
-
-
-
-
structure/funding
availability or
inability to access
capital markets
Increased cost of
debt
Foreign exchange
risk
Bank failure/bank
systems failure
Payment error
-
A reliance on a
limited number of
suppliers
A reliance on our
distribution
channel
A reliance on a
limited number
of suppliers
delivering material
services
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Inmarsat Global Limited
Strategic Report
For the year ended 31 December 2021
- We constantly look for powerful
additions to our channel partner
community in light of changing market
dynamics.
- We continue to work dynamically with
existing partners
to grow their revenues
- We are focused on Increasing the
Unchanged
impact and quality of our business and
market intelligence
- We proactively react to new competitive
threats
- We focus on reinforcing our market
focus and customer intimacy through our
Business Units
- We are continuously looking to increase
our operational agility, to optimise the
mobilisation of our network capacity to
leverage cost/bit capabilities
- We broaden our market presence
beyond pure connectivity to capture new
value-added services to include
connectivity+ capabilities, managed
services and related activities, and
digital capabilities and partnerships
- We perform ongoing and ad hoc
contract review assessments
- We differentiate our products to ensure
we appeal to our customers’ needs
- We obtain in-country market access for
Increase
our distribution channel as far in
advance as possible and make licensing
requirements as straightforward as
possible for our
partners
- We proactively support satellite
operators in forums where appropriate to
defend broader satellite interests from
use by terrestrial operators
- We develop commercial strategies to
retain customers effectively, driving
product capabilities or revised
commercial offers in response to
customer insight feedback
- We continuously monitor technology,
competitor and market developments
ELERA and ORCHESTRA work is
underway to showcase our services
-
- We invest in market intelligence to
understand longer term pricing
dynamics, and plan our response in
advance
- We have simplified our standard
contracts and pricing in order to make it
easier to do business with us
- We introduced new services with
common technologies
Failure to gain
access to a
minimum
available market
in a timely
manner in order
to fulfil
shareholder
expectations
and to support
the growth
agenda.
Failure to
respond
appropriately to
market
conditions to
protect the
business against
areas such as
low / flat growth,
changes in
consumer
behaviour and
requirements,
M&A activities of
others and loss
of spectrum
slots
Failure of the
company to not
respond to
actions of a
competitor which
impacts our
strategic
objectives.
These may be
new entrants or
established
players in the
satellite
communications
who introduce
disruptive
business models
or technology
9
Market Size
Link to Strategy
1, 2, 3, 4
- Changing customer
-
demand
- Commoditisation of
our products
and services
- New competitive
threats impact
our business
-
-
Competition
Link to Strategy:
1, 2, 3, 4
-
- New competitors
enter the market
Existing
competitors
improve
offerings
- Competitor pricing
may be more
compelling to a
customer
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Inmarsat Global Limited
Strategic Report
For the year ended 31 December 2021
Customer
Expectations Not
Met
Link to Strategy:
1, 2, 3, 4
- Customer data
-
demand exceeds
over capacity
- Customer
requirements
cannot be met
- We lose customer
engagement to
competitors
Failure to meet
the expectations
of customers,
either through
lack of
competitive
products or
failure to
understand
customer
requirements,
leading to a loss
of revenue and
failure to
capture market
opportunities
Technology and
Innovation
Link to Strategy:
1, 2, 3, 4
-
Low Earth Orbit
(LEO) satellite
operators impact
our revenue
growth
- Disruptive
technology impacts
our services
- Competitive
products are
appealing to our
existing
customers
Spectrum &
Regulatory
Link to Strategy:
1, 2, 4
- Market licenses
may not be
obtained
- We may not secure
the orbital
slots
- Regional SAS
-
-
licenses may not be
issued
Spectrum costs
may be excessive
5G deployment may
impact our
service offerings
PUBLIC | © INMARSAT
-
-
-
Failure to deliver
value/create
value from
investment in
disruptive
technologies
needed
to meet our
customers’
needs
Failure to create
breakout
opportunities in
a timely manner
Failure to invest
in new
technologies will
lead to reduced
opportunities for
growth and
potential
loss of our
existing
customer base
Failure to obtain
adequate orbital
slots and
frequency filings,
failure to obtain
country by
country market
access licenses
hinders
deployment of
our services
- Deployment of
terrestrial
networks impact
our existing and
10
-
- We continuously optimise the
Unchanged
mobilisation of our network capacity to
leverage cost/bit capabilities which has a
financial benefit for the business
- We broaden our market presence
beyond pure connectivity to embed our
core value-add to the customer
- We manage customer data demands in
line with our commercial strategy,
deploying and using satellite capacity
resource management tools
- Our business analysts prioritise
capturing customer experience
requirements and technical
requirements in our offer development
phase
- Customer surveys are regularly
undertaken to understand core issues
and provide resolutions
- We work hard to reinforce our market
focus and customer intimacy
- We are establishing customer boards to
amplify their voice within our business
- We invest in new satellites to meet
customer capacity demands. We adapt
our product and services portfolio to
address technological developments
- We have developed a broad portfolio of
products and services to address
customer requirements and
opportunities in several markets. This
makes us more resilient to competitor
developments
- We have ELERA (L-band) developments
underway including next generation
terminal activities
- We monitor technology, competitor and
market developments and adapt
accordingly
- We regularly review alternative sources
of supply
- We regularly improve the efficiency of
our spectrum usage through innovation
and system enhancement
- We maximise spectrum opportunities
where possible
- Our Business Units provide pipeline
assessment to allow future capacity
assessments to be performed
Unchanged
- We work closely with in-country
Unchanged
partners/regulators to
secure licenses and market access to
allow our services to be operated in key
countries
- We engage with and support regulators
to defend our licences against 5G
demands
- We work with regulators globally through
ITU forums
- We proactively make ITU filings for
orbital slots through
several national administrations for our
short and long term spectrum and orbital
slot requirements
Inmarsat Global Limited
Strategic Report
For the year ended 31 December 2021
any planned
infrastructure
Failure to put in
place in a timely
manner the
necessary
people
capabilities to
find, acquire,
negotiate,
integrate and
successfully
operate
new business
opportunities
including
accessing
third party
capabilities for
M&A
Failure to invest
in the key skills
required
to maintain
competitive
advantage in the
current business
environment,
resulting in
insufficient
capacity or
capability to
deliver the core
business plans
and establish
effective
organisational
structures
Failure to attract
candidates and
put in place a
diverse
workforce
Failure to
comply with
laws, regulations
and
governance
requirements
which would
result in
fines,
loss/damage of
reputation and
potential
litigation claims
11
- We work closely with regulators to
source network licenses in the market
and secure licenses early wherever
possible to grandfather spectrum
- We regularly improve the efficiency of
our spectrum usage through innovation
and system enhancements
- We take responsibility for updating
regulators and governments about the
socio-economic contribution of
our mobile satellite services
- We review succession plans for critical
Increased
roles and put in
place development plans for employees
identified as
having steep growth potential
- Our employee value proposition focuses
on career development, training and
reward to ensure we have an engaged
and motivated workforce
- Our 2021 D&I survey set the base to
measure progress for future survey
results
- We implement our People strategy
where we identify key employees, skills
and skills gaps to manage human
resources effectively
- We have introduced a compressed
working week offering which has been
well received
- We delivered a comprehensive
communication and engagement plan
around return to office work and future
working patterns during and post Covid
- We have taken comprehensive steps to
ensure employee health and wellbeing is
promoted and to support
employees transitioning to remote
working
- We are committed to a D&I environment
which encourages employees to
collaborate in an inclusive way
- We maintain awareness of new
Decreased
legislation by legal horizon scanning
- We introduce new policies and training
into the business when relevant
- We have strong external advisors and
in-house experts in place to advise the
business and help mitigate legal and
compliance risks
- Our legal team provides regular litigation
protocol training to the business as well
as annual refresh training for all
employees
- We ensure that legal, compliance and
governance teams are involved from the
People & Talent
- We do not attract
-
Link to Strategy:
1, 2, 3, 4
talent or
retention of
employees in
critical
roles
- We do not have
-
robust succession
planning in place
Leadership
engagement and
capability declines
- Resource allocation
is not
optimised
-
-
-
Legal,
Compliance &
Governance
Link to Strategy:
1, 3
- New laws and
regulations impact
how we operate
Litigation claims
increase
-
- Compliance and
governance
regulations increase
in
complexity
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Inmarsat Global Limited
Strategic Report
For the year ended 31 December 2021
Major Security or
Cyber Event
Link to Strategy
1, 3
-
-
-
Information security
is breached
Supply chain
vulnerability
impacts
our business
A strong security
culture is not in
place
-
-
Failure to meet
compliance
requirements
and standards
could result in
fines and
penalties
and reputational
damage
Failure to secure
satellites,
networks,
information,
data, systems,
processes and
services which
could impact
business
objectives,
services to
customers,
performance
and reputation
outset of any new projects to ensure risk
is managed and mitigated
- We have compliance programmes and
training in place for anti-bribery and
corruption, export controls, sanctions
and whistleblowing
- We maintain and update our policies
and processes regularly
- We maintain industry standard security
Increased
measures and meet regulatory
requirements through in depth, state-of
the art counter measure monitoring and
enhanced cyber security operations
including a dedicated 24/7 Cyber
Security Operations centre
- Due to increasing scale, complexity and
sophistication of cyber threats we
maintain a continuous improvement
programme to maintain risk appetite and
reduce risk in targeted areas
- We undertake an independent maturity
assessment against the NIST framework
and maintain accreditations including
ISO 27001 and Cyber Essentials (Plus)
- Our mitigation strategy is informed by
feedback from commercial and
government organisations
- We maintain a level of insurance cover
where available to reduce the financial
consequences of a cyber event
The ISO27001 standard was met and
renewed in 2021 and our certificate has
been reconfirmed
-
- We maintain a broad and sophisticated
cyber security awareness programme,
including mandatory training and
employee confirmation of understanding
our obligations
- We maintain policies, guidelines and
standards consistent with a positive
security culture and embed security
assessments in key elements of project
initiation and at each stage of a project’s
deployment
Major
Operational
Failure
Link to Strategy:
1, 3
- Major Space or
-
Ground Segment
failure
- Major business
system failure
- Major failure in
service delivery
network or supply
chain
Business continuity
is not
effective
-
Failure of one or
more critical
systems or
assets disrupts
our ability to
operate and
results in a
failure to meet
designed
resilience levels
and customer
commitments or
we lose key
business
systems
resulting in a
loss of
revenues,
supplier or
reputational
impacts
12
- We have services and related
Unchanged
infrastructure (including satellites) which
are designed, built and maintained with
an acceptable level of redundancy and
resilience, and are continuously
reviewed in accordance with life cycle
management practices
- Our space asset operation is in line with
manufacturer instructions and industry
best practices, with protection against
space weather and debris enhanced
through
participation in industry and international
bodies
- Our global operating model includes
satellite and network operations centres,
with established backups, distributed
teams, site and infrastructure
redundancy at defined levels, and skills
and capabilities retained and developed
as required
PUBLIC | © INMARSAT
Inmarsat Global Limited Strategic Report For the year ended 31 December 2021 13 PUBLIC | © INMARSAT - Our IT investment strategy is based on commercially available software products wherever possible - Inmarsat operates a broad regional service and global partner network to mitigate localised disruptions and enable alternative operating approaches - Our operation of supply chain management techniques include multi sourcing, variants and alternate suppliers to minimise single source or component exposure Key performance indicators The Directors of the Group manage the Group’s operations on a business sector basis. For this reason, the Company’s Directors believe that an analysis using key performance indicators for the Company is not necessary or appropriate for an understanding of the development, performance, or position of the Company’s business. The development, performance and position of the Group are discussed in the Group’s 2021 Annual Report which does not form part of this report but can be obtained from the address detailed in note 1 to the accounts. Alison Horrocks Company Secretary 30 September 2022 Inmarsat Global Limited
Directors’ Report
For the year ended 31 December 2021
Reporting in accordance with our Corporate Governance Policy
This index shows where our stakeholders can evaluate how we have applied our Corporate Governance Policy and where
key content can be found in this report.
Purpose and Board Leadership
The Board determines the long-term strategy. Our business model and our strategic framework embeds our vision, purpose,
values and priorities to ensure stakeholder interests are met.
Business model
Our strategy
Engaging with our stakeholders: s172 statement
Page:
1
2
3
Board Composition
The Board comprises the CFO and an Executive Director who is also the Company Secretary. Both members of the Board
are part of the Executive Management team. The Composition of the Board is determined by our Corporate Governance
Policy.
Board attendance
Board biographies
Page:
17
17
Director Responsibilities
The Board received regular report on business, financial performance, employee and partner engagement as well as key
business risks.
How the Board operates
Role of the Board
Key roles and responsibilities
Page:
15
15
17
Opportunities and Risks
The Board seeks our opportunity while managing risk. The Central Risk Committee and the Executive management team
ensure risks are identified and managed appropriately
Risk Management
Principal risks
Page:
6
6
Stakeholder Relationships and Engagement
Our strategic priorities and values are how we deliver our vision. The table set out in our section 172 statement on page 3-5
sets out some of the engagement that takes place with key stakeholders
Business model
Our strategy
Engaging with our stakeholders: s172 statement
Stakeholder statement
Page:
1
2
3
18
The Board considers that the Company has complied fully with its corporate governance policy throughout the year.
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14
Inmarsat Global Limited
Directors’ Report
For the year ended 31 December 2021
Directors’ Report
The Directors submit their annual report and the audited financial statements for the Company for the year ended
31 December 2021. The Board of Inmarsat Global Limited is pleased to present its Corporate Governance Statement
for the period to 31 December 2021. This statement includes a review of how corporate governance acts as the
foundation for our corporate activity and is embedded in our business and the decisions we make. The Board is
committed to the creation of long-term sustainable value for the benefit of our shareholders and wider stakeholders.
The Company is committed to the highest standards of governance and during the year adopted its own Corporate
Governance Policy. Our Corporate Governance Policy is a combination of both the Wates Principles for Large Private
Companies and our own existing governance frameworks which provides detailed governance principles reserved for
the Board and its subsidiary boards. These principles are strictly reserved to ensure the Directors can demonstrate
sound and competent execution of their statutory duties (including oversight of the management of relationships and
engagement with stakeholders on their behalf) in accordance with applicable legislation.
The Board has deemed the Corporate Governance Policy appropriate to use instead of the Wates Principles as it
reflects the ownership structure and utilises the pre-existing and overarching corporate governance frameworks that
were operational during the time Inmarsat was a listed business on the London Stock Exchange. The Board considers
these frameworks and delegations to be effective to enable the Board to discharge their statutory and fiduciary duties
appropriately. The Corporate Governance Policy created a framework to capture key corporate governance protocols,
subsidiary governance protocols and a principal decision process, as set out in the section 172 statement on pages 3
to 5 of the Strategic Report and pages 18 to 19 of this Directors’ Report.
How the Board operates
The Company has composed a Board with a balance of skills, backgrounds, experience and knowledge required to
compliment the promotion of the long-term success of the Company and to identify the impacts of the Board’s decisions
on their stakeholders, and where relevant, the likely consequences of those decisions in the long-term. Individual
Directors have sufficient capacity to make a valuable contribution that is aligned to the Company’s activities (details of
the skills and experience are set out on page 16 of this Directors’ Report).
The Directors are mindful of corporate governance and seek to demonstrate understanding of their accountability and
statutory responsibilities. The Board understands is primary duties under the Companies Act 2006 and broader
regulatory responsibilities e.g. General Data Protection Regulations, Anti-Money Laundering, Corporate Criminal
Offence. Governance policies are in place to support these primary duties and boarder regulatory requirements.
Role of the Board
The Board is ultimately responsible for organising and directing the affairs of the Company in a manner most likely to
promote the success of the Company for the benefit of its investors whilst complying with legal and regulatory
frameworks.
Our Board is ultimately accountable for:
- The long-term success of the Company, having regard for to interests of all stakeholders.
- Ensuring the effectiveness and reporting on our system of governance, including retaining oversight of its
delegated responsibilities.
- Performance and proper conduct of the business and ensuring a positive culture is supported.
Responsibility for developing and implementing strategy is delegated to the Executive Management team. The
Executive management team are listed on page 16 and their biographies can be found on our website at
www.inmarsat.com/en/about/ who-we-are/leadership-team-and-board.
The Board has responsibility for managing risk and does not delegate overall responsibility for the approval of the risk
management policy to management. Following additional work undertaken in 2020 on risk processes with, and by, the
Executive Management team, changes to Board reporting were implemented in 2021.
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15
Inmarsat Global Limited
Directors’ Report
For the year ended 31 December 2021
Role of the Board (Cont.)
In accordance with the Corporate Governance Policy, principal decisions are delegated to the Executive Management
team. In making its decisions, the Executive Management team is required to consider the outcome of any stakeholder
impact assessment that has been undertaken to support it making any principal decision (details of the principal
decisions made by the Board during the reporting period are set out on page 18-20). The Executive Management team
reports back to the Board as part of the wider risk management and internal controls of the Group, allowing the Board
to demonstrate its oversight of the delegated responsibilities
A formal schedule of matters specifically reserved for decision or consideration by the Board as a whole has been
agreed by the Directors and is included in the Corporate Governance Policy. This schedule covers areas such as:
- Major capital projects
- Significant capital structure changes
-
- Acquisitions and divestments
Investments
In 2021 we focused on the following key areas:
- Reviewed strategic objectives
- Received reports on technology and innovation
- Received and approved the annual budget, long range business plan
- Reviewed regular reports on compliance matters from the Company Secretary
- Received detailed updates regarding new ways of working and wellbeing initiatives.
Executive Management team
The Chief Executive Officer chairs the Executive Management team which meets on a monthly basis. During 2021 due
to Covid-19, these meetings were shorter in time due to different time zones of the management team and therefore
additional weekly and fortnightly meetings were set up to ensure the management team remained connected and
operating effectively. As part of its remit, this team focuses on the Group’s strategy, financial reviews and long range
business planning, the competitive landscape, strategic updates from all areas of the business, risk reviews, culture,
learning and development and organisational development. The Executive Management team includes:
Jat Brainch, Chief Commercial and Product Officer effective 25 March 2021
- Rupert Pearce, CEO until 26 February 2021
- Rajeev Suri, CEO effective 1 March 2021
- Tony Bates, CFO
- Phil Balaam, President, Aviation Business Unit until 22 November 2021
-
- Philippe Carette President Aviation Business Unit effective 22 November 2021 to 28 July 2022
- Mike Carter, President, Enterprise Business Unit
- Natasha Dillon, Chief Commercial and People Officer
- Barry French, Chief Communications and Marketing Officer effective 25 March 2021
- Fredrik Gustavsson, Chief Strategy Officer effective 28 June 2021
- Peter Hadinger, Chief Technology Officer
- Alison Horrocks, Chief Corporate Affairs Officer and Company Secretary
- Todd McDonell, President, Global Government Business Unit
- Susan Miller, CEO Inmarsat Government Inc.
- Ben Palmer OBE, President, Maritime Business Unit effective 5 November 2021
-
- Ronald Spithout, President, Maritime Business Unit until 5 November 2021
- Niels Steenstrup – President, Aviation Business Unit effective 28 July 2022
Jason Smith, Chief Operations Officer
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16
Inmarsat Global Limited
Directors’ Report
For the year ended 31 December 2021
Governance and conduct of Board meetings
Our Board meets as often as necessary to effectively conduct its business. During the year the board met 18 times. The
attendance at the meetings can be seen in the table below:
Rupert Pearce*
Tony Bates
Alison Horrocks
Meeting
6/18
18/18
18/18
Percentage attendance
33%
100%
100%
*Rupert Pearce resigned as a director on 26 February 2021.
The Directors noted above are those who served on the Board during 2021.
Key roles and responsibilities
Tony Bates is responsible for:
- The leadership and management of the Company according to the strategic direction set by the Board.
-
Leading the global finance function and oversees the relationship with the investment community.
- Ensures effective reporting procedures and controls are in place
Alison Horrocks is a Director and the Company Secretary to the Board and is responsible for:
- The day to day management of the Company.
- The implementation of the business strategy.
- Ensuring that all Directors have full and timely access to all relevant information
The Board of Directors
Tony Bates (Director and CFO)
Background and relevant experience
Tony has been Inmarsat’s Chief Financial Officer since June 2014. As well as responsibility for the financial running of the
Company, Tony is also responsible for procurement operations and investor relations activities. Tony is a member of the
Executive Management Team. Tony previously held the roles of Group CFO of Yell Group Plc (hibu Plc), Group CFO and
then COO of Colt Group S.A. and Group Finance Director at EMI plc. Tony holds a First Class Honours degree in
Management Sciences from the University of Manchester. He is a Fellow of the Institute of Chartered Accountants in England
and Wales.
Alison Horrocks (Director and Company Secretary)
Background and relevant experience
Alison joined Inmarsat in 1999 and is responsible for risk, compliance and corporate governance across the Company. She
is a member of the Executive Management Team and Chairman of the Trustee Company for the Inmarsat UK pension plans.
Alison manages our operations in India, China and Russia and the legal and market access regulatory teams. She was Group
Company Secretary of International Public Relations plc, a worldwide public relations company, for 11 years prior to joining
Inmarsat. Alison is a Fellow of the Chartered Secretaries and Administrators.
No Director had during the year or at the end of the year any material interest in any contract of significance to the Company’s
business.
Principal activities
The principal activity of the Company is the supply of global mobile satellite communications services (‘MSS’), providing data
and voice connectivity to end-users worldwide.
Results and Dividends
The Company’s results for the financial year are shown in the Income Statement on page 26. No final dividend for the year
ended 31 December 2021 has been declared or paid.
17
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Inmarsat Global Limited
Directors’ Report
For the year ended 31 December 2021
Future developments
The Company intends to continue operating in the areas of provision of global mobile satellite communications services
including data and voice connectivity to end users.
Financial risk management
Details of the financial risk management objectives and policies of the Group are disclosed in Group accounts of Connect
Topco Limited.
Research and development
The Company continues to invest in new services and technology necessary to support its activities through research and
development programmes.
Events since the balance sheet date
Details of events since the balance sheet date are given in note 29 to the financial statements.
Conflicts of interests
The Company has in place procedures for managing conflicts of interests and is aware of any potential conflict through annual
review of other commitments of its Directors.
Branches
The Company has activities through branches in Qatar and Italy.
Engaging with our stakeholders: stakeholder statement
The Directors understand their responsibility to promote the success of the business in accordance with section 172 of the
Companies Act 2006 (section 172).
Effective engagement with stakeholders at Board level and throughout the business is essential to enable us to meet our
strategic purpose and our business objectives. The Board is aware that actions and decisions taken by the Company can
impact our stakeholders and the communities in which we operate.
The Company Secretary provides support and guidance at Board meetings to ensure sufficient consideration is given in Board
discussions to the impact of Board decisions on stakeholder groups and these are documented where appropriate. The
relevance of each stakeholder group may change depending on the issue under discussion, so the Board seeks to understand
the needs and priorities of the relevant stakeholders throughout the decision process.
We have set out our principal stakeholders and how we engage with them on pages 3 to 7 of the Strategic Report.
Principal decisions
We consider our ‘principal decisions’ as decisions and discussions, which are material or strategic to the Group and those
that are significant to any of our stakeholder groups. The following are examples of how the Board considered the interests
of its key stakeholders when making decisions:
Debt re-pricing
Inmarsat delivered resilient financial results over 2020 in the fact of Covid-10. In the early part of 2021, interest rates had been
falling and there was high demand for good debt investment opportunities. recognising that Inmarsat’s debt was trading at a
premium and that Inmarsat’s term loan could be called at anytime at par at no cost, the Board took the opportunity to seek to
reduce the interest rate it was paying on its term loan.
How we engaged
The Board engaged with our shareholders and our debt investors through the Executive Management team to negotiate a
re-pricing of the term loan.
18
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Inmarsat Global Limited
Directors’ Report
For the year ended 31 December 2021
Outcome of engagement
The Board considered the re-pricing to deliver material savings over the remaining 6 years of the term loan. The repricing
was completed on 25 January 2021.
Science based targets
The Board takes its responsibility for setting the Climate Change and ESG Strategy of the Company seriously and during
the year approved Science-based Targets for validation. The Board considered climate risk in the context of investment
risk and the correlation between disclosure and capital allocation. The Board agreed a clear and defined pathway to
reduce emissions to help prevent the worst impacts of climate change would future proof the business, for the benefit
of all stakeholders in the long term.
How we engaged
In reaching this decision the Board engaged with its suppliers through the Vice President of Global Procurement to
better understand our Scope 3 emissions.
Outcome of engagement
Going forwards we continue to engage with our suppliers to understand our products and their carbon emissions in
more detail. We will implement as part of our RFI/RFP processes a sustainability scorecard.
2021 ESG Report
Our 2021 Environmental, Social and Governance (ESG) Report is available on our inmarsat.com website and contains
additional information on our non-financial risk management. Taking account of our responsibilities socially and
environmentally is important in the way we operate and interact with all our stakeholders. This way of working creates
value for all our stakeholders.
Employees
2021 has once again been a challenging year for our employees as the pandemic and its impact have endured
throughout the year. Our people agenda, having adapted in 2020 to the challenges of a more remote working
environment, 2021 has focused on embedding these across our business. We have also continued our focus on
employee wellbeing with a comprehensive programme of support.
Flexible working
In 2021 we built on previous co-creation work with our employees to shape new working patterns appropriate to a hybrid
working model, and we have supported colleagues in implementing these across the business as we started to slowly
return to the office in the second half of 2021.
We also made further strides in our flexible working offer with the launch of compressed working cycles broadly across
the organisation, following a successful pilot with our Global Government Business Unit. Our approach to flexible
working is something highly prized by our employees and an important part of Our People Promise – our employee
value proposition – which we also refreshed.
New CEO and strategic focus
This year we welcomed Rajeev Suri as our new CEO and our people agenda has focused on ensuring a seamless
transition, engaging our employees with a reinvigorated strategic direction, embedding a strengthened operating model
and building our culture to support renewed commercial and customer focus.
Later in 2021, we announced a plan to combine with Viasat to create a new global leader in our industry and we
implemented a comprehensive engagement and communications plan to inform our employees about this exciting
announcement and underpin retention during the period leading up to the transaction close.
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19
Inmarsat Global Limited
Directors’ Report
For the year ended 31 December 2021
Internal transformation
A strategic reset in 2020 led to internal transformation, work that continued into 2021. A Commercial and Product
Management function was mobilised with the ambition to bring focused commercial capabilities built on customer insight
to drive our growth ambitions. Other programmes of work included driving greater simplification across our organisation,
a programme to drive deeper customer centricity and also to strengthen our strategic planning capabilities.
Diversity and inclusion
Inmarsat embraces diversity and prides itself on creating an inclusive environment where everyone can bring their whole
selves to work. In 2021 we conducted our first diversity and inclusion survey, which gave us baseline data for our
workforce metrics by attributes. This allows us to drill into our engagement scores and establish any significant
differences by ethnic groups as well as by gender, religion, sexual orientation. This complements the great work our
employee resource networks – EDEN (ethnic diversity), WIN (women in Inmarsat), PRIDE (LBGTQ+) and Veterans –
already do to champion these diverse interests. We have also launched a fifth network for Parents and Carers.
Learning and development
For Senior Leaders we have continued a virtual thought leadership programme, bringing academics and business
leaders into the organisation to share insight and strengthen our leadership capabilities. This complements our wide-
ranging Learning and Development offering that includes Corporate Induction, our High Performance Culture
programme and a comprehensive online learning offering.
Reward
This year we have refreshed our UK Pension and benefits plans, moving away from an age-related pension contributions
arrangement, and offering a more flexible pension design, giving all employees more choice about pension contributions.
We also introduced a workplace investment vehicle for U.K. employees which operates alongside our pension scheme,
giving employees an additional way to save to meet their personal financial goals, along with improved tools and
information to make informed choices about their financial future.
Communications
We have continued to evolve our communications and engagement activity, adapting to new hybrid ways of working,
launching a new enterprise social networking tool and driving a richer mix of media, to bridge the remote nature of our
working life, with more human communications and commentary via user generated video content
Gender pay gap
Inmarsat's Gender Pay Gap report is available on our Inmarsat.com website and also in our 2021 ESG Report.
Environmental performance and strategy
We recognise the impact that our products and services may have on climate change and are working to review how
we can reduce our environmental impacts and our carbon footprint. As an example, across the broader satellite industry,
satellite launch companies are reviewing how they become more accountable for carbon generation through innovative
new satellite launch techniques. We will work together with our industry partners, including our launch providers to see
how we can improve techniques for our future launches and reduce the footprint of our products.
Our environmental impacts include the use of natural resources, the consumption of energy and water, the production
of a variety of waste, as well as staff and visitor travel. We have provided further details of our objectives for how we
manage our environmental activities in our 2021 ESG Report which can be found on our website.
Directors’ indemnity
Each of the Directors benefit from an indemnity given by the Company under its Articles of Association. This indemnity
is in respect of liabilities incurred by the Director in the execution and discharge of his or her duties.
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20
Inmarsat Global Limited
Directors’ Report
For the year ended 31 December 2021
Going concern
In determining whether the Company’s financial statements can be prepared on a going concern basis, the Directors’
have considered all the factors likely to affect its future development, performance and its financial position, including
the matters disclosed in the Strategic and Directors’ Report. The Company is part of the Connect Bidco Limited Group
(‘Bidco’), ultimately owned by Connect Topco Limited. The going concern review completed at the date of signing the
Bidco accounts is set out within the Connect Bidco Limited 2021 annual report. The going concern of the Company is
reliant on Bidco’s financing facilities.
In order to confirm that the Bidco business should adopt the going concern basis in preparing the consolidated financial
statements for 2021, the Board and Management of Bidco have considered a number of possible scenarios and their
impact on future revenues, EBITDA and liquidity. These scenarios consider the latest market information for each
business unit and the impact of actions that have been and can be taken to improve financial performance. The
evaluation uses the most recently approved budget and long-range business plan and considers the maturity profile of
the existing debt facilities and the $700 million undrawn revolving credit facility as discussed in note 20 of Connect
Bidco’s annual report for 2021. Under all scenarios there continues to be sufficient headroom to the Financial
Performance Covenant under the debt agreements. As at 31 December 2021, Bidco has $1,094.0m of liquid resources
(Cash: $364.0m, short-term deposits: $30.0m, undrawn RCF: $700.0m) and a continued expectation that Bidco will
generate positive free cash flow and reduce leverage over the medium to long term.
The impact of Covid-19 is now confined to the aviation business unit where the aviation industry continues to recover
and steady improvement has been shown throughout 2021. Inmarsat’s robust business model and capital structure,
along with strong positions in a diverse range of geographies and markets will help Inmarsat manage future Covid-19
related risks.
During 2021 the Connect Topco shareholders accepted an offer from Viasat Inc. to purchase the Group for
approximately $7.3bn. Refer note 29 for further information on this transaction. The going concern assessment has
been performed using the Inmarsat financial performance and position.
At the date of signing of these financial statements the Directors have considered all the factors impacting the
Company’s and Bidco’s business. The Directors have a reasonable expectation that Bidco shall continue to operate as
a going concern for the foreseeable future. Consequently, the Directors have a reasonable expectation that the
Company will continue in operational existence for a period of at least twelve months from the date of approval of the
financial statements and therefore the Company continues to adopt the going concern basis in preparing the 2021
financial statements.
Russia Ukraine
The Group has set up a Ukraine Crisis Management Team to assess and respond to the operational and business risks
arising from the invasion of Ukraine, including ensuring compliance with sanctions. Inmarsat is not supplying new
products or services to Russia and planned infrastructure projects in the country are stopped. To ensure the ongoing
provision of services that support humanitarian efforts as well as other governments in the region, including the work of
national embassies, and safety related services, we continue to provide existing airtime services. Decisions in this matter
have been made on security of critical and safety services in the region and not on financial grounds. The Group has
limited exposure to revenue generation in both Russia and Ukraine, does not receive any income in Roubles and holds
very limited amounts in Roubles. Revenue represents less than 2% of total revenue for 2021 and the current outstanding
debtors balance is not material. No post balance sheet adjustments are therefore required.
PUBLIC | © INMARSAT
21
Inmarsat Global Limited Directors’ Report For the year ended 31 December 2021 22 PUBLIC | © INMARSAT Statement of Directors’ responsibilities The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations. Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), including Financial Reporting Standard 101 ‘Reduced Disclosure Framework’ (‘FRS 101’) issued by the Financial Reporting Council (FRC). Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period. In preparing these financial statements, the Directors are required to: • select suitable accounting policies and then apply them consistently; • make judgments and accounting estimates that are reasonable and prudent; • provide additional disclosures when compliance with the specific requirements in FRS 101 are insufficient to enable users to understand the impact of particular transactions, other events and conditions on the entity’s financial position and financial performance; and • prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business. The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and for taking reasonable steps for the prevention and detection of fraud and other irregularities. Disclosure of information to auditor As far as each of the Directors are aware, there is no relevant audit information of which the Company’s auditor is unaware and the Directors have taken all the steps that ought to have been taken to make themselves aware of any relevant audit information and to establish that the Company’s auditor is aware of that information. This confirmation is given and should be interpreted in accordance with the provisions of s418 of the Companies Act 2006. Independent auditor Deloitte LLP are deemed to be re-appointed in accordance with an elective resolution made under section 386 of the Companies Act 1985 which continues in force under the Companies Act 2006. The Company is not required to hold Annual General Meetings. Subject to the receipt of any objections as provided under Part 13, sections 281 to 361 of the Companies Act 2006, Deloitte are deemed re-appointed in accordance with section 485 Companies Act 2006. By order of the Board Alison Horrocks Company Secretary 30 September 2022 INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF INMARSAT GLOBAL LIMITED
Report on the audit of the financial statements
Opinion
In our opinion the financial statements of Inmarsat Global Limited (the ‘company’):
• give a true and fair view of the state of the company’s affairs as at 31 December 2021 and of its profit for the year
then ended;
• have been properly prepared in accordance with United Kingdom adopted international accounting standards,
including Financial Reporting Standard 101 “Reduced Disclosure Framework”; and
• have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements which comprise:
•
•
•
•
•
the income statement;
the statement of comprehensive income;
the balance sheet;
the statement of changes in equity;
the related notes 1 to 29.
The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom
Accounting Standards, including Financial Reporting Standard 101 “Reduced Disclosure Framework” (United Kingdom
Generally Accepted Accounting Practice).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law.
Our responsibilities under those standards are further described in the auditor's responsibilities for the audit of the
financial statements section of our report.
We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the
financial statements in the UK, including the Financial Reporting Council’s (the ‘FRC’s’) Ethical Standard, and we have
fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we
have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting
in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions
that, individually or collectively, may cast significant doubt on the company’s ability to continue as a going concern for a
period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant
sections of this report.
Other information
The other information comprises the information included in the annual report, other than the financial statements and
our auditor’s report thereon. The directors are responsible for the other information contained within the annual report.
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly
stated in our report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to
be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required
to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the
work we have performed, we conclude that there is a material misstatement of this other information, we are required
to report that fact.
We have nothing to report in this regard.
PUBLIC | © INMARSAT
23
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF INMARSAT GLOBAL LIMITED
Report on the audit of the financial statements
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement, the directors are responsible for the preparation of
the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the
directors determine is necessary to enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the 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 the directors either intend to liquidate the company or to cease operations, or have no realistic
alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with
ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line
with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud.
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.
We considered the nature of the company’s industry and its control environment, and reviewed the company’s
documentation of their policies and procedures relating to fraud and compliance with laws and regulations. We also
enquired of management about their own identification and assessment of the risks of irregularities.
We obtained an understanding of the legal and regulatory frameworks that the group operates in, and identified the key
laws and regulations that:
• had a direct effect on the determination of material amounts and disclosures in the financial statements. These
included the UK Companies Act and relevant tax legislation; and
• do not have a direct effect on the financial statements but compliance with which may be fundamental to the
company’s ability to operate or to avoid a material penalty.
We discussed among the audit engagement team including significant component audit teams and relevant internal
specialists such as tax and IT regarding the opportunities and incentives that may exist within the organisation for fraud
and how and where fraud might occur in the financial statements.
As a result of performing the above, we identified the greatest potential for fraud or non-compliance with laws and
regulations in the following areas, and our specific procedures performed to address it are described below:
Accounting for capital expenditure
o Obtaining an understanding of, and testing, relevant controls over the additions to AUC and the annual
impairment review process;
o Discussing material capital projects within the year with the respective project managers in order to understand
the nature of the costs capitalised, inquiring as to the reasons for any significant deviations from budget;
o Challenging management’s assessment of the impact of Covid-19 on each project by inquiring with relevant
project managers as to the ongoing progress of each project;
o Testing the integrity of AUC ageing reports and comparing the profile of capitalised expenditure during the
period to previous periods, in order to identify projects that may be at risk of being abandoned.
In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk
of management override. In addressing the risk of fraud through management override of controls, we tested the
appropriateness of journal entries and other adjustments; assessed whether the judgements made in making accounting
estimates are indicative of a potential bias; and evaluated the business rationale of any significant transactions that are
unusual or outside the normal course of business.
24
PUBLIC | © INMARSAT
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF INMARSAT GLOBAL LIMITED
Report on the audit of the financial statements
In addition to the above, our procedures to respond to the risks identified included the following:
•
reviewing financial statement disclosures by testing to supporting documentation to assess compliance with
provisions of relevant laws and regulations described as having a direct effect on the financial statements;
• performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of
material misstatement due to fraud;
• enquiring of management and in-house legal counsel concerning actual and potential litigation and claims, and
instances of non-compliance with laws and regulations; and
reading minutes of meetings of those charged with governance and reviewing correspondence with HMRC.
•
Report on other legal and regulatory requirements
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
•
the information given in the strategic report and the directors’ report for the financial year for which the financial
statements are prepared is consistent with the financial statements; and
the strategic report and the directors’ report have been prepared in accordance with applicable legal requirements.
•
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit,
we have not identified any material misstatements in the strategic report or the directors’ report.
Matters on which we are required to report by exception
Under the Companies Act 2006 we are required to report in respect of the following matters if, in our opinion:
• adequate accounting records have not been kept, or returns adequate for our audit have not been received from
branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
•
certain disclosures of directors’ remuneration specified by law are not made; or
•
• we have not received all the information and explanations we require for our audit.
We have nothing to report in respect of these matters.
Use of our report
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.
James Isherwood ACA (Senior statutory auditor)
For and on behalf of Deloitte LLP
Statutory Auditor
Birmingham, United Kingdom
30 September 2022
PUBLIC | © INMARSAT
25
2021
1,194.2
(173.2)
(44.2)
(439.5)
25.2
(631.7)
562.5
(290.7)
-
(0.2)
0.3
271.9
192.1
(28.2)
163.9
435.8
(190.6)
245.2
2021
245.2
(1.1)
0.3
(0.8)
244.4
2020
1,137.3
(158.4)
(50.1)
(435.2)
34.4
(609.3)
528.0
(333.9)
(10.3)
-
-
183.8
158.6
(40.0)
118.6
302.4
(84.0)
218.4
2020
218.4
(29.1)
5.5
(23.6)
194.8
Inmarsat Global Limited
Income Statement
For the year ended 31 December 2021
($ in millions)
Revenue
Employee benefit costs
Network and satellite operations costs
Other net operating costs
Own work capitalised
Total net operating costs
EBITDA
Depreciation and amortisation
Impairment loss on fixed and intangible assets
Loss on disposals of assets
Gains on the impairment reversal
Operating profit
Financing income
Financing cost
Net financing income
Profit before income tax
Income tax expense
Profit for the year
Statement of Comprehensive Income
For the year ended 31 December 2021
Notes
4
6
5
5
5
5
7
7
7
8
($ in millions)
Profit for the year
Other comprehensive income
Remeasurement of the defined benefit asset and post-
employment benefits
Tax charged directly to equity
Notes
24
8
Other comprehensive loss for the year, net of tax
Total comprehensive income for the year, net of tax
The accompanying notes are an integral part of the financial statements.
All results relate to continuing operations.
PUBLIC | © INMARSAT
26
Inmarsat Global Limited Balance Sheet As at 31 December 2021 27 PUBLIC | © INMARSAT ($ in millions) Notes As at 31 December 2021 As at 31 December 2020 Assets Non-current assets Property, plant and equipment 11 2,711.5 2,668.5 Intangible assets 12 322.1 360.5 Investments 13 16.8 16.8 Other receivables 16 3,200.7 2,317.9 Right of use assets 14 21.0 28.3 6,272.1 5,392.0 Current assets Cash and cash equivalents 15 346.1 233.5 Short-term deposits 30.0 688.1 Trade and other receivables 16 3,246.3 2,650.5 Inventories 17 11.8 14.8 3,634.2 3,586.9 Total assets 9,906.3 8,978.9 Liabilities Current liabilities Borrowings 18 452.4 472.8 Trade and other payables 19 3,166.3 2,507.2 Provisions 20 4.0 8.1 Current income tax liabilities 21 148.1 153.8 Lease obligations 14 7.9 7.7 3,778.7 3,149.6 Non-current liabilities Borrowings (non-current) 18 1,500.1 1,567.5 Other payables (non-current) 19 11.5 10.9 Provisions (non-current) 20 5.5 4.3 Deferred income tax liabilities 21 460.7 332.9 Lease obligations (non-current) 14 23.1 31.4 2,000.9 1,947.0 Total liabilities 5,779.6 5,096.6 Net assets 4,126.7 3,882.3 Shareholders’ equity Ordinary shares 22 760.6 760.6 Share premium 1,211.2 1,211.2 Other reserves 1.6 1.6 Retained earnings 2,153.3 1,908.9 Total shareholders’ equity 4,126.7 3,882.3 The accompanying notes are an integral part of the financial statements. The financial statements of Inmarsat Global Limited, registered number 3675885, were approved by the Board of Directors on 30 September 2022 and signed on its behalf by: Tony Bates Director Inmarsat Global Limited
Statement of Changes in Equity
For the year ended 31 December 2021
($ in millions)
Balance at 31 January 2020
Profit for the period
Losses on cash flow hedges capitalised on tangible
assets
Comprehensive Income:
Other comprehensive (loss) before tax
Other comprehensive loss – tax
Balance at 31 December 2020
Profit for the period
Losses on cash flow hedges capitalised on tangible
assets
Comprehensive Income:
Other comprehensive (loss) before tax
Other comprehensive loss – tax
Balance at 31 December 2021
1 For IFRIC 23 adjustment, refer to note 2 for further details
2 Refer to note 23 for a reconciliation of this account.
Ordinary
share capital
760.6
Share
premium
1,211.2
Capital
contribution
reserve
1.60
Revaluation
reserve
0.1
Cash flow
hedge
reserve2
(1.2)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
760.6
1,211.2
1.6
0.1
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
760.6
1,211.2
1.6
0.1
Retained
earnings
1,714.1
218.4
Total
3,686.4
218.4
-
1.1
(29.1)
5.5
1,908.9
245.2
(29.1)
5.5
3,882.3
245.2
-
1.1
-
-
(0.1)
-
0.1
(0.1)
-
-
-
-
(1.1)
0.3
2,153.2
(1.1)
0.3
4,126.7
PUBLIC | © INMARSAT
28
Inmarsat Global Limited
Notes to the Financial Statements
For the year ended 31 December 2021
1. General Information
The principal activity of the Company is the supply of global mobile satellite communications services (‘MSS’), providing
data and voice connectivity to end-users worldwide. It is a private company limited by shares incorporated in the United
Kingdom under the Companies Act 2006 and domiciled in England and Wales. The address of its registered office is 99
City Road, London, EC1Y 1AX.
The ultimate controlling party of the Company is Connect Topco Limited which is an entity based in Guernsey. The results
of the Company are consolidated into Connect Topco Ltd (the ‘Group’). The immediate parent company is Inmarsat New
Ventures Limited ("INVL") based in the United Kingdom and registered in England and Wales.
The Group accounts of Connect Topco Ltd can be obtained from the Company’s registered address, 99 City Road,
London, EC1Y 1AX.
These financial statements reflect the activities of the Company, Inmarsat Global Limited (Qatar Branch) being the
Company’s branch office in Qatar, and Inmarsat Global Limited (Fucino Branch) being the Company’s branch office in
Italy.
2. Principal accounting policies
The principal accounting policies adapted in the preparation of these financial statements are set out below. These
policies have been applied consistently to all the years presented unless otherwise stated.
Basis of preparation
The financial statements have been prepared in accordance with Financial Reporting Standard 101, ‘Reduced
disclosure Framework’ (FRS 101). FRS 101 sets out a reduced disclosure framework for a ‘qualifying entity’ as defined
in the standard which addresses the financial reporting requirements and disclosure exemptions in the individual
financial statements of qualifying entities that otherwise apply the recognition, measurement and disclosure
requirements of IFRS. The Company meets the definition of a qualifying entity under FRS 100 ‘Application of Financial
Reporting Requirements’ issued by the FRC. The financial statements have, therefore, been prepared in accordance
with FRS 101.
As permitted by FRS 101, the Company has taken advantage of the disclosure exemptions available under that standard
in relation to financial instruments, financial risk & capital management, presentation of comparative information in
respect of certain assets, presentation of a cash flow statement, standards not yet effective, impairment of assets and
related party transactions, share based payments and financial instruments. Where required, equivalent disclosures
have been given in the Group accounts of Connect Topco Ltd.
In accordance with paragraph 4(a) of IFRS 10 and Section 400 of the Companies Act, the Company has elected not to
prepare consolidated financial statements and has presented separate Company financial statements. Investments are
held at cost less any impairments to date.
The financial statements have been prepared under the historical cost convention, modified for certain items carried at
fair value, as stated in the accounting policies. A summary of the more significant accounting policies is set out below.
These policies have been applied consistently for all the years presented unless otherwise stated.
Going Concern
In determining whether the Company’s financial statements can be prepared on a going concern basis, the Directors’
have considered all the factors likely to affect its future development, performance and its financial position, including
the matters disclosed in the Strategic and Directors’ Report. The Company is part of the Connect Bidco Limited Group
(‘Bidco’), ultimately owned by Connect Topco Limited. The going concern review completed at the date of signing the
Bidco accounts is set out within the Connect Bidco Limited 2021 annual report.
PUBLIC | © INMARSAT
29
Inmarsat Global Limited
Notes to the Financial Statements
For the year ended 31 December 2021
2. Principal accounting policies (continued)
In order to confirm that the Bidco business should adopt the going concern basis in preparing the consolidated financial
statements for 2021, the Board and Management of Bidco have considered a number of possible scenarios and their
impact on future revenues, EBITDA and liquidity. These scenarios consider the latest market information for each
business unit and the impact of actions that have been and can be taken to improve financial performance. The
evaluation uses the most recently approved budget and long-range business plan and considers the maturity profile of
the existing debt facilities and the $USD700 million undrawn revolving credit facility as discussed in note 20 of Connect
Bidco’s annual report for 2021. Under all scenarios there continues to be sufficient headroom to the Financial
Performance Covenant under the debt agreements. As at 31 December 2021, Bidco has $USD1,094.0m of liquid
resources (Cash: $USD364.0m, short-term deposits: $USD30.0m, undrawn RCF: $USD700.0m) and a continued
expectation that Bidco will generate positive free cash flow and reduce leverage over the medium to long term. The
impact of Covid-19 is now confined to the aviation business unit where the aviation industry continues to recover and
steady improvement has been shown throughout 2021. Inmarsat’s robust business model and capital structure, along
with strong positions in a diverse range of geographies and markets will help Inmarsat manage future Covid-19 related
risks.
During 2021 the Connect Topco shareholders accepted an offer from Viasat Inc. to purchase the Group for
approximately $7.3bn. Refer note 29 for further information on this transaction. The going concern assessment has
been performed using the Inmarsat financial performance and position.
At the date of signing these financial statements the Directors have considered all the factors impacting the Company
and Bidco’s business, including downside sensitivities. This includes information pertaining to the potential operational
and financial impacts of Covid-19 to the Company and Bidco. The Directors therefore have a reasonable expectation
that the Company has adequate resources to continue in operational existence for the foreseeable future. Consequently,
the Directors have a reasonable expectation that the Company will continue in operational existence for a period of at
least twelve months from the date of approval of the financial statements and therefore the Company continues to adopt
the going concern basis in preparing the 2021 financial statements.
Basis of accounting
The preparation of the financial statements in conformity with FRS 101 requires management to make certain estimates
and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the Balance Sheet dates and the reported amounts of revenue and expenses during the reported period.
Although these estimates are based on management’s best estimate of the amounts, events or actions, the actual
results ultimately may differ from those estimates. The areas involving a higher degree of judgement or complexity, or
areas where assumptions and estimates are significant to the financial statements are disclosed in note 3.
New accounting policies
In the current financial period, the Company adopted the new or amended IFRS standards that are mandatory for
application. Changes to the company’s accounting policies have been made as required.
The adoption of these new or amended standards did not result in substantial changes to the company’s accounting
policies and had no material effect on the amounts reported for the current financial period.
Foreign currency translation
The functional and presentation currency of the Company is the US dollar, as the majority of operational transactions
are denominated in US dollars.
Foreign exchange gains and losses resulting from the settlement of transactions and the translation of monetary assets
and liabilities denominated in foreign currencies at period end exchange rates are recognised in the income statement
line which most appropriately reflects the nature of the item or transactions.
Revenue
The Company applies the 5 step-model as required by IFRS 15 in recognising its revenues. A contract’s transaction
price is allocated to each distinct performance obligation and recognised as revenue when, or as, the performance
obligation is satisfied.
30
PUBLIC | © INMARSAT
Inmarsat Global Limited
Notes to the Financial Statements
For the year ended 31 December 2021
2. Principal accounting policies (continued)
Mobile satellite communications service revenues result from utilisation charges that are recognised as revenue over
the minimum contract period. The selection of the method to measure progress towards completion requires judgement
and is based on the nature of the products or services to be provided. Because of control transferring over time, revenue
is recognised based on the extent of progress towards completion of the performance obligation. Deferred income
attributable to mobile satellite communications services or subscription fees represents the unearned balances
remaining from amounts received from customers pursuant to prepaid contracts.
The Company enters into minimum spend contracts with customers, known as ‘take-or-pay’ contracts, whereby
customers agree to purchase a minimum value of mobile satellite communications services over a fixed period. Any
unused portion of the prepaid contracts or the take-or-pay contracts (‘breakage’) that is deemed highly probable to occur
by the expiry date is estimated at contract inception and recognised over the contract period in line with the pattern of
actual usage of units by the customer.
Revenue from the sale of prepaid credit is deferred until such time as the customer uses the airtime and subsequently
recognised over time. Breakage from prepaid credit deferrals which is considered highly probable is estimated and
recognised from contract inception. Mobile satellite communications service revenues from capacity sold are recognised
on a straight-line basis over the term of the contract concerned, which is typically between one and 12 months, unless
another systematic basis is deemed more appropriate.
Revenue from spectrum coordination agreements (such as Ligado Networks), is recognised at a point in time based on
standalone selling prices.
Revenue from service contracts is recognised as the service is provided over time based on the contract period.
Revenue of terminals and other communication equipment sold are recognised at the point in time when control is
transferred to the customer. Installation revenues relating to this are also recognised at a point in time. Revenue from
installation of terminals and other communication equipment owned by Inmarsat and used in the delivery of the service
to the customer is however recognised over the contract term.
The Company offers certain products and services as part of multiple deliverable arrangements. Consistent with all
other contracts, the Company will assess whether the performance obligations are distinct by considering whether 1)
the customer can benefit from good or service on its own; or together with other readily available resources 2) the good
or service is distinct in the context of the contract. The transaction price is allocated to each performance obligation
based on its stand-alone selling price relative to the total of all performance obligations’ stand-alone selling prices under
the contract.
The nature of the contracts within the Company may give rise to variable consideration. This is estimated as the most
likely amount based largely on an assessment of the anticipated performance and all information (historical, current and
forecasted) that is reasonably available and is included in the transaction price to the extent that it is highly probable
that a significant reversal in the amount of cumulative revenue will not occur.
Where a contract contains a significant financing component, the Company adjusts the transaction price to a present
value where the effect of discounting is deemed to be material. The Company has adopted the practical expedient
whereby it is not required to adjust the transaction price for the effects of a significant financing component if, at contract
inception, the period between customer payment and the transfer of goods or services is expected to be one year or
less. For contracts with an overall duration greater than one year, the practical expedient also applies if the period
between performance and payment for that performance is one year or less.
A contract asset or a contract liability will arise when the performance of either party exceeds the performance of the
other. Contract assets are rights to consideration in exchange for goods or services that the entity has transferred to a
customer when that right is conditional on something other than the passage of time. Contract liabilities are obligations
to transfer goods or services to a customer for which the entity has received consideration, or for which an amount of
consideration is due to the customer. These are referred to as deferred income within the Company.
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Notes to the Financial Statements
For the year ended 31 December 2021
2. Principal accounting policies (continued)
Contract costs to obtain a contract and fulfil a contract are capitalised and amortised on a systematic basis, consistent
with the pattern of transfer of the goods or services to which the capitalised cost relates. As a practical expedient, a cost
to obtain contract with a customer will be immediately expensed if it has an amortisation period of one year or less.
Financing income and financing cost
Financing income comprises interest receivable on funds invested and the net interest on the net defined benefit asset
and post-employment liability. Financing costs comprise interest payable on borrowings including bank overdraft,
amortisation of deferred financing costs and the unwind of the discount on deferred satellite liabilities.
Financial assets
Trade and other receivables
Trade and other receivables, including prepaid and accrued income, are initially recognised at fair value and
subsequently measured at amortised cost using the effective interest method. Trade and other receivables, including
prepaid and accrued income are classified as financial assets at amortised cost under IFRS-9. The Company stratifies
trade debtors based on internal credit ratings. The Company calculates the loss allowance for trade receivables and
contract assets based on lifetime expected credit losses under the IFRS 9 simplified approach.
Cash and cash equivalents
Cash and cash equivalents, measured at fair value, comprise cash balances, deposits held on call with banks, money
market funds and other short-term, highly liquid investments with maturities of three months or less. Cash and cash
equivalents are classified as financial assets at fair value through profit and loss under IFRS-9. Bank overdrafts are
shown as current liabilities within borrowings on the Balance Sheet.
Short term deposits
Short term deposits, measured at fair value, comprises deposits held with banks, money market funds and other short-
term, highly liquid investments with an original maturity of four to twelve months
Financial liabilities and equity
Trade and other payables
Trade and other payables are recorded initially at fair value and subsequently measured at amortised cost using the
effective interest method.
Borrowings
Borrowings, comprising interest-bearing intercompany loans and bank overdrafts, are initially recognised at fair value
which equates to the proceeds received, net of direct transaction and arrangement costs. They are subsequently
measured at amortised cost.
Borrowings are classified as current liabilities unless the Company has unconditional right to defer settlement of the
liability for at least 12 months after the Balance Sheet date.
Derivative financial instruments
In accordance with its treasury policy, the Company does not hold or issue derivative financial instruments for trading
or speculative purposes. Derivatives are initially recognised at fair value on the date the contract is entered into and
subsequently measured at fair value. The gain or loss on remeasurement is recognised in the income statement, except
where the derivative is used to hedge against risks such as fluctuations in interest rates or foreign exchange rates. The
accounting policy for hedging follows below.
Cash flow hedges
The effective portion of the gain or loss on the hedging instrument is recognised in other comprehensive income and
accumulated in the cash flow hedge reserve, while any ineffective portion is recognised immediately in the income
statement within financing costs.
Where there is a material contract with a foreign currency exposure, a specific hedge to match the specific risk will be
evaluated. At present the Company only hedges certain foreign currency milestone payments to Airbus and Thales for
the construction of the I-6 and GX-5 satellites.
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Inmarsat Global Limited
Notes to the Financial Statements
For the year ended 31 December 2021
2. Principal accounting policies (continued)
Amounts recognised as other comprehensive income are transferred to profit or loss when the hedged transaction
affects profit or loss, such as when the hedged financial income or financial expense is recognised, or when a forecast
sale occurs. When the hedged item is the future purchase of a non-financial asset or non-financial liability, the amount
recognised as other comprehensive income is transferred to the initial carrying amount of the non-financial asset or
liability.
Employee benefits
Wages, salaries, social security contributions, accumulating annual leave, bonuses and non-monetary benefits are
accrued in the year in which the associated services are performed by the employees of the Company.
Termination benefits are payable whenever an employee’s employment is terminated before the normal retirement date
or whenever an employee accepts voluntary redundancy in exchange for these benefits. The Company recognises
termination benefits when it has demonstrably committed to either terminate the employment of current employees or
to provide termination benefits, as a result of an offer made to encourage voluntary redundancy.
The Company recognises liabilities relating to defined benefit pension plans and post-employment benefits in respect
of employees. The Company’s net obligations in respect of defined benefit pension plans and post-employment benefits
are calculated separately for each plan by estimating the amount of future benefit that employees have earned in return
for their service in the current and prior periods; that benefit is discounted to determine its present value, and the fair
value of any plan assets is deducted. The calculations are performed by qualified actuaries using the projected unit
credit method.
All actuarial gains and losses that arise in calculating the present value of the defined benefit obligation and the fair
value of plan assets are immediately recognised in the Statement of Comprehensive Income.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the
income statement as it excludes items of income or expense that are taxable or deductible in other years and items that
are never taxable or deductible. The Company’s liability for current tax is calculated using tax rates that have been
enacted or substantively enacted by the balance sheet date.
Deferred income tax
Deferred tax is provided on temporary differences arising between assets and liabilities’ tax bases and their carrying
amounts (the balance sheet method). Deferred tax is determined using tax rates (and laws) that have been enacted or
substantively enacted by the balance sheet date and are expected to apply when the related deferred tax asset is
realised or the deferred tax liability is settled.
Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against
which the temporary deductible differences or tax loss carry forwards can be utilised.
Deferred tax liabilities are provided on all taxable temporary differences except on those:
• arising from the initial recognition of an asset or liability in a transaction other than a business combination that
at the time of the transaction affects neither accounting nor taxable profit.
• associated with investments in subsidiaries and associates, but only to the extent that the Company controls
the timing of the reversal of the differences, and it is probable that the reversal will not occur in the foreseeable
future.
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Notes to the Financial Statements
For the year ended 31 December 2021
2. Principal accounting policies (continued)
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set them off, when they relate to
income taxes levied by the same taxation authority and if the Company intends to settle its current tax assets and
liabilities on a net basis.
Investment in subsidiaries
Investments in subsidiaries are carried at cost less accumulated impairment losses in the Company’s balance sheet.
On disposal of investments in subsidiaries the difference between disposal proceeds and the carrying amounts of the
investments are recognised in profit or loss.
Research and development costs
Research expenditure is expensed when incurred. Development expenditure is expensed when incurred unless it meets
criteria for capitalisation. Development costs are only capitalised once the technical feasibility and commercial viability
of a business case has been demonstrated and they can be measured reliably. Capitalised development costs are
amortised on a straight-line basis over the period of expected future benefit. Amortisation is recorded in the Income
Statement.
Property, plant and equipment
Space segment assets
Space segment assets comprise satellite construction, launch and other associated costs, including ground
infrastructure. Expenditure charged to space segment projects includes invoiced progress payments, amounts accrued
appropriate to the stage of completion of contract milestones, external consultancy costs and direct internal costs.
Internal costs, comprising primarily staff costs, are only capitalised when they are directly attributable to the construction
of an asset. Progress payments are determined on milestones achieved to date together with agreed cost escalation
indices.
Deferred satellite payments represent the net present value of future payments dependent on the future performance
of each satellite and are recognised in space segment assets when the satellite becomes operational. The associated
liability is stated at its net present value and included within borrowings. These space segment assets are depreciated
over the life of the satellites from the date they become operational and are placed into service.
Assets in the course of construction
These assets will be transferred to space segment assets and depreciated over the life of the satellites or services once
they become operational and placed into service. No depreciation has yet been charged on these assets.
Capitalised borrowing costs
The Company incurs borrowing costs directly attributable to the acquisition, construction or production of an asset that
necessarily takes a substantial period of time to get ready for its intended use or sale and capitalises these borrowing
costs as part of the cost of the asset. Capitalisation commences when the Company begins to incur the borrowing costs
and related expenditures for the asset, and when it undertakes the activities that are necessary to prepare the asset for
its intended use or sale. Capitalisation of borrowing costs ceases when substantially all of the activities necessary to
prepare the asset for its intended use or sale are complete.
Other fixed assets
Other fixed assets are stated at historical cost less accumulated depreciation.
Depreciation
Depreciation is calculated to write-off the historical cost less residual values, if any, of fixed assets, except land, on a
straight-line basis over the expected useful lives of the assets concerned. The Company selects its depreciation rates
and residual values carefully and reviews them annually to take account of any changes in circumstances. When setting
useful economic lives, the principal factors the Company takes into account are the expected rate of technological
developments, expected market requirements for the equipment and the intensity at which the assets are expected to
be used.
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Inmarsat Global Limited
Notes to the Financial Statements
For the year ended 31 December 2021
2. Principal accounting policies (continued)
Derecognition
A fixed asset is derecognised upon disposal or when no future economic benefit is expected from its use or disposal.
Any gain or loss arising on derecognition of the asset, calculated as the difference between the net disposal proceeds
and the carrying amount of the asset, is included in the Income Statement.
Intangible assets
Intangible assets comprise patents, trademarks, software, terminal development and network access costs, spectrum
rights, orbital slots and licences, customer relationships, unallocated launch slots and intellectual property.
Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired
in a business combination is the fair value at the date of acquisition. After initial recognition, intangible assets are carried
at cost less any accumulated amortisation and accumulated impairment losses.
Internally generated intangibles, excluding capitalised development costs, are not capitalised and the related
expenditure is recognised in profit or loss in the period in which the expenditure is incurred. Development costs directly
relating to the development of new services are capitalised as intangible assets once a business case has been
demonstrated as to technical feasibility and commercial viability.
Intangible assets with a finite useful life are amortised on a straight-line basis over the life of the asset and the
amortisation period and method are reviewed each financial year. Intangible assets with an indefinite useful life are
reviewed annually for impairment.
Leases
Contracts which convey the right to control the use of an identified asset for a period of time in exchange for
consideration are accounted for as leases by the Company. At the commencement date, the Company, as lessee,
recognises a right of-use asset and a lease liability. The lease liability is measured at the present value of the lease
payments that are not paid at that date, discounted using the rate implicit in the lease, unless such a rate is not readily
determinable, in which case the incremental borrowing rate is used.
The right-of use asset comprises the amount of the initial measurement of the lease liability, adjusted for any lease
payments made at or before the commencement date, less any lease incentives received and any initial direct costs
incurred by the Company. Lease term is determined as the non-cancellable period of a lease adjusted for any reasonably
certain extension or termination option. After commencement date, the right-of use asset is depreciated on a straight-
line basis to the end of the lease term. The lease liability is accounted for by reducing the carrying amount to reflect the
lease payments made, and increasing the carrying amount to reflect the interest on the lease liability.
Impairment reviews
All assets that are subject to depreciation or amortisation are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable. Indicators of impairment may include changes
in technology and business performance. For the purposes of assessing impairment, assets are grouped at the lowest
levels for which there are separately identifiable and independent cash flows, these are known as cash generating units.
An impairment loss is recognised in the Income Statement whenever the carrying amount of an asset exceeds its
recoverable amount.
The recoverable amount is the higher of an asset’s fair value less costs of disposal and value in use. In assessing value
in use, estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific to the asset.
An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount.
An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount
that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
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Notes to the Financial Statements
For the year ended 31 December 2021
2. Principal accounting policies (continued)
Inventories
Inventories are stated at the lower of cost (determined by the weighted average cost method) and net realisable value.
Allowances for obsolescence are recognised in other operating costs when there is objective evidence that inventory is
obsolete.
Provisions
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event.
It is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be
made of the amount of the obligation. The expense relating to a provision is presented in the Income Statement.
3. Critical accounting judgements and key sources of estimation uncertainty
In applying the Company’s accounting policies, which are described in note 2, the directors are required to make
judgements (other than those involving estimations) that have a significant impact on the amounts recognised and to
make estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from
other sources. The estimates and associated assumptions are based on historical experience and other factors that are
considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the year in which the estimate is revised if the revision affects only that period, or in the period of the
revision and future periods if the revision affects both current and future periods.
Key sources of estimation uncertainty
The key assumptions concerning the future, and other key sources of estimation uncertainty at the reporting period that
may have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the
next financial year, are discussed below.
(a) Taxation
The calculation of the Company’s uncertain tax provisions involves estimation in respect of certain items whose tax
treatment cannot be finally determined until resolution has been reached with the relevant tax authority, or, as
appropriate, through a formal legal process. Issues can, and often do, take a number of years to resolve. The amounts
recognised or disclosed are derived from the Company’s best estimation. However, the inherent uncertainty regarding
the outcome of these means eventual realisation could differ from the accounting estimates and therefore impact the
Company’s results and cash flows.
In the event that all such enquiries were settled entirely in favour of the authorities, the Company would incur a cash tax
outflow of $129m, excluding interest, during 2021. The quantum and timing of this cost remains uncertain but it is
substantially provided for and the enquiries remain ongoing at this time. The largest provision held of $100m is in relation
to a long running tax case concerning tax deductions for historic launch costs. The Company’s 1999 claim for a tax
deduction for satellite launch costs was heard at the Upper Tribunal which ruled in favour of HMRC in March 2021 on
one point of legal interpretation. Inmarsat subsequently appealed directly to the Court of Appeal which was granted and
a hearing set for June 2022.
The case was heard by the Court of Appeal on 21 and 22 June 2022. In July 2022, the judges issued their verdict,
finding in favour of HMRC. We have applied for the case to be heard at the Supreme Court and we await the outcome.
As at 31 December 2021, the Company has provided fully for the potential cost of c.$125m, comprising tax ($100m)
and interest ($25m).
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Notes to the Financial Statements
For the year ended 31 December 2021
3. Critical accounting estimates and key judgements (continued)
Critical judgements in applying the Company’s accounting policies
In the process of applying the Company’s accounting policies, the following judgements have been made, which have
the most significant effect on the amounts recognised in the financial statements:
(b) Revenue in respect of the Ligado Networks
There have been no material developments regarding Ligado during 2021 and our collectability assessment of future
receipts remains unchanged. A summary of Ligado, including the current outstanding balances, is provided below.
In December 2007, Inmarsat and Ligado Networks LLP (formerly LightSquared LP and LightSquared Inc.), and Ligado
Networks (Canada) Inc. (formerly Skyterra (Canada) Inc.) entered into a 100 year Cooperation Agreement for the
efficient use of L-band spectrum over North America. The Cooperation Agreement has been modified a number of times,
and this has been assessed against IFRS-15 as to whether the modification is treated as a new contract or an
amendment to an earlier contract. The most recent amendments were signed in 2020 (amendment 5 & 6) under which
Ligado paid $700m. The amendments also reduced all future quarterly payments by 60% and deferred Q2 2020 to Q4
2022 quarterly payments as well as all previously deferred amounts to 1 January 2023, at which date a payment of
$395m, including interest, falls due. Additionally there is a call option available until 15 October 2025 for Ligado to buy
out all remaining lease payment obligations to 2107 for a cash payment ranging between $825m - $968m.
For the year ended 31 December 2021, the Company recognised $nil revenue or operating costs (year ended 31
December 2020: $33.3m and $nil respectively). Given the level of uncertainty around the collection of future monies,
the Company ceased to apply the IFRS15 five step model from Q2 2020 to Amendments 5 & 6. Based on the continued
level of uncertainty, no revenue has been recognised during 2021.
At 31 December 2021, deferred income of $906.5m (2020: $906.5m) was recorded on the balance sheet. $206.5m
represents services not yet performed relating to issues including interference resolution for which payment has already
been received from Ligado. $700m represents the upfront payment received pursuant to Amendment 5 & 6. At 31
December 2021 a receivable, net of bad debt, of $17.2m (2020: $17.2m) has been recorded on the balance sheet
relating to the deferrals and an interest receivable, net of bad debt, of $3.9m (2020: $3.9m). A 51% impairment has
been recognised in the prior year in order to comply with IFRS-9 and align with our conclusion that uncertainty remains
around the collection of future monies. No adjustment to this provision was required in 2021. If Ligado failed to make
remaining payments as they fall due, this default would release Inmarsat from its remaining obligations, which would
trigger the recognition in the income statement of the remaining deferred income resulting in a net gain to the Company.
(c) Capitalisation of space segment assets and associated borrowing costs
The net book value of space segment assets is currently $1,407.7m (2020: $1,570.9m). There have been additions and
transfers from assets in the course of construction of $5.0m in the year (2020: $182.2m). The key judgements involved
in the capitalisation of space segment assets and associated borrowings costs are:
• Whether the capitalisation criteria of the underlying IAS have been met.
• Whether an asset is ready for use and as a result further capitalisation of costs should cease and depreciation
should commence.
• Whether an asset is deemed to be substantially complete and as a result capitalisation of borrowing costs should
cease.
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Inmarsat Global Limited
Notes to the Financial Statements
For the year ended 31 December 2021
4. Revenue
Revenue, which is stated net of value added tax, represents amounts received and receivable from the Company’s
continuing principal activity. During the year ended 31 December 2021, 95.1% (2020: 95.2%) of the Company’s revenue
was to markets outside the United Kingdom.
5. Profit before income tax
Costs are presented by the nature of the expense to the Company. Network and satellite operations costs comprise
costs to third parties for network service contracts, operating lease rentals and services. A further breakdown of
employee benefit costs is given in note 6.
Profit before income tax is stated after charging the following items:
($ in millions)
Depreciation of property, plant and equipment
Amortisation of intangible assets
Depreciation of right-of-use assets
Gains on the impairment reversal
Impairment1
Notes
11
12
14
11,12
2021
197.2
86.3
7.3
(0.6)
0.3
2020
252.2
74.2
7.4
-
10.3
1 In 2021 the $0.3m impairment expense relates to an intangible asset impairment. In 2020 the impairment relates to $8.2m and $2.7m of tangible
and intangible asset impairments respectively, offset by a reversal of $0.6m.
($ in millions)
Cost of inventories recognised as an expense
Research costs expensed
Intercompany management charges
Professional Fees
Other operating costs
Total other net operating costs
The analysis of the Auditor’s remuneration is as follows:
($ in millions)
Fees payable to the Company’s Auditor for the audit of the
Company’s annual accounts
Total audit fees
Fees payable to the Company’s Auditor for other services to the
Company:
- Other Services
Total other fees payable
Total Auditor’s remuneration
2021
24.3
10.1
316.2
37.0
51.8
439.5
2020
25.5
2.5
297.6
26.2
83.4
435.2
2021
2020
0.1
0.1
-
-
0.1
0.1
0.1
-
-
0.1
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Inmarsat Global Limited
Notes to the Financial Statements
For the year ended 31 December 2021
6. Employee benefit costs
($ in millions)
Wages and salaries
Social security costs
Share options charge (including employers’ National Insurance
contribution)
Defined contribution pension plan costs
Total employee benefit costs
None of the Directors received any remuneration from the Company during the year (2020: nil).
2021
143.1
17.1
3.9
9.1
173.2
2020
134.0
14.9
1.0
8.5
158.4
Employee numbers
The average monthly number of people (including the Executive
Directors) employed during the year by category of employment:
Operations
Sales and marketing
Development and engineering
Administration
Total
7. Financing income
($ in millions)
Intercompany interest payable
Other interest
Financing costs
Less: Amounts included in the cost of qualifying assets(a)
Total financing costs
Intercompany interest receivable
Bank interest receivable and other interest
Dividend Revenue from Group undertakings
Total financing income
Net financing income
2021
383
156
151
214
903
2020
473
166
145
236
1,020
2021
85.5
9.3
94.8
(66.6)
28.2
188.3
2.0
1.8
192.1
163.9
2020
93.9
9.7
103.6
(63.6)
40.0
155.2
3.4
-
158.6
118.6
(a) Borrowing costs included in the cost of qualifying assets during the year are calculated by applying a capitalisation rate to expenditure on such
assets. The average interest capitalisation rate for the year was 6.5% (2020: 7.0%).
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Inmarsat Global Limited
Notes to the Financial Statements
For the year ended 31 December 2021
8. Taxation
Tax charge recognised in the Income Statement:
($ in millions)
Current tax:
Current year
Adjustments in respect of prior periods
Total current tax charge
Deferred tax:
Origination and reversal of temporary differences
Adjustments due to changes in corporation tax rates
Adjustments in respect of prior periods
Total deferred tax charge
Total income tax charge
($ in millions)
Profit before tax
Income tax at 19.0% (2020: 19.0%)
Differences in overseas tax rates
Adjustments in respect of prior periods
Adjustments due to changes in corporation tax rates
Impact of fixed asset disposals and impairments
Impact of UK patent box regime
Unrelieved foreign tax
Other non-deductible expenses / non-taxable income
Total income tax charge
Tax charged to equity:
($ in millions)
Deferred tax charge on share based payments
Total tax credited to equity
Tax charged to OCI:
($ in millions)
Deferred tax credit on actuarial gains and losses from pension
and post- employment benefits
Total tax credited to equity
9. Net foreign exchange gains
($ in millions)
Other foreign exchange gains
Total foreign exchange gains
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2021
2020
(38.9)
(23.8)
(62.7)
(34.8)
(105.6)
12.5
(127.9)
(190.6)
2021
435.8
(82.8)
0.8
(11.3)
(105.7)
0.1
5.8
-
2.5
(190.6)
(39.0)
27.1
(11.9)
(13.0)
(33.5)
(25.6)
(72.1)
(84.0)
2020
302.4
(57.5)
0.9
1.5
(32.0)
(2.0)
6.3
(0.6)
(0.6)
(84.0)
2021
2020
-
-
-
-
2021
2020
0.3
0.3
5.4
5.4
2021
0.5
0.5
2020
0.3
0.3
Inmarsat Global Limited
Notes to the Financial Statements
For the year ended 31 December 2021
10. Dividends
The Company declared no dividends and paid no existing dividends payable during the year ended 31 December 2021
(2020: $nil).
11. Property, plant and equipment
($ in millions)
Cost at 1 January 2021
Additions
Transfers from assets in the course of construction
Transfers
Impairment
Disposals
Cost at 31 December 2021
Accumulated depreciation at 1 January 2021
Charge for the year
Disposals
Impairment
Accumulated depreciation at 31 December 2021
Services
equipment,
fixtures and
fittings Space segment
3,951.5
7.8
5.0
2.5
323.8
3.0
2.8
2.0
-
(5.9)
325.7
(202.5)
(24.3)
5.9
-
-
-
3,966.8
(2,380.6)
(172.9)
-
-
(220.9)
(2,553.5)
Assets in the
course of
construction
985.2
257.9
(7.8)
(33.0)
-
-
1,202.3
(8.9)
-
-
-
-8.9
Total
5,260.5
268.7
-
(28.5)
-
(5.9)
5,494.8
(2,592.0)
(197.2)
5.9
-
(2,783.3)
Net book amount at 31 December 2020
Net book amount at 31 December 2021
121.3
104.8
1,570.9
1,413.3
976.3
1,193.4
2,668.5
2,711.5
The lives assigned to significant tangible fixed assets are:
Space segment assets:
- Satellites
- Other space segment assets, including ground infrastructure
- Fixtures and fittings, and services-related equipment
13–15 years
5–12 years
3–15 years
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Inmarsat Global Limited
Notes to the Financial Statements
For the year ended 31 December 2021
12. Intangible Assets
($ in millions)
Cost:
Cost at 1 January 2021
Additions
Disposals
Impairments
Transfers
Cost at 31 December 2021
Accumulated depreciation:
Accumulated depreciation at 1 January
2021
Charge for the year
Disposals
Impairment losses
Accumulated depreciation at 31
December 2021
Net book amount at 31 December
2020
Net book amount at 31 December
2021
Terminal
development
and network
access
costs
Spectrum
rights, orbital
slots and
licenses
Customer
relationships Software Trademarks
Total
241.7
13.7
(1.4)
-
-
100.9
7.3
-
-
-
13.6
-
-
-
-
254.0
108.2
13.6
456.8
27.8
(12.3)
-
(0.4)
471.9
0.1 813.1
- 48.8
- (13.7)
-
-
(0.4)
0.1 847.8
-
(197.4)
(19.7)
1.4
-
(40.8)
(6.2)
-
-
(13.6)
-
-
-
(200.9)
(60.4)
12.1
(0.3)
- (452.6)
- (86.3)
- 13.5
(0.3)
-
(215.7)
(47.0)
(13.6)
(249.5)
- (525.7)
44.3
38.3
60.1
61.2
-
255.9
0.1 360.5
-
222.4
0.1 322.1
The Company capitalises costs associated with the development and enhancement of user terminals and associated
network access costs as intangible assets and amortizes these over the estimated sales life of the related services,
which range from five to ten years.
Other consists of orbital slots, licences, spectrum rights and unallocated launch slots. Orbital slots and licences relate
to the Company’s satellite programmes, and each individual asset is reviewed to determine whether it has a finite or
indefinite useful life. Orbital slots are amortised over the useful life of the satellite occupying them. Amortisation of the
GX programme finite life assets commenced when the Inmarsat-5 satellites went operational in December 2015.
Unallocated launch slots are not amortised until allocated to a satellite asset where they are re-classed to Property,
Plant and Equipment and depreciated in-line with Company policy discussed in note 2.
Customer relationships represent the consideration paid by the Company in relation to its appointment as the
exclusive wholesaler of existing ACeS services. This has now been fully amortised.
Software includes the Company’s billing system and other internally developed operational systems and purchased
software, which are being amortised on a straight-line basis over its estimated useful life of three to eight years.
The Company capitalises costs associated with the development and enhancement of user terminals and associated
network access costs as intangible assets and amortises these over the estimated sales life of the related services,
which range from five to ten years.
13. Investments
($ in millions)
Investment in Inmarsat New Zealand Limited
Total investments
Refer to note 27 for a list of registered addresses of the Company's investments.
42
As at 31
December
2021
16.8
16.8
As at 31
December
2020
16.8
16.8
PUBLIC | © INMARSAT
Inmarsat Global Limited
Notes to the Financial Statements
For the year ended 31 December 2021
14. Leases
Right of use assets
The right of use assets for the Company's property and vehicle leases are presented in the table below.
($ in millions)
Net carrying amount:
1 January
Changes in terms
Charge for the year
Total at 31 December
2021
2020
28.3
-
(7.3)
21.0
33.9
1.8
(7.4)
28.3
The Company does not hold options to purchase any leased assets for a nominal amount at the end of the lease term.
The Company expenses short-term leases and low-value assets as incurred which is in accordance with the recognition
exemption in IFRS 16.
Lease liabilities
Lease liabilities are calculated at the present value of the lease payments that are not paid at the commencement date.
The company's lease liabilities as of 31 December 2021 comprise only the transition of existing contracts. The maturity
of lease liabilities is shown on the balance sheet. No other lease liabilities are held.
The remaining lease term of the Company's property lease is 2.9 years. The maturity profile of the company's leases is
shown in the table below.
($ in millions)
Within one year
Between two to five years
Greater than five years
Total at 31 December
2021
7.9
23.1
2020
7.7
31.4
-
-
31.0
39.1
For the year ended 31 December 2021, the discount rate applied to property leases was 3.4% (2020: 3.4%). Interest
rates are fixed at the contract date. All leases are on a fixed repayment basis and no arrangements have been entered
into for contingent rental payments. The total cash flow relating to all lease obligations in 2021 was $9.0m (2020: $8.5m)
with lease obligations denominated predominantly in Sterling. Total lease interest paid was $1.2m (2020: $1.4m). The
Company does not face a significant liquidity risk with regard to its lease liabilities. The Company’s obligations are
secured by the lessors’ title to the leased assets for such leases.
15. Cash and cash equivalents
Cash and cash equivalents includes cash in hand, deposits held on call with banks, other short term highly liquid
investments with original maturities of three months or less. Bank overdrafts are shown within borrowings in current
liabilities on the Balance Sheet. At 31 December 2021, the Group has $30m of cash held in short-term deposits with an
original maturity of between four to twelve months (2020: $688.1m).
($ in millions)
Cash at bank and in hand
Cash and cash equivalents
As at 31
December
2021
346.1
346.1
As at 31
December
2020
233.5
233.5
43
PUBLIC | © INMARSAT
Inmarsat Global Limited
Notes to the Financial Statements
For the year ended 31 December 2021
16. Trade and other receivables
($ in millions)
Current:
Trade receivables
Other receivables
Amounts due from Group undertakings
Prepayments and accrued income
($ in millions)
Non-current:
Loans due from Group undertakings
Pension surplus
As at 31
December
2021
As at 31
December
2020
111.7
9.1
3,074.6
50.9
3,246.3
134.9
14.6
2,464.3
36.7
2,650.5
Effective Interest %
As at 31
December
2021
As at 31
December
2020
3m USD Libor
3,200.7
-
3,200.7
2,314.4
3.5
2,317.9
The Directors consider the carrying value of trade and other receivables to approximate to their fair value. Amounts
due from Group undertakings are all repayable on demand.
17. Inventories
($ in millions)
Finished goods
Total inventories
18. Borrowings
($ in millions)
Current:
Borrowings from Group undertakings
Total current borrowings
Non-Current:
Borrowings from Group undertakings
Total non-current borrowings
Total borrowings
The maturity of non-current borrowings is as follows:
($ in millions)
Within one year
Between two and five years
Greater than five years
As at 31
December
2021
11.8
11.8
As at 31
December
2020
14.8
14.8
Effective Interest %
As at 31
December
2021
As at 31
December
2020
1.9%
452.4
452.4
472.8
472.8
Libor +3.7% 1,500.1
1,500.1
1,952.5
1,567.5
1,567.5
2,040.3
As at 31
December
2021
452.4
As at 31
December
2020
472.8
-
-
1,500.1
1,952.5
1,567.5
2,040.3
The borrowings which fall due after five years are due December 2026 and incurring interest Libor+3.7%. The
Directors consider the carrying value of borrowings to approximate to their fair value.
44
PUBLIC | © INMARSAT
Inmarsat Global Limited
Notes to the Financial Statements
For the year ended 31 December 2021
19. Trade and other payables
($ in millions)
Current:
Trade payables
Other taxation and social security payables
Other creditors
Amounts due to Group undertakings
Accruals and deferred income
Non-current:
Defined benefit pension and post employment liability
As at 31
December
2021
As at 31
December
2020
41.3
3.3
9.4
2,043.5
1,068.8
3,166.3
44.1
3.6
29.5
1,401.0
1,029.0
2,507.2
11.5
11.5
10.9
10.9
The Directors consider the carrying value of trade and other payables to approximate to their fair value.
20. Provisions
($ in millions)
As at 31 December 2020
Charged in respect of current year
Utilised in current year
Reversal in the year
As at 31 December 2021
Non-current
Current
As at 31 December 2021
A. Restructuring
Restructuring
4.2
3.4
(6.1)
-
1.5
-
1.5
1.5
Contract
Obligation
7.8
3.1
(1.3)
(2.2)
7.4
5.0
2.4
7.4
Deferred
salary
0.5
-
-
-
0.5
0.5
-
0.5
Total
12.5
6.5
(7.4)
(2.2)
9.5
5.5
4.0
9.5
The restructuring provision relates to an organisational development review which began in 2020, in response to the
Covid-19 pandemic. As part of that review, a number of roles came under consultation, ultimately resulting in employee's
exiting the business. The provision is calculated based on the estimated costs from the terms of relevant employee
contracts. The remaining provision is expected to be utilised within 1 year.
B. Contract Obligation
Contract obligation provisions relate to various contracts within the Aviation business unit, which are expected to result
in an outflow of economic benefit as a result of the contract terms. The provisions are calculated using various best
estimate methods including weighted probability of a range of potential outcome. The costs do not include future
operating costs.
C. Deferred Salaries
Deferred salary payments is a regulatory provision in Italy that is paid upon the termination of the employment
relationship. The provision is calculated based on the estimated costs based on the terms of the relevant contracts
and the number of years worked.
45
PUBLIC | © INMARSAT
Inmarsat Global Limited
Notes to the Financial Statements
For the year ended 31 December 2021
21. Current and deferred income tax assets and liabilities
The current income tax liability of $148.1m (2020: $153.8m) represents the income tax payable in respect of current
and prior periods less amounts paid.
Recognised deferred income tax assets and liabilities
The movements in deferred income tax assets and liabilities (prior to the offsetting of balances within the same
jurisdiction as permitted by IAS 12) during the period are shown below.
($ in millions)
Property, plant and equipment and intangible
assets
Borrowing costs capitalised in the cost of qualifying
assets
Other
Pension and post employment benefits
Net deferred income tax liabilities
As at 31 December 2021
Net
391.8
Assets Liabilities
391.8
-
As at 31 December 2020
Net
Assets Liabilities
289.6
-
-
73.2
(1.1)
(3.2)
(4.3)
-
-
465.0
73.2
(1.1)
(3.2)
460.7
-
46.2
(0.8)
-
(0.8)
-
(2.1)
333.7
289.6
46.2
(0.8)
(2.1)
332.9
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets
against current tax liabilities and when the deferred income taxes relate to the same fiscal authority.
The value of deferred income tax assets and liabilities included in the net deferred income tax balance is shown
below:
($ in millions)
Deferred tax asset
Deferred tax liability
2021
(4.3)
465.0
460.7
2020
(0.8)
333.7
332.9
Movement in temporary differences during the year:
($ in millions)
Property, plant and equipment and intangible assets
Borrowing costs capitalised in the cost of qualifying assets
Other
Pension and post employment benefits
Total
($ in millions)
Property, plant and equipment and intangible assets
Borrowing costs capitalised in the cost of qualifying assets
Other
Pension and post employment benefits
Total
As at 1
January
2021
289.6
46.2
(0.8)
(2.1)
332.9
Recognised
in income
statement
102.2
27.0
(0.3)
(0.8)
128.1
As at 1
January
2020
225.3
37.3
(0.2)
3.5
265.9
Recognised
in income
statement
64.3
8.9
(0.6)
(0.2)
72.4
Recognised
in
OCI/equity
Recognised
in
OCI/equity
As at 31
December
2021
391.8
73.2
(1.1)
(3.2)
460.7
-
-
-
(0.3)
(0.3)
As at 31
December
2020
289.6
46.2
(0.8)
(2.1)
332.9
-
-
-
(5.4)
(5.4)
The Budget announced by the Chancellor on 3 March 2021, included changes to the main rate of corporation tax for
UK companies. The standard rate of corporation tax remains at 19% for the financial year commencing 1 April 2021,
however this will be increased to 25% from 1 April 2023. UK deferred tax has been recognised in the accounts at a rate
of 25% on the basis that this is the substantively enacted rate at 31 December 2021. However, in the September 2022
Mini Budget it was announced that the increase to 25% would now not occur and the Corporation Tax Rate would
instead be held at 19%. This rate has not been substantively enacted at the balance sheet date, and as the result the
deferred tax balances as at 31 December 2021 continue to be measured at the hybrid rate noted above. The estimated
impact of the reversal of the corporation tax rate increase would be to reduce the deferred tax balance liability by
$105.0m.
46
PUBLIC | © INMARSAT
Inmarsat Global Limited
Notes to the Financial Statements
For the year ended 31 December 2021
22. Ordinary share capital
2. Ordinary share capital
($ in millions)
01 ordinary shares of £1 each (2018: 473,935,801)
Allotted, issued and fully paid:
473,935,801 ordinary shares of £1 each (2020: 473,935,801)
As at 31
9
December
2021
As at 31
December
2020
760.6
760.6
During the year ended 31 December 2021 no new shares were issued by the Company (2020: no new shares were
issued).
23. Reserves
Cash flow hedge reserve:
($ in millions)
Balance as at 1 January
Gain/(loss) recognised on cash flow hedges:
Forward exchange contracts
Reclassified to the Income Statement Forward exchange
contracts:
Forward exchange contracts
Balance as at 31 December
2021
(0.1)
2020
(1.2)
0.1
-
-
-
1.1
(0.1)
There are no gains and losses reclassified from equity included within the income statement for the period ended 31
December 2021 (2020: nil). Gains and losses relating to the effective portion of cash flow hedges are recognised in
other comprehensive income and accumulated in the cash flow hedge reserve. When a hedged item is recognised in
the income statement the cumulative deferred gain or loss accumulated in other comprehensive income and the cash
flow hedge reserve is reclassified to the income statement. When a hedged item is recognised as a non financial asset
or liability in the balance sheet the accumulated gain or loss is removed from the cash flow hedge reserve and included
directly in the initial cost of the assets or liability.
24. Pension arrangements and post-employment benefits
The Company operates pension schemes in each of its principal locations. The Company’s pension plans are provided
through both defined benefit schemes and defined contribution arrangements.
The Company operates defined benefit pension schemes in the United Kingdom, regulated by the Pensions Regulator.
The Company’s principal defined benefit pension plan was the Inmarsat Global scheme, which was a UK funded scheme
with assets held in a separate fund administered by a corporate trustee; the scheme is closed to new employees and
the Company closed the defined benefit plan to future accruals during 2017. The trustee is required by law to act in the
interest of the fund and of all relevant stakeholders in the scheme.
During October 2020, the Trustees of the UK pension plan entered into a bulk annuity insurance contract with Aviva Life
& Pension UK Limited (Aviva), a UK insurance company authorised by the Prudential Regulation Authority and regulated
by the Financial Conduct Authority in respect of the liabilities of the Inmarsat Global defined benefits scheme. This is
known as a ‘buy-in’. Under this policy Aviva undertakes, via the Plan, to pay the Plan’s benefit obligations as they fall
due. The insurer has paid cash into the scheme matching the benefits due to members. The Trustees retain the legal
obligation for the benefits provided under the scheme. As the buy-in policy is a qualifying insurance asset, the fair value
of the insurance policy is deemed to be the present value of the obligations that have been insured. The policy secured
exactly matches the benefits due to scheme members under the scheme’s Trust Deed and Rules, and the asset has
therefore been set equal to the liabilities covered. Therefore, any future change in the valuation of the liabilities are
matched by a corresponding movement in the valuation of the insurance asset. The buy-in has resulted in a re-
measurement of the scheme’s assets, with an actuarial loss recognised in the Company’s Statement of Comprehensive
Income. As at 31 December 2020, following the buy-in, there is a net defined benefit asset of $3.5m on the Balance
Sheet reflecting the remaining assets held by the scheme. The value of this asset is nil at 31 December 2021 as it was
used to fund defined contribution obligations under the scheme. A buy-out, whereby the legal obligation for the benefits
provided under the scheme shift to the insurer, has not yet occurred but is expected during 2022.
47
PUBLIC | © INMARSAT
Inmarsat Global Limited
Notes to the Financial Statements
For the year ended 31 December 2021
24. Pension arrangements and post-employment benefits (continued)
Given the Company still hold the liability obligations under the Inmarsat Global defined benefit plan, this plan has been
valued using the projected unit credit method with the valuation undertaken by professionally qualified and independent
actuaries as at 31 December 2021. The results of the valuation, which have been updated for any material transactions
and material changes in circumstances (including changes in market prices and interest rates) up to 31 December 2021,
are set out below. There are no guaranteed minimum pension (‘GMP’) benefits held under the scheme.
The Plan’s investment in a bulk annuity policy represents a concentration risk with the annuity provider not making the
required payments. The policy in place is governed by substantial insurance market solvency regulations and the
Trustee has further mitigated this credit risk through careful choice of provider and contract terms. The Trustee
recognises that the investment in the bulk annuity contract is illiquid. Additionally, the Plan is exposed to operation risk
in relation to the buy-in with the insurance company, as it is the insurer that is taking on the majority of risks in relation
to the Plan’s defined benefit liabilities.
There have been no plan amendments, curtailments or settlements since the previous year end that we have been
made aware of. The plan closed to future DB accrual with effect from 1 April 2017.
The Company also provides post-employment benefits for some of its employees. The Company’s principal scheme is
the Inmarsat Global post-retirement healthcare benefit scheme, which is the provision of healthcare to retired employees
(and their dependants) who were employed before 1 January 1998. Employees who have 10 years of service at the age
of 58 and retire are eligible to participate in the post-retirement healthcare benefit plans. Membership of this plan is
multinational, although most staff are currently employed in the UK. The plans are self-funded and there are no plan
assets from which the costs are paid. The cost of providing these benefits is actuarially determined and accrued over
the service period of the active employee groups. The Company’s post-retirement medical liability includes a £100
excess, required since January 2020.
There have been no pension plan amendments, curtailments or settlements since the previous year end that we have
been made aware of, other than the buy-in disclosure above. Schemes denominated in local currencies are subject to
fluctuations in the exchange rate between US Dollars and local currencies.
The principal actuarial assumptions used to calculate the Company’s pension and post-employment benefits liabilities
under IAS 19 are:
Weighted average actuarial assumptions:
Discount rate
Future salary increases
Medical price inflation
Future pension increases
As at 31
December
2021
As at 31
December
2020
1.8%
5.2%
3.3%
3.3%
1.5%
7.0%
2.9%
2.9%
Mortality assumptions have been updated to reflect experience and expected changes in life expectancy. The average
life expectancy assumptions for the Company’s pension and post-employment benefits liabilities are as follows:
Male current age 65
Female current age 65
Life
Life
expectancy expectancy
2020
88.3
89.4
2021
88.4
89.6
Mortality assumptions used are consistent with those recommended by the individual scheme actuaries and reflect the
latest available tables, adjusted for the experience of the Company where appropriate. For the Inmarsat Global defined
benefit pension scheme and the Inmarsat Global post-retirement healthcare benefits for 2021, mortality has been
assumed to follow the S2PA tables with -1 year age rating for males and CMI 2017 improvement with a long-term trend
of 1.75% pa.
Significant actuarial assumptions for the determination of the defined benefit obligation are discount rate, expected
salary increase, mortality and healthcare cost trend rates. The sensitivity analysis below is for the Company’s principal
pension and post-employment benefits schemes, and has been determined based on reasonable possible changes of
the assumptions occurring at the end of the reporting period assuming that all other assumptions are held constant.
48
PUBLIC | © INMARSAT
Inmarsat Global Limited
Notes to the Financial Statements
For the year ended 31 December 2021
24. Pension arrangements and post-employment benefits (continued)
Inmarsat Global defined benefit scheme:
Change in assumption ($ in millions)
Increase in discount factor of 0.25%
Decrease in discount factor of 0.25%
Increase in inflation of 0.25%
Decrease in inflation of 0.25%
Mortality: -1 year
Inmarsat Global post-retirement healthcare benefit scheme:
Change in assumption ($ in millions)
Increase in discount factor of 0.5%
Increase in inflation of 0.5%
Increase in medical price inflation trend rate of 1%
Decrease in medical price inflation trend rate of 1%
Impact on
benefit
obligation
increase/
(decrease)
(6.4)
6.9
7.1
(6.7)
4.6
Impact on
projected
pension
cost
increase/
(decrease)
-
-
-
-
-
Impact on
benefit
obligation
increase/
(decrease)
(1.2)
1.3
2.8
(2.2)
Impact on
service
cost
increase/
(decrease)
-
-
0.1
(0.1)
In reality, there is an expectation of inter-relationships between the assumptions, for example, between discount rate
and inflation. The above analysis does not take the effect of these inter-relationships into account.
Amounts recognised in the balance sheet are:
At 31
December
2021
(124.1)
(11.5)
124.1
(11.5)
At 31
December
2020
(122.8)
(10.9)
126.3
(7.4)
At 31
December
2021
At 31
December
2020
3.5
-
(11.5)
(10.9)
($ in millions)
Present value of funded defined benefit obligations (pension)
Present value of unfunded defined benefit obligations (post-employment benefits)
Fair value of defined benefit assets
Net defined benefit (liability) / asset recognised in the balance sheet
The above net (liability) / asset is recognised in the balance sheet as follows:
($ in millions)
Defined benefit pension asset
Defined benefit pension and post-employment liability
Notes
16
19
49
PUBLIC | © INMARSAT
Inmarsat Global Limited
Notes to the Financial Statements
For the year ended 31 December 2021
24. Pension arrangements and post-employment benefits (continued)
Analysis of the movement in the present value of the defined benefit obligations is as follows:
($ in millions)
At 1 January 2020
Current service cost
Past service cost
Interest cost
Remeasurement gains:
Actuarial gains arising from changes in financial assumptions
Change in experience assumptions
Foreign exchange gain
Benefits paid
Contributions by pension participants
At 31 December 2020
Current service cost
Past service cost
Interest cost
Remeasurement gains:
Actuarial gains arising from changes in financial assumptions
Change in in demographic assumptions
Foreign exchange gain
Benefits paid
Contributions by pension participants
At 31 December 2021
Analysis of the movement in the fair value of the assets of the defined benefit pension plans is as follows:
2021
($ in millions)
126.3
At 1 January
Interest income
1.9
Remeasurement (losses) / gains:
Experience return on plan asset (excluding interest income)
Contributions by employer
Contributions by pension participants
Benefits paid
Expenses paid (included in service cost)
Foreign exchange (loss) / gain
At 31 December
(2.1)
(0.6)
(1.4)
124.1
2.6
(2.6)
-
Amounts recognised in the income statement in respect of the plans are as follows:
2021
2020
Defined
benefit
pension
plan
0.6
Post-
employment
benefits
0.1
Defined
benefit
pension
plan
0.4
Post-
employment
benefits
0.1
-
(0.1)
-
0.5
-
-
-
0.2
(0.2)
0.1
(0.6)
(1.2)
(1.4)
0.2
0.3
0.6
50
($ in millions)
Current service cost
Past service gain
Net interest (income) / expense
Foreign exchange (gain) / loss
PUBLIC | © INMARSAT
Defined
benefit
pension
plan
100.5
Post-
employment
benefits
8.7
0.1
-
0.2
-
-
2.0
18.5
-
3.3
(1.5)
-
122.8
-
-
1.8
3.0
-
(1.4)
(2.1)
-
124.1
0.8
1.0
0.3
(0.2)
-
10.9
0.1
-
0.2
0.2
0.6
(0.2)
(0.3)
-
11.5
2020
130.1
2.6
(8.8)
-
-
(1.6)
(0.4)
4.4
126.3
Inmarsat Global Limited
Notes to the Financial Statements
For the year ended 31 December 2021
24. Pension arrangements and post-employment benefits (continued)
Current service cost is included within employee benefit costs (note 6). The financing costs together with foreign
exchange gains and losses are included within interest payable (note 7).
Amounts recognised in the statement of comprehensive income in respect of the plans are as follows:
2021
2020
($ in millions)
Actuarial gains arising from changes in financial assumptions
Return on plan asset (excluding interest income)
Actuarial gain arising from changes in experience adjustment
Re-measurement of the net defined benefit asset and liability
Defined
benefit
pension
plan
3.0
(2.6)
Post-
employment
benefits
0.2
-
Defined
benefit
pension
plan
18.5
8.8
Post-
employment
benefits
0.8
-
0.4
0.6
0.8
-
27.3
-
1.0
1.8
The assets held in respect of the company’s defined benefit schemes were as follows:
At 31 December 2021 At 31 December 2020
Cash
Assets held by insurance company
Other
Fair value of scheme assets
Value ($
in
millions)
Percentage
of total plan
assets
0.0%
100.0%
0.0%
100.0%
Value ($
in
millions)
1.6
122.8
1.9
126.3
Percentage
of total plan
assets
1.3%
0.97
1.5%
100.0%
-
-
124.1
124.1
The Plan’s main asset is the buy-in policy with Aviva, the value of which has been set equal to the corresponding value
of the IAS19 liabilities it covers. The remaining assets retained by the Trustees are used to fund expenses and defined
contribution payments under the scheme.
The duration of the defined benefit liabilities within the Inmarsat Global defined benefit plan is approximately 25 years.
The defined benefit obligation as at December 2021 is split as follows:
Active members
Deferred members
Pensioner members
N/A
83%
17%
The average age of the deferred and pensioner members at the date of the last statutory funding valuation for the
Inmarsat Global defined benefit plan (31 December 2017) was 56 years and 69 years, respectively.
The estimated contributions expected to be paid into the Inmarsat Global defined benefit pension plan during 2022 are
$nil. In 2021 actual contributions under this plan were $2.6m (2020: $nil).
51
PUBLIC | © INMARSAT
Inmarsat Global Limited
Notes to the Financial Statements
For the year ended 31 December 2021
25. Capital risk management
The following table summarises the capital of the Company:
($ in millions)
As per Balance Sheet
Cash and cash equivalents
Short-term deposits greater than three months at inception
Borrowings
Net debt
Shareholder's equity
Capital
As at 31
December
2021
As at 31
December
2020
(346.1)
(30.0)
1,952.5
1,576.4
4,126.7
5,703.1
(233.5)
(688.1)
2,040.3
1,118.7
3,882.2
5,000.9
The Company's objective when managing its capital is to safeguard its ability to continue as a going concern in order to
provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to
reduce the cost of capital. The Company continually evaluates sources of capital and may repurchase, refinance,
exchange or retire current or future borrowings and/or debt securities from time to time in private or open market
transactions, or by any other means permitted by the terms and conditions of borrowing facilities and debt securities.
No changes were made in the Company's objectives, policies or processes for managing capital in the years ended 31
December 2021 and 2020.
26. Capital commitments
The Company had authorised and contracted but not provided for capital commitments as at 31 December 2021 of
$465.8m (2020: $531.6m). These amounts primarily represent commitments in respect of the Company's I6 satellites
and other future satellite projects. The Company has not reported the split between tangible and intangible assets for
these capital commitments in line with prior periods.
27. Subsidiary undertakings
At 31 December 2021, the Company had investments in the following subsidiaries:
($ Millions)
Inmarsat Leasing (Two) Limited
Inmarsat New Zealand Limited
Inmarsat Brazil Eireli
ISAT Global Xpress LLC
Flysurfer Ecuador S.A.
Inmarsat Satellite Services S.R.L
Total Investments
Country of
incorporation and
operation
England and Wales/A
Principal activity
Satellite leasing
Operating company New Zealand/B
Dormant
Operating company Russia/D
Operating company Ecuador/E
Operating company Romania/F
Brazil/C
Interest in
issued
ordinary
share
capital
100%
64%
100%
0%
0%
0%
As at 31
December
2021
-
16.8
-
-
-
-
16.8
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Inmarsat Global Limited
Notes to the Financial Statements
For the year ended 31 December 2021
28. Contingent assets and liabilities
In the ordinary course of business, the Company is subject to contingencies pursuant to requirements that it complies
with relevant laws, regulations and standards failure to comply could result in restrictions in operations, damages, fines,
increased tax , increased cost of compliance, interest charges, reputational damage and other sanctions. These matters
are inherently difficult to quantify.
In cases where the Company has an obligation as a result of a past event existing at the balance sheet date, and it is
probable that an outflow of economic resources will be required to settle the obligation and the amount of the obligation
can be reliably estimated, a provision will be recognised based on best estimates and management judgement.
A contingent liability is disclosed where the existence of the obligation will only be confirmed by future events, or where
the amount of the obligation cannot be measured with reasonable reliability. At 31 December 2021, the Company had
no material contingent liabilities.
29. Events after the balance sheet date
Viasat acquisition
On November 8, 2021, Viasat Inc and the ultimate parent entity of the Company (“Inmarsat”) announced a definitive
agreement under which Viasat will acquire Inmarsat in a transaction valued at around $7.3 billion, comprised of c.$850.0
million in cash, approximately 46.36 million shares of Viasat common stock valued at $3.1 billion based on the closing
price on Friday November 5, 2021, and the assumption of $3.4 billion of net debt. The agreement has been approved
by both the Inmarsat and Viasat Board of Director’s, including support provided by The Baupost Group, L.L.C., Viasat’s
largest shareholder.
The Viasat shareholders approved the transaction in July 2022. We continue to work towards a goal of closing by the
end of 2022, assuming all regulatory approvals are obtained.
Distribution to Group shareholders
During April 2022, Inmarsat Group remitted $299m to its shareholders reflecting strong business performance and cash
generation. As a result, and in accordance with the Share Purchase Agreement (“SPA”) with Viasat, the cash element
of the consideration will be reduced by $299m to $551m. As part of this group distribution, the Company, advanced
$299m to Connect Midco Limited as part of the existing loan facility and will be a material asset for the Company in
2022.
Taxation
The Company’s Launch Costs case was heard by the Court of Appeal on 21 and 22 June 2022. In July, the judges
issued their verdict, finding in favour of HMRC. We have applied for the case to be heard at the Supreme Court and we
await the outcome. The Company has provided fully for the potential cost of c. $126m, comprising tax (c.$100m) and
interest (c.$26m).
Russia and Ukraine
The current international geopolitical context and the war in Ukraine may impact the global economy and market
environment. As of the date of approval of these annual accounts, the management of the Company is actively
monitoring the consequences of these events on valuation and performance of the financial assets. However, it is too
early to assess all the potential economic and financial impacts that may significantly affect the Company in the future.
There have been no other significant events which would require disclosure in the 31 December 2021 financial
statements.
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